FOR LIMITED DISTRIBUTION NOT FOR PUBLICATION ee JUDGMENT No. bAb 1 #1. - IN THE FEDERAL COURT OF AUSTRALIA ) ) - VICTORIA DISTRICT REGISTRY ) VG No. 402 of 1987 ) ) GENERAL DIVISION Between: LASLO KOVASSY (Applicant) And: TARGET HOTELS BUNDOORA PTY LIMITED (Respondent) Coram: Ryan J Date: 28 October 1987 EX TEMPORE REASONS FOR JUDGMENT The applicant in this matter has, since December 1975, conducted a restaurant at Monbulk under the registered business name "Bundy's Tavern". The restaurant has always specialized in Hungarian and central European dishes and has been favourably noticed by good food guides and restaurant critics in journals and newspapers as providing a good example of that cuisine. The name ""Bundy's Tavern" was derived from the name of the pet poodle of the applicant and is a Hungarian word roughly translatable as, "little thing". 2 6.NOV 1987 aU3 Pea ® RECEIVED FEDERAL COURT OF AUSTRALIA In about August 1987, the applicant learned that the respondent was conducting an establishment, within a hotel at Bundoora, of a restaurant or eating room designated as "Bundy 's Bistro". The only evidence of possible confusion as to whether the two premises are associated in any way is that Mr. Kovassy was asked by a patron of his restaurant whether he, Kovassy, had opened another restaurant as the patron had seen the respondent's restaurant known as "Bundy's Bistro". Mr. Kovassy's oral evidence was that he only advertises his business once a year in the "Age" newspaper and that most of his custom comes from persons who have earlier made reservations. The hotel premises from which the respondent conducts its business have, since they were opened about 17 years ago, been called the "Bundoora Hotel" and have for many years been known locally as "The Bundy" or "Bundy's Hotel". Meals are served in the hotel lounge by means of a servery. Those meals are not distinctively Hungarian or central European in character, but are said to be typical of those offered by surburan hotels in Victoria. On 12 November 1984, the respondent became registered under the Business Names Act 1962 (Vic.) as the proprietor of the business names, "Bundy's Nite Spot" and "Bundy's Cellars". Apparently the respondent was unable to procure So eer eee 4 aN ' v fe "h eee par oF "pO eye ' THEN POT hy FT a ws TEN Se "a ve Toueae Bi Sy ~u Te + U2 a we 23} ~y registration of the name "Bundy's Bistro", presumably because of the applicant's prior registration of ""Bundy's Tavern". There is evidence to suggest that the respondent has used the name "Bundy's" in a distinctive script on its letterhead, coasters and business cards in conjunction with the words, "Bistro Nite Spot". The words, "Bundoora Hotel" together with the address of that establishment have been used as well in that printed material. The name "Bundy's" has also been used standing alone in a similar script in the form of fluorescent lighting with what appears to be a cocktail glass surmounting the letter "ue, The applicant has alleged that the respondent has been guilty of misleading or deceptive conduct in contravention of s.52 of the Trade Practices Act 1974 ("the Act") and has been guilty of the common law tort of passing off. Accordingly, the applicant has sought interlocutory relief by way of an injunction restraining: "the Respondent or its servants or agents howsoever from operating, promoting, advertising or conducting the business of a restaurant under the name 'Bundy's Bistro'." Mr. Isles for the applicant has sought to draw an analogy between this case and Taco Bell Pty. Ltd. v. Taco Company of Australia Inc. (1982) 4 ATPR 40-277. In that Seay rr case Ellicott J. granted a final injunction restraining the respondent from operating a restaurant in the Sydney metropolitan area under the name, "Taco Bell", or any similar name, and from passing' off goods and services supplied at any restaurant in the Sydney metropolitan area not supplied by the applicant as, and for, goods and services supplied by the applicant. Essential to his Honour's reasoning in that case was his conclusion of fact expressed as follows, at 43,492:- "On the basis of the findings I have already made there was, at that date and, in my view, there still is, a significant number of members of the public in the Sydney metropolitan area who, in my opinion, regard the name "Taco Bell's Casa" as denoting or meaning the restaurant business conducted by the applicant at Bondi and who would on seeing that name or a name such as "Taco Bell" used in connection with a restaurant elsewhere within the Sydney metropolitan area believe that it was a restaurant which had a business connection with the applicant''s. Clearly enough if the restaurant was not conducted by the applicant or had no such connection they would thereby be misled or deceived." To similar effect it was observed at 43,497:- "Its restaurant is and has been conducted to attract custom from people throughout the Sydney metropolitan area and as a result there is, on the evidence, in my view, a significant section of the public in Sydney who regard the name "Taco Bell's Casa" as representing the applicant's restaurant and who would, on seeing it or a name such as "Taco Bell" used on another restaurant in Sydney, believe that that restaurant had some business connection with the applicant's. cane er ee ee anes es ar pe ee ee nt pee ere, wpe ee ee wont In other words, there is a significant section of the public who would be likely to be misled or deceived by the use of the name "Taco Bell" by the respondent in the manner proved by the evidence." (emphasis added) A like conclusion was reached in the joint judgment of Deane and Fitzgerald JJ. when Ellicott J.''s judgment went on appeal to a Full Court of this Court under the name Taco Company of Australia Inc. v. Taco Bell Pty Ltd. (1982) 4 ATPR 40-303. At page 43,753 of that report this passage occurs in the joint judgment :- "If all that the U.S. company had done had been to open one Mexican food restaurant in a Sydney suburb under the name "Taco Bell", we entertain some doubt as to whether it could properly be held that the mere adoption and use of that name in respect of another Mexican food restaurant in a quite different part of a large metropolis like Sydney could properly be seen as a representation that the new restaurant business and the Bondi company's restaurant business were connected. It is not, however, necessary to form or express any concluded view on that question. The U.S. company's conduct involves far more than the mere opening of one suburban restaurant under the name "Taco Beil". It is clear from the evidence that the U.S. company's restaurants in Granville and central Sydney must be seen as part of a proposed chain of Mexican food restaurants. The intentions of the U.S. company in that regard are established by the evidence and have been made known to the public. In these circumstances, each of the U.S. company's restaurants should and will be seen as part of a chain of restaurants established in Sydney and bearing the name "Taco Bell". It is inevitable that some members of the above-mentioned section of the public, who are unfamiliar with the actual operations of both the chain and the Bondi restaurant, already believe or will in due course believe that the Bondi company's restaurant is part of the chain. It is nothing to the point that any such persons are likely to be disabused if they actually wietpe ot Lee ssa> whos at mateo ayer eye ye attend the Bondi company's restaurant: for reasons which we have already given, sec.52 contains no requirement that deception continue to point of sale." In my view, the essential feature of the operations of the applicant and the respondent which permitted the conclusion reached both by Ellicott J. and in the joint judgment of Deane and Fitzgerald JJ. was that both operations were centred on the supply of a distinctive item of Mexican food, the taco. No such similarity can be discerned between the food or service offered by the applicant in the present case and that offered by the respondent. Mr. Isles next submitted that even if I were not satisfied that there is a serious question to be tried as to whether the respondent's conduct is 1n contravention of s.52 of the Act, I should be satisfied of the existence of such a question in respect of whether the respondent is guilty of passing off. However, the essential elements of that cause of action are that the class of goods or services to which the plaintiff's goodwill attached be clearly defined, and that the plaintiff has suffered, or is really likely to suffer, substantial damage to his property in the gocdwill by reason of the defendant selling goods or services of the same class which are falsely described by the trade name to which the Pointe te oe PRN ene re ee re cee ee sa eee goodwill is attached. See Warnink v. Townend and Sons (Hull) Ltd. £19793 A.C. 731 at 755 in the speech of Lord Fraser of Tullybelton and Office Cleaning Services, Ld., v. Westminster Window and General Cleaners, Ld. (1946) 63 R.P.C. 39 where Lord Simonds observed at 42: "The real question is the simple and familiar one. Have the Appellants proved that the use by the Respondents of the trading style "Office Cleaning Association" is calculated to lead to the belief that their business is the business of the Appellants? It is in these words "calculated to lead to the belief" that the issue lies. It is a calculation often difficult to make, as the different estimates in the Court below in this case indicate. The nature of the words which are used in the trade name, the circumstances and peculiarites of the trade, the motives, proved or presumed, of the trader who would use the words, all these and Many other factors must be considered by the judge in determining whether a Plaintiff can succeed in his claim. It is a question upon which the judge who has to decide the case has to bring his own mind to bear and which he has to decide for himself (see per Parker, J., in British Vacuum Cleaner Co., Ld. v. New Vacuum Cleaner Co., Ld. £19073 2 Chancery 312 at p. 326) But instances of actual deception will be given their due weight." In the present case, it is clear that the services provided by the applicant are clearly defined as the provision of Hungarian and Central European dishes and that he has established a considerable goodwill attaching thereto. However, the evidence leads me to conclude that the services which the respondent describes by the name "Bundy's Bistro" are of quite a different class or type from those of the applicant. Consequently, Ido not consider that he has shown a serious question to exist as to whether he has "sre core ars a =e , re ta ~ya v suffered or 1s likely to suffer damage by reason of the respondent's use of the name "Bundy's Bistro". Even if, contrary to the views just expressed, I were able to find that a serious question exists as to whether the applicant can make out either of the causes of action on which he relies, I would consider that the balance of convenience is against the grant of an interlocutory injunction. There is no evidence that the applicant's business has suffered any loss of patronage since the respondent commenced, in July 1986, to promote the use of part of its premises using the name "Bundy's Bistro". Nor can I perceive any significant likelihood of future loss of patronage being caused to the applicant by the respondent's continued use of ""Bundy's Bistro" in its present manner at the existing Bundoora Hotel premises. I am reinforced in that assessment by the delay of some two months from the time when the applicant first learned of the respondent's use of the name until the institution of these proceedings. On the other hand, the respondent has incurred considerable expense in printing a "first birthday" advertising brochure containing a reference to "Bundy's Bistro" and in the printing of stationery and promotional material containing, amongst other things, the legend "Bundy's Bistro Nite Spot". I infer that some significant part of the benefit of that expenditure would be lost to the respondent 1f I were to grant the interlocutory injunction sought by the applicant. It would be difficult to quantify that loss if the respondent were compelled to enforce the undertaking as to damages which would be extracted from the applicant as a condition for grant of that injunction. Accordingly, the motion for an interlocutory injunction is refused. The applicant is ordered to pay the respondent's costs of the motion. The directions hearing in this matter is adjourned to 27 November 1987 to enable the parties to consider these reasons and what procedural directions are required to facilitate an early trial of the substantive application. I certify that this and the eight (8) preceding pages are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Ryan. es ad Corcewie. Associate Dated: 22 Cake gene gor/.