CATPCHWORDS TRADE PRACTICES - Consumer protection - misleading ard deceptive conduct - misrepresentations - evidence of consumer confusion - whethec loss suffered by applicants - if sc, whether attributable to conduct of respondents - injunction - damages - basis for assessment of damages. COPYRIGHT? - author of work is a resident of New Zealand - ownership of copyright in that work under N.Z. law rests in second applicant, the commissioner of the work - whether second applicant may sue in Australia for infringement ~ injunction - damages - exemplary damages and additional damages sought. PRACTICE & PROCEDURE - application for judgment on admission in the pleadings - application to strike out - general principles. TRADE PRACTICES ACT 1974 - s.52, paras. 53(d), 80(1)(f) & 80(1)¢h) COPYRIGHT ACT 1968 - S. 115, PARA. 184({(1)ta), 8.249. COPYRIGHT ACT 1962 (N.@.} - 58.9 COPFRIGHT (INTERNATIONAL PROTECTION) RECULATIONS - sub-reg. 4(1). WAG 39 of 983 Coram: Lockhart J. 26 March 1984 Sydney 2 ne ae rer Pe Se oe Se TO 2 RR WT Lt A pee te Fed LO ate CML ae TL IN THE FEDERAL COURT OF AUSTRLIA WESTERN AUSTRALIA DISTRICT REGISTRY NO. WAG 39 OF 1983 GENERAL DIVISION Corag: Place: Date : BETWEEN ENZED HOLDINGS LIMITED First Applicant and ENZED PRECISION PRODUCTS LIMITED Second Applicant and - ENZED PRECISION PRODUCTS (AUST) PTY. LIMITED Third Applicant . and ENZED FRANCHISES (AUST) PTY. LIMITED Fourth Applicant . and COMPRESSED AIR & PACKING SYSTEMS PLY. LTD. and CONTENDER PTY. LIMITED Fifth Applicants AND WYNTHEA PTY. LIMITED First Respondent and WARREN RICHARD COOPER and ALEXANDER GREGORY SMITH Second Respondents Lockhart J. Sydney 26 March 19U¢ QRDERS THE COURT ORDERS THAT: -~ 1. The first respondent by itself its servants and agents be restrained from engaging in conduct in trade or commerce that is misleading or deceptive or is likely to mislead or deceive by representing that its business is the business of the fifth applicant or the third applicant. Se eminence omen ene aster tor ae bode me - rary ad LOST pT a al oe EN SS OU, LST A EB SO oer enmnnenier ear a i a Pa ar Toor ee on eterno ib ine eer tt" USE A SS n 2. The first respondent by itself its servants and agents he restrained in connection with the supply of qoods of services from representing that its business 1s associated with cr affiliated with ar has the sponsorship or approval of 'the applicants or anv of them. 3. The second respondent, Alexander Greacey Smith, one restrained from aiding, abetting, counselling or procuring the first respondent in any conduct forbidden bv orders 1. and 2. above and from being in any way directly or indirectly know:nely concerned in or a party tn any such conduct. 4, The first respondent by itself 1ts servants and agents be restrained from infringing the second applicant's copyriart in the design or lago comprising a stvlised representation of eicht hydraulic couplings arranged in a particular configuraticn and appearing in Exhibit 3 page 11 by publishing or causing tao he published any design or lago substantially or colourablv sivilar thereto. 5. Any varty be at liberty to apply on three davs' notice to vary any cf the foregoing orders. "a " IN THE FEDERAL COURT OF AUSTRLIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION BETWEEN ENZED HOLDINGS LIMITED First Applicant and ENZED PRECISION PRODUCTS LIMITED Second Applicant and ENZED PRECISION PRODUCTS (AUST) " NO. WAG 39 OF 1983 PTY. LIMITED Third Applicant and ENZED FRANCHISES (AUST) PTY. LIMITED Fourth Applicant and COMPRESSED ATR & PACKING SYSTEMS PrY. LIMITED and CONTENDER PITY. LIMIZ Fifth Applicants AND WYNTHEA PTY. LIMITED First Respondent and WARREN RICHARD COOPER and Second Respondents Coram: Lockhart J. Place: Sydney Date : 26 March 1984 REASONS FOR JUDGMENT LOCKHART J. The applicants seek to restrain the first respondent, Wynthea Pty. Limited ("Wynthea"), from contravening s. 52 and para. 53(d) of the Trade Practices Act 1974 (the "Trade Practices Act") by engaging in misleading or deceptive conduct in the business of selling and servicing hydraulic hoses and couplings and associated goods. The applicants allege that the second respondents, Warren Richard Cooper and Alexander Gregory ehteerememmennere Sent feanrettreerrcr ren t Fe WETS mle CATE EL a eh ' ry 2. Smith, have been knowlingly concerned in the alleged contraventions of s. 52 and para 53{d) and seek to restrain them accordingly. The applicants also seek to restrain the respondents from passing off Wynthea's business as the business ef one of the fifth applicants namely, Contender Pty. Limited ("Contender"), and the business of the third applicant, Enzed Precision Products (Aust) Pty. Limited. In addition, the applicants seek to restrain the respondents from infringing the copyright of the second applicant, Enzed Precision Products Limited, in an artistic work namely, a design or logo comprising a stylised representation of eight hydraulic couplings arranged in a particular configuration. The applicants alsc seek damages. Although a clain is meds by the applicants in their amended statement of claim to recover a@ pecuniary penalty under s. 79 of the Trade Practices Act in respect of the alleged contravention of para. 53(d), this claim was abandoned. The final hearing of this case occupied seventeen days and involved a considerable volume of evidence, both oral and documentary. There is conflict between witnesses on particular matters, some of which are important; but generally the facts were not in dispute. There are, however, some matters in issue wnich, although not reflecting conflicts between witnesses, are susceptible of more than one interpretation or finding. What follows are my findings of fact including findings on contentious matters. rey The first to fourth applicants are all members of the Enzed group of companies, based in New Zealand and established in 1972 by Mr. Wayne Mooney when he acquired an existing business as a going concern in Auckland, New Zealand. The group is now a substantial and profitable organisation engaged in the business of design, manufacture and sale of hydraulic hoses, couplings and associated products. All the products are manufactured in New Zealand; but the sales are made in many countries of the world, including Australia, mainly through franchisees. The first applicant, Enzed Holdings Limited, and the second applicant, Enzed Precision Products Limited, were both incorporated in New Zealand. Mr. Mooney is their managing director. The first applicant is the group's parent and holding company, while the second applicant is responsible for the manufacture and distribution of the group's products. The third and fourth applicants are both companies incorporated in Victoria. Mr. Rex Falloon is their managing director. The third applicant is the Australian distributor of the second applicant's products; and the fourth applicant, Enzed Franchises (Aust) Pty. Ltd., sells or grants franchises to other companies or individuals to retail the Enzed product in Australia. The lccos Two logos are used by the Enzed group. One logo is represented by the word "ENZED" preceded by two red flashings or « oo ee te We we etd ata Er yy SE sa ear ant ort red fiecks. I shall refer to it as "the name logo". It was designed in 1974 by Lioyd Litchfield Anderson, a New Zealand resident, on the commission of the second applicant. Mr. Anderson said that the two red flecks or flashings symbolise the "flow-through concept of bringing fluid into a pipe by means of some sort of snap-on coupling: this tied the whole logo into Enzed's manufacture of hydraulic fittings." In the middle of 1974 Mr. Mooney, on behalf of the second respondent, commissioned Mr. Anderson to design the first Enzed hydraulic hose and couplings catalogue and to produce a series of leaflets for the various Enzed couplings. For each ctype of Enzed coupling Mr. Anderson produced a corresponding sketch. Mr. Mooney next commissioned Mr. Anderson to design a symbol or logo for the group that clearly depicted or represented the activity carried on by the group. By taking various drawings appearing separately on the leaflets previously prepared by him, and arranging them in a certain configuration, Mr. Anderson produced a line drawing of eight hydraulic couplings. I shall ceter to this drawing as "the drawing logo". Both the name logo and the drawing logo were reproduced and applied to many facets of the Enzed business, including catalogues, packaging, advertisements, promotional material, invoices and statements of account. In some instances the drawing logo depicts eight couplings, in others six and in others more than eight. lees ae VNEN PR eR WEE) CA aptmeerh wrt Eline teed tihdaeee RUM Amr et Ge ee eS . £ Growth of the Enzed enterprise Throughout the 1970's the Enzed business grew intoa successful and prosperous enterprise. The business of the Enzed companies is especially aimed at the small user of hydraulics. Enzed produces a large range of products for a considerable variety of commercial and industrial applications. In addition to the manufacture and sale of hydraulic Products and accessories, the group conducts a service facility from its various service centres throughout the world in which the product is displayed more in the fashion of a modern supermarket than an engineering workshop. Further, accent is placed by Enzed on taking its service to the customer, i.e. to the place where the machine has broken down, rather than the more traditional method where the customer brings the broken part to the mechanic for repair. Mr. Mooney gave evidence that this concept evolved in late 1978 to the point where a mobile service van, suitably and prominently signwritten, was acquired in New Zealand. It is now a firm policy of the Enzed group that each of its world-wide service centres operate at least one fully equipped mobile van repair vehicle. The success of this retail technique in New Zealand led Mr. Mooney to believe, in about 1979 or early 1980, that a similar scheme would work in Australia. Prior to the introduction of the present franchise system the Enzed group exported products to Australia using established companies within the hydraulics and engineering amt ee eet pte On een mene 6m emer = neereme on 2 teccen wen: 6. industry. For example, in Western Australia the products were marketed in the mid to late 1970's through three organisations namely, Swift MIP and then Lucas Hydraulics and Rubicon Mining. Establishment of Enzed Sydney The Enzed business was established in Sydney under the direction of Mr. Peter Duncan, then one of the Enzed distributors in New Zealand, and Mr. Waily Davey then the Enzed group's New Zealand national sales manager. I shall refer to this business hereaiter as "Enzed Sydney". A written agreement dated 10 September 1979 was executed by the second applicant and by Mr. Davey "for and on behalf of a company to be formed" which was described as Enzed Australia Pty. Limited. This company was never incorporated. The company which was later formed was Enzed Hydraulics Pty. Limited. Under the agreement the second applicant appointed Enzead Hydraulics Pty. Limited as its sole distributor within the Commonwealth of Australia for the sale and distribution of all Enzed brand products and certain other products (clause L)- Enzed Hydraulics Pty. Limited was prohibited from selling any of the products to persons outside Australia and from permitting the redistribution or resale of the products by any persons to any purchaser outside Australia without the approval of the second applicant (clause 1). The agreement was expressed to subsist for the period of five vears, at the expiration of which it would continue in force until terminated by either party on written notice {clause 12). This Australia wide distributorship continued until April, 1981. peeweenten a wee ee Tee MR RT UAT ES does SCRE SST ARS, ROR cnt On aeerrererermeerie geet saunas ath ee Establishment of Mr. Smith's company, Bendara Pty. Ltd. as Western Australian distributor In early 1979 one of the second respondents, Mr. Smith, went to Fiji where he was employed by Grayburn Constructions, a civil engineering and earth moving company . Grayburn Constructions was at that time interested in diversifying its operations. Mr. Smith was placed in charge of conducting negotiations, on behalf of Grayburn Constructions, with the Enzed group which led to the appointment of Grayburn Constructions as the Fijian distributor for Enzed products. Mr. Smith travelled to New Zealand where he stayed for about a week and familiarised himself with the Enzed products and the Enzed business. He spent some time with a Mr. Maher, the Auckland franchisee of Enzed products, and learnt about the Enzed franchise system. Grayburn Constructions purchased a van. The name logo, but not the drawing logo, was painted on both sides. In October 1979 Mr. Mooney was in Fiji. He spoke to Mr. Smith who told him that for personal reasons he would he returning to live in Western Australia. Mr. Mooney suggested to Mr. Smith that he may wish to open an "Enzed shop" in Western Australia and said that if he was interested in the proposal so was Enzed. Mr. Smith expressed interest in the suggestion. On 14 February 1980 Mr. Mooney wrote to Messrs. Duncan and Davey of Enzed Sydney and asked them to do "all that was necessary" to ensure that Mr. Smith became a distributor of Enzed products 'in Western Australia, informed them that Mr. Smith would be arriving in Sydney from Fiji on 6 March and that he would be CA ' Fie PVE ea RA als OUEST AER kL TiN heed 1 RAY POLARIS MDATAPRS TRON OR Rp Rm eee ape arene ot t re getting in touch with them. In March 1980 Mr. Smith arrived in Sydney and had discussions with Mr. Duncan and Mr. Davey of Enzed Sydney. Also present was Mr. John Badham from the Enzed companies of New Zealand. It was agreed that Mr. Smith, or a company to he formed by him, would be appointed the distributor of Enzed products in Western Australia, although the evidence is scanty as to what were the precise terms. It is sufficient to say that the principal terms of the agreement were set out in a letter of 13 March 1980 from Enzed Sydney to Mr. Smith including terms as to price, stock and equipment and the following terms: (a) the Western Australian distributor was to be Mr. Smich's "new company" which was to enjoy "the Enzed distribution and sale rights for Hestern Australia"; (b) all supplies were to be obtained direct from Enzed Sydney; (c) the "agency" was to commence on 1 May 1980; (da) "Enzed" would provide at least one member of staff for a period of one week to undertake sales activity or otherwise assist; (e) advertising material would be provided at no cost to Mr. Smith; and provision was made for an advertising subsidy. Oy 2 EN RT et er ML ee den erie n> Abe bh 8 ee eT 9. Mr. Smith travelled to Perth about 14 March 1980 and then incorporated a family company, Bendara Pty. Limited ("Bendara"}. He took steps to register the business name "Enzed Hydraulic Hose & Coupling Service" under the Business Names Act 1962 (WA) . He chose that name because: "that was the product Che was] going to sell and it was advised by the Australian distributors that CheJd use the name Enzed"". Mr. Smith said in evidence that he used the name with full knowlede and consent of Enzed in Sydney and New Zealand, The business name was registered on 24 April 1980, the registered proorietor was Bendara, and the nature of the intended business was described as "supplying hydraulic hoses". The business, which became known as Enzed Hydraulic Hose & Coupling Service, commenced on or about 1 June 1980. Mr. Smith arranged for the printing of business and "prompt" cards in the manner suggested by Enzed Sydney, leased premises and engaged one employes. "Prompt" cards are designed to be placed or to hand near customers' telephones. He received from Enzed Sydney the promotional material mentioned in the letter of 13 March 1980. Both the name logo and the drawing logo were used in the conduct of the business. In June 1980 Mr. Badham visited Mr. Smith in Perth. As promised in the letter of 13 March 1980 Mr. Badham assisted Mr. none pee eee t There ALOT oe RRO ne NN IMNR! ab mR Y ETI mRy wnat, Sop nr mnStE ABN Ry nenee rama Mortman 10. Smith and helped canvass business on his behalf. When Mc. Smith arrived in Perth he discovered that three other companies (Swift MIP, Lucas Hydraulics and Rubicon Maning Service) had been retailing Enzed products and that one of them, Rubicon Mining Service, believed itself to be the Enzed distributor in Western Australia. These companies had all received stock direct from the second applicant. Mr. Smith gave evidence that he had not heard of the existence of these dealers prior to his arrival in Perth. He asked Mr. Davey why he had not been told of the existence of a company (Rubicon Mining Service) with about $30,000 to $40,000 worth of Enzed stock. Mc. Davey teld him that Rubicon Mining Service was the previous distributor and that it would be ceasing to act as such. Mr. Smith also gave evidence that within the Western Australian market Enzed products had a fairly bad reputation at that time and that both the presence cf other outlets and the poor standing ur ef the product affected the initial profitability of hi business. On 23 January 19681 the Western Australian business of Mr. Smith was restructured. Previously it had been conducted by Bendara in the registered business name "Enzed Hydraulic Hose & Coupling Service", but Mr. Cooper, one of the second respondents, joined with Mr. Smith, in effect as a working partner, and to facilitate matters the corporate structure of the Western Australian distributorship was re-arranged. Wynthea was formed. Fifty percent .of its share capital was acquired by Bendara, Mr. Smith's family company, and fifty percent by Mr. Cooper's family wae et ee oe oe Wana ames Bap AAD CUZ UE f cne ll. company, Kimden Pty. Limited. Wynthea was not registered as the Holder of the business name "Enzed Hydraulic Hose & Coupling Service". Mr. Smith said that this was due to an oversight on the part of his accountants and that the first he knew of that omission was in August 1983 when these proceedings were commenced. Mr. Smith said that he believed the business and its assets were owned by Wynthea at all material times. The business continued to be conducted, however, under the name "Enzed Hydraulic Hose & Coupling Service". In about January 1981 Wynthea (I will use this term interchangeably with Bendara; at other times it 1s convenient to speak of Mr. Smith as the owner of the business; this 1s because the evidence did not diffrentiate between them) purchased an International two tonne van and arranged for it to be signwritten and generally equipped. Zt went on the road in February 1981. In March 1981 Ms. Davey visited Perth, some nine months after the business had commenced. He stayed there for a few days and discussed with Mr. Smith the future course of the Western Australian business. Relations between Mr. Smith and Enzed Sydney became strained, principally over the quality of Enzed products supplied by Enzed Sydney. The last invoice for Enzed products ordered by Wynthea from Enzed Sydney was dated 1 April 1981. Wynthea made payments to Enzed Sydney after then, but probably for stock invoiced before April 1981. There is conflict of evidence as to the length of the dispute between Enzed Sydney and Wynthea. I am Fe em Apriate ane me wey eee dead See oa ey ee SE ed et ee ee ee abee ow teat ~ en 12. satisfied that it continued at least until November 1981 and t "possibly to dune 1982; but, for reasons which I will mention later, the distributorship agreement between Enzed Sydney and Wynthea terminated before November 1981. During the currency of this agreement Wynthea purchased its hydraulic products elsewhere than from Enzed Sydney. Mr. Smith said in evidence that the $40,000 worth of Enzed stock was purchased from Rubicon Mining at . a cost of some $6,000 to $7,000. He said that $1,000 to $2,000 worth of Enzed products was purchased from Lucas Hydraulics. Both of these companies wished to "offload" their stockpiled product, allowing Wynthea to purchase the product at significant discounts. These purchases were made to the knowledge of Enzed Sydney. It was during 1981 that Wynthea placed its first order for a rival product to the Enzed product, namely a product sold by a New Zealand organisation known as Hydraulink. Thereafter Wynthea purchased both Enzed and Hydraulink product. Wynthea also obtained some supplies of hoses from at least one other manufacturer, BIX Apex. During 1981 relations between Enzed Sydney and the Enzed companies in New Zealand became strained. After various discussions it was decided in April 1981 by Enzed Sydney and the Enzed New Zealand companies that Enzed Sydney would be reorganised and its franchise rights confined to New South Wales. The new arrangements are referred to ina letter dated 6 April 1981 from Mr. Mooney to Enzed Sydney. Mr. Mooney approached a Mr. Rex Falloon to join the Enzed group and introduce into Australia the new Enzed franchise 13. _scheme. Mr. Falloon joined the group in New Zealand in July "1981. He moved to Australia in August that year and based the Enzed operations in Melbourne. Since then the third and fourth applicants have operated from Melbourne; and the fourth applicant has been successful in selling a number of franchises throughout Australia. Mr. Falloon said in evidence that when he arrived in Melbourne (in August 1981) relations between the third and fourth applicants and Enzed Sydney were "distant". He said that late in 1981 there was an attempt at reconciliation between Enzed Sydney and other Enzed companies but that broke down irretrievably in 1982. In about August 1981 Mr. Smith heard that an Enzed "operation" had been established in Melbourne. He said that in order to "find out what was going on" he telephoned Enzed Sydney, but was given an unsatisfactory answer so he telephone the Enzed head office in New Zealand and was referred to Melbourne. He then spoke with a Mr. Jenkins, an employee of the third applicant in Melbourne, and attempted to discover what the new Enzed arrangement in Melbourne was "all about". Mr. Smith said in evidence: "CMe. Jenkins] told me that they had opened up the shop and that they were setting up agencies or distributors in Victoria and I just asked him basically what they were doing and how it was going. I think it was left at that at that stage." They also discussed the problem which Mr. Smith had encountered with the quality of the product previously purchased from Enzed Sydney. 14. In about September 1981 Mr. Falloon telephoned Mr. - Smith. Mr. Falloon gave evidence that during this call he felt that Mr. Smith was "not totally aware of that situation" (that is the position of Enzed Sydney at that time). Mr. Falloon said: "That is why I made the approach to keep him informed". He said he probably would have told Mr. Smith that the third applicant would be supplying Enzed product to Western Australia in future. During that same conversation Mr. Falloon asked Mr. Smith to fly to Melbourne to view the Enzed "operations" there and attend a sales seminar to be held in conjunction with newly acquired franchisees from Queensland. Mr. Smith did not go to Melbourne. He said he was too busy at the time. There is some question as to whether Mr. Falloon offered to pay for the air fare or whether it was to be prepaid by Mr. Smith and reimbursed by the third applicant, but nothing turns on this. The quality of the Enzed product was also discussed in the same conversation. Mr. Falloon raised the question of Mr. Smith's complaints which had been made to Mr. Jenkins and asked Mr. Smith to put them in writing. Mr. Smith did not do this. The pricing of the Enzed product was also discussed. Mr. Smith told Mr. Falloon that he could buy, and was buying, equivalent stock, both fittings and hoses, at cheaper prices through other suppliers. Finally, Mr. Falloon asked him to submit comparative prices. Mr. Falloon told Mr. Smith that he would be travelling_to Perth to consider the purchase of the 15. Enzed stock held by Mr. Smith because Mr. Smith made it plain - that he would not deal with someone whom he had not met. In the result, on 2 October 1981 Mr. Falloon sent Mr. Smith a telex informing him that the third applicant could match its competitors' prices and asked for Mr. Smith's order. No, orders were forthcoming because Mr. Smith used Mr. Falloon's matching quote to obtain an even cheaper price from his original source namely, BIX Apex. In the telex of 2 October Mr. Falloon told Mr. Smith that he would not be able to travel to Perth as early as previously planned and that he hoped to get there before the end of October. Mr. Smith gave evidence that he was in touch with Enzed Sydney at about this time, but they did not really provide him with any information as to the status of their relationship with "Enzed". More than one telephone conversation took place between Mr. Smith and Mr. Falloon during this period of September-October 1981. Termination of Wynthea's distributorship On 21 October 1981 Mr. Failoon sent a telex to Mr. Smith, with the authoirty of Mr. Mooney, in these terms; ",oe Att Greg Smith 16. We confirm that effective from today our relationship is unfortunately terminated. You are requested to cease using the Enzed trade mark and you are requested to remove the Enzed name from your premises and other promotional material on vehicles. ... Regards, Bill Falloon" Mr. Falloon gave evidence that there was "a relationship" between Mr. Smith and the third applicant which the telex was intended to terminate. Mr. Falloon maintained this notwithstanding that the third applicant was aware of the existence of Mr. Smith's agreement with Enzed Sydney, though not as to its precise terms. Mr. Falloon said in evidence: "As I undertand it, Smith's business was operating with the approval of our New Zealand operation via the auspices of the Sydney one and he was going outside the ambit of that type of operation - in other words ... he was not buying our product, aithough he did buy some when he first came to Australia, which he has subsequently found difficulty in paying for ..." Mr. Smith's reaction to the telex was one of annoyance. He did nothing in response to the telex because he:- "felt that the manner in which (Cthe telex] arrived was not the way most people do business." However, Mr. Smith telephoned Mr. Falloon, either on 21 or 22 October, to enquire as to the exact reasons for the termination. On 22 October 1981 Mr. Falloon sent a telex to Mr. Smith providing those reasons. Mr. Smith did not get in touch with the third applicant after receipt of the telex, notwithstanding the statement in the telex:- 17. "Unless you can show good reasons for us to adopt another attitude by action i.e. orders and increasing our market share our termination of association remains. If you wish to ring me that is o.k." ~ Third and fourth applicant's search for a Western Australian franchisee After October 1981 the third and fourth applicants: sought to obtain a franchisee for Western Australia. The search proceeded along three paths: (CL) Mr. Smith himself. The third and fourth applicants remained interested in Mr. Smith as a possible future franchisee. Whilst in Perth in November 1981 Mr. Falloon attempted to visit Mr. Smith at his premises for the purpose of discussing a long term franchise arrangement with him, but Mr. Smith was not at the premises when Mr. Falloon called, so no meeting took place. in April-May 1982 consideration was given by both Mr. Falloon and Mr. Smith to the purchase by the third applicant or another Enzed company of Mr. Smith's business. Discussions took place between the parties. On 1 April 1982 Mr. Mooney wrote to Mr. Smith's financial consultants in an attempt to resolve the differences between Mr. Smith and the Enzed group. Included in this letter was an acknowledgement that either a franchise arrangement or a purchase of stock may be possible solutions. Mr. Mooney said in evidence that he was genuinely interested in some proposition and acknowledged that Mr. Smith had some goodwill in his business, but denied that it 18. had developed completely independently from Enzed. On 3 May 1982 Mr. Smith's financial advisers replied to Mr. Mconey's letter. The discussions came to nothing because the fourth applicant found a prospective franchisee in one of the fifth applicants, Compressed Air and Packing Systems Pty. Limited ("CAPS"). (ii) International Harvester Company. There was some : suggestion that International Harvester might become a franchisee for the sale of Enzed products in Western Australia, but it suffered financial difficulties, so the suggestion came to nothing. (iii) CAPS. The third path travelled by the third and fourth applicants in their search for a Western Australian franchisee led them to CAPS. CAPS was incorporated in Western Australia and commenced carrying on business in January 1982 originally as a distributor for Ingersoll-Rand products. Mr. Robert McIntyre and Mr. Quinlan were directors of CAPS. In about April-May 1982 there were discussions between the third and fourth respondents and the directors of CAPS about a possible franchise arrangement. At the time of the discussions CAPS was not aware of Mr. Smith's business nor of the dispute that was brewing over Mr. Smith's use of the name Enzed and the two logos. Following extensive negotiations a franchise agreement was entered into between the fourth applicant and CAPS on 15 July 1982. Contender's business 19. Having signed the franchise agreement on 15 July 1982 - CAPS then- took the necessary steps to commence carrying on business. It obtained premises which were a very short distance away from those of Wynthea. A mobile service van was purchased, signwritten and equipped. It was decided that a company separate from CAPS should be formed to act as the Enzed franchisee, so steps were taken to incorporate the other fifth applicant, . Contender Pty. Limited. Also during these initial stages the fifth applicants appointed a brother of Mr. Robert McIntyre, namely Mr. Lynton McIntyre, as an owner-operator of the mobile service. van which "hit the road" in October 1982. Contender engaged in a vigorous promotional campaign consisting of door knocking, distribution of "prompt" cards which displayed the location of Contender's premises and its telephone number, making selective mail drops and following these with telephone calls to prospective consumers of Enzed products. When dealing with the question of damages I will consider in some detail the success of the business of the fifth applicants, but it is sufficient to say at this stage that the business has not been successful and the high hopes of the Enzed group and the directors of the fifth applicants have not been realised. 4 August 1982 agreement Notwithstanding the telex of 21 October 1981 from Mr. Falloon, Mr. Smith continued to carry on business as "Enzed 20. Hydraulic Hose & Coupling Service" and continued to use the two - logos. During 1982 there were discussions between the Enzed group (in particular the third and fourth applicants) and Mr. Smith about the continued use by Mr. Smith of the logos and the name Enzed and the conduct of the business as ""Enzed Hydraulic Hose & Coupling Service". These discussions culminated in an agreement in writing of 4 August 1982 between the third : applicant, Bendara and Mr. and Mrs. Smith as directors of Bendara. It seems that Bendara was a party to the agreement primarily because it was still the proprietor of the business name "Enzed Hydraulic Hose & Coupling Service". Under the agreement Bendara agreed that it would deliver to the third applicant, or its solicitors, notice of cessation in respect of the business name "Enzed Hydraulic Hose & Coupling Service"; and withdraw from publication in the next edition of the Yellow Pages Directory for Perth any advertisement which included a reference to the word "Enzed" or which incorporated the name logo or any logo substantially identical with or deceptively similar to it {clause 1). Bendara also agreed that it would not carry on business "under and by reference to the style and/or name "Enzed Hydraulic Hose & Coupling Service" or a style or name which includes the word "Enzed" or any style or name deceptively similar thereto, substantially identical with or constituting merely a colourable imitation thereof" (clause 2). The third applicant agreed to pay to Bendara $2,250 in consideration of the business name "Enzed Hydraulic Hose & Coupling Service" not being used in the future, and of the withdrawal of the Yellow Pages advertisement and of the cessation of trading in a manner which harmed the reputation of second or third applicant in or in 2. connection with the Enzed products or the name "Enzed" (clause - 5). The parties are in dispute as to whether the agreement required Mr. Smith to cease using the drawing logo. Mr. Smith gave evidence that because the agreement made no mention of the drawing logo he did not even think about it and that in his view, the consideration paid was not meant to include the cost of the removal of the drawing logo. After the execution of the August agreement there were discussions between the relevant parties relating to the repurchase of stock for which provision had been made in the agreement. The third applicant had covenanted to purchase Enzed stock held by Bendara at the date of the agreement at a price to be determined by the valuation of both Bendara and the third applicant, or failing agreement by- a valuer appointed by them. In September 1982 the third applicant sent a letter to Bendara enclosing a cheque for $3,108.36 which it said was the amount of stock agreed to be purchased from Mr. Smith less an outstanding account which Mr. Smith agreed he owed. Mr. Smith replied, denying that the cheque fulfilled the obligations of the third applicant under the agreement. Late in 1982 there was a meeting between Mr. Falloon and Mr. Smith, but it seems that the parties remained in dispute until at least October 1982 about this matter; indeed, they may still be.in dispute. Mr. Smith's.compliance with 4 August 1982 agreement 22. Following the execution of the agreement of 4 August - 1982 Mr. Smith took the following steps to comply with its terms: i) He delivered a Notice of Cessation of business name to the solicitors for the third and fourth applicants, dated 3 August 1982; ii) On 11 August 1982 he obtained registration of a new business name "C & S Hydraulic Services (W.A.)" (to which I shall refer to "C & S"); iii) A new business card was prepared and distributed in the course of his business bearing the name "C & S Hydraulic Services (W.A.)"; iv) New "prompt" cards were printed and reference to "Enzed Hydraulic Hose & Coupling Services" was deleted. The new name of the business was substituted. There was some suggestion in the evidence that this may have been done simply by a sticker but the evidence is confusing. v) A new logo was designed for the business. vi) A pro forma circular was prepared and sent to customers in virtually identical téems.to one sent by Mr. Davey of Enzed Sydney to his customers, under similar circumstances, some months earlier. Mr. Smith said that he copied Mr. Davey's circular and made only slight alterations. This appears to be the fact from my observations of the two circulars. 23. vii) Mr. Smith conducted a heavy advertising programme in the " West Australian newspaper through the final months of 1982. viii) Mr. Smith gave evidence that from August 1982 he has always answered the telephone "Good morning" or "Good afternoon", "C & S Hydraulics" or "Hydraulic Services W.A.". He admitted however that in the first week or so of the transition he may ' have said "Enzed" by mistake but he said he has not done so since. He said that since August 1982 he had never heard any of his employees using the word "Enzed" when answering the telephone. ix) Mr. Smith took the necessary steps to ensure that the Perth Yellow Pages Directory for 1983 which issued in December 1982 did not contain the reference to "Enzed Hydraulic Hose & Coupling Service" or the name logo. The entry in the Perth White Pages Directory for 1982, published in August-September 1982 continued to contain Mr. Smith's earlier listing "Enzed Hydraulic Hose & Coupling Service" and his business telephone number. x) Mr. Smith continued to use the drawing logo in many aspects of the business. For example, it was applied to his new business cards and to his service vans and was signwritten on two new service vans which commenced to operate in mid 1983. In November 1982 Mr. Falloon and Mr. Smith met at Mr. Smith's premises. Present also were Mr. Cooper, a Mr. Brian Kemp and an office girl. There is some evidence that Mr. Addison was present also. I am not satisfied that he was at the meeting, 24. but he may have been in the premises whilst the meeting was held. - The discussion centered round the differences between the parties relating to the repurchase of stock, also the hydraulics industry in general and Mr. Smith's activities. There is dispute as to whether the guestion of the signwriting on Wynthea's mobile service van was discussed. Mr. Faliloon maintains that it was discussed and that he expressed concern that the van was still, signwritten in such a way as to indicate that the Enzed group ons associated with or a participant in Mr. Smith's business. Mr. Falloon said that he specifically raised the question of the drawing logo on the van and that Mr. Smith and Mr. Cooper asserted that they were entitled to use it. Mr. Smith denied that any mention was made of the get-up of Wynthea's service van or its business cards or its use of the drawing logo. I am not satisfied that there was any discussion at this meeting about the appearance of the van, or its get-up or the business cards or use of the drawing logo. August _ 1982 - October 1983 From August 1982 to August 1983 Wynthea continued to carry on business in the same manner namely, using the drawing logo, having service vehicles with similarly styled get-up to those operated by Contender and using similar promotional material such as business cards and prompt cards. There was however no use by Wynthea of the Enzed name or the name logo. Wynthea carried on business as "C & S Hydraulic Services (W.A.)". During this period Contender complained to Wynthea on 25. more than one occasion about the use of the drawing logo and t - generally that the conduct of Wynthea was conveying the general impression that it was associated with the Enzed group. .In June 1983 Contender engaged two new van drivers, a Mr. Burnham anda Mr. Baldrey. Each man supplied his own vehicle, signed a franchise agreement and paid a franchise fee of . $4,000 to Contender. Each received $3,000 worth of stock. In the middle of June 1983 Wynthea obtained two new vehicles for its business. Mr. Smith engaged a sign-writer to sign-write the two vans. In the result they were sign-written in substantially the same way as the existing van. The vans were coloured white. Along their sides were painted two horizontal stripes each of about six inches in width being an upper stripe coloured red and a lower stripe coloured orange with the two stripes rising at the front of the vehicles to run horizontally across the top of the radiators. The letters "CS" printed in white on a red background appeared in a circle on the front door of the vans andon each side was written "Hydraulic Services W.A.". In one box there was written "For Service 362 1142" and in another box "Hydraulic Hose Coupling Service Unit". On the rear of the vans there appeared the words "Emergency Hydraulic Hose Service Unit". The drawing logo was varied from its previous form in that, instead of portraying the eight couplings on each side of the van, there appeared four couplings on each side. Although I have not seen any of the vans I have seen photographs of then. In my opinion the vans of Wynthea, both before and after the execution of the August 1982 agreement, 26. resembled closely the Enzed vans operated by or on behalf of Contender. There are some obvious differences between the get-up of the vans but the overall impression which they convey to me is that the vans all belong to the same business. The presence of the drawing logo, or a significant portion of it, contributes substantially to this impression. 'On 23 August 1983 an application was filed in this Court's Western Australian District Registry by the applicants seeking the relief mentioned earlier. Directions hearings took place immediately and on 24 August 1983 the respondents by their counsel gave undertakings to the Court to the following effect:- 1. That within 48 hours Wynthea would obliterate the drawing logo from its service vans; 2. That within 48 hours Wynthea would destroy all business cards in its possession bearing the drawing logo and would direct its employed salesmen to return their business cards for destruction and would destroy all cards so returned. 3. That Wynthea would not in future use the drawing logo on any of its plant or literature. 4. That Wynthea, Mr. Smith and Mr. Cooper, would within 24 hours give to the employees of Wynthea a written direction signed by Mr. Smith and Mr. Cooper to the effect that any person getting in touch with Wynthea and seeking to deal with any of the applicants was to be immediately informed that Wynthea had no 27. connection with any of the applicants. The undertakings were expressed to be given unconditionally. In the light of the undertakings the application for interlocutory injunctive relief then before the Court was adjourned. The first and fourth undertakings were complied with. There is no suggestion that the other undertakings have not been complied with; indeed it appears from the material before me that probably they have been complied with. In October 1983 both Mr. Baldrey and Mr. Burnham sold their interests in their respective service vans and ceased to carry on business on behalf of Contender. Evidence of consumers Evidence was led on behalf of the applicants from witnesses designed to establish that members of the public have been misled or deceived into believing that they were dealing with Contender as part of the Enzed group when in fact they were dealing with Wynthea's business - Cc & S. There was a great deal of evidence bearing on these matters. I do not propose to relate it at length but will state my findings in respect of each incident. Mr. Pinkerton's daughter 28. The ten year old daughter of aMr. Pinkerton (an - - employee and Sales Manager of Contender) tried to get in touch with him at work and by mistake rang C & S after she had looked up "Enzed" in the 1982 Perth White Pages Telephone Directory. She was told by the person to whom she spoke that they [CC & SJ had never heard of Enzed or Mr. Pinkerton. This incident occurred in October 1982. The Gardenland incident Mr. Donald, a partner in a landscaping supply business called "Gardenland" of Perth, sought urgent attention from "Enzed" when on 4 December 1982 a hydraulic fitting on the back of his company's truck blew off near its premises. He obtained the telephone number by referring to an ""Enzed"" prompt card pinned to his office wall(i.e. a card previously issued by Mr. Smith showing his business as ""Enzed Hydraulic Hose & Coupling Service" with his telephone number). The number he in fact telephoned was that of C & S. When the telephone was answered Mr. Donald said "Enzed?" and received the reply "What can we do for you?" or "Can we help you?" or something to that effect. He explained his problem and need for a service van to call and was assured that one would be sent immediately. The job was attended to by C & S but was apparently done badly. Mr. Donald complained to Contender, thinking that it had done the job, but he was directed by Contender to C & S Hydraulics, on the ground that the fitting supplied had not come from Contender. He then complained to C & S Hydraulics. 29. The First Bunnings incident Mr. Brian Hornby, the workshop foreman of Bunnings, a company engaged in the timber industry in Perth, received a visit in early 1983 from a Mr. Addison who was employed by C & 5S. Mr. Hornby was very busy at the time. He glanced at the business card given to him by Mr. Addison which he thought was a card of . "Enzed" and that Mr. Addison was another salesman for "Enzed". Mr. Addison may have told him that he was from "C & 5S Hydraulic Services". Mr. Hornby remembered the term "Hydraulics" being used and assumed that it was "Enzed". The Mole Engineering cheque incident Contender did some hydraulic servicing work for Mole Engineering. Subsequently a cheque was sent by Mole Engineering, in payment of the account, to C & S who banked it. Contender, not knowing this, requested payment from Mole Engineering and was told that the account had been paid. Once the error was discovered a cheque was written out by C & S in favour of Mole Engineering who made arrangements for it to be passed on to Contender. The Sadlier's Incident Mr. Colbran, an employee of Sadlier's Transport, in mid 1983 telephoned what he thought was Enzed's number. He obtained the number from the 1982 Perth White Pages. He asked "Is this Enzed?" and the reply was "Yes". He said "It is Richard Colbran 30. here from Sadlier's Transport. We have blown a hose on a crane. Can you come out urgently?" The person on the telephone replied "Yes, no worries." A van appeared soon afterwards and the ~ problem was rectified. Mr. Colbran thought that it was an "Enzed" van because of its appearance. He had previously had dealings with Mr. Lynton McIntyre of Contender and when he saw the van arrive he thought it was Mr. McIntyre's van. When the _ driver alighted from the vehicle he realised it was not Mr. McIntyre; nevertheless the job was done. He said that he was still unsure as to whether the van that came out was in truth an "Enzed" van notwithstanding that he noticed that "CS" and "Hydraulic Services" were written on the van, and not "Enzed". The CSR Building Materials Cheque Incident Work was done for CSR, Building Materials Division, by Contender. The original invoice was dated 23 June 1983 and the purchase order 24 June 1983. CSR drew a cheque in payment of the invoice in favour of Enzed. The cheque was sent to Enzed at the address which was in fact C & S's address. Mr. Lee, the accounts clerk with CSR Building Materials Division, had obtained the address from his computer records and it had been there for a few years. The cheque was received and banked by C & S on 29 July 1983, When the error was discovered, after a telephone call was made by Mr. Lynton McIntyre to C&S, the matter was rectified and the money refunded by C & S to Contender. The Second Bunnings Incident 31. Mr. I.H. Gould, a leading hand mechanic from Bunnings, - gave evidence relating to an incident late in July 1983 when he wanted some urgent service from "Enzed", he having previously dealt with Mr. Lynton McIntyre. He obtained the number from the 1982 Perth White Pages and that, of course, was the number of C & S. There is conflicting evidence from Mr. Gould, Mrs. Curry the telephonist with C & S, and Mr. Addison of C & 8S. Mr. Gould . changed his mind in the course of his evidence as to more than one matter relating to this telephone call. I do not suggest for a moment that Mr. Gould was other than truthful but his evidence cannot be accepted as reliable. The Ingersoll-Rand Incident In mid 1983 a Mr. Westaway, an employee of Ingersoll-Rand, wanted to speak to Mr. Pinkerton and telephoned what was infact the C & S telephone number. The person who answered the phone at C & S declined to indicate that Mr. Pinkerton was not with them and declined to give the caller his telephone number. The Second Sadlier's Incident Mrs. Curry, in the course of her monthly reconciliation ef C & S§ accounts, noticed a discrepancy in the Sadlier's Transport account. Her reconciliation revealed a surplus of $246. After checking thoroughly she realised that the money did not belong to C &§& and telephoned Sadliers. The money was refunded to Sadliers. It had been previously banked on 28 July 32. 1983 and appears to have been payment by Sadlier's intended for - Contender which had done work for it. The Third Bunnings Incident In about August 1983 Mr. Hornby of Bunnings telephoned what he thought was the "Enzed" number. He looked it up from the. 1982 Perth White Pages. I am satisfied that whoever answered the phone at C & S said to Mr. Hornby something to the effect: "Good afternoon, C & S Hydraulics". He realised from whatever he was told that he was not speaking to ""Enzed". Mr. Trainor's Incident In August 1983 Mr. C.W. Trainor looked up the 1982 Perth White Pages to find the "Enzed" telephone number because he wanted to speak with Mr. Pinkerton on a personal matter. He telephoned the number, aman answered and said "Enzed" and nothing else. He asked for Mr. Pinkerton but the man said "Sorry - Dave doesn't work here any more." Mr. Trainor said: "That's a little unusual, because Dave and I have been such good friends for such a long time that I would expect he would have told me if he was thinking of leaving." The man said: "Well, here today and gone tomorrow." In due course the man to whom Mr. Trainor spoke gave him the telephone number of Mr. Pinkerton. The Chamberlain John Deere Purchase Order Incident The Chamberlain John Deere company employed both C & § 33. and Contender for hydraulic servicing and found both of them equally satisfactory. In August 1983 Chamberlain John Deere, under a mistake made in its own purchasing department, sent to C & S a purchase order verifying a hydraulic service job in fact done by Contender. After checking, C & S realised that a mistake had been made and in due course steps were taken to rectify it. The Sigma Plumbing Incident Mr. Martin Watson of Sigma Plumbing obtained the ""Enzed" telephone number from the 1982 Perth White Pages and called it. He had previously dealt with "Enzed". I am not satisfied that there was any conduct on the part of the person to whom Mr. Watson spoke (probably Mrs. Curry, the telephonist of C & S) representing that the telephone number was that of "Enzed". Indeed, I think it likely that Mrs. Curry answered the phone and said "Hydraulic Services" or words to that effect. Mr. Watson also gave some evidence of an earlier incident occurring in about May-June 1983. That evidence was apparently intended to suggest gome confusion in Mr. Watson's mind between C & S and Enzed, but, in my opinion, no case has been made out at all from his vague and general evidence given with respect to this alleged incident. I do not find that Mr. Watson was other than truthful; but his evidence cannot in my opinion be relied upon to found a suggestion that C & 5 represented that it was in fact "Enzed" when Mr. Watson telephoned what he thought was the "Enzed" telephone number. I have not referred to every incident relied on by the \e 34. applicants as constituting evidence of misleading or deceptive conduct but have referred to the principal incidents. Nor have I adopted the course of setting out chapter and verse of the evidence of each witness bearing on each incident. I see no need to do so. TI have carefully considered all the evidence of the various witnesses bearing on these matters and reached the conclusions referred to above. I am satisfied that during the period from the commencement by Contender of its business (though not entirely Clear from the evidence this appears to be about September 1982) until about the end of August 1983 (shortly after the giving of the undertakings to the Court on 24 August 1983) there were occasions on which customers of Contender or other members of the public thought they were speaking to or dealing with employees or van drivers of Contender whereas in truth they were speaking to or dealing with employees of C & S. In at least one instance the confusion resulted in C & S obtaining a small order intended for Contender with the consequent loss to Contender of that order. The 1982 Perth White Pages seems to have been the major source of this confusion; but for reasons I shall mention later, it is my view that Mr. Smith should have taken steps before the end of May 1982 to ensure that the 1982 White Pages, which appeared in August-September 1982, did not contain reference to "Enzed Hydraulic Hose & Coupling Service" with his own business address and telephone number. Therefore, in my opinion the respondents were responsible for some of the confusion that arose. I shall deal in a moment with the question whether this 35. conduct constitutes misleading and deceptive conduct under s. 52 er contravenes para. 53(d) of the Trade Practices Act. I note in this connection that there is, of course, a logical distinction between a person being confused by the conduct of another on the one hand and a person being misled or deceived by another's conduct, a distinction which in practice may be real. A more difficult question is to determine the extent to which this confusion existed in the market place for hoses and hydraulic couplings. Counsel for the applicants submitted that I should infer from the evidence led on behalf of the applicants that it was, in effect, "the tip of an iceberg" and that there must have been large numbers of instances of confusion similar to those the subject of the evidence before me. I reject this submission. On the other hand I do not think that the proper analysis of the evidence is to rely merely on the specific instances proved. Looked at over the period September 1982 to August 1983, I am satisfied that the conduct of Wynthea resulted in a not insubstantial number of occasions of confusion in the minds of members of the public which led some of them to think that C & S and "Enzed" were one and the same business and led others, conscious of the fact that "Enzed" and C &S were different businesses, to think that upon dealing with C & S they were dealing with "Enzed". ~~ The evidence of the consumer witnesses was relevant to the issue of misleading deceptive conduct (also to passing off), but, as has been said more than once by the courts, the determination of these questions ultimately rests with the Court 36. and its assessment of the evidence as a whole. The evidence of "the consumer witnesses also 'bears on the question of damages. Witnesses and the case generaily The hearing of this case occupied seventeen days, mostly in the examination of witnesses. Twenty-six witnesses were called, of whom eleven were what are sometimes called consumer witnesses. The principal witnesses were not, however, the consumer witnesses; but they included Mr. Mooney, the managing director of the first and second applicants; Mr. Falloon, the managing director of the third and fourth applicants and Mr. Smith who, through his family company Bendara, controls fifty percent of Wynthea. Most of the material facts were not in issue, but of those that were, most were not the subject of sharply divergent views so much as different degrees of emphasis. This is not a case to be decided by accepting some witnesses and rejecting others on the grounds that they are untruthful. The difference between the witnesses reflect various shades of grey rather than black and white. Por example, Mr. Falloon was aman of firm disposition and strong views. Mr. 'Smith_believed that he was primarily responsible for establishing any reputation in the name "Enzed" and in Enzed products in Western Australia and that any relevant goodwill had been built up essentially by his ow efforts. I think both Mr. Falloon and Mr. Smith were generally truthful witnesses. They gave evidence which I accept on some matters but reject on others; not because I think that they were 37. untruthful but because I found on some matters the evidence of - one was more reliable than the evidence of the other. When assessing the evidence of witnesses I have considered their demeanour, contemporaneous documents where available and the probabilities of the relevant occasion. What is regrettable is that this case was fought at all,. after the undertakings were given by the respondents to the Court on 24 August 1983. For practical purposes the giving of those undertakings should have created the climate in which common sense would prevail and the case be resolved outside the courtroom. But the feelings of the parties obviously ran high; hence the impasse between them, seventeen days of hearing and large legal costs. Section 52 and Paragraph 53(d) of the Trade Practice Act Mr. Smith's company, Bendara, became the Western Australian distributor of Enzed products on the terms set out in the letter to Mr. Smith of 13 March 1980. Notwithstanding the reference in the note of acknowledgement signed by Mr. Smith at the foot of the letter which refers to "the above and other conditions" the evidence is too vague to admit a positive conclusion as to what were those other conditions, if any. The parties to the contract were Mr. Smith and, upon its incorporation, Bendara, on the one hand and Enzed Sydney on the other hand. Enzed Sydney did not contract with Mr. Smith as agent for any principal whether the second applicant or anybody 38. else. Enzed Sydney had the sole distribution rights of Enzed products within Australia umder its agreement with the second respondent of 10 September 1979. Mr. Smith was, however, introduced to Enzed Sydney by Mr. Mooney. Mr. Badham was present at the initial discussions in March 1980 when the letter of 13 March 1980 was handed to Mr. Smith. Mr. Badham came across to Perth shortly after the commencement of business by Bendara in: Western Australia and provided assistance to it. These and other considerations lead me to conclude that Mr. Smith knew that Enzed Sydney was the Australian distributor of Enzed products and knew, in general terms, of the relationship between Enzed Sydney and the Enzed group of companies in New Zealand, though not of the specific terms embodied in the agreement of 10 September 1979. Enzed Sydney never formally terminated the appointment of Mr. Smith (I use this term to include Bendara and Wynthea also) as the Western Australian distributor; but in my opinion that relationship must be taken to have been terminated not later than September 1981. Although the evidence on the question is sparse, this is the sensible conclusion to draw from all the relevant evidence. By September 1981 Mr. Smith had ceased buying Enzed product from Enzed Sydney, his last purchase having been made in April 1981. He was dissatisfied with the quality of the product purchased from Enzed Sydney and was in dispute with it on this question. He knew, at the latest when Mr. Falloon spoke to him in September 1981, about the general nature of the relationship between the Enzed companies in New Zealand and the third and fourth applicants including the fact that the third applicant now had the Australia wide distribution rights of Enzed 39. product and that Enzed Sydney was confined to distribution of Enzed products in New South Wales. Mr. Smith must have realised by then that his rights as Western Australian distributor, previously granted to him by Enzed Sydney, had ceased because Enzed Sydney no longer had the right to deal with him as the Australian distributor of Enzed products. All that remained contractually between Mr. Smith and Enzed Sydney was the tidying up of extant,loose ends. Mr. Falloon's telex of 21 October 1981 did not technically terminate Mr. Smith's rights as Western Australian distributor because those rights had ceased before then. But the October telex must be taken as confirming to Mr. Smith that the then Australian distributor of the Enzed group namely, the third applicant, denied any right of Mr. Smith to thereafter represent himself or his company as the Western Australian distributor for Enzed products. It is true that Mr. Smith made at least one purchase of product from the third applicant and made a warranty claim upon it in respect of goods purchased previously from Enzed Sydney, but I am not satisfied that this estabished a relationship for distribution of Enzed products in Western Australia between Mr. Smith and the third applicant or that there was some adoption by the third applicant of the earlier agreement between Enzed Sydney and Mr. Smith. Mr. Smith's right to use the name Enzed, the name logo and the drawing logo arose from his being appointed by contract with Enzed Sydney the Western Australian distributor of Enzed products. He established the business in Western Australia known ' 40. as "Enzed Hydraulic Hose & Coupling Service" but once his appointment as distributor was terminated in my view, his right to use that business name and the logos ceased. A term must be imported into Mr. Smith's contract with Enzed Sydney, to give it business efficacy, that his entitlement to use the name Enzed, the name logo and the drawing logo and otherwise to represent his business as being affiliated with or associated with the Enzed group subsisted only so long as did his distributorship. once the contract was terminated, his right to their use died. Was Wynthea's subsequent conduct misleading or deceptive within the meaning of s. 52 or did it represent that it had a sponsorship, approval or affiliaiton it did not have within the meaning of para. 53(d)? In my opinion, Wynthea's conduct contravened both provisions. The misleading and deceptive conduct was in Wynthea's continuing to carry on business under the name "Enzed Hydraulic Hose & Coupling Service", and by continuing to use the two logos, the vans, documents, promotional and other literature all styled either as "Enzed" or as being in some way associated or affiliated with it and as representing that its business was that of "Enzed". Also Mr. Smith should have taken steps to remove the telephone entry "Enzed Hydraulic Hose & Coupling Service" before the end of May 1981 (which was the deadline for inserting material for the 1982 Perth White Pages. After September 1981, at the latest, Mr. Smith had no right to carry on business as "Enzed Hydraulic Hose & Coupling Service". It was certainly open to him to sell Enzed products if he could obtain them and to state that he was a seller of then, but he was not entitled to~assert that he continued to be in 41. effect the "Enzed" Western Australian distributor. The next Matter to consider is the August 1982 agreement. It is a curious document because it does not purport to settle the whole dispute between the parties. It must in my view be taken as dealing with the matters therein mentioned and no others. Mr. Smith agreed not to use the name "Enzed" and to cease carrying on business under the name "Enzed Hydraulic Hose & Coupling Service" and to cease using the name logo; and he agreed to change the relevant entry in the Yellow Pages. Doubtless no provision was made in the August agreement about the 1982 White Pages because it was then too late for any change to be made to it, although curiously enough no reference was made to Mr. Smith being obliged to take the necessary steps to withdraw the entry for the 1983 White Pages. I reject the argument of the applicants that the agreement extended to require Mr. Smith not to use the drawing logo in future. Likewise, I reject the argument of the respondents that anything not dealt with in specific terms by the agreement assumes that Mr. Smith was in effect given a licence to carry on his business in a manner which otherwise would constitute a violation of the third applicant's rights. Mr. Smith complied with the August agreement. Thereafter he continued to use the drawing logo in his business; but this ceased after the giving of the undertakings to the Court on 24 August 1983, very soon after the commencement of these proceedings. 42. In the result I am satisfied that between September 1981 -and 24 August 1983 Wynthea engaged in conduct which contravened s. 52 and para. 53(d). Whether damages have been sustained by the applicants by reason of this conduct is a different question to which I will turn later. There is no evidence of any offending conduct by Wynthea after the undertakings referred to above were given to the Court on 24 August 1983. But, at the time the proceedings were commenced, Wynthea was acting in contravention of s. 52 and para. 53(d); and the undertakings given to the Court on 24 August 1983 still leave open the possibility of conduct being committed by Wynthea which would constitute a contravention of either statutory provision. It is essentially the public interest that I am considering and not merely the interests of the applicants. In my opinion it is in the public interest that injunctions be granted to restrain Wynthea from engaging in misleading or deceptive conduct in its business of selling and servicing hydraulic hoses and couplings and associated goods by representing that its business is associated with the business of the applicants or any of then. In my opinion, injunctive relief should also be granted against Mr. Smith as a person involved in the contraventions. He has engaged in the conduct mentioned in paragraphs 80(1)(f) and (h) of the Trade Practices Act. Although Mr. Cooper is a 43. Girector of Wynthea and plays some role in its business' the evidence is sparse and general as to his involvement in any of the alleged contraventions. I do not think a case has been made out for injunctive relief against him, so I decline to grant it. Passing off The applicants also allege passing off. The matters which must be established to prove passing off are well known and need not be repeated by me. It is sufficient to refer to the frequently cited judgment of Lord Diplock in Erven Warnink Besloten Vennootsehas v. Townsend & Sons (Hull) (1979) A.C. 731 (at p. 742). It is common ground in this case that the claim for passing off does not raise wider issues than the claim based on s. 52 and para. 53(d). In all the circumstances it is my view that the claim based on passing off raises what is essentially an academic question so I do not propose to consider it. Copyright I turn to the question whether the second applicant is entitled 'to relief against the respondents in respect of the second applicant's claim that they have infringed its copyright in the drawing logo. Lloyd Litchfield Anderson designed the drawing logo in New Zealand. He is a resident of New Zealand. He was commissioned to make the drawing by the second applicant which paid him for his work. There is no doubt that Mr. Anderson 44, is the author of the work. In my opinion it is an artistic work: see Copyright Act 1968 (Cth.) and Copyright Act 1962 (N.Z.) s. 2; see also Cuisenaire v. Reed £19631 V.R. 719 and George Hensher Limited v. Restawile Upholstery (Lanes) Pty. Limited [19731 3 W.L.R. 453. Under New Zealand law the second applicant is the owner. of the copyright in the drawing logo because it commissioned the drawing and paid money for it: sub-s. 9(3) of the New Zealand Copyright Act. S. 115 of the Australian Copyright Act entitles the owner of a copyright to bring an action for an infringement of copyright. Para. 184 (1)(a) of the Australian Act provides "(1) Subject to this section, the regulations may make provision applying any of the provisions of this Act specified in the regulations, in relation to a country (other than Australia) so specified, in any one or more of the following ways:- (a) So that the provisions apply in relation to ... artistic works ... first published ... in that country in like manner as those provisions apply in relation to eee artistic works ... first published ... in Australia; iy coe S. 249 confers the usual regulation making power upon the Governor-General. The Copyright (International Protection) Requlations provide, so far as relevant, as follows:~ 4s. "(4)(1) Subject to these Regulations, the provisions of the Act [the Australian Act] apply in relation to... artistic works ... first published ... in a country that constitutes ... the territory of a Country specified in Part 1... of the First Schedule to these Regulations in like manner as those provisions apply in relation ... artistic works ... first published ... in Australia." New Zealand is a country specified in Part 1 of the Pirst Schedule to those Regulations. The Copyright (International Protection) Regulations give the same protection to artistic and other works first published in Convention countries as would be given to those works if they were made, or first published, in Australia. This protection is based on the principle of reciprocity. In my opinion the Copyright (international Protection) Requlations operate to entitle the second applicant to sue under s. 115 of the Australian Act, as owner of the copyright, for its infringement. One turns to New Zealand law to determine whether the second applicant is the owner of the copyright: see in particular s. 9 of the New Zealand Copyright Act. In my opinion Wynthea has infringed the copyright of the second applicant in the drawing logo. Notwithstanding the undertakings given to the Court on 24 August 1983 an injunction should be granted to restrain Wynthea from any further infringement. Damages The applicants' case for damages is based on the poor 46. performance of Contender' s business since it commenced operations "as the Western Australian distributor of Enzed products in September 1982. The franchise agreement of 15 July 1982 appointed Contender as franchisee for Western Australia. It was envisaged that Contender would commence trading in August 1982 but, although there is some room for doubt about the matter, on the evidence the commencing date of the business was probably: September 1982. The applicants took as their starting point for the damages claim (in relation to all causes of action although exemplary damages are also claimed, and additional damages are claimed in relation to the alleged infringement of copyright) a budget prepared before Contender commenced business, as amended by a supplementary budget prepared in October 1982. The applicants assert that the budget as amended is a reasonably accurate forecast of anticipated sales and profits of Contender. As its actual sales were substantially lower, the difference represents the base from which any computation of loss or damage flows. In fact, Contender has carried on business at a loss. As across check the applicants contend that it is permissible to compare the trading figures of Contender after September 1983 (i.e. after the undertakings had been given on 24 August 1983 and after the Perth White Pages for 1983 were in general circulation) with earlier sales and the result is a considerable increase in dealer sales (i.e. sales by dealers appointed by Contender) and vans sales (i.e. sales made by the owners of mobile vans). 47. Prior to entering into the franchise agreement in July - 1982 CAPS made its own investigations and analyses. It did not commission any independent market research, but relied essentially on information gathered by Mr. Quinlan or supplied by Enzed companies in New Zealand. The directors of CAPS, Mr. Robert McIntyre and Mr. Quinlan, each played a role in the preparation of material which resulted in the initial budget for the prospective franchise of CAPS. It is convenient to consider Mr. Quinlan's role first. He did four main things. First, he calculated the estimated market share that CAPS could expect to enjoy in Western Australia. This calculation was reduced to writing. The second applicant had been told by a company known as International Franchising, which it had commissioned to analyse the Australian hydraulics market, that the total national market in Australia for retail sales and services of hydraulic hoses and fittings was approximately $50m per annum. Mr. Quinlan assumed that the Western Australian share of that market was 8%, i.e. S4m. The 8% figure was obtained from Mr. Quinlan's general knowledge and experience in the engineering industry. He had no direct experience previously with the hydraulic hoses and fittings market. Mr. Quinlan further broke down that 8% figure to obtain the total value of various regions within Western Australia, those regions coinciding with the areas that it was expected the third applicant would agree to sub-franchise. Upon information supplied to him by Mr. Lean, an employee of the third applicant, Mr. Quinlan assumed that each 48. sub-franchisee in Western Australia could expect to collect $250,000 per annum in sales revenue. When this estimate was multiplied by the figure 7, being the number of expected sub-franchisees, it represented 7/16 of the total hydraulics market for Western Australia. The view I have formed from the evidence as a whole is that this estimate of 7/16 is unrealistically high. Indeed, Mr. Quinlan agreed an cross-examination that the figure was high and that a second estimate made by him of 35% market share was also high, but he maintained that it was possible to obtain a 20% share within the first twelve months of trading. Second, Mr. Quinlan visited various consumers of hydraulic products and sought information about the products they bought and used. He visited two large volume users and a number of small volume users. I treat the information given to him by those consumers with considerable reservation because most of the information was in the form of verbal estimates of a general character of purchasing needs and turnovers. Statistical information of a specific nature was not obtained by hin. Third, at the time these discussions were taking place with a view to CAPS being a prospective franchisee, there were fourteen recognised competitors in the Western Australian hydraulics market, although it seems that only two, namely Wigmores and Mr. Smith's business, were equipped with mobile vans and therefore had facilities for carrying out repairs on customers' premises. Of the fourteen competitors Mr. Quinlan visited five or six personally and inspected their marketing, 49. stocking and "presentation" techniques for the purpose of gleaning as much practical information as possible, to better equip CAPS in assessing the potential market. He received some figures from one of the competitors namely, Frederick Duffields. I treat this evidence with caution because whatever information (and there was little evidence of what it was) Mr. Quinlan obtained, he obtained from prospective competitors. Fourth, Mr. Quinlan got in touch with two existing franchisees, a Mr. Wegenaar of Sydney and a Mr. Ross Popplewell in Dandenong, Victoria, both of whom had only just commenced to act as Enzed franchisees. These discussions related mainly to the acceptability of the Enzed product in the market place and to the process of establishing oneself as a franchisee. Again the evidence suggests that what was obtained from this source by Mr. Quinlan was of a very general nature. The other director of CAPS, Mr. Robert McIntyre, participated in the pre-franchise negotiations, but his participation is limited to discussing the matter generally with Mr. Wegenaar, having discussions with Mr. Lean and travelling to New Zealand to discuss the prospective franchise with Enzed people there. Whilst in New Zealand Mr. McIntyre had discussions of a financial nature which dealt mainly with capital requirements and how the franchise was to be "sourced". He also had discussions about budgets. In one discussion a "two year budgetary profit" 50. was discussed with Messrs. McIntyre, Mooney, Falloon and Harvey, the last mentioned person being the second applicant's financial director. At this meeting Mr. McIntyre had the benefit of a written "consolidation" of Mr. Quinlan's research and investigations. The result of the talks was that on 13 June 1982 a. document headed "Proposed Franchise - Perth" was produced which in effect was a statement of what CAPS and Enzed sought to achieve in the W.A. franchise. Mr. McIntyre said in evidence that he believed the statement to be realistic and achievable. I do not accept this document as a reliable basis for the assessment of the damages claimed. None of the four people present at the budget discussions, including Mr. McIntyre, had any experience in the Western Australian hydraulics market notwithstanding that, according to Mr. McIntyre, the management of the second applicant had available to it figures obtained from International Harvester and others who had dealt in the market. As scon as Contender commenced to trade in September 1982, the directors were disappointed in its performance as franchisee. Mr. McIntyre gave evidence that "business was extremely slow in getting going and we have been very disappointed in the result". This attitude is confirmed by minutes of meetings of directors of Contender. A revised budget was prepared in October 1982, although there is some evidence that it was prepared earlier. The original figures were prepared and provided by Mr. Quinlan. The 51. amended budget was not prepared until some trading experience of - Contender had established that it was obvious that the original budget figures would not be achieved. There are various differences between the original budget and the amended budget, the principal differences being four in number, namely:- 1. The amended budget is for a ten month period only, namely from August 1982 to July 1983 instead of the period of two years in the original budget; 20 There was no provision for a second service van in the amended, budget, thus reducing expected sales. Contender had decided to delay the start of a second mobile van for some months. 3. There was no provision for sales in the amended budget through the "dealer network". When Contender took on the franchise it expected to take over the second applicant's supply of hydraulic preducts to the International Harvester chain. The arrangement had been that International Harvester bought in bulk 'direct from the manufacturer at a considerable discount, large —— stocks of various products which its dealers required, including hydraulic hoses and fittings from the second applicant. While the profit margin on these sales to the second applicant was low, the turnover was considerable. It was expected that Contender would perform far better than the second applicant in developing this market. However, towards the end of 1982 International 52. Harvester experienced financial difficulties and a receiver was appointed.- The receiver changed the method of International Harvester's business and as a result, Contender failed to secure that company's market and it's "dealer network". As it had been expected that this source would account for some $100,000 worth of sales per annum, it's loss was taken into account by Mr. Quinlan in reducing the expected revenue from sales in preparing _ the amended budget. 4. A significant reduction was made in the amended budget to the level of expected sales in the "original equipment market" because Contender found that its prices were uncompetitive in that area. Large companies, such as Chamberlain John-Deere, manufacture plant and equipment (e.g. tractors) and spare parts for that equipment. The market for replacement parts for that equipment is called the "original equipment market". Mr. Quinlan gave evidence that the amended budget related quite closely to the original budget provided an adjustment for the above four considerations was made, although he denied that his sales figures in the amended budget were based on the original budget. After the basic material was prepared by Mr. Quinlan for the amended budget, it was sent to Mr. Long a partner of Messrs. Long & Rigby, Chartered Accountants and a director of Contender, so that it may be expressed in proper accounting forn. It was returned to Contender by Mr. Long under cover of a letter dated 23 September 1982. Interestingly enough that letter referred to 53. Mr. Quinian's original figures as "guestimates". Both Mr. McIntyre and Mr. Quinlan maintained that the amended budget was the best that could be produced on the information available to them at the time. The difference between actual sales made by Contender and those the subject of the amended budget was considerable. Iam not satisfied that either the original budget or that budget as amended provides a reliable base for the determination of any damage suffered by Contender by reason of the conduct of the respondents. Doubtless both documents were prepared in good faith as useful business tools to plot the prospective success of Contender's business. But I know tco little about the reliability of the base data on which both the initial budget and the amended budget are founded; and I have the impression that the initial budget and the amended budget were both unduly optimistic assessments of Contender''s prospects as a franchisee. Indeed, the initial budget was in my view extremely optimistic. Although the people involved in the preparation of the initial budget in New Zealand were experienced in relation to the New Zealand market they had no direct knowledge of the Western Australian hydraulics market. Nor did Mr. Quinlan and Mr. Robert McIntyre have any real or acceptable experience in the Western Australian hydraulics industry. I note with interest that the minutes of the meeting of Directors of Contender held on 17 November 1982 record the following:- 54. "The Chairman CMr Quinlan] advised that he had reported in writing to Melbourne on the difficulties of penetrating the W.A. market, how the initial budgets were unrealistic in relation to the W.A. market". Also Mr. Robert McIntyre gave evidence that he and Mr. Quinlan thought that perhaps the Enzed people "Had not really been terribly - had been a bit optimistic in assisting us when they were putting together the sales target for the first year." Ido not accept the budget and the amended budget as laying reliable foundation for the damages claimed. I shall proceed nevertheless to consider the claim for damages on the assumption that the budget and the amended budget do provide reliable bases for the calculation of the claim for damages because there was considerable evidence and full submissions about the activities of Contender and the problems it experienced in the market place, many of which it sought to lay at the door of the respondents. From the commencement of its trading activities, Contender faired poorly. Figures for September and the first half of October 1982 were "50% behind the initial budget figures". The minutes of the meeting of directors of Contender held on 22 October 1982 state that the meeting requested the Chairman (Mr. Quinlan) to advise the third applicant of the difficulties Contender was experiencing and to "show the Chairman's concern with the slow take-off of 55. the company's product. It was apparent that the product would not be the bonanza that it had originally been promoted as by Enzed ..." Iam satisfied that the poor performance by Contender was due to a number of matters, including the following which I do not list in any particular order of priority:- (a) The Western Australian market for hydraulic hoses, couplings and fittings is highly competitive. Contender had some 14 competitors, principally Duffields and Ryco, although special competition came from C & S and Wigmores because they were the only other two organisations that employed mobile service vans; (b) The Enzed pricing policy prevented Contender from granting any, or any substantial, discounts and there were irregularities in the Enzed price lists. Some products were priced too high and others too low when compared with the prices of competitors. Not only were the list prices of competitors frequently lower than the Enzed prices but competitors were able to grant further discounts. This was obviously a severe disadvantage to Contender in a highly competitive market. (e) Contender was not efficiently managed. Its management did not have a proper understanding of the Enzed products and the management structure was less than efficient. There was a lack of support by management for the operators of the. mobile units in the field. (d) There was a rather unhappy working environment in 56. Contender, especially in the period after June 1983. This seems to have been accentuated by the fact that a director, Mr. Robert Mcintyre, and his brother, Mr. Lynton McIntyre, were both involved in the affairs of Contender, Mr. Lynton McIntyre being the operator of a mobile service van. This led to complaints being made by at least one of the van operators, Mr. Baldrey, that he was being unfairly discriminated against because he, thought that customers who should have been allocated to hin by virtue of their location in his area of north Perth, were in fact being allocated by Mr. Lynton McIntyre to himself in another area. I say nothing about whether these allegations are true or not; but what is important is that Mr. Baldrey thought they were true and this hardly sets the stage for a congenial working arrangement. (e) Contender did not obtain any benefit from the International Harvester chain as expected when the original budget was prepared for the reason mentioned by me earlier. This was obviously a considerable disappointment to Contender and affected its profitability adversely. (f) Original equipment manufacturers (e.g. Chamberlain John-Deere) tended to supply customers with spare parts (such as hydraulic hoses, couplings and fittings) for the original equipment supplied by them, thus effectively denying a market to Contender. (g) The market for hydraulic hoses, couplings and fittings was not buoyant during much of the period after September 1982. 57. (h) Competition provided by C & S probably had some adverse - affect on Contender's business: The problem in this case is that it is impossible to state the extent to which the activities of the respondents caused loss or damage to Contender's business. The matters which I have mentioned as having some bearing upon the poor performance of Contender's business are not capable of being treated piecemeal. They must be viewed together. I accept, that C & S caused some loss or damage to Contender; but it is impossible to calculate the amount of that loss or, indeed, the basis on which it can be determined or measured. Any attempt to determine that loss would be sheer speculation. Iam not satisfied, however, that any substantial loss or damage was suffered by Contender by reason of the conduct of C & S. It must be remembered also that Mr. Baldrey gave evidence, in effect, that C&S did not have a particularly adverse effect upon Contenter's business, as conducted by him. Also, Mr. Robert McIntyre, when asked if he could point to specific instances where the alleged unfair competition from C & S resulted in loss of business to Contender (except for one incident involving less than $100 worth of goods ordered by Bunnings), said: "Off the top of my head, no. They are the only instances that are before us at this stage, although we would believe -we only know of a few instances." The minutes of meetings of directors of Contender are also significant in this respect. For example the minutes of 22 October 1982 refer at more than one point to the difficulties 58. facing Contender in its business. One entry in the minutes - states: "The Chairman, (Mr. Quinlan] expressed concern for the ability of the company to tender competitively against Duffield who appeared to be the largest competitors in W.A. The situation has been improved this week when Melbourne sent a revised price list for all products which are a direct result of the pricing difficulties Enzed franchisees are experiencing in Australia. In order to assist the company Enzed Melbourne had arranged for Bill Falloon to visit Western Australia in a fortnight to assist in the promotion of the company's products. Bob McIntyre advised the meeting that his recent trip to the south-west had not resulted in any orders and there appeared to be a considerable reluctance of merchandisers in that area to stock any of the company's products ... it appeared that the company would be facing severe competition to establish itself in the field and that other suppliers were prepared to give discounts of up to 50% on list price..." I am not satisfied therefore that, even if it were legitimate to regard the amended budget of Contender as a reliable base from which to determine loss or damage resulting from the activities of the respondents, it could be said with any confidence that any such loss or damage is attributable to the conduct of the respondents. The reality is that Contender's poor performance is essentially due to causes other than any competition presented by the respondents. In addition, it is impossible to say to what extent any diminution of Contender's business due to the competition of C & S can be further severed into legitimate competition and competition attributable to the unfair trade practices of C & S. It 1s umnecessary therefore for me to consider the 59. principles on which damages should be assessed in a case of this t nature. The applicants' claim for damages must fail, not only in relation to the Trade Practices Act, but also as to passing off and infringement of copyright, including the claim for exemplary damages and for additional damages uner s.._115 of the Copyright Act. In the result the applicants have succeeded in their claim for injunctive relief against the respondents based on contraventions of s. 52 and para. 53 (a) of the Trade Practices Act and for breach of copyright. But they have failed in their claim for damages. Application for Judgment om Admissions in the pleadings that Statement of Claim be Struck Out On the first day of the hearing counsel for the respondents submitted that judgment should be entered in favour of the respondents based on admissions in the pleadings or alternatively, that the statement of claim should be struck out in so far as it was based on alleged breach of copyright because no reasonable cause of action existed in relation to breach of copyright. I heard argument on the matter and refused the application, but said that I would give my reasons for judgment in due course. I do not propose to set out my reasons in great detail for taking the course I did. The pleadings speak for themselves. I was satisfied that any admissions on the pleadings 60. did not entitle the respondents to judgment on any cause of - action alleged in the amended statement of claim. The task confronting a party who--seeks to have a statement of claim struck out is not easy. The relevant principles are well known and I need not refer to then. They appear sufficiently from Dey v. Victorian Railways Commissioners (1949) 78 C.L.R. 62 (at ip. 91); General Steel Industries Inc. v. Commissioner for Railways (NSW) (1964) 112 C.L.R. 125; Hanimex Pty. Ltd. v. Kodak (Australasia) Pty. Ltd. [£1982] A.T.P.R. 40-287; and Universal Telecasters (Queensland) Ltd. v. Ainsworth Consolidated Industries Ltd. £1983] A.T.P.R. 40 - 384 (at pp. 44, 525-6). This is not a case where it was obvious from the pleadings that the claim based on breach of copyright must fail. Indeed, it was plainly a case where the statement of claim based on the allegation of breach of copyright should not have been struck out, but allowed to proceed to hearing on the evidence when all the relevant matters could be looked at, as indeed proved to be the case. Costs The hearing of the case occupied many days. Technically, I suppose, the correct order for costs would be to award costs against the respondents so far as the injunctive relief is concerned and to order costs against the applicants on the question of damages. That would, however, present an 6l. impossible task to the taxing officer and would only result in a great deal-of time and money being spent on this exercise which, of necessity, would be essentially arbitrary and ultimately of no benefit to the parties. Some of the evidence related only to injunctive relief and other evidence only to damages; but a great deal of the evidence concerned both questions and it is impossible to separate then. This is not a case where damages were treated as being merely ancillary to injunctive relief. The parties attached considerable importance to the question of damages in its own right. I have carefully considered the question of costs and, in my opinion, the proper result is that each party should pay its own costs of the whole proceedings so that there will be no order as to costs. I was asked by counsel for the applicants to make a special order for costs relating to the calling of Mr. Anderson, the author of the copyright in the drawing Logo. He resides in New Zealand and travelled to Perth at the request of the applicants especially for the purpose of giving evidence in this case. His evidence lasted approximately 30 minutes. His evidence in chief was directed to a smail, but not unimportant, aspect of the case for the second applicant based on infringement of copyright. No request was made on behalf of the applicants for leave to take his evidence by affidavit. If such a request had been made I can see no reason why I would not have granted it; and it would then have been necessary for the respondents to decide whether they wished to run the Fisk of bearing the burden 62. of paying Mr. Anderson's costs and expenses of attendance by requiring him to attend for cross-examination. Although it is not necessary for me to make any special order for costs because in ny view each party should pay its own costs, if there had been an order for costs in favour of the applicants I would have ordered that the applicants bear, in any event, the costs and expenses of and relating to the attendance of Mr. Anderson. The orders of the Court are as follows:- 1. That the first respondent by itself its servants and agents be restrained from engaging in conduct in trade or commerce that is misleading or deceptive or is likely to mislead or deceive by representing that its business is the business of the fifth applicant or the third applicant. Ze That the first respondent by itself its servants and agents be restrained in connection with the supply of goods or services from representing that its business is associated with or affiliated with or has the sponsorship or approval of the applicants or any of them. 3. That the second respondent, Alexander Gregory Smith, be restrained from aiding, abetting, counselling or procuring the first respondent in any conduct forbidden by orders 1. and 2. "above and from being in any way directly or indirectly knowingly concerned in or a party to any such conduct. 4. That the first respondent by itself its servants and oe te Se nt ee Re ete et ss me ewer - - Hn wad . agents be restrained from infringing the second applicant's copyright in the design or logo comprising a stylised representation of eight hydraulic couplings arranged particular configuration and appearing in Exhibit 3 page publishing or causing to be published any design or substantially or colourably similar thereto. 5. That any party be at liberty to apply on three notice to vary any of the foregoing orders. 6. That there be no order as to costs. I certify that this and the sixty-two preceding pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Lockhart. patea: LC Mec 7 ene ee meee + — in a 11 by logo zr of days'