MacDonald v Special Days Pty Ltd [2004] FCA 1068

FEDERAL COURT OF AUSTRALIA

MacDonald v Special Days Pty Ltd [2004] FCA 1068 INJUNCTION – application for interlocutory injunction restraining publication of a magazine – whether there is a serious question to be tried – balance of convenience – full accounting records kept by secretary of respondent Trade Practices Act 1974 (Cth) s 52

Bullock v The Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464 referred to SmithKline Beecham (Australia) Pty Ltd v Herron Pharmaceuticals Pty Ltd [2001] FCA 361 referred to Hornsby Building Information Centre Proprietary Limited v Sydney Building Information Centre Limited (1977-1978) 140 CLR 216 referred to Pacific Publications Pty Ltd v IPC Media Pty Ltd (2003) 57 IPR 28 referred to STEPHEN HENRY MACDONALD v SPECIAL DAYS PTY LTD No QUD 149 of 2004 SPENDER J BRISBANE 16 AUGUST 2004

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY QUD 149 OF 2004

BETWEEN: STEPHEN HENRY MACDONALD

APPLICANT

AND: SPECIAL DAYS PTY LTD

RESPONDENT

JUDGE: SPENDER J

DATE OF ORDER: 16 AUGUST 2004

WHERE MADE: BRISBANE

THE COURT ORDERS THAT: 1. Interlocutory orders sought by the notice of motion filed 28 July 2004 be refused. 2. The respondent's costs on the application for interlocutory relief be the respondent's costs in the cause. 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 QUD 149 OF 2004

BETWEEN: STEPHEN HENRY MACDONALD

APPLICANT

AND: SPECIAL DAYS PTY LTD

RESPONDENT

JUDGE: SPENDER J

DATE: 16 AUGUST 2004

PLACE: BRISBANE

REASONS FOR JUDGMENT 1 By an application filed on 28 July 2004, Stephen Henry MacDonald seeks against Special Days Pty Ltd, in the principal application, damages in the sum of $250,000 for breach of copyright, breach of s 52 of the Trade Practices Act 1974 (Cth) ("the Act"), and passing off. 2 I am today concerned with a claim for interlocutory relief which seeks that the respondent be restrained, and an injunction be granted restraining it, from continuing to publish a magazine entitled "Pubs & Clubs Gold Coast" until the trial of this action (or earlier order) on a basis that in so doing the respondent is breaching the applicant's copyright, is in breach of s 52 of the Act and is passing off its business as the business of the applicant. 3 In respect of the application for interlocutory relief, it is necessary to consider first whether there is a serious question to be tried and, secondly, if so, where the balance of convenience lies. As was pointed out in Bullock v The Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464 by Sir Edward Woodward at 472: '… the two legs of the test need not be considered in isolation from each other. Thus an apparently strong claim may lead a court more readily to grant an injunction when the balance of convenience is fairly even. A more doubtful claim (which nevertheless raises 'a serious question to be tried') may still attract interlocutory relief if there is a marked balance of convenience in favour of it.' In SmithKline Beecham (Australia) Pty Ltd v Herron Pharmaceuticals Pty Ltd [2001] FCA 361, Hely J noted that the issue is whether there is a serious question to be tried, although the strength of the case is a relevant factor to take into account in conjunction with the assessment of where the balance of convenience lies. 4 This is an unusual case in my view, because the material, on my assessment, does not establish that there is any reputation of the applicant's publication on the Gold Coast, at least in respect of pubs and clubs on the Gold Coast, the advertisers of pubs and clubs on the Gold Coast, or persons who attend pubs and clubs on the Gold Coast. 5 Mr MacDonald owns and carries on a business called "The Pub & Club Guide". His business number is 18247180. That business name was registered on 3 October 2002 but the business commenced on 5 December 1997. 6 In an affidavit filed 13 August 2004, Mr MacDonald says that he owns and publishes through the business a quarterly magazine called "The Pub & Club Guide" which, he says, circulates in Brisbane, the Sunshine Coast and the Gold Coast. He says that he has had the business since December 2003 when he purchased it. 7 The current issue, Issue 22, is current until mid-September 2004. Mr MacDonald says that he found out about the respondent's magazine on 1 June 2004 and he proffers the observation that: 'The quality and printing is not very good. It's poor colour, it looks washed out.' 8 Mr MacDonald says that he contracts to a company called Worldwide Online that distributes 'my magazine to bottle shops plus pubs and clubs that advertise'. He says that the magazine goes to 100 bottle shops, ten of which are on the Gold Coast. His only advertiser so far on the Gold Coast is Twin Towns. He says that Saks Restaurant used to advertise. 9 In a second affidavit filed 13 August 2004, Mr MacDonald says that when he purchased the business in December 2003, it was his intention to immediately expand it. 'The major area in the first instance where I intended to expand the business was the Gold Coast.' He says: 'It was an obvious further outlet for the magazine having regard to: (i) steps that had already been taken to do business there - (being a reference to the fact that ten bottle shops on the Gold Coast received his magazine) and: '(ii) the area contains many entertainment businesses that are inclined to advertise in the type of magazine that I publish.' He continued: 'In fact, the plan was that once sufficient Gold Coast advertisers had been attracted to my magazine, a Gold Coast edition would be issued concurrently with my existing magazine. It would be called "The Pub & Club Guide Gold Coast edition", would contain only Gold Coast advertisers, and would be published in conjunction with the Brisbane edition.' 10 He complains that the publication by the respondent of a bi-monthly magazine which is called "Pubs & Clubs Gold Coast" has had a negative impact on his plans for expansion. 11 Mr MacDonald says: 'This has been mainly evidenced by the fact that the type of entertainment venues that would normally advertise in my magazine are instead advertising in the respondent's magazine.' and he refers to the fact that his Sales and Marketing Manager was intending to visit a number of establishments on the Gold Coast. 12 Two issues of each of the magazines are in evidence before me. The first two issues of the respondent's magazines, Issue Number 1 and Issue Number 2, show that the persons who advertise in those magazines are Gold Coast establishments, and the magazine is directed to pubs and clubs on the Gold Coast and to persons who might wish to visit those establishments. 13 There are two features of the respondent's magazine, to which specific attention was drawn by Mr Foley of counsel for the applicant, those being a "Chef Profile" of a chef at the Hope Island Tavern, and then a three-page spread of eating establishments with a photograph of the establishment or the food at the establishment and a description of it accompanying the photograph, giving details of its location and telephone number and the nature of the business conducted. 14 The two copies of the applicant's magazine in evidence are the magazine which was said to be current until June 2004, Issue Number 21 and a second issue, Issue Number 22, which is said to be current until September 2004. The most obvious difference about the cover of each magazine is the fact that the applicant's magazines are called "The Pub & Club Guide". The respondent's magazine is called "Pubs & Clubs Gold Coast". The colour, type-face and words are different and the actual contents are different, the applicant's magazine being directed almost entirely to pubs and clubs in the Brisbane area. 15 The applicant's magazine contained an article headed "Chef Profile" which relates to a chef at the Wynnum Services Club, and also under a section headed "Function On" gives details of various establishments which cater to functions. Under a section headed "Eating Out" it describes various hotels and clubs, almost all of which are Brisbane establishments, although I note at page 42 of Issue Number 21 there is a reference to Twin Towns Service Club, Wharf Street, Tweed Heads with a photo of the club and details of its services, its location and how it might be contacted. 16 An inspection of both magazines leads one to the impression, the very strong impression, that they are simply different magazines. One is directed at the pub and club market in Brisbane and the other is directed at the pub and club market on the Gold Coast. There is nothing in the material which persuades me to a view that there is a reputation or goodwill attaching to the applicant's magazines in the geographical market of the Gold Coast. 17 This is an interlocutory application and any findings that I might express have to be understood as being not a final determination of any question of fact, but for the purposes of interlocutory proceedings it seems to me to be the position that the applicant really is concerned that his plans for expansion to the Gold Coast have been "stymied" by the production of a magazine which would be very similar to his intended magazine, the Gold Coast edition of his "Pub & Club Guide". 18 In the absence of a reputation or goodwill of the applicant's magazines on the Gold Coast, I have grave doubts whether there is any serious question to be tried. But even if, contrary to my strong impression at the moment in that regard, there were a serious question to be tried on this material, the balance of convenience clearly is against the grant of an injunction. The consequence of an injunction would be to stop the business of the respondent. That is a course which should, in my view, only be adopted if it is the only way that irreparable damage to an applicant can be prevented. Here, if the applicant is successful in the principal proceedings, there is no reason to doubt that damages would be an adequate remedy. 19 The considerations that are relevant on claims such as this have been canvassed in great detail, I have to say, in the written submissions by counsel. The conclusion that I have reached is consistent with the observations by the High Court in Hornsby Building Information Centre Proprietary Limited v Sydney Building Information Centre Limited (1977-1978) 140 CLR 216; and in the factual circumstances of this case the observations of Sir Ninian Stephen at 231 are apposite: 'Neither the concept of such a centre nor its conduct is anything for which a monopoly can be claimed, any more than it could be claimed for, say, an art gallery. If the first commercial art gallery in a city meets with an enthusiastic response from the public, competitive galleries are likely to be attracted to the field. They will be free to enter it and to describe themselves as art galleries, that being the descriptive name appropriate to their business; and this despite the fact that the pioneer gallery might have chosen also to style itself "art gallery", prefixed by a regional name. For competitors' conduct to be misleading and deceptive they would have to have adopted as their names the same or a similar regional prefix followed by "art gallery". A quite distinct regional prefix, followed by "art gallery" would neither mislead nor deceive. The opposite view would involve treating this provision of the trade practices legislation as the source of a newly created monopoly heretofore unknown to the law and likely to deter new entrants into a field which ought to be open to legitimate competition. It is difficult to contemplate any less likely legislative source of such a consequence. The present case of building information centres is, I think, no different in principle.' 20 The judgment of Sir Ninian Stephen was agreed with by Jacobs J. It is relevant also to the circumstances of this case that note should be taken of the observation by the Chief Justice Sir Garfield Barwick, which is recorded at 217 and 218: 'I can imagine a case in which it is sufficient to say to a trader against whom an interim injunction is sought, "Keep account of all your sales and we will be able to make you pay in the long run if you are found to have been misleading the public". One would have thought that in many instances absolutely adequate.' 21 Here there is no evidence that there has been any attempt at appropriation of the reputation of the applicant and, in particular, nothing approaching the evidence that appeared in Pacific Publications Pty Ltd v IPC Media Pty Ltd (2003) 57 IPR 28. I note that Amanda Jane Stichbury, the sole director and secretary of the respondent, in par 26 of her affidavit filed 16 August 2004 says: 'In my position as secretary of the respondent company, I have kept full accounting records of all income associated with the magazine from advertising for Issue 1, Issue 2 and the soon to be published Issue 3 of the magazine.' 22 There is nothing to suggest that full details of advertising revenue from the publications of the respondent will not be available as relevant to any remedy that the applicant may establish at trial. In my judgment even if there be a serious question to be tried in relation to this matter (about which I have the gravest of reservations), the balance of convenience clearly inclines against a grant of any interlocutory relief. I decline to make any interlocutory orders. 23 I think in all the circumstances the appropriate order is that the respondent's costs on the application for interlocutory relief be the respondent's costs in the cause. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender