JUDGMENT No. oc 22,. 2.4... CATCHWORDS TRADE PRACTICES - real estate business trading under particular name - Trade Practices Act 1974 (Cth) - s 52(1) - misleading or deceptive conduct - whether conduct likely to mislead or deceive - whether monopoly sought in descriptive words. TORTS - alleged passing off - reputation and goodwill of applicant's business. Trade Practices Act 1974 (Cth) - s 52 McWilliams Wines Pty Limited v McDonald's System of Australia Pty Limited (1980-81) 33 ALR 394 Parkdale Custom Built Furniture Pty Limited v Puxu Pty Limited (1981-82) 149 CLR 191 Global Sportsman Limited v Mirror Newspapers Limited (1984) 2 FCR 82 Hornsby Building Information Centre Pty Limited v Sydney Building Information Centre Limited (1978) 140 CLR 216 ALT IMITED tradi DN R REALTY v ing as SYDN No. NG 730 of 1994 FOSTER J 1 DECEMBER 1994 SYDNEY -1 DEC 1994 COURT OF FED TUSTRALIA PRINCIPAL REGISTRY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION No. NG 730 of 1994 wee ee we ew BETWEEN: AUSTRALIAN PRIME REALTY PTY LIMITED trading as SYDNEY PRIME REALTY Applicant AND: GALBID" PTY LTD trading as SYDNEY FIRST REALTY Respondent JUDGE MAKING ORDERS: FOSTER J DATE: 1 DECEMBER 1994 » PLACE: SYDNEY MINUTE OF ORDERS THE COURT ORDERS THAT: 1. The respondent, by itself, its servant or agents be permanently restrained from using the name "Sydney First Realty" or any name using or including the said words in the same sequence, in connection with the business of selling, ' offering for sale, managing or letting of real estate. 2. The respondent pay the applicant's costs of these proceedings. Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. NG 730 of 1994 — ee GENERAL DIVISION BETWEEN: AUSTRALIAN PRIME REALTY PTY LIMITED trading as SYDNEY PRIME REALTY Applicant AND: GALBID" PTY LTD trading as SYDNEY FIRST REALTY Respondent CORAM: FOSTER J DATE: 1 DECEMBER 1994 ' PLACE : SYDNEY REASONS FOR JUDGMENT HIS HONOUR: In these proceedings the applicant company, which trades as "Sydney Prime Realty", seeks to restrain the respondent company from trading under the name "Sydney First Realty". It alleges that the use by the respondent of that name constitutes a breach of s 52 of the Trade Practices Act 1974 (Cth) ("the [IP Act") and also involves the commission of the tort of passing off. Both the applicant and the respondent conduct real estate agency businesses at Double Bay, Sydney: the applicant from premises at Level i1/2C Cross Street and the respondent at 312 New South Head Road. The premises are approximately 150 metres apart and are both within the area of the Double Bay shopping centre. -2- The applicant company was incorporated early in 1994. Its directors and shareholders are Tony Reuben Braham and Dominic Serafino. They are both young men, qualified as real estate agents, and from families which, according to the evidence, are well known in Sydney's eastern suburbs. Both have had considerable experience in the marketing of real estate gained from working with large long established agencies and major property developers. The name "Sydney Prime Realty" was previously held by Mr Serafino, who transferred it to the company on 28 March 1994, to be used, thereafter, as the company's trade name. Mr Serafino had first registered the name on 11 August 1993, after which date it had been used as the business name for a real estate agency business conducted by himself and Mr Braham. At the time of the registration of the name the business was mainly involved in the sale of units in a large apartment block at 212 Bondi Road, Bondi. It was conducted from a commercial office in that building. The business was also involved, to a relatively minor extent, in the sale of other properties. About the end of November 1993, the two men left those premises and commenced to operate from premises at 38B The Crescent, Vaucluse. This is an extensive property owned by Mr Braham's father. Sydney Prime Realty was retained to market the property and also to manage it. It is clear that the business has received fees from these endeavours and has also been provided with gifts of money, from time to time, from Mr Braham''s father for use as working capital. In -3- addition to work done in relation to 38B The Crescent, the two men also promoted the sales of other items of real estate. In January 1994 they moved to the present premises in Cross Street, Double Bay. Those premises are not "shop front" premises. They have an entrance at street level, the office of the business being on the _ first floor of the building. Prior to 15 November 1994 there was no sign in relation to the business at street level, other than a notice complying with the requirements of the relevant legislation. On 15 November 1994 a substantial advertising window was erected at the doorway which displays the business name and also its get-up and logo, to which I shall make reference later. Although only recently installed, the construction of the sign was, I am satisfied, ordered in May of this year. The name, acquired by the applicant company in March of this year, had, therefore, been in use since August of last year. It is contended on behalf of the respondent that the amount of use of the name and its exposure in the market place has been so little as to lead to the conclusion that the applicant has no significant goodwill or reputation capable of being protected by the law of passing off. It is also asserted that the name would have been so little known that there was no significant likelihood of consumers' being relevantly misled or deceived by the respondent's use of its own name. I am not persuaded by these arguments. The evidence makes it plain that the business conducted by the -4- applicant cannot be characterised as large and is, indeed, in a fairly early stage of development. It is, however, being conducted by two men who appear to be favourably known in the area and who have put the name that they have chosen for their business before the public by way of advertisements in the newspapers, signs on buildings, placement of promotional material in letter boxes and advertising brochures. The business name has also been put before the public by way of sponsorship of a painting exhibition in a local art gallery which received exposure in the Wentworth Courier, the National Trust magazine and on a television program on Channel 9. Examples of the advertising are in evidence. Significant expenditure has been incurred. Advertisements in the Sydney Morning Herald have, over the last 15 months, been reasonably regular. They have always contained the name "Sydney Prime Realty" and sometimes a black and white version of the company's logo. Advertisements in the Wentworth Courier and similar publications have been much larger in size, in colour, and clearly exhibit the name and associated logo. Although they are to be found amongst similar advertisements for large real estate agencies, they are not, in my view, swamped by this other material. They are eye catching and clearly put the name before the public. The name, itself, was, in my view, accurately described in argument as "a catchy collocation of words". -5- The printed advertising material, when in colour, consists of an attractive navy blue band appearing either across the top of the advertisement or down one side, as the particular layout requires. On this band, in contrasting white and gold colours, there appears, first, the logo which apparently consists of a stylised facade of a classical building with the letters "SPR" appearing in individual spaces marked out by vertical columns. The central initial "P" is emphasised by its being larger than the others. It is also surmounted by a stylised archway which gives it further emphasis. The name then follows in bold type, the word "Prime" being emphasised by its being printed in white as a contrasting colour. There can be no doubt that this presentation achieve its obvious aim of emphasising the word "Prime" in the name. I am satisfied that the name is a very good business name for a real estate agency. It is succinct, attractive and memorable. Although it has not had a great deal of exposure in comparison with the well known names of the real estate industry, the exposure that it has received has made some appreciable impact. Mr Braham, whose evidence I generally accept as reliable, said that the advertisements have always evoked a large number of responses and have obviously been successful in attracting attention. I consider it most likely that potential customers in the real estate market, once they had been exposed to the name, would tend to remember it. It is a name which, in itself, is capable of achieving currency -6- without the assistance of an associated visual presentation. It could, therefore, spread amongst customers by repetition, without any need for individual customers to have seen its stylised presentation with the company logo. That presentation, however, would undoubtedly augment its impact in the market place. I reject the submission that the applicant's trade name could not have garnered to it reputation or goodwill sufficient to warrant the protection of the law. Conversely, I am satisfied that by August of 1994 the business conducted under the name of "Sydney Prime Realty" was, even if small, a noticeable presence in the market place. I turn to consider the real estate business conducted at 312 New South Head Road. The evidence indicates that real estate businesses had been conducted in these premises for a number of years. The premises themselves are in a prominent position at a major intersection at the Double Bay shopping centre. It is a "shopfront" location on a major street. It is visible to traffic passing along that street and also to traffic approaching at right angles from one of the intersecting roads. The position, quite obviously, carries with it significant commercial advantage. There is no need to consider the real estate businesses which had been conducted at this site prior to its being occupied by a business conducted under the name of -J- "First Benchmark Realty". This business had, for some time prior to 1994, been conducted as a member of the co-operative of real estate agents known as "the Professionals". As such, it had adopted the presentation ordinarily associated with that organisation; that is, it adopted the colours black, red and white in its advertising and general presentation and, in its signage and get-up, coupled with its name the words "the Professionals", together with the Professionals distinguishing coloured star logo. I am satisfied that prior to a date in July 1994 the business displayed in a large under-awning illuminated sign directed to pedestrian and vehicular traffic along New South Head Road, 'the name "the Professionals First Benchmark Realty". This ,name was presented in the format customarily used by estate agencies associated with the group. The name was also painted on the outside of the awning over the pavement and, if the name was not painted on the external brickwork of the upper story of the building, the colour of the building was at least consistent with its use by a real estate agency in the Professionals group. In effect, I am satisfied, the estate agency, for practical purposes, proclaimed itself to be "the Professionals, Double Bay". I doubt that the name "First Benchmark Realty" had any significant impact upon the public. The evidence indicates that the agency First Benchmark Realty had a significant rent-roll business in the local area. It also conducted a general real estate selling business. Prior to July 1994 it suffered a commercial ~8- catastrophe in that there was a significant theft of its funds by a former employee. When this matter became known it had an effect upon the goodwill of the business, particularly amongst the landlords for whom rent was collected. A number of persons who had been associated with the business did not wish to continue with it. A number of employees left and the business was clearly in considerable disorder. The respondent company was, apparently, formed to purchase the business from its previous owner. The proprietor of the company was a Mr George Bru who did not give evidence in these proceedings. The evidence for the respondent, affidavit and oral, was given by Mr Steve Paton who had been an employee of First Benchmark Realty and who became employed by the respondent after its purchase of the business. He had worked as a senior sales representative in the previous business and, as such, had had contact with the organisation of "the Professionals". He played no managerial role in the new business conducted at the premises by the respondent company but, notwithstanding this, was apparently selected as the appropriate person to give evidence on its behalf in these proceedings. It is clear that Mr Bru decided that the name of the business should be changed as there were obvious problems in continuing with the old name. A new name, "Sydney First Realty", was selected. According to Mr Paton's evidence, the new name was Mr Bru's idea. There is a suggestion in the evidence that it was selected because it had some similarity with the name of a major client "the Sydney Housing Company". -9- This client was heavily involved in the sale of ""dual- occupancy" building sites. It was said that it used advertising material in which its name and the name of the agent both figured. As the two names have in common only the word "Sydney", I fail to see why the new name could confer any particular commercial advantage upon either the client or the agency by its use in common advertisements. There was no evidence from Mr Bru to assist in this regard. Mr Paton did not provide any satisfactory explanation. There was an issue in the case as to whether Mr Paton or Mr Bru were aware of the existence of the applicant and its trade name "Sydney Prime Realty" at the time when the name "Sydney First Realty" was chosen. Mr Paton asserts that he did not become aware of the existence of the other name in the market place until the receipt of a letter from the applicant's solicitor on 13 September 1994. He says that it was not his practice, despite the applicant's involvement in the real estate market, to make any study of real estate advertising in the local or Sydney newspapers. Any regular study would have revealed the existence of the applicant and its trade name. I was not impressed with the evidence of Mr Paton upon this and other topics. Where he is in conflict with the evidence called for the applicant, I prefer the latter. He is particularly in conflict with evidence given by Mr Paridis, a witness who gave evidence on affidavit and -10- erally on behalf of the applicant. I was impressed by Mr Paridis as a witness. I make allowance for the fact that he is a close personal friend of Mr Braham. However, I am quite satisfied to accept his testimony as being that of a witness of truth. Mr Paridis conducts an estate agency which is part of the Professionals group. He performs the role of zone chairperson for the group, which involves him in holding meetings with the representatives of real estate agencies which are part of the Professionals and which operate within his zone. He testified that 'there were problems in relation to First Benchmark Realty, and its successor, at 312 New South Head Road, Double Bay. There was a considerable amount owing by the agency to the Professionals for monthly fees payable in respect of membership of the group. There was clearly a question as to whether the purchaser of First Benchmark Realty could remain a member of the Professionals group in the absence of payment of the outstanding fees. It appears that the respondent, at first, wished to remain in the group under the name "Sydney First Realty". Indeed, I am satisfied that it made an alteration to its under-awning illuminated sign so that it read "Professionals Sydney First Realty" instead of "Professionals First Benchmark Realty". It exhibited this sign for a short period of time in circumstances to which I shall refer later. However, Mr Paton advised Mr Paridis in July that the respondent had decided not -1li- to remain with the Professionals group but would "go it alone" as an independent agency under the name "Sydney First Realty". I am quite satisfied, despite Mr Paton's evidence to the contrary, that during the course of conversations in July between the two men, Mr Paridis expressed the view to Mr Paton that the use of that name could cause problems because there was another agency operating under the name "Sydney Prime Realty", the directors of which would be unhappy if the respondent adopted its intended new name. I am satisfied that when the respondent decided to change the name "First Benchmark Realty" to "Sydney First Realty", it did so in the knowledge that there was another local agency trading under the name "Sydney Prime Realty", and that there could be problems occasioned by the similarity between the two names. Although there is no direct evidence, I readily infer that Mr Paton would have passed on his knowledge of this potential problem to Mr Bru when the two men were discussing the name change in July. Although I am not prepared, on the evidence, to hold that the new name was adopted with the specific intention of trespassing upon the applicant's reputation and good will, I am quite satisfied that the two men deliberately took the risk when adopting the new name that objection would be raised and that legal proceedings could ensue. The expenditure that the respondent has incurred in relation to the name was clearly undertaken in the shadow of that risk. I should add that I am not persuaded on the evidence that failure in these proceedings will cause the respondent to go out of business. -12- As already indicated, I am not impressed by the suggestion that the name was chosen as being harmonious with the name "Sydney Housing Company". Other names could have been chosen which would have produced this result without entering the area of dangerous similarity to the applicant's name. The desire to abandon the name "First Benchmark Realty" is understandable in the circumstances. However, the new name did not completely distance itself from the old; it included two of the words from the old name viz "First" and "Realty". I am satisfied that the name "Sydney First Realty" was chosen because, like the name "Sydney Prime Realty" it had a good ring to it and was likely to attract attention in the market place. , There was dispute in the case as to when the name "Sydney First Realty" was first used in connection with the premises 312 New South Head Road, Double Bay. It is quite clear that at some time in July the name on the under-awning illuminated signed was changed so that the words "First Benchmark Realty" were removed and the words "Sydney First Realty" substituted, the sign remaining a conventional "Professionals" sign. Clearly this sign could not remain once the agency was withdrawn from the Professionals group. How long was it in position? I have little doubt that Mr Paton, in his affidavit, sought to give the impression that the sign was changed in early July as this would increase the period of public exposure of the new name. JI am not prepared to accept that the change occurred so early. The invoice from the -13- Claude Neon organisation, relating to the replacement of the sign, sufficiently indicates that this took place on 26 July. In the circumstances that the evidence is otherwise uncertain, I consider that I should accept this date as being the earliest date upon which the new name was displayed in any way to the public. The evidence is not clear as to whether any alteration was made to the signage on the awning itself which had, previously, indicated that the agency was "Professionals First Benchmark Realty". I am not persuaded that this name did not remain in place at least for some time after the under-awning sign had been altered. ? , The evidence of. the witness, Mr Hatzigiannis, a signmaker engaged in the production of the present under- awning sign, to which I shall make reference later, satisfies me that he removed the sign "Professionals Sydney First Realty" no later than the second week of August with a view to its being replaced with the ultimate sign. This did not occur until very close to 12 September 1994. In the meantime, the space for the under-awning sign was empty apart from the visible presence of the fluorescent tubes used in it illumination. I am also satisfied that, until a date later than the installation of the new sign by Mr Hatzigiannis, the painting of the external brickwork of the building remained unchanged from the earlier colour, which was consistent with the presentation get-up of the Professionals. -14- The exposure of the name "Sydney First Realty" in conjunction with "the Professionals" occurred, in my view, at the most for a period of two to three weeks in late July and early August. Because of its continued association with the name "the Professionals" and the Professionals' conventional get-up, the name change was far from eye-catching. I am confident that a cursory glance would not have caused an observer to realise that there had been a change from "First Benchmark Realty" to "Sydney First Realty". The likely impression would have been of a continuation of the old name. Indeed, Mr Hatzigiannis, who is a completely independent witness, was clearly misled: He was of the opinion that the name which he removed in early August was the same name that he had had occasion to observe, as a mere passerby, in early July. It is clear that this was not so. Mr Hatzigiannis was observing the sign which contained the name "First Benchmark Realty". The change from that sign to the sign which he removed was not sufficiently remarkable to cause him to observe any difference. Throughout July and until its removal in early August, the sign, in my opinion, would merely have indicated to the casual observer that it was the Professionals office in Double Bay. It is also worthy of remark that the respondent in its advertising up until 26 July, for the most part, referred to itself as "the Professionals Double Bay". It was only after the sign change on 26 July that there was any real indication of the use of the name "the Professionals Sydney -15- First Realty". I am quite satisfied that there was no significant impact upon the public eye or ear of the name "Sydney First Realty" until the new under-awning sign was put in position near 12 September 1994. This was a completely different sign from the previous one and made no reference to "the Professionals". It would seem that about the same time work was commenced on the awning and the external brickwork of the building above the awning to obliterate reference to the Professionals. There was painted on the awning the telephone number of the respondent in large numerals. The respondent's new sign and logo were also prominently displayed on the brickwork. All this work was completed by 19 September 1994. The respondent's new sign, get-up and logo is entirely different from the previous one. This appears clearly from the photographs tendered in the case. The words "Sydney" and "Realty" appear in bold letters. The middle word "First" is, however, heavily emphasised by its being dropped below the level of the other two words and being in letters approximately three times the size. It is also provided with a background, being a rectangle, light orange in colour, which serves to thrust it out towards the observer. Further significance is added to it by its being surmounted by a stylised design consisting of two curves of unequal size, of the same colour as the letters which meet in a type of arrow head pointing directly downwards to the centre of the word. It may be said that the word "First" is emphasised to an even greater degree than is the word "Prime" in the get~-up of the -16- applicant's name. However, the methods of emphasis are somewhat similar in that the salient word is pushed into public attention by its being presented in a different colour and being, as it were, crowned by an emblem composed of curved lines. The appearance of the respondent's new sign on 12 September was brought to the attention of Messrs Braham and Serafino by acquaintances who observed it. Prior to this they had no knowledge of the name "Sydney First Realty". They considered that the use of the name was unfair in that it closely resembled the name of the applicant's business. They sought the advice of their solicitors and, as a result, a letter of complaint and demand was sent to the respondent on 13 September 1994. The letter asserted that the name "Sydney Prime Realty" was the registered business name of the applicant and that it had "established a considerable reputation and goodwill in the name". It contended that the respondent's trade name "Sydney First Realty" was "deceptively similar to or associated with "Sydney Prime Realty" so that consumers may believe that the businesses are connected". It asserted that the use of the name constituted misleading or deceptive conduct in breach of s 52 of the TP Act and also a "passing off". It required that the respondent ceased trading under that name or face legal action by the applicant. The letter was responded to on 14 September 1994 by a letter from the respondent's solicitors which, inter alia, -17- denied any possibility of confusion or deception in the market place, or that there was any passing off of the applicant's goodwill. It evinced a clear intention on the part of the respondent to continue trading under the name and using the new logo and get-up. Thereafter the respondent continued to use the name and went ahead with the painting of the awning and the brickwork to display prominently the new name and logo. It offered to put a sign in its window disclaiming any connection between the two businesses. This offer was unacceptable to the applicant and it has not been persisted with in these proceedings. It is convenient, in the first place, to consider the applicant's claim under s 52 of the TP Act. This claim asserts that the respondent by using the name "Sydney First Realty", either on its own or in association with its visual logo and get-up, is relevantly guilty of misleading or deceptive conduct which should be restrained by order of this Court pursuant to s 80 of the TP Act. The respondent denies that the use of the name, logo and get-up are relevantly misleading or deceptive or likely to mislead or deceive consumers in the market place. It also asserts that the applicant's claim cannot be brought under s 52 as it amounts to no more than an attempt to acquire a monopoly in three essentially descriptive words in circumstances where it has established neither reputation nor goodwill sufficient to -18- underpin it. The defences are, of course, related although it is convenient to consider them separately. Por the applicant to succeed it is necessary for it to establish that the conduct complained of is, in fact, misleading or deceptive or likely to mislead or deceive. As both the applicant and respondent are real estate agents carrying on business in the Double Bay shopping centre, it is clear that the members of the public who are candidates for being misled or deceived are those who could be contemplated as likely to make use of the services of such real estate agents. Specifically, it is contended by the applicant that such persons, because of the use of the impugned name by the respondent, could be led to believe that the respondent's business was, or was associated with, the applicant's business. It is not sufficient, of course, that such a consumer should be merely confused by or be caused to wonder about these matters. (McWilliams Wines Pty Limited v u strali ed (1980-81) 33 ALR 394; Parkdale Custom Built Furniture Pty Limited v Puxu Pty Limited (1981-82) 149 CLR 191 at 198, 209). In Global Sportsman Limited v Mirror Newspapers Limited (1984) 2 FCR 82 a Full Court of this Court (Bowen CJ, Lockhart and Fitzgerald JJ) said (at p 87):- "A contravention of s. 52(1) is established by conduct which is misleading or deceptive or which is likely to mislead or deceive. Conduct is likely to mislead or deceive if that is a 'real or remote chance or possibility regardless of whether it is -19- less or more than fifty per cent': cf. Tillmanns Butcheries Pty Ltd v. Australasian Meat Industry Employees' Union (1979) 42 F.L.R. 331 at 346, per Deane J.; Sheen v. Fields Pty Ltd (1984) 58 A.L.J.R. 93. Evidence that an erroneous conclusion has been formed by reference to conduct is admissible to establish that the conduct was misleading or deceptive or likely to mislead or deceive; such evidence may be persuasive but it is not essential. Evidence of acts or omissions resulting from the erroneous belief may also be admissible but again is not essential. Section 52(1) is concerned with the effect or likely effect of conduct upon the minds of those by reference to whom the que8tion of whether the conduct is likely or is likely to be misleading or deceptive falls to be tested. The test is objective and the court must determine the question for itself: Taco Company of Australia Inc v. Taco Bell Pty Ltd (1982) 42 A.L.R. 177 at 202." In the present case, the applicant has provided evidence of persons being,confused by the similarity in the trade names used by it and the respondent. It is unnecessary to set this out in detail. It has been criticised on behalf of the respondent as being evidence from too narrow a class, namely persons involved with or associated with the real estate industry. I do not see this as a valid criticism in the present case. It might well be thought that people with knowledge of the industry and, in particular, with knowledge of the applicants themselves, as some of the witnesses had, would be less likely to be confused by the similarity between the two names. Such people knowing of the applicant and, in particular, of its proprietors Messrs Braham and Serafino and of the trade name that they used would, it might be thought, be more likely to remember that their business was known as "Sydney Prime Realty" and not "Sydney First Realty". Notwithstanding this, they failed to make the distinction when -20- confronted with the respondent's trade name. Indeed, Mr Braham gives evidence of a conversation with a Mr Patterson, a friend of many years, who, on 12 September 1994 congratulated him upon his new office in New South Head Road, saying that he had seen the sign when he drove past. This gentleman was obviously not merely momentarily confused. He was positively misled by the respondent's sign into believing that the applicant was now conducting its business at the premises in New South Head Road. Although such evidence is not conclusive it is, in my view, helpful in a case' such as this. It provides some meaningful indication of what might occur in the mind of a potential client who had retained in his or her recollection only a hazy outline of the three word name of the applicant, based upon seeing an advertisement or a sign on a building, and who wanted to make contact with the agency for commercial reasons. Would such a person be likely to be misled by the respondent's trade name into believing that its business was the business of the applicant? On behalf of the respondent it is submitted that such a person should not be misled or, if he or she were, then the misconception could not be laid at the door of the respondent, as no potential client, behaving reasonably in his own interests, could have been so misled (see per Gibbs CJ Parkdale at p 199). The two names are, it is put, incapable of being confused in the mind of anyone rationally considering -2 1- them. "Sydney Prime Realty" must, so the argument proceeds, reasonably be taken as indicating that the organisation bearing that name is interested in dealing only with real estate which can be described as "Prime", ie property at the top end of the market. On the other hand, it is submitted, the name "Sydney First Realty" can convey no such impression. The word "First" is a mere puffing claim to professional expertise. Whilst acknowledging the ingenuity of this argument, I fail to be persuaded by it. Whilst it is possible that some potential real estate clients might perceive and be influenced by the distinction contended for, I am quite satisfied that the bulk of persons dealing in the real estate market would regard the words "First" and "Prime" as being interchangeable as, indeed, reference to standard dictionaries indicates them to be. I am satisfied that the great preponderance of such people would simply regard the words "Prime" and "First" as constituting puffing claims. In my view, there is a very marked similarity indeed between the two names. The only difference between them is the use of "Prime" in one and "First" in the other. To the majority of people, as I have said, they would convey the same meaning. In each name one of these words occupies the middle position and, in the pronunciation of the name, necessarily receives emphasis. These circumstances heighten the likelihood of deception. There is a natural rhythm to the two phrases which markedly increases their similarity. For instance, had the word "First" been placed before "Sydney" so -22- that the name used by the respondent was "First Sydney Realty" the likelihood of deception would have been considerably decreased to the point where, arguably, no breach of the section would have been involved. It was also argued on behalf of the respondent that there was no reasonable likelihood of confusion or deception from the use of its name because the nature of its business was different from that of the applicant. The respondent was, through its association with the Sydney Housing Company, concentrating upon a particular area of the market involved in the selling of dual occupancy sites. It also had a large rent-roll business and specialised in the sale of defence housing. It is clear, however, that it was holding itself out for general real estate business. There was nothing in the name it used to indicate restriction or specialisation of activity. A potential client, unaware of these specialised activities, would reasonably suppose that the respondent dealt in ordinary real estate transactions. Indeed, it is not suggested that it did not. In fact, this argument tends to work against the respondent. A person interested in making contact with the applicant for an ordinary real estate transaction and having only a hazy recollection of its business name might well, on making inquiries by word of mouth, be misled into thinking that the agency it was seeking was, in fact, the agency of the respondent. Further inquiry might elicit the information that that agency deal primarily in specialised not ordinary real estate. This information -23- might well result in the potential client going to neither the applicant nor the respondent, with consequent damage to the applicant. The question whether the respondent's conduct in using its trade name is misleading or deceptive or likely to be either is for the Court to decide having regard to all the circumstances. I accordingly take into account the evidence as to confusion, to which I have made reference, that the two businesses are conducted in fairly close proximity in the same shopping centre, that they apparently hold themselves out to the public as willing to conduct ordinary real estate business, that their trade. names would have currency amongst the public by ordinary word of mouth communication, and that they would also be available to the public through the printed word in advertisements sometimes associated with the logo and get-up adopted by each. I am quite satisfied that the similarity between the names is very great indeed. When the respondent adopted its trade name and put it before the public, in my opinion, it engaged in conduct which was likely to mislead or deceive the public into believing that its business was that of the applicant. I am not persuaded to the contrary by the fact that it also put its name before the public in association with its logo and get-up. It is most likely, in my view, that ordinary members of the public would, for the most part, remember the sound of the name without necessarily associating -24- it with the visual presentation. Indeed, even though there are marked dissimilarities between the visual presentation of the trade names of the applicant and the respondent, the respondent, in choosing its logo and get-up, has chosen to emphasise the relevant middle word in much the same way as the applicant. Human recollection being what it is, it is likely that the mind would retain the similarities as much as the differences with the result that recollection of the visual presentation would not operate significantly to prevent the deception that could arise from the great similarity in the sound of the names. Should the applicant, nevertheless, fail because it seeks merely to claim a monopoly in three simple descriptive words? The respondent argues that it should. It places reliance upon the well known passage from the judgment of Stephen J in Hornsby Building Information Centre Pty Limited v Sydney Building Information Centre Limited (1978) 140 CLR 216 at 229-230 where his Honour said:- "There is a price to be paid for the advantages flowing from the possession of an_ eloquently » descriptive trade name. Because it is descriptive it is equally applicable to any business of a like kind, its very descriptiveness ensures that it is not distinctive of any particular business and hence its application to other like businesses will not ordinarily mislead the public. In cases of passing off, where it is the wrongful appropriation of the reputation of another or that of his goods that is in question, a plaintiff which uses descriptive words in its trade name will find that quite small difference in a competitor's trade name will render the latter immune from action (Office Cleaning Services Ltd. v. Westminster Window and General Cleaners Ltd. (1946) 63 R.P.C. 39, at p. 42, per Lord Simonds). As his Lordship said (1946) 63 -25- R.P.C., at p. 43, the possibility of blunders by -members of -the -public will always .be present when names consist of descriptive words - 'So long as descriptive words are used by two traders as part of their respective trade names, it is possible that some members of the public will be confused whatever the differentiating words may be.' The risk of confusion must be accepted, to do otherwise is to give to one who appropriates to himself descriptive words an unfair monopoly in those words and might even deter others from pursuing the occupation which the words describe. If this be so in the case of passing off action the case of s. 52(1), concerned only with the interests of third parties, is a fortiori. To allow this section of the Trade Practices Act to be used as an instrument for the creation of any monopoly in descriptive names would be to mock the manifest intent of the legislation. Given that a name is no mote than merely descriptive of a particular type of business, its use by others who carry on that same type of business does not deceive or mislead as to tha nature of the business described." I am satisfied that the present case does not fall within these principles. The name chosen by the applicant is not descriptive of its business in the same way as the name chosen by the Sydney Building Information Centre Limited. It merely indicates that it is a real estate agency and, perhaps, that it conducts its business in Sydney. It says nothing of the nature of the business beyond that. The applicant has not described its business operations in the name it has adopted. It has merely chosen three ordinary words and by placing them in a particular order produced a name calculated to appeal to the public with which it wishes to do business. The respondent, by putting forward as its name three words in the same order with the middle word being different in form but, for practical purposes, identical in meaning and bearing the same emphasis in the pronunciation of the phrase, has created -~26- a situation in which, in my opinion, the public is clearly likely to be misled or deceived. I find that the applicant has made out its case for relief. Accordingly, I do not find it necessary to deal in any detail with the applicant's alternative claim for passing off. I merely state my opinion that this case has also been amply demonstrated. I have already found that the applicant had acquired a reputation and goodwill in its name at the time when the respondent placed its name before the public. The possibility of confusion between the two names was such as to cause detriment to the applicant's goodwill. In so far as some degree of intent on the part of the respondent may be necessary, this is amply demonstrated by its persistence in the use of the impugned name after the applicant had made its complaint and request for the respondent to desist. I am satisfied that the respondent has committed a passing off of the applicant's business name. The applicant has provided me with the form of order that it seeks in the event of its being successful. No objection has been raised by the respondent to my making the order in this form in that event. Accordingly I order:- i. That the respondent, by itself, its servant or agents be permanently restrained from using the name "Sydney First Realty" or any name using or including the said words in the -27- same sequence, in connection with the business of selling, offering for sale, managing or letting of real estate. 2. That the respondent pay the applicant's costs of these proceedings. I certify that this and the preceding twenty six (26) pages are a true copy of the reasons for judgment herein of the Honourable Mr Justice M. L. Foster. Associate: ie ADrE Date: 1 DECEMBER 1994 ' ' APPEARANCES COUNSEL FOR THE APPLICANT: MR S. WHEELHOUSE INSTRUCTED BY: MESSRS GILBERT & TOBIN COUNSEL FOR THE RESPONDENT: MR J.E. MACONACHIE Q.C. ' with MR S. CLIMPSON INSTRUCTED BY: MESSRS ANDREW THORPE DATE OF HEARING: 18, 21 & 22 NOVEMBER 1994 DATE OF JUDGMENT: 1 DECEMBER 1994