Greyhound Pioneer Australia Ltd v Pioneer Motor Service Pty Ltd [1997] FCA 1065

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY QG 51 of 1997

BETWEEN: greyhound pioneer australia limited

(acn 008 685 229)

Applicant

AND: Pioneer motor service pty ltd

(ACN 002 858 451)

Respondent

JUDGE(S): SPENDER J

DATE OF ORDER: 16 October 1997

WHERE MADE: BRISBANE

THE COURT ORDERS THAT: 1. The respondent, whether by itself or otherwise, on the route between Brisbane and Sydney, be restrained from - (a) using, permitting or authorising the use of the word "Pioneer" as part of the respondent's trading name or style; (b) using, permitting or authorising the use of the word "Pioneer" upon any motor coach used by the respondent in the provision of motor transport services; or (c) using, permitting or authorising the use of any other colourable imitation of the word "Pioneer". 2. The above order be stayed for a period of 28 days from the date of this order. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY QG 51 of 1997

BETWEEN: Greyhound pioneer australia limited

(acn 008 685 229)

Applicant

AND: Pioneer motor service pty ltd

(ACN 002 858 451)

Respondent

JUDGE(S): SPENDER J

DATE: 16 October 1997

PLACE: BRISBANE

REASONS FOR JUDGMENT By an amended application, the applicant, Greyhound Pioneer Australia Limited ("Greyhound Pioneer"), seeks an injunction to restrain the respondent, Pioneer Motor Service Pty Ltd ("Pioneer Motor Service"), on the route between Brisbane and Sydney, from passing off its motor coach passenger and freight transport services as and for services provided by Greyhound Pioneer, and from using the word "Pioneer" in any way in the course of trade. In addition to reliance on passing off, the applicant seeks an injunction pursuant to s 80 of the Trade Practices Act 1974 ("the TPA") to restrain Pioneer Motor Service on the route between Brisbane and Sydney from, (a) using, permitting or authorising the use of the word "Pioneer" as part of the Respondent's trading name or style; (b) using, permitting or authorising the use of the word "Pioneer" upon any motor coach used by the Respondent to provide such transport services; or (c) using, permitting or authorising the use of any other colourable imitation of the word "Pioneer" or otherwise howsoever. The claims by Greyhound Pioneer for damages or enquiry as to damages for passing off or, alternatively, damages pursuant to s 82 of the TPA for breaches of s 52 of that Act, as well as for other relief, were not pressed at the final hearing of the proceedings. The elements of the test of passing off are summarised in the well known statement of principle in Warnink v Townsend and Sons [1979] AC 731 at 742. Such elements in the present circumstances overlap the conduct proscribed by s 52 of the TPA, which section enjoins a company in trade or commerce from engaging in conduct that is misleading or deceptive or likely to mislead or deceive. Given that the applicant is no longer seeking damages or an enquiry as to profits in passing off, nor seeking damages pursuant to s 82 of the TPA, it is sufficient for the present application to focus on whether an injunction pursuant to s 80 of the TPA should be granted, on the basis of the allegation that the respondent is currently engaged in conduct in contravention of s 52 of the TPA and threatens to persist in that conduct. An application for interlocutory relief in terms similar to that sought in the present application was refused by Drummond J on 30 May 1997, Pioneer Motor Services undertaking to segregate in its records the information dealing with the financial effect of the Brisbane to Sydney run from 30 May 1997 until the conclusion of this trial. His Honour expressed the view that the applicant had a strong arguable case that the respondent was passing off its business of running passenger bus services between Brisbane and Sydney as that of Greyhound Pioneer, but that, having regard to the circumstance that a trial was to take place relatively shortly after the application for interlocutory relief, and having regard to the balance of convenience, his Honour declined to grant any interlocutory injunction. Greyhound Pioneer and its predecessors have supplied motor coach passenger and freight transport services in Australia under the various trading names or styles of "Greyhound Pioneer", "Pioneer Tourist Industries" and "Ansett Pioneer". The origins of the applicant commence in 1905. In that year, a Victorian, Mr A A Withers, commenced to take tourists and locals on half day tours of Melbourne. In 1913, the services were expanded with the acquisition of another vehicle to include full day trips to Warburton and Flinders, and later, three-week tours between Sydney and Melbourne were added to the timetable. In 1919 a vehicle with then revolutionary pneumatic tyres was fitted, and in 1923 the service was operated by the "Pioneer Tourist Coaches Pty Ltd" and called "Pioneer Tourist Coaches". In 1927 Pioneer Tourist Coaches undertook transcontinental motor coach tours from Melbourne to Darwin, returning via the Queensland Coast. Pioneer Tourist Coaches began motor coach tours around Australia in 1934. In 1944, Mr Reginald Ansett, who had founded Ansett Airlines, acquired the coach company which had been started by Mr Withers. The coach service business then became known as "Ansett Pioneer". In 1955 this company introduced the first interstate express service from Melbourne to Sydney, and in 1957 undertook a survey of the route between Adelaide and Perth. It became the first motor coach company to run weekly trips across Australia from 1964. Ansett later sold the business, which thereafter operated as "Pioneer". Pioneer operated a coach service between Brisbane and Sydney from at least 1950. I am satisfied on the evidence, and particularly the evidence of David Raven, the Director of Operations of Greyhound Pioneer , that a coachline business called "Pioneer Tours" operated between 1950 and 1956, and the successor to that business operated from approximately 1956 to about 1987 as "Ansett-Pioneer". In about 1987 Ansett sold the Pioneer passenger coach business to a consortium of operators, and from that time until about 1993 the "Pioneer" passenger coach business continued to be operated as a distinct business and continued to operate coach services under the name "Pioneer" between Brisbane and Sydney. Commencing in about 1970, a passenger coach business styled "Pioneer Express" had a regular coach service and fare schedule. This continued until approximately March 1974, when the business was operated as "Ansett Pioneer". This styling lasted until approximately October 1987. Greyhound Coach Service originated in Toowoomba, when a Mr Penfold began operating a coach company in the circumstances of a rail strike. The first passengers travelled in the latest "Willy's Overland Bullnose Whippet" coach, whose emblem of the racing whippet became the Greyhound Coaches logo. In 1938 Mr Penfold introduced padded aircraft-style seating, with a rear opening door and an observation platform on the coach service. This coach business continued to grow, and eventually, Pioneer and Greyhound became the two major operators of motor coaches in Australia. Until "Greyhound Pioneer", under that designation, commenced operating from about October 1993, there had been a passenger service which operated as either "Pioneer", or "Pioneer Express", or "Pioneer National Express". In 1988 Pioneer merged with Greyhound, and in 1990 the coach services which previously had operated as "Greyhound" Coaches, and that each service operated as "Pioneer" along with "Bus Australia" coaches (owned by Australian Coachlines Pty Ltd) became part of "Australian Coachlines Group". In 1993 Australian Coachlines Pty Ltd, which owned Greyhound Australia and Pioneer, merged with Bowra Holdings Ltd, the owner and operator of Bus Australia Ltd, to form Greyhound Pioneer Australia Ltd. The evidence shows that, since 1993, the applicant has operated its coachline services under the style of "Greyhound Pioneer". The applicant is thus the successor of various motor coach passenger and freight transport businesses in Australia dating back to 1905, which has used the word "Pioneer" as an important part of its trading designation. It is clear from the evidence that the applicant has had a turbulent recent corporate history. In my view, however, the turbulent financial history in recent times is not relevant to the legal questions in this present application. In any event, the evidence of Mr Trenton Clark, Chief Financial Officer of Greyhound Pioneer, is that the business of the applicant is currently trading profitably. I am satisfied that Greyhound Pioneer has an established reputation as a bus operator throughout Australia, including the Brisbane to Sydney run, and that an important element in its business reputation resides in the use of the name "Pioneer" as part of the name under which it trades and provides its passenger services. A business styled "Pioneer Motor Service" operated a bus service on the New South Wales south coast, initially between Sydney and Nowra and then, after 1946, between Sydney and Eden. In May 1995, this business came under the control of Mr John King and his family, and the company "Auburn Coaches Pty Ltd" ("Auburn Coaches") under which Mr King and his family had operated a coach service, changed its name to "Pioneer Motor Service Pty Ltd" on 20 May 1996. In June 1996, Pioneer Motor Service Pty Ltd acquired two return services from Brisbane to Sydney of "Kirklands Coaches". It was only after the acquisition of Kirklands that Pioneer Motor Services began to operate on the Brisbane/Sydney route. Before this time, the operations of that company were limited to services south of Sydney. On 15 August 1996, the respondent also acquired the business of "Lindsey Brothers", which had operated, amongst other things, a coach service between Sydney and Brisbane under the predominant name of "Lindsays". After the acquisition by the respondent of the service operated under the name "Kirklands" and a service operated under the name "Lindsays", it continued to operate the services under the name "Kirklands" or "Lindsays" until 30 October 1996, although the name "Pioneer Motor Service" was noted on the timetable. On 30 October 1996, the respondent amalgamated the services and created one timetable using the sole name "Pioneer Motor Service" and the services previously operated under the name "Kirklands" and "Lindsays" were operated solely under the name "Pioneer Motor Service". On the Brisbane to Sydney route, (which is the only route with which the present application is concerned), both the applicant and the respondent operate distinctive coach services. Both the applicant and the respondent use different colours on their stationery and their reservations desk, and the buses are painted in a quite different livery. Not all of the bus stops are the same for each service. Greyhound Pioneer has a distinctive mark, the famous "Greyhound" or "Whippet", which appears on each of its coaches and on much of its promotional material. The applicant and the respondent clearly mark their material, including their buses and their reservation documentation with their differing names. Notwithstanding this, the evidence establishes that the entry of Pioneer Motor Service into the Brisbane to Sydney coach route has caused a significant part of the travelling public to be misled into thinking that the two entities are one and the same. In my opinion, the conduct of the respondent in operating its business between Sydney and Brisbane using the phrase "Pioneer Motor Service" in circumstances where the applicant has a longstanding reputation by reference to the phrase "Greyhound Pioneer" has been the source of causing many people to think that the service operated by the respondent is the same as the service operated by the applicant. The central question is whether the conduct of the respondent in operating its service between Brisbane and Sydney under the name "Pioneer Motor Service" is in trade or commerce, misleading or deceptive. On the evidence, I have no doubt that it is. The evidence of Mr Marwick concerning the conduct of passengers at the Transit Centre in Brisbane is particularly illuminating. Notwithstanding the differences in get-up between the Greyhound Pioneer business as reflected in its desk at the Transit Centre in Brisbane and the get-up at the desk for the respondent, Mr Marwick's evidence is that customers with Pioneer Motor Service tickets frequently enquire about or check in for Pioneer Motor Services at the Greyhound Pioneer desk. The evidence of a number of travel agents who were called as witnesses similarly demonstrates that a significant segment of the coach travelling public did not appreciate that there were two types of "Pioneer" services, and that passengers had not infrequently sought tickets on one service when in fact they wished to have tickets on the other. My assessment from the evidence is that a significant number of travellers used "Pioneer" as a shorthand for "Greyhound Pioneer" and were ignorant of the business of the respondent, yet, on the other hand, there was a not insignificant number of potential customers who simply did not know that a reference to "Pioneer" could refer to (and was in fact understood to refer to) competitors on the Sydney-Brisbane passenger coach route. Perhaps the most persuasive evidence of the misleading or deceptive nature of the conduct of the respondent in entering into competition with Greyhound Pioneer on the Brisbane/Sydney route with "Pioneer" as part of its name is to be found in the evidence of Mr John King himself. In an affidavit of Mr King filed 29 May 1997, he said that there was only one route which is in direct competition with the applicant company, that route being taken three times per day from Brisbane to Sydney to Eden and return. He admits that in 1995 he knew of Greyhound Pioneer, knew that when the respondent commenced operating the Sydney to Brisbane route from 27 October onwards as "Pioneer Motor Service", he was competing with Greyhound Pioneer on that route. He advanced the contention that Pioneer Motor Service has always competed with Greyhound Pioneer on the Sydney-Nowra run, and subsequent to that, on the Sydney to Eden route. In a letter of 24 December 1996 addressed to the directors of the respondent, the solicitors for the applicant said in part: To demonstrate the confusion over your name, our client logs calls to its nationwide reservation system, and can document several calls per day, including customer complaints, which are intended for Pioneer Motor Services. Our client assumes that you receive a similar number of calls intended for GPA. Our client is continuing to log this information. It is clearly untenable for your use of "Pioneer" to continue to mislead the public. GPA has a prior and wider reputation in the word "Pioneer" in relation to coach travel and freight services. Therefore, GPA requires that you cease using the word "Pioneer" in relation to the coach travel and freight services you supply. GPA acknowledges that it will take some time for you to change livery and advertising for your services. Therefore, GPA seeks an immediate undertaking from you that you will cease using the name, and that you will complete the change to your livery and advertising, over the next six weeks. Mr Patrick Sefton, a solicitor for the applicant, gave evidence (by affidavit), which was unchallenged. He said that on the day of the letter of 24 December, he received a phone call from Mr John King, the effect of which conversation Mr Sefton says is as follows: John King PMS has the same rights as Greyhound Pioneer to the name "Pioneer". Perhaps Greyhound Pioneer should start trading under the name "Greyhound". Patrick Sefton While GPA recognises that Pioneer Motor Services has been trading in the Nowra region for some time, it has only recently begun operating on routes up and down the East coast, and this is the problem. Our letter explains GPA's grievance. John King Pioneer Motor Services "inherited" the name. To change the name would be costly. Particularly since Pioneer Motor Services has recently taken over Lindsay's coaches. Pioneer Motor Services receives as many telephone calls for Greyhound Pioneer, as GPA does for Pioneer Motor Services. Patrick Sefton That's exactly the point. There is public confusion. Consumers are being confused over the two services. John King The turnover of Pioneer Motor Services is about five million dollars per year. I am open to an offer if Greyhound Pioneer wishes to buy the business from me. The price would be in the region of one year's turnover. Patrick Sefton I think it is unlikely that Greyhound Pioneer will want to buy the business. However, I will seek instructions and I will get back to you. [my emphasis] The concession by Mr King that Pioneer Motor Services receives as many phone calls from customers seeking the services of Greyhound Pioneer as Greyhound Pioneer receives from passengers seeking the services of Pioneer Motor Services is wholly consistent with the other evidence in this case and demonstrates beyond argument that the entry of Pioneer Motor Services to the motor coach business between Sydney and Brisbane was the reason that many customers fell into error in thinking that the services of Greyhound Pioneer were the services of Pioneer Motor Services, notwithstanding the different livery and get-up of selling desks and stationery. The confusion, it is accepted, also operated in reverse. The vice or the public deception, was occasioned by the use of the word "Pioneer" as part of the designation of the new entrant to the Brisbane/Sydney coach passenger business. I have already indicated my view that the financial difficulties of the applicant are irrelevant to the legal questions involved in the present proceedings. Further, while it was strenuously advanced on behalf of the respondent that Greyhound Pioneer focussed its marketing on the Greyhound name and the Greyhound logo, I simply do not accept that the connotation associated with the word "Pioneer" is an irrelevant part of the reputation of the applicant. The evidence is quite to the contrary. I am satisfied on the evidence that the conduct of the respondent in embarking on the Sydney to Brisbane route of the passenger coach business under the name Pioneer Motor Services was, and continuing to operate on that route under that nme is, conduct in contravention of s 52 of the TPA. It is true that the name under which that service was provided on the Brisbane to Sydney route subsequent to October 1996 was also the name by which services from Sydney to Nowra and, more recently Sydney to Eden had been conducted. That circumstance, in my opinion, does not entitle the respondent to move into a new area of business where such movement would be likely to mislead or deceive a not insignificant number of the coach travelling public into believing that Pioneer Motor Services was a part of or associated with, or had a connection with, the previous and continuing participant in that business, namely, Greyhound Pioneer. It was suggested on behalf of the respondent that: If the Pioneer Motor Service was stopped, the bus service...would go out of business within two weeks. The matter presently in issue is not a question of whether a bus service operated by the respondent should cease: the question is whether it is unlawful for it to operate under a style deceptively similar to that of a longstanding participant in the market. The cost of replacement, of both the livery of the motor coaches involved and the ticket desks, and stationery have been the subject of quite extravagant evidence before me. I think it is quite possible to use plastic decals to rebadge the motor vehicles under an appropriate non-misleading name, and at not very great cost. I accept that there would be some costs associated with new stationery and with a different name for the ticket desks servicing the Brisbane to Sydney route. The question of what is appropriate for the respondent in all the circumstances is very much a matter for it, but it cannot be that the respondent is entitled to point to the cost of ceasing to infringe the prohibition contained in s 52 as a justification for being permitted to continue in contravention of that section. For the above reasons I will make orders of a kind similar to that sought in paragraph 2 of the amended application filed 26 June 1997. In all the circumstances I propose to order that that order be stayed for a period of 28 days from the date of this order. I will hear the parties on costs. I certify that this and the preceding nine (9) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender