FEDERAL COURT OF AUSTRALIA Australian Associated Motor Insurers Ltd v Australian Automotive Motor Inspection Centre Pty Ltd (No 2) [2003] FCA 1268 AUSTRALIAN ASSOCIATED MOTOR INSURERS LTD V AUSTRALIAN AUTOMOTIVE MOTOR INSPECTION CENTRE PTY LTD V683 of 2003 HEEREY J MELBOURNE 28 OCTOBER 2003 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V683 OF 2003 BETWEEN: AUSTRALIAN ASSOCIATED MOTOR INSURERS LTD ACN 004 791 744 APPLICANT AND: AUSTRALIAN AUTOMOTIVE MOTOR INSPECTION CENTRE PTY LTD and ANOTHER RESPONDENT JUDGE: HEEREY J DATE OF ORDER: 28 OCTOBER 2003 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: Upon the usual undertaking, there will be an order that: 1. The applicant have leave to file and serve an amended application and an amended statement of claim in the form exhibited as ABW7 to the affidavit of Anthony Brook Watson, sworn 22 October 2003. 2. Until a final hearing of this proceeding or further order, the first and second respondents, or either of them, whether by themselves, their directors, servants, employees or agents, or howsoever otherwise, be restrained from using the words, letters, signs or acronyms AMIC or AEMIC in the course of business conducted by them for the advertising, promotion, offer for sale and supply of services relating to the inspection, assessment and repair of motor vehicles. 3. Within seven days of the date of this order the first respondent take all necessary steps to effect the cessation of the registration of the business name AEMIC with the Victorian Office of Business Affairs, registration number B1716856U. 4. The respondents pay the applicant's costs of this application on an indemnity basis, such costs to be taxed and paid forthwith. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V683 OF 2003 BETWEEN: AUSTRALIAN ASSOCIATED MOTOR INSURERS LTD ACN 004 791 744 APPLICANT AND: AUSTRALIAN AUTOMOTIVE MOTOR INSPECTION CENTRE PTY LTD and ANOTHER RESPONDENT JUDGE: HEEREY J DATE: 28 OCTOBER 2003 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 On 2 October 2003 I granted an interlocutory injunction which in essence restrained the respondents from using the words, letter, sign or acronym AAMIC in the course of any business relating to the inspection, assessment and repair of motor vehicles; see Australian Associated Motor Insurers Ltd v Australian Automotive Motor Inspection Centre Pty Ltd [2003] FCA 1088. I shall treat those reasons as being incorporated in the present reasons. 2 By a notice of motion dated 22 October 2003 the applicant seeks a further interlocutory injunction restraining the respondents from using the words, letters, signs or acronyms AMIC or AEMIC in relation to the inspection, assessment and repair of motor vehicles. The motion also seeks an order that the first respondent take all necessary steps to effect the cessation of the registration of the business name AEMIC with the Victorian Office of Business Affairs. 3 The motion also seeks that within two days of the date of the order, the respondents file and serve an affidavit giving explanations as to (a) the steps they have taken to comply with order 2(a) of my earlier order (removal of White Pages internet listing for AAMIC), (b) the reasons for writing the two letters hereafter mentioned and (c) the reason why the advertisement hereafter mentioned appeared in the October/November issue of the journal Motor Equipment News. At lunchtime today the respondents filed some affidavits which did provide explanations relating to these matters. Although the affidavits reveal conduct on the part of the respondents which is unsatisfactory, and which in that respect is relevant to the substantive injunction sought, there is no practical purpose in making this particular order. 4 There is evidence that on 8 October 2003 the respondents' solicitor, Mr Issac Brott, wrote to a Mr Alex Sims a letter demanding payment for $3594.80 for services allegedly rendered by the first respondent. The letter is headed "Re AAMIC v Yourself and AAMI, Assessment of Vehicle, Daewoo Lanos 3D Hatch, being registered number QNZ-973". The letter is as follows: "We wish to advise that we act on behalf of AAMIC being the Australian Automotive Motor Inspection Centre. You will note the following:- 1. per the attached authority you state, inter alia, as follows "I hereby authorise Australian Automotive Motor Inspection Centre (A.C.N. 104 887 863) ("AAMIC") to act as my agent in relation to all matters concerning the repair of my vehicle", 2. AAMI has refused/neglected/failed to make payment of the inspection fee in the value of $3,594.80 despite requests to do so, 3. consequently it is necessary for our client to recover its monies from AAMI but in conversation with yourself you have been uncooperative, 4. our client looks to you and AAMI for recovery of its bonofied claim for inspection fee which resulted in substantial gain for yourself, 5. it is also noted that you have provided a false name as the owner of the vehicle, 6. you acted as agent carrying out all dealings with AAMIC on behalf of the owner of the motor vehicle, 7. should you fail to attend this office to provide the statement as well as the name of the true owner of the motor vehicle who authorised you to act as agent on her behalf within four (4) days of the dispatch of this correspondence from this office it will be necessary to carry out a search of the motor registration vehicle being QNZ973 for the purposes of taking proceedings in the Magistrates' Court at Melbourne against yourself and the owner of the vehicle. Our client regrets that this demand is necessary but as you have expressed a clear refusal to honour the authority which is annexed hereto our client is not able and not in a position to take action against AAMI who are liable to you and to AAMIC for the inspection fee for which the owner of the vehicle and his/her agents being yourself are responsible for primarily. You have been placed on notice. This correspondence and prior correspondence will be submitted to the court on the question of costs should you fail to respond satisfactorily to this correspondence." 5 On the same date, Mr Brott wrote to a Mr Joe Buttigieg a letter as follows: "We advise we act on behalf of AAMIC. We attach the following:- 1. tax invoice number 1004, 2. overall evaluation, 3. estimate 1362, 4. extract from AAMI charter, 5. correspondence to AAMI, 6. authority executed by yourself "to act as agent" to AAMIC, 7. estimate 1372, 8. tax invoices 1006,1387, 9. letter by AAMIC to AAMI dated 10 September 2003, 10. CNR rental account. Our client has not received payment of accounts from AAMI. Unless you are prepared to pay outstanding accounts your client must necessarily either seek to recover from yourself or, as agent for yourself recover from AAMI This office requires a reaffirmation from yourself allowing us to issue proceedings in your same for the quantum outstanding and request you execute the attached authority is space indicated and return to this office within 48 hours. Our client instructs the following:- 1. any and all legal costs of this firm will be his/its (AAMIC's) responsibility and should any costs be awarded against yourself (i.e. the unlikely event) AAMIC will indemnify you and pay such costs, 2. should you fail to return the authority, duly and correctly executed within 72 hours of receipt of same our client has no option but to issue proceedings against yourself for recovery of debt to you. You will note that AAMIC has changed its name and is now AMIC, Automotive Motor Inspection Centre. Should you have any queries, please contact our Mr Brott by way of written correspondence and he will endeavour to assist you." 6 There is also evidence of an advertisement published in the October/November edition of Motor Equipment News which commences, "Who's AAMIC?" and repeats the AAMIC logo. According to one of the respondents' affidavits this magazine was published at the end of September, which was of course before my earlier order. So I do not place any further reliance on it. 7 However, the two letters came to the notice of the applicant's solicitors. On 17 October they wrote to Mr Brott, referring to the two letters using the acronym AAMIC and the advertisement and also the fact that the AAMIC listing was still on the White Pages website. The applicant's solicitors alleged that the use of the words AEMIC and AMIC were still phonetically and visually closely similar to AAMI and requested confirmation that the respondents would by Monday, 20 October 2003 cease using the AEMIC and AMIC acronyms. 8 Mr Brott did not reply to the letter but in an affidavit sworn today he deposed that the letters "were not sent in furtherance of any promotion or advertisement of AAMIC". He says further that the recipients "were very aware that AAMIC had no association with AAMI and that AAMIC was seeking to claim money from AAMI". He said in essence that the use of AAMIC was really following the citations he had used on prior correspondence. He said that in the letters he clearly stated that AAMIC had changed its name and is now known as AMIC, which was in accordance with his instructions at the time. He says, however, that he is now instructed by the first respondent that it no longer wishes to be known as AMIC and is in fact styling itself AEMIC, an acronym for Australian Engineering Motor Inspection Centre. 9 There was also affidavits filed on behalf of the respondent dealing with the continued existence of AAMIC on the White Pages website. Ms Melanie Burns, who is the second respondent and a director of the first respondent, on 7 October 2003, that is five days after the order, spoke to a person called Alison Bolding at Telstra and was told that the listing could be removed but it would take between two and four weeks. Ms Burns asked for that to be done. A day or two later Ms Burns spoke with Ms Belinda Mercuri, an accountant-bookkeeper for the first respondent, and requested her to write a letter to the Melbourne White Pages confirming the request. 10 Ms Mercuri deposes that she sent a letter to Melbourne White Pages. The letter is exhibited to her affidavit. It contains a letterhead with a logo, in the same oval-shaped form as that referred to in my earlier reasons, with the letters AEMIC, again in sans serif type, very similar to the logo referred to. Underneath it are the words "Australian Automotive Motor Inspection Centre". The letter requests the business name be cancelled and the user name be changed to "aemic". 11 In my opinion there is a serious issue to be tried that the new logos AMIC and AEMIC are deceptively similar to the applicant's marks. I think again the governing principle is that stated in the Australian Woollen Mills case referred to in my earlier judgment. As counsel for the applicants rightly stressed, in a sense this is a stronger case because the letters "AEMIC" are not a true acronym, that is to say, they are not the first letters of the respondent's name, and it seems highly arguable that they have been chosen not by accident but because the respondent thought that they were as close to the applicant's name as they could get without being subject to further injunction. 12 Again, there is the circumstance that an apparent tautology has been used to create a desired impact of letters which have a similar visual appearance and phonetic impact to that of the applicant's marks. Further, there was no evidence as to the reasons for the choice of these new acronyms. The respondents produced affidavits from four different deponents, but none who deposed as to the reason for the choice of the new acronyms. There was a valiant attempt by counsel from the bar table to say that they were chosen to minimise the costs of changing signage but in a way which would not cause confusion. Not only is there no evidence of that, but it seems an inherently unlikely explanation. 13 The applicant seeks leave to file and serve an amended application and statement of claim which will include the matters the subject of the present application. This is not opposed. Leave will be granted. 14 Upon the usual undertaking, there will be an order that: 1. The applicant have leave to file and serve an amended application and an amended statement of claim in the form exhibited as ABW7 to the affidavit of Anthony Brook Watson, sworn 22 October 2003. 2. Until a final hearing of this proceeding or further order, the first and second respondents, or either of them, whether by themselves, their directors, servants, employees or agents, or howsoever otherwise, be restrained from using the words, letters, signs or acronyms AMIC or AEMIC in the course of business conducted by them for the advertising, promotion, offer for sale and supply of services relating to the inspection, assessment and repair of motor vehicles. 3. Within seven days of the date of this order the first respondent take all necessary steps to effect the cessation of the registration of the business name AEMIC with the Victorian Office of Business Affairs, registration number B1716856U. 15 The applicant seeks an order that the respondents pay the applicant's costs of the notice of motion and the application and the amended statement of claim on an indemnity basis. It is true, as counsel for the respondents points out, that usually when an interlocutory injunction is granted costs are reserved or made costs in the cause. However, this is not the usual case. The reaction of the respondents to the Court's order of 2 October 2003 has ranged from lackadaisical nonchalance to patently disingenuous evasion. The Court has been trifled with. If the respondents are not careful, they will be facing contempt proceedings which could result in imprisonment. I think this is a clear case for the award of indemnity costs. I will order pursuant to O62 r 3(2) that they be taxed and paid forthwith. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. Associate: Dated: 7 November 2003 Counsel for the Applicant: M Wise Solicitors for the Applicant: Middletons Counsel for the Respondents: J Isles Solicitor for the Respondents: Isaac Brott & Co Date of Hearing: 28 October 2003 Date of Judgment: 28 October 2003