NOT FOR OISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V. No. G 249 of 1987 wee ww GENERAL DIVISION BETWEEN : ACI AUSTRALIA LIMITED Applicant and GLAMOUR GLAZE PTY. LTD. and OTHERS Respondents COURT: NORTHROP J. DATE : 2 OCTOBER 1987 PLACE: MELBOURNE MINUTES OF ORDER THE COURT ORDERS THAT: - l. The interlocutory orders sought be refused. 2. The respondents' costs be reserved. (Settlement and entry of Orders is dealt with in 0.36 of the Rules of Court.) ~ ZOCT 1987 FEDERAL COURT OF AUSTRALIA PRINCIPAL REGISTRY Be, —-- ma Nee or on set te . IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) V. No. G 249 of 1987 ) GENERAL DIVISION ) BETWEEN : ACI AUSTRALIA LIMITED Applicant and GLAMOUR GLAZE PTY. LTD. and OTHERS Respondents COURT: NORTHROP J. DATE : 2 OCTOBER 1987 PLACE: MELBOURNE REASONS FOR JUDGMENT The applicant is seeking an interlocutory injunction restraining the respondent Glamour Glaze Pty. Ltd. from carrying on business or representing that it carries on business under or by reference to the name "Yencken Sandy Glass Industries" or any name, word or words substantially the same or deceptively similar thereto. Variations of that interlocutory injunction are sought as well as consequential orders all applying to Glamour Glaze Pty. Ltd. and the other respondents who are officers of or connected with Glamour Glaze Pty. Ltd.. It must be remembered that these are interlocutory proceedings with the result that the facts have not been fully investigated and no final view has been formed on the facts or the law. vee ~-—$—$—rer The applicant is the major manufacturer of glass products in Australia. Prior to the year 1985, the four major glass distributors and glazing contractors in Australia were Yencken Sandy Glass Industries, fT. & K. Glass Co., Oliver Davey Glass Co. and O'Brien Glass Industries Ltd.. At the present time the applicant controls the largest share of the glass contracting and distribution market in Australia. In particular, the applicant controls T. & K. Glass Co. and Oliver Davey Glass Co.. It carries on the business of glass contracting and distribution under each of those names. The name ""Yencken" has been well known in the Australian wholesale hardware and glass industries for a very long time ~ some 100 years. The name "Yencken" continued to form part of a name used in the business of glass. In 1972, Burns Philp & Co. Ltd. acquired that business which was then trading as "Yencken Glass Industries Ltd." Thereafter, Burns Philp & Co. Ltd. carried on the business of glass distribution and glazing contracting under the name "Yencken Sandy Glass Industries." Burns Philp & Co. Ltd. was registered as carrying on that business under that name in the States of Victoria, New South Wales, Queensland and Western Australia. The position in the other parts of Australia is not clear. mecorierr -w- By an agreement in writing dated 21 October 1985, Burns Philp & Co. Ltd. agreed to sell and the applicant agreed to purchase parts of the business of glass distribution and glazing contracting then being carried on by Burns Philp & Co. Ltd. at premises in Victoria, New South Wales, Queensland and Western Australia. The applicant purchased plant, equipment and stock and the agreement provided for the applicant to have the use of the premises then being used by the business sold. Clause 13 of the agreement is set out:- "13, GOODWILL 13.1 The Vendor and the Purchaser agree that: (a) subject to (b) below and to Clause 15 hereof the goodwill of the Business shall not pass to the Purchaser on completion; (b) the Vendor shall assign any registered business name under which the Vendor carries on the Business in Australia to the Purchaser at the Completion Date." Clause 15 relates to the transfer of trademarks and patents and was not relied upon in the present proceedings. Clause 13, on its face, appears to be somewhat unusual since the applicant did not acquire, pursuant to the agreement, the reputation or goodwill attached to the name "Yencken Sandy Glass Industries." The clause, however, illustrates the reality of the position. On all the material before me, and for the purposes of the interlocutory orders sought, I am satisfied that the applicant had no intention ' . oe Soleil ah on Sete dined oo. wae es to, and in fact did not, carry on the business of glass distribution and glazing contracting under the name "Yencken Sandy Glass Industries" or any name, word or words substantially the same or similar thereto. The applicant intended to and did merge the plant, equipment and stock it had acquired from Burns Philp & Co. Ltd. into that part of its business which it carried on under the name "T. & K. Glass Co." and concentrated its business within its own premises or some oniy of the premises it took under the agreement. The true position is illustrated by a circular letter forwarded by the applicant to some 3,200 former customers of Yencken Sandy Glass Industries in New South Wales, Queensland and Western Australia and some 400-500 former customers in Victoria. The names and addresses of those customers were supplied by Burns Philp & Co. Ltd. pursuant to the terms of the agreement. The form of the circular letter produced at the hearing is dated 28 October 1985 and is on the letterhead "T. & K. Glass Co. (N.S.W.) A Unit of Acmil Industries Pty. Ltd. (Inc. in N.S5.W.)." In his affidavit in support of the interlocutory injunctions, the General Manager of T. & K. Glass Co. deposes as follows:- "T & K Glass has been in business for approximately 24 years. Until April, 1986, it was carried on by Acmil Industries Pty. Ltd., a wholly owned subsidiary of Acmil Limited. ACI acquired control of Acmil Limited in April 1981, and has carried on business under the name 'T & K Glass' since April 1986." ee ee eee a re oe wo pes we ee oes Cn re rs That is consistent with the letterhead appearing on the copy circular letter. At all material times the applicant controlled T. & K. Glass Co.. The circular letter is set out:- "We wish to announce that A.C.I. Australia acquired the business of Yencken Sandy Glass Industries as from the ist November, 1985, and will be merged with T & K Glass Co. We write to your (sic) because we think it is most important that the people and customers involved in any acquisition situation should be considered from the very outset, these are the people, on both sides, wha will make any eventual merger successful. We shall continue jointly, to provide the products listed overleaf and services you are accustomed to receiving, except now, with a much broader range of products to offer and with our experienced combined sales and production personnel, we will be able to continue to offer service, unequalled. We hope that you will continue to purchase your requirements as previously, and we intend to visit you shortly, to further foster our goodwill and intentions to all parties concerned. In the meantime please continue to call any of the sales offices you are familiar with." I do not find it necessary to refer to the evidence given on this issue. Tt is surficient to say that the applicant was merging the activities theretofore being conducted by Burns Philp & Co. Ltd. into its activities conducted under the name "T. & K. Glass" and that in due course the name ""Yencken Sandy Glass Industries" would cease to be used at all. It is true that the applicant continued —ee ere mem nee eee Bee go ere or aay > we nS aa to distribute some pamphlets under the name "Yencken Sandy Glass Industries. A Division of Burns Philp & Company (Incorporated in N.S.W.)." That itself may well constitute misleading or deceptive conduct by the applicant. This distribution however, appears to be action more in the nature of using up existing pamphlets and not in the nature of carrying on the business under the name "Yencken Sandy Glass Industries." Further, it appears to be contrary to clause 13 of the agreement. On the material before me, and for the purposes of interlocutory relief, I am not satisfied that the applicant is carrying on the business of glass distribution and glazing contracting under the name "Yencken Sandy Glass Industries" or any name similar to it. In conformity with clause 13 of the agreement, Burns Philp & Co. Ltd. assigned the registered business name "Yencken Sandy Glass Industries" with respect to Victoria, New South Wales, Queensland and Western Australia to the applicant. As a result, on 1 November 1985, the applicant was registered under the Business Names Act 1962 (Vic) as carrying on business in Victoria under the name "Yencken Sandy Glass Industries." That registration expired by effluxion of time on 14 January 1986. On the material before the Court, I make no finding on whether the registration was allowed to expire by accident or not. For the purposes of these proceedings, I will assume it was by accident. For the purposes of these proceedings, on all the material before me, oe ary iN I am satisfied that since 14 January 1986 the applicant has not carried on business in Victoria under the name "Yencken Sandy Glass Industries." The respondents filed a number of affidavits in opposition to the granting of the interlocutory injunctions. One affidavit was sworn by the respondent Steven Vasiljevich (Snr) ("Vasiljevich"). It is a very frank affidavit. Vasiljevich has been involved in the glass industry for many years, first in Yugoslavia and, since 1958, in Australia, when he commenced to carry on business in Victoria. He and his family carried on business in the glass business in a small way at Gardenvale until 1983. After that date, the business was transferred to premises at Mentone. Vasiljevich knew of the activities of Yencken Sandy Glass Industries, T. & K. Glass Co., Oliver Davey Glass Co. and O'Brien Glass Industries Ltd.. He knew that in 1985, the applicant acquired the business previously carried on by Burns Philp & Co. Ltd. in glass distribution and contract glazing under the name "Yencken Sandy Glass Industries." Thereafter, from observing what was happening with respect to the premises previously occupied by Yencken Sandy Glass Industries and from changes in name to T. & K. Glass Co., he formed the view that the business of Yencken Sandy Glass Industries was no longer being conducted under that name. For the purposes of these interlocutory proceedings, I am satisfied that there was material upon which Vasiljevich reasonably could come to that view. He caused enquiries to be made concerning the = weer registration of the business name "Yencken Sandy Glass Industries." He ascertained that the name was not registered in Victoria and in South Australia. He then took steps to obtain the registration of that name or similar names in Victoria and in South Australia in interests associated with his family. To this end, Glamour Glaze Pty. Ltd., which was incorporated in Victoria on 29 January 1986, registered the business name "Yencken Sandy Glass Industries" in the glass processing industry on 29 January 1987. Since that date, Glamour Glaze Pty. Ltd. has carried on business in Victoria under the name "Yencken Sandy Glass Industries." To that end, it has purchased a mirror silvering machine. The only two other similar machines in Australia are owned by the applicant. In August 1987, it leased premises at Clayton in which to carry on its business. It continues to carry on its business at Mentone under the name Mentone Glass. In his affidavit, Vasiljevic said that the name "Yencken Sandy Glass Industries" does have a commercial value. In explanation of what he did, the following paragraph appears in his affidavit:- "It was my belief that the name Yencken Sandy Glass Industries had acquired a reputation in the industry and that even after a lapse of time when business was not carried on, that some commercial advantage may be derived from a glass distribution and contracting business being carried on under that name. It was my view that the applicant had itself taken a commercial decision to continue its own glass distribution and contracting business under the name, more particularly T & K Glass." wee ee Sree ae pepe rene ee, . " nA ae a een nen nt ee cere tt ae ow ase ' oa t The applicant's claim is founded on s.52 and paragraph 53(d) of the Trade Practices Act 1974 ("the Act"). Counsel for the applicant contended that the applicant had acquired a reputation with respect to the name Yencken Sandy Glass Industries and that its use by Glamour Glaze Pty. Ltd., was, contrary to s.52, misleading or deceptive in that it suggested, wrongly, that Glamour Glaze Pty. Ltd. was connected with the applicant and further that 1ts use was in breach of paragraph 53(d) in that it represented that Glamour Glaze Pty. Ltd. had a sponsorship, approval or an affiliation it does not have. On the material before me, I am not satisfied that the applicant has established a serious question to be tried sufficient for the purpose of an interlocutory injunction insofar as it is based on any reputation or goodwill of the applicant in the name ""Yencken Sandy Glass Industries." That reputation or goodwill was not transferred by Burns Philp & Co. Ltd. to the applicant. The applicant does not carry on business under that name. It is conducting all its glass distributing and glazing contracting business under the business name "T. & kK. Glass Co." It has allowed the registration of the name to expire. The applicant has no reputation or goodwill in the name to protect. In any event, if the question of balance of convenience does arise, it should be considered on the basis that the issue to be tried is not strong in favour of the applicant on this issue; cf. wee eee » 4 an - 10 - Magna Alloys & Research Pty. Ltd. v. Coffey £19813 V.R. 23 at p.28 which, with necessary adaptations, is applied to this case. Counsel for the applicant relied on a second issue, namely the interest of the public generally and particularly the group of people who normally dealt with Yencken Sandy Glass Industries when Burns Philp & Co. Ltd. was carrying on business under that name. Those people included wholesale merchants, retailers, builders, architects and groups of that kind. On this issue, it was contended that the applicant did not need to establish any special interest. He relied on a number of cases such as Warren Halloran v. Henry F. Halloran & Co. Pty. Ltd. (1984) 5 F.C.R. 571. In that case, the applicant did not have a goodwill or reputation which required protection. The respondent had advertised that it was carrying on land developments which had been commenced in 1906 by the applicant's father. The trial Judge held that a reader of the advertisement would understand that he was dealing with a group of companies of substance with a long and successful experience of the purchase of land for investment purposes and that the message was one of stability, long experience, continuity, substance and wise judgment, and that it inferred that the advertiser was the continuation of the enterprise established by the applicant's father; see Sheppard J. at p.579. In that case, the Court held that the conduct of the respondent contravened s.52 and sub-section 53A(1) of the Act and granted interlocutory injunctions. The interest to be protected was that of the eee me ee oo ep ror. - Il + general public. Counsel for the applicant in the present case contended those principles applied to the present case. It is clear that registration, or absence of registration, of a name under State legislation, cannot be determinative of issues arising under the Trade Practices Act; see for example Tec & Tomas (Aust) Pty. Ltd. v. Matsumiya Computer Co. Pty. Ltd. (1984) 53 A.L.R. 167 and Aspar Autobarn Co-operative Society Ltd. v. Dovala Pty. Ltd. (1986) 8 A.T.P.R. 47,935. On the facts of the present case, I am satisfied that a serious question arises to be tried on the second issue but that the claim is not a strong one in favour of the applicant. Accordingly, I turn to consider the question of the balance of convenience. What is said on this issue applies to both issues raised by the applicant on the assumption a serious question arises on the first issue. Under State law in Victoria, Glamour Glaze Pty. Ltd. is entitled to carry on business under the name "Yencken Sandy Glass Industries." Unlike the case of Halloran, Glamour Glaze Pty. Ltd. does not by express words claim that it was carrying on the business previously carried on by Burns Philp & Co. Ltd.. It is accepted that the name "Yencken" is associated with the glass processing business but that cannot prevent that name being used in that type of business for all time. It is true that Glamour Glaze Pty. Ltd. is attempting to gain a commercial benefit from the use wee oe eer mn pei Re er ae 78 "ot ros re ee -12- of the name "Yencken" and its association with the glass industry. It is accepted that members of the public may be confused by a mistaken belief that Glamour Glaze Pty. Ltd. is in some way connected with Burns Philp & Co. Ltd., or possibly, if they are slightly better informed, with the applicant, but that mistaken belief arises from their misunderstanding of the true position; cf. McWilliam's Wines Pty. Ltd. v. McDonald's System of Australia Pty. Ltd. (1980) 49 F.L.R. 455 per Smithers J.. Glamour Glaze Pty. Ltd. is setting out to expand its business. It has expended moneys in the leasing of premises and the purchase of machinery. If an interlocutory injunction is granted it will be affected financially adversely and to a serious extent. It is true that to date it has not made much use of the name for publicity purposes but that fact does not mean it should not use the name. The applicant commenced these proceedings promptly after it discovered what Glamour Glaze Pty. Ltd. was doing. To some extent, it is trying to protect its major share of the market in the glass distribution and glazing contracting business. It has no reputation or goodwill in the name. It cannot use that business name in Victoria. It has not used that business name in Victoria. It does not intend to use that business name in Victoria. There is much to be said for the view that the applicant is seeking the interlocutory injunctions to protect its strong market position in the market against the entry of a small competitor. Having a erm -13- regard to the policy behind other provisions of the Act, it is difficult to see how it is in the public interest to restrain the small competitor. Counsel for the applicant contended that it would be difficult to quantify damages suffered by the applicant if Glamour Glaze Pty. Ltd. is not restrained but ultimately is found to be in contravention of the Act. This highlights the nature of the claim. On this aspect, what is relevant is the effect on the public generally. Any damages suffered by the applicant arise from competition, not from a contravention of the Act. Any adverse effect on the general public would be small, On a consideration of all the facts of this case, on the balance of convenience I find in favour of the respondents. In the result, I refuse to make the interlocutory orders sought and would reserve the respondents' costs. Y chat hike and the wheelie (12) . ding, Beges are a Sue copy of the i 22Song "fr Judyment Rerein of the nouable 3h. 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