Re Strathfield Car Radios Pty Ltd v Ryda Car Radios Pty Ltd and Theft Guard Alarma Pty Ltd [1986] FCA 189 (11 June 1986)

FEDERAL COURT OF AUSTRALIA

Re: STRATHFIELD CAR RADIOS PTY. LTD.
And: RYDA CAR RADIOS PTY. LTD. and THEFT GUARD ALARMA PTY. LTD.
No. G168 of 1986
Trade Practices - Injunction

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Neaves J.

CATCHWORDS

Trade Practices - Misleading or deceptive conduct - Advertisement in "Sydney Yellow Pages" - Similarity to name under which applicant carries on business - Application for interlocutory injunction - Whether serious question to be tried - Balance of convenience.

Injunction - Interlocutory - Test to be applied in determining whether injunction should be granted.

Trade Practices Act 1974 (Cth), s. 52

HEARING

SYDNEY
11:6:1986

ORDER

Upon Strathfield Car Radios Pty. Ltd. ("the applicant") by its counsel giving the usual undertaking as to damages, Ryda Car Radios Pty. Ltd. ("the first respondent") and Theft Guard Alarms Pty. Ltd. ("the second respondent") and each of them be restrained, whether by themselves, their servants or agents or otherwise, from causing to be published in the 1987 edition of the official classified telephone directory published by or on behalf of the Australian Telecommunications Commission (Telecom Australia), a publication commonly known as the "Sydney Yellow Pages", an advertisement in the form of the advertisement appearing at the bottom left hand side of p. 1512 of the 1986 edition of the said publication or an advertisement in respect of their respective businesses or either of them which includes the word "Strathfield" in such a manner as to be likely to cause members of the public to believe that the business being advertised is that of the applicant.

That, in the event that the respondents or either of them lodge for publication in the 1987 edition of the "Sydney Yellow Pages" a form or forms of advertisement in lieu of that appearing at the bottom left hand side of p. 1512 of the 1986 edition of the said publication, a copy of such advertisement or advertisements be delivered to the applicant or its solicitor within 7 days after the same shall have been lodged.

That the costs of the motion for interlocutory relief be costs in the substantive application.

That there be reserved to the parties liberty to apply on 2 days' notice.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

Strathfield Car Radios Pty. Ltd. ("the applicant") has commenced a proceeding in this Court against Ryda Car Radios Pty. Ltd. ("the first respondent") and Theft Guard Alarms Pty. Ltd. ("the second respondent") alleging that the first and second respondents have engaged in conduct that is misleading or deceptive or is likely to mislead or deceive contrary to s. 52 of the Trade Practices Act 1974 (Cth) ("the Act"). The conduct relied upon is the conduct of the first and second respondents in causing a certain advertisement to be published in the 1986 edition of the official classified telephone directory published by or on behalf of the Australian Telecommunications Commission (Telecom Australia) to serve the metropolitan area of Sydney, a publication commonly known as the "Sydney Yellow Pages". It is apparent that the first and second respondents intend to have published in the 1987 edition of the "Sydney Yellow Pages" an advertisement in the same form as that the subject of the applicant's complaint.

2. The applicant has now applied, by motion on notice, for interlocutory relief by way of an injunction restraining the first and second respondents or either of them "from advertising in the 1987 edition of the 'Sydney Yellow Pages' their products using the word 'Strathfield' appearing therein". The evidence before the Court establishes that the date by which advertisers wishing to have advertisements containing art work inserted in the 1987 edition of the "Sydney Yellow Pages" must lodge their advertising material with the publishers, Edward H. O'Brien Pty. Limited, is 13 June 1986.

3. The applicant carries on the business of selling, installing and servicing car radios, car alarms and communication systems for motor vehicles. It markets a wide range of brands of car radios, car alarms and communication systems. Its business is conducted from four locations, one at Strathfield, two at Parramatta and one at Wollongong.

4. The first and second respondents are engaged in similar business activities to those conducted by the applicant. The first respondent carries on business from two locations, one at Petersham and one at Chatswood. The business of the second respondent is carried on "in association with" that carried on by the first respondent at Petersham.

5. The business in which the applicant and the first and second respondents are engaged is a highly competitive one. According to the applicant, the profit margin on each unit of goods sold is small so that profitability depends on the volume of sales effected. In consequence, intensive advertising campaigns in the press and on radio and television are conducted in order to increase sales. The applicant contends that it advertises to a greater extent than the respondents.

6. The applicant caused its business to be advertised in the 1986 edition of the "Sydney Yellow Pages". It has an entry under the classification "Radios & Stereos - Automotive" giving its name in bold type and its address and telephone number in small type and referring to the display advertisement which appears on p. 1511. The display advertisement has the name "Strathfield Car Radios" prominently displayed at the top in moderately large white lettering on a rectangularly shaped black background with the abbreviations "Pty. Ltd." added but in a much less prominent manner. The advertisement refers to various brands of equipment which, it may be inferred, the applicant will supply, install and service. The telephone numbers of its premises at Strathfield and the telephone number of one of its premises at Parramatta follow in prominent type coloured red. The addresses of those premises are also given.

7. On the following page of the directory, p. 1512, appear three display advertisements inserted by the respondents. On the top left hand side of the page is an advertisement relating to the business of the first respondent conducted at premises known as 730 Parramatta Road, Petersham. Its dominant characteristic is the name "Ryda Car Radios" in red, the word "Ryda" appearing in very large type of a distinctive style.

8. At the bottom of p. 1512 are two display advertisements, each of similar size to the one to which I have already referred. The one on the left is the one of which the applicant complains. It has at its head the word "Strathfield" in very large and distinctive lettering. Immediately below are the words "Car Radio & Alarm" on one line and the word "Specialists" on the following line, those words being in large block capitals though smaller in size than the word "Strathfield". The advertisement then refers to the types of product sold, indicates that all major brands will be supplied at discount prices and states that professional installation and service is available. The telephone number appears in very bold block type and that is followed by the address at Petersham and the name "Theft Guard Alarms Pty. Ltd.". The telephone number and address are the same as those shown in the advertisement immediately above relating to the business of Ryda Car Radios Pty. Ltd.

9. The third of the three advertisements to which I have referred has the word "Chatswood" at the top in lettering as prominent as the word "Strathfield" in the advertisement for Theft Guard Alarms Pty. Ltd. and in lettering very similar to, but not identical with, that of the word "Strathfield". It is an advertisement for Ryda Car Radios Pty. Ltd. giving the address and telephone number of that company's business carried on at 676 Pacific Highway, Chatswood.

10. The application for interlocutory relief proceeded on the basis that there was no dispute, at least so far as that application was concerned, as to the formal matters necessary to invoke the provisions of s. 52 of the Act. It also proceeded on the basis that the applicant had, before commencing proceedings, given notice to the respondents that, if its demands were not met - as was, in fact, the case - application would be made to the Court for relief.

11. Contrary to the submission put by counsel for the respondents that a more stringent test should be applied, I regard it as being settled, at least so far as proceedings in this Court are concerned, that the first question to be answered in determining whether a case has been made for the grant of an interlocutory injunction is whether the applicant has shown that there is a serious question to be tried: see Epitoma Pty. Ltd. v. Australasian Meat Industry Employees' Union (1984) 3 FCR 55; Bullock v The Federated Furnishing Trades Society of Australasia (No. 1) (1985) 5 F.C.R. 464. The matter has been adverted to more recently by individual judges of the Court in Burswood Management Ltd. v. Burswood Casino Hotel/Motel Pty. Ltd. (1985) ATPR 40-579 at p 46, 709; Telmak Teleproducts Australia Pty. Ltd. v. Bond International Pty. Ltd. (1985) ATPR 40-592 at pp 46, 792-46, 793; State Government Insurance Office (Queensland) v. Australian Associated Motor Insurers Ltd. (13 June 1985 - unreported); Western Mail Ltd. v. West Australian Newspapers Ltd. (1985) A.T.P.R. 40-633 at p. 47, 153; Azemoudeh v. Minister for Immigration and Ethnic Affairs (10 October 1985 - unreported); Weston Communications Pty. Ltd. v. Fortune Communications Holdings Ltd. (1986) ATPR 40-651 at p 47, 259 and Budget Transport Industries Pty. Ltd. v. Giboland Pty. Ltd. (14 March 1986 - unreported).

12. The applicant's contention is that members of the public in their capacity as consumers or potential consumers of the goods and services in which the applicant deals are likely to be confused and misled by the advertisement complained of by reason of the use therein of the word "Strathfield" in combination with the words which immediately follow "Car Radio & Alarm Specialists". The applicant contends that it has spent considerable sums of money in extensive advertising campaigns to bring its name and the goods and services in which it deals before the public. It further says that persons who hear and see the applicant's advertisements on radio and television, advertisements which refer to "Strathfield Car Radios", consult the "Sydney Yellow Pages" to ascertain the applicant's business address or telephone number. Particular attention is directed to the very prominent manner in which the word "Strathfield" is displayed in the first line of the advertisement complained of which would clearly attract the eye of the user of the directory. Thus, it is said that, objectively considered, the respondents' advertisement which uses both the word "Strathfield" and the words "Car Radio and Alarm Specialists" so closely resembles the name under which the applicant carries on its business as to be confusing and likely to mislead or deceive consumers or potential consumers that if they deal with the business there advertised they will be doing business with the applicant. The applicant went so far as to submit that, as no connection is shown, or indeed suggested, between the businesses carried on by the respondents and the suburb of Strathfield, the use of that word in such a prominent position in the advertisement complained of is explicable only on the basis of an intention on the part of the respondents to cause confusion in the minds of the public and thereby derive an advantage from the applicant's advertising campaigns and its good name.

13. For the respondents it was submitted that a member of the public who consulted the "Sydney Yellow Pages" for the purpose of ascertaining the address or telephone number of Strathfield Car Radios Pty. Ltd. would immediately turn to that company's name in the alphabetical list of businesses within the classification "Radios & Stereos - Automotive" and would not be concerned with the display advertisements. It was further submitted that a member of the public who did consult the display advertisements would not be misled or deceived by the advertisement complained of as a reading of the advertisement as a whole would demonstrate that the business there referred to was not that of the applicant. It was contended that the evidence adduced by the applicant was not sufficient to entitle it to interlocutory relief as it did not establish a real likelihood that the public would be misled or deceived by the respondents' advertisement.

14. Applying the test to which I have adverted, I am satisfied that there is a serious question to be tried whether the respondents, by advertising in the manner to which reference has been made, have engaged in conduct that is misleading or deceptive or likely to mislead or deceive contrary to s. 52 of the Act. It seems to me to be clearly arguable that the advertisement in question, objectively examined, is capable of misleading members of the public in their capacity as consumers of the relevant goods and services and that the publication of it amounts to conduct in contravention of that section.

15. Before turning to the balance of convenience, I should notice a further submission on behalf of the respondents based upon the Yellow Pages Advertising Guidelines published by Telecom Australia in January 1986 as a guide to Telecom policy regarding the insertion of advertisements in classified directories. Particular reference was made to sub-pars. 27.5 and 27.9. Those sub-paragraphs read:

"27.5 All advertisements must show the
advertiser's name in one colour and in a manner
whereby it will be easily identifiable by the
directory user. The complete legal name must be
shown and any altered formation or any phraseology
used for the purpose of securing a particular
position in the alphabetical sequence will not be
permitted except as an additional listing where
registration of the name in its altered form is
obtained, or where the Registrar of Companies
(Commissioner of Corporate Affairs) indicates in
writing that he has no objection to the
re-arrangement of the name for such purpose.

"27.9 Where a registered business, firm or company
name incorporates a location as part of its title,
the location name must be in the same type style
and colour as the rest of the name. Where a
business, firm or company name associates a
location not part of the registered title, this
location must be shown in a different type size,
style or colour to avoid the impression that the
location name is part of the registered title."

It is submitted that the guidelines are designed, inter alia, to prevent the publication of misleading advertisements and that, as the advertisement in question complies with the guidelines - particularly the sub-paragraphs thereof set out above - its publication should not be regarded as conduct in breach of s. 52 of the Act.

16. In my opinion, the fact that an advertisement complies with the Yellow Pages Advertising Guidelines is of little, if any, significance in determining whether it is likely to mislead or deceive consumers or potential consumers of the goods or services the subject of the advertisement.

17. Turning to the balance of convenience, the advertisement, if permitted to appear in the 1987 edition of the "Sydney Yellow Pages" will have an effective life of at least a year. The opportunity to have it altered will not occur again until the 1988 edition is being prepared for publication. If, therefore, the advertisement is held to be misleading or deceptive in the relevant sense, the applicant will be prejudiced because there will be no means available to it to have the advertisement withdrawn from the 1987 edition of the publication. On the other hand, what prejudice is there to the respondents if they are restrained from publishing an advertisement in the 1987 edition in similar terms to that complained of in the current edition of the "Sydney Yellow Pages"? The only consequence will be that the respondents will need to change the format or content of the advertisement to remove any possibility of misleading the public that the business being advertised is that of the applicant. It seems to me to be of significance in this connection that it has not been suggested that the respondents' businesses have any connection with Strathfield as a location and it has not been demonstrated that any prejudice would be suffered by the respondents if the word "Strathfield" were deleted from the advertisement. I have also taken into account that there is still time, albeit a very limited time, for the respondents to arrange for an amended advertisement to be inserted in the 1987 edition of the publication. Another relevant factor is my own view that the prospects of the applicant succeeding in its substantive application are good.

18. I have, therefore, concluded that the balance of convenience is in favour of the grant of interlocutory relief.

19. I, therefore, order that, upon the applicant by its counsel giving the usual undertaking as to damages, the first and second respondents and each of them be restrained, whether by themselves, their servants or agents or otherwise, from causing to be published in the 1987 edition of the official classified telephone directory published by or on behalf of the Australian Telecommunications Commission (Telecom Australia), a publication commonly known as the "Sydney Yellow Pages", an advertisement in the form of the advertisement appearing at the bottom left hand side of p. 1512 of the 1986 edition of the said publication or an advertisement in respect of their respective businesses or either of them which includes the word "Strathfield" in such a manner as to be likely to cause members of the public to believe that the business being advertised is that of the applicant.

20. I further order that, in the event that the respondents or either of them lodge for publication in the 1987 edition of the "Sydney Yellow Pages" a form or forms of advertisement in lieu of that appearing at the bottom left hand side of p. 1512 of the 1986 edition of the said publication, a copy of such advertisement or advertisements be delivered to the applicant or its solicitor within 7 days after the same shall have been lodged.

21. I further order that the costs of the motion for interlocutory relief be costs in the substantive application.