FEDERAL COURT OF AUSTRALIA First National Group of Independent Real Estate Agents Ltd v Elyod Investments Pty Ltd (No. 2) [2008] FCA 1471 FIRST NATIONAL GROUP OF INDEPENDENT REAL ESTATE AGENTS LTD (ACN 005 942 192) v ELYOD INVESTMENTS PTY LTD (ACN 124 432 471), PATRICK JOSEPH DOYLE and ANDREW BRENDAN DOYLE VID 175 of 2008 JESSUP J 7 OCTOBER 2008 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 175 of 2008 BETWEEN: FIRST NATIONAL GROUP OF INDEPENDENT REAL ESTATE AGENTS LTD (ACN 005 942 192) Applicant AND: ELYOD INVESTMENTS PTY LTD (ACN 124 432 471) First Respondent PATRICK JOSEPH DOYLE Second Respondent ANDREW BRENDAN DOYLE Third Respondent JUDGE: JESSUP J DATE OF ORDER: 7 OCTOBER 2008 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. A fine of $2,000 be imposed on the first respondent for its contempt of court by failing to comply with orders made by the court on 26 May 2008 in the following respects: 1. in breach of order 1 made that day, by failing to file, by 4.00 pm on 26 May 2008, a withdrawal of trade mark application No. 1214112 for "First National Business Brokers" listed on the Australian Trade Marks Register; 2. in breach of order 2 made that day, by failing to withdraw, by 4.00 pm on 26 May 2008, the registration of – (a) the Queensland business name "First National Business Brokers (BN20211545)" registered with the Queensland Office of Fair Trading; and (b) the New South Wales business name "First National Business Brokers (BN98331686)" registered with the New South Wales Department of Fair Trading; 3. in breach of order 3 made that day, by continuing to use, in the course of trade and commerce and in connection with the first respondent's business, as a trade mark the words "First National Real Estate" to promote, market and provide real estate agents' services; 4. in breach of order 4 made that day, by – 1. continuing to represent on the first respondent's website that the first respondent's business was sponsored, approved or authorised by the applicant to use the trade mark No. 565933; 2. continuing to represent on the first respondent's website in trade and commerce and in the course of the first respondent's business and in connection with the supply or possible supply of real estate agents' services and business broking services that the first respondent's business or services had the sponsorship or approval of the applicant; 3. continuing to represent on the first respondent's website in trade and commerce that the first, second and third respondents had the sponsorship or approval of, or were affiliated with, the applicant; 4. passing off, or enabling to be passed off, the first respondent's business and/or the service offered by it as a business or service of, or sponsored or approved by, or associated or connected with, the applicant or the applicant's business. 2. The first respondent pay the said fine to the Registrar on or before 31 October 2008. THE COURT DECLARES THAT: 3. The second respondent was in contempt of court by failing to comply with orders made by the court on 26 May 2008 in the following respects: 1. in breach of order 1 made that day, by failing to file, by 4.00 pm on 26 May 2008, a withdrawal of trade mark application No. 1214112 for "First National Business Brokers" listed on the Australian Trade Marks Register; 2. in breach of order 2 made that day, by failing to withdraw, by 4.00 pm on 26 May 2008, the registration of – (a) the Queensland business name "First National Business Brokers (BN20211545)" registered with the Queensland Office of Fair Trading; and (b) the New South Wales business name "First National Business Brokers (BN98331686)" registered with the New South Wales Department of Fair Trading; 3. in breach of order 3 made that day, by continuing to use, in the course of trade and commerce and in connection with the first respondent's business, as a trade mark the words "First National Real Estate" to promote, market and provide real estate agents' services; 4. in breach of order 4 made that day, by – 1. continuing to represent on the first respondent's website that the first respondent's business was sponsored, approved or authorised by the applicant to use the trade mark No. 565933; 2. continuing to represent on the first respondent's website in trade and commerce and in the course of the first respondent's business and in connection with the supply or possible supply of real estate agents' services and business broking services that the first respondent's business or services had the sponsorship or approval of the applicant; 3. continuing to represent on the first respondent's website in trade and commerce that the first, second and third respondents had the sponsorship or approval of, or were affiliated with, the applicant; 4. passing off, or enabling to be passed off, the first respondent's business and/or the service offered by it as a business or service of, or sponsored or approved by, or associated or connected with, the applicant or the applicant's business. 4. The third respondent was in contempt of court by failing to comply with orders made by the court on 26 May 2008 in the following respects: 1. in breach of order 1 made that day, by failing to file, by 4.00 pm on 26 May 2008, a withdrawal of trade mark application No. 1214112 for "First National Business Brokers" listed on the Australian Trade Marks Register; 2. in breach of order 2 made that day, by failing to withdraw, by 4.00 pm on 26 May 2008, the registration of – (a) the Queensland business name "First National Business Brokers (BN20211545)" registered with the Queensland Office of Fair Trading; and (b) the New South Wales business name "First National Business Brokers (BN98331686)" registered with the New South Wales Department of Fair Trading; 3. in breach of order 3 made that day, by continuing to use, in the course of trade and commerce and in connection with the first respondent's business, as a trade mark the words "First National Real Estate" to promote, market and provide real estate agents' services; 4. in breach of order 4 made that day, by – 1. continuing to represent on the first respondent's website that the first respondent's business was sponsored, approved or authorised by the applicant to use the trade mark No. 565933; 2. continuing to represent on the first respondent's website in trade and commerce and in the course of the first respondent's business and in connection with the supply or possible supply of real estate agents' services and business broking services that the first respondent's business or services had the sponsorship or approval of the applicant; 3. continuing to represent on the first respondent's website in trade and commerce that the first, second and third respondents had the sponsorship or approval of, or were affiliated with, the applicant; 4. passing off, or enabling to be passed off, the first respondent's business and/or the service offered by it as a business or service of, or sponsored or approved by, or associated or connected with, the applicant or the applicant's business. tHE COURT FURTHER ORDERS THAT: 5. The respondents pay the applicant's costs of its notice of motion filed on 11 July 2008, such costs to be taxed as between solicitor and client. 6. The applicant's costs of hearing judgment on the notice of motion be its costs on the motion. 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 VID 175 of 2008 BETWEEN: FIRST NATIONAL GROUP OF INDEPENDENT REAL ESTATE AGENTS LTD (ACN 005 942 192) Applicant AND: ELYOD INVESTMENTS PTY LTD (ACN 124 432 471) First Respondent PATRICK JOSEPH DOYLE Second Respondent ANDREW BRENDAN DOYLE Third Respondent JUDGE: JESSUP J DATE: 7 OCTOBER 2008 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 By Notice of Motion filed on 11 July 2008, the applicant has moved for the respondents to be punished for contempt of court, constituted by breaches of orders made by consent on 26 May 2008. The Notice of Motion is supported by a Statement of Charges, in which each of the three respondents is charged with contempt in four respects. The respondents have admitted the facts upon which the applicant relies, and have admitted also that they were in contempt of court as charged. The question which now arises concerns the orders which the court should make in relation to the respondents' admitted contempts. 2 I provided a brief statement of the nature of the proceeding in my reasons for judgment on the respondents' application for change of venue given on 18 August 2008: First National Group of Independent Real Estate Agents Ltd v Elyod Investments Pty Ltd [2008] FCA 1260. As I said on that occasion, it is alleged by the applicant that it carries on a real estate agency business called "First National", and that it has a number of registered trade marks, including "FIRST NATIONAL" (registration No. 565933) and marks which incorporate the expression "First National Real Estate". According to the applicant's allegations, the first respondent was previously entitled, pursuant to an agreement between them, to use the "First National" marks and get up. However, it is said that this agreement was terminated in February 2008, whereupon the first respondent had no further right to use those marks or get up. The applicant alleges that the first respondent continued to do so, and that the conduct in question also involved misleading or deceptive conduct in breach of the Trade Practices Act 1974 (Cth), and passing off. 3 On 26 May 2008, the court made the following orders by consent: 1. The Respondents by 4pm 26 May 2008 file a withdrawal of trade mark application no. 1214112 for FIRST NATIONAL BUSINESS BROKERS listed on the Australian Trade Marks Register and cease further prosecution of the said application. 2. The Respondents by 4pm 26 May 2008 withdraw the registration and discontinue using: (a) the Queensland business name FIRST NATIONAL BUSINESS BROKERS (BN20211545) registered with the Queensland Office of Fair Trading; and (b) the New South Wales business name FIRST NATIONAL BUSINESS BROKERS (BN98331686) registered with the New South Wales Department of Fair Trading. 3. Until the hearing and determination of the application or further order, the Respondents and each of them, whether by themselves, their employees, agents or otherwise howsoever, be restrained from using in the course of trade and commerce and in connexion with the First Respondent's business as a trade mark: (i) "FIRST NATIONAL BUSINESS BROKERS"; (ii) "FIRST NATIONAL"; (iii) "FIRST NATIONAL REAL ESTATE"; or any other trade mark that is substantially identical with or deceptively similar to Australian Registered Trade Mark No. 565933 and/or the Australian Registered Trade Marks, or any of them, to promote, market and provide real estate agents' services and/or business broking services or any services closely related to such services under or by reference to such trade marks. 4. Until the hearing and determination of the application or further order, the Respondents and each of them, whether by themselves, their employees, agents or howsoever otherwise, be restrained from: (i) representing that the First Respondent's business, or any services offered by it, is sponsored, approved or authorised by the Applicant to use the Trade Mark No. 565933 and/or the Australian Registered Trade Marks, or any of them; (ii) representing in trade and commerce and in the course of the First Respondent's business and in connection with the supply or possible supply of real estate agents' services and business broking services that any such business or services has the sponsorship or approval of the Applicant; (iii) representing in trade and commerce and that the First, Second and Third Respondents have the sponsorship or approval of or are affiliated with the Applicant; (iv) from passing off or enabling to be passed off the First Respondent's business and or the service offered by it as for a business or service of, or sponsored or approved by, or associated or connected with the Applicant or the Applicant's business. In its present motion, the applicant alleges, and the respondents admit, that the latter did not comply with these orders. 4 Before turning to the evidence as to the respondents' omissions, I should identify the respondents themselves. The first respondent, Elyod Investments Pty Ltd, is the company which was previously in agreement with the applicant, and, as alleged by the applicant, was then entitled to use the "First National" marks and get up. It carries on business as a real estate agent and business broker in Queensland, and possibly also in New South Wales. The second respondent, Patrick Joseph Doyle, is the director of the first respondent. The third respondent, Andrew Brendan Doyle, is an employee of the first respondent. There is no evidence as to the capacity in which he is so employed. However that may be, he consented to orders being made against him on 26 May 2008, and he admits that he did not comply with them. 5 As to the first order, the respondents have admitted, and I find, that they did not file a withdrawal of the trade mark application by 4.00 pm on 26 May 2008. Mr Patrick Doyle has sworn that, on 26 May 2008, he instructed an employee (presumably of the first respondent) to contact IP Australia to withdraw the application for the trade mark "First National Business Brokers". Mr Doyle assumed that he had left the matter in capable hands. He was not aware that the trade mark had not been withdrawn until he was notified of the applicant's Notice of Motion for contempt. Subsequently, Mr Doyle personally arranged for the withdrawal of the trade mark application. By letter to the first respondent dated 31 July 2008, IP Australia advised that the application had been recorded on the Trade Marks Register as withdrawn, and would be so advertised in the Official Journal. 6 As to the second order, the respondents have admitted, and I find, that they did not withdraw the registration of the Queensland business name "First National Business Brokers" by 4.00pm on 26 May 2008. Mr Doyle has sworn that, on 26 May 2008, he instructed his staff to "withdraw" that registration. However, it seems that it was not until 18 June 2008 that Mr Doyle signed a "Cessation of Business Under Business Name" form for the purposes of the Business Names Act 1962 (Qld). The only explanation for the delay between 26 May and 18 June was that it was only on or about the latter date that Mr Doyle discovered that his staff had not carried out his instructions. Unfortunately, even the form completed on 18 June 2008 named the first respondent as the "lodging party", and it has since transpired (and came to the respondents' notice only on 22 September 2008) that it was not the first respondent, but Mr Doyle himself, who was registered as carrying on business as "First National Business Brokers". In response to this revelation, counsel for Mr Doyle offered, and I accepted, an undertaking in the following terms: The second respondent by his counsel undertakes within seven days to do all things necessary to cause to be lodged the statement required by s 12(3) of the Business Names Act 1962 (Qld) notifying the Registrar that the second respondent has ceased to carry on business in the State of Queensland under the name "First National Business Brokers". 7 The respondents have also admitted, and I find, that they did not withdraw the registration of the New South Wales business name "First National Business Brokers" by 4.00 pm on 26 May 2008. Mr Doyle has sworn that, on 26 May 2008, he instructed his staff to remove the new South Wales registration of that business name. Something appears to have gone amiss with the paperwork required by the New South Wales Office of Fair Trading, since Mr Doyle has sworn that, when he became aware that "the forms were required to be lodged again", he did so as soon as possible. In evidence is a letter from the Office to Mr Doyle dated 14 July 2008, referring to an application to cancel registration of the business name dated on that day. The writer of the letter informed Mr Doyle that the application had been accepted, and that the business name had been cancelled. 8 As constituting breaches of the third and fourth orders made on 26 May 2008, the applicant relies upon the continued existence, on the first respondent's website, of the words "First National Real Estate". These words were previously on the website during the currency of the membership agreement with the applicant. The respondents have admitted, and I find, that the words were not removed promptly on 26 May 2008. Mr Doyle has sworn that he did everything within his power to remove the words from the first respondent's website. It seems that the website was built by a company called Port Plus Pty Ltd ("Port Plus"), and that, on 30 April 2008, the first respondent sent an email to them, informing them that it was no longer "Mermaid Beach First National Real Estate", and requesting that "the First National logo be immediately removed from our listings". A replacement logo was attached to the email. However, Port Plus appears to have done nothing about this request, notwithstanding the payment by the first respondent of its account on 30 May 2008. When he learned that the logo had not been changed as requested, on 23 June 2008 Mr Doyle sent a further email to Port Plus, asking them to rectify the situation immediately. According to an affidavit filed on behalf of the applicant, it was not until 14 July 2008 that the respondents' website bearing the name "First National Real Estate" was "dismantled". 9 By reason of the facts to which I have referred, and in the light of the admissions made on behalf of the respondents, I find that each of the respondents has failed to comply with the orders made on 26 May 2008, as follows: 1. in relation to the first order, by failing to file, by 4.00 pm on 26 May 2008, a withdrawal of trade mark application No. 1214112 for "First National Business Brokers" listed on the Australian Trade Marks Register; 2. in relation to the second order, by failing to withdraw, by 4.00 pm on 26 May 2008, the registration of – (a) the Queensland business name "First National Business Brokers (BN20211545)" registered with the Queensland Office of Fair Trading; and (b) the New South Wales business name "First National Business Brokers (BN98331686)" registered with the New South Wales Department of Fair Trading; 3. in relation to the third order, by continuing to use, in the course of trade and commerce and in connection with the first respondent's business, as a trade mark the words "First National Real Estate" to promote, market and provide real estate agents' services; 4. in relation to the fourth order, by – (a) continuing to represent on the first respondent's website that the first respondent's business was sponsored, approved or authorised by the applicant to use the trade mark No. 565933; (b) continuing to represent on the first respondent's website in trade and commerce and in the course of the first respondent's business and in connection with the supply or possible supply of real estate agents' services and business broking services that the first respondent's business or services had the sponsorship or approval of the applicant; (c) continuing to represent on the first respondent's website in trade and commerce that the first, second and third respondents had the sponsorship or approval of, or were affiliated with, the applicant; (d) passing off, or enabling to be passed off, the first respondent's business and/or the service offered by it as a business or service of, or sponsored or approved by, or associated or connected with, the applicant or the applicant's business. 10 The question then arises as to what order the court should make in relation to the respondents' contempts. The respondents have agreed to pay the applicant's costs on a solicitor/client basis, a circumstance which may be relevant to that question, even if only by way of background. 11 I do not consider that the respondents' contempts were wilful. I accept that, on the day the orders were made (being also the day upon which they had to be complied with) Mr Doyle gave instructions for steps to be taken which, if taken promptly and efficaciously, would have led at least to substantial compliance with the orders. I could not find, however, that he gave to his obligations under the orders the degree of serious and conscientious attention that the gravity of the subject-matter warranted. The court knows only that Mr Doyle instructed his staff to take certain steps on 26 May 2008. There is no suggestion that he took any early steps to satisfy himself that these instructions had been followed. In the case of the Queensland business name registration, more than three weeks passed before the required form was completed by Mr Doyle. In the case of the New South Wales business name registration, there is little or no evidence of exactly what step was taken and when, save that a form, acceptable to the Office of Fair Trading, was lodged on 14 July 2008, more than six weeks after the making of the orders. In the case of the website, it was not until 23 June 2008, four weeks after the orders, that Mr Doyle followed up on Port Plus's failure to carry out the earlier instructions given to them by the first respondent. I do not believe I should accept that the fairly casual approach demonstrated by these transactions was even approximately the best that the respondents could do. I feel confident that, if the achievement of a substantial commercial advantage depended on the respondents getting their paperwork right, and following through on the instructions they had given, these things would happen both promptly and efficiently. 12 At the hearing of the applicant's motion, the respondents apologised for what they described as their "tardiness" in complying with the orders. It was submitted on their behalf that at least some aspects of the orders required the doing of things that were beyond their control, and that they had not received the measure of assistance from government departments that they might have expected. As to this last aspect, I would say that there is nothing in the evidence before me from which I might infer that any administrative or like shortcoming on the part of persons in government employment was to any extent responsible for the respondents' failure to comply with the orders. Neither do I accept that compliance with the orders required the respondents to do anything that was beyond their control. The orders were made by consent. It is of the utmost importance in the administration of justice that a party not consent to the making of an order which imposes obligations on him or her without at least the normal degree of practical confidence that he or she will be able to discharge those obligations. On any view the orders in question here required the respondents to take steps which involved interfaces with other organisations. The respondents ought not to have consented to the orders if they considered that it might be beyond their control to take those steps. 13 Taking all of the above considerations into account, I consider that a fine ought to be imposed on the first respondent. That is necessary, in my view, to uphold the authority of the court and to leave no doubt but that orders made by the court must be complied with. I do not regard the first respondent's omissions as trivial, or even approximately so. I consider that its failure to comply with the orders was substantially the result of an overly casual approach to its obligations thereunder. On the other hand, the breaches in question were not wilful, the first respondent eventually, if belatedly, applied an appropriate measure of focus to the discharge of its obligations under the orders, and it has apologised to the court. These are all mitigating factors which I take into account, as I do the fact that the respondents will be obliged to pay the applicant's costs of the motion on a solicitor/client basis. 14 There are four contempts admitted by the first respondent, and found against it. Of those, two are constituted by the same omission – failing to remove the expression "First National" from the website – albeit that the orders in question were based upon different legal rules. The other two are constituted by different, yet related, omissions (the business names registration in Queensland and New South Wales respectively). If any one of these contempts were considered separately, I think that, in the light of the discretionary considerations to which I have referred above, a fine of $1,000 would be appropriate. However, I would be disposed to impose that fine only once in relation to the two website contempts, as I have identified them. Putting that consideration together with the two business name contempts, and applying the totality principle, I consider that a fine of $2,000 would be appropriate in the circumstances. 15 I am not disposed to fine the individual respondents in addition to the fine to be imposed on the first respondent. It was the first respondent which was the trading entity, to whose commercial benefit the continued use of the words "First National" would presumably accrue. Further, the nature of the orders made on 26 May 2008 was such that each could be complied with only once. Had the first respondent complied, there would have been no need for the other respondents to comply also. I consider that, given the relationship between the respondents, the authority of the court will be sufficiently upheld by the orders I propose in relation to the first, together with declarations recording the findings I have made in relation to the second and third. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup. Associate: Dated: 7 October 2008 Counsel for the Applicant: A Panna SC Solicitor for the Applicant: McDonald Partners Counsel for the Respondents: M Wright Solicitor for the Respondents: Wrightway Legal Date of Hearing: 22 September 2008 Date of Judgment: 7 October 2008