Re Tracey Lee Wickham v Associated Pool Builders Pty Ltd; Geoffrey James Ramsey; Sohkmet Pty Ltd; Westside Enterprises & Management Services Pty Ltd; Halhapin Pty Ltd; Directories (Australia) Pty Ltd and Australian Telecommunications Commissi [1986] FCA 309 (12 September 1986)

FEDERAL COURT OF AUSTRALIA

Re: TRACEY LEE WICKHAM
And: ASSOCIATED POOL BUILDERS PTY. LTD.; GEOFFREY JAMES RAMSEY; SOHKMET PTY.
LTD.; WESTSIDE ENTERPRISES & MANAGEMENT SERVICES PTY. LTD.; HALHAPIN PTY.
LTD.; DIRECTORIES (AUSTRALIA) PTY. LTD. and AUSTRALIAN TELECOMMUNICATIONS
COMMISSION
No. QLD G129 of 1986
Trade Practices - Injunction

COURT

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Spender J.

CATCHWORDS

Trade Practices - applicant agreed to promote and endorse respondent's products - respondent registered business name which includes applicant's name - promotion agreement terminated - whether continued use of business name contravenes ss.52, 53(c), 53(d) of Trade Practices Act 1974.

Injunction - interlocutory - principles applicable where applicant has strong prima facie case - adequacy of damages for infringement of goodwill and foregone royalties - delay in commencing proceedings.

Trade Practices Act 1974

American Cyanamid Co. v. Ethicon Ltd. [1975] UKHL 1; (1975) AC 396

Epitoma Pty. Ltd. v. Australasian Meat Industry Employees' Union (No.2) (1984) 54 ALR 730 at 734.

Fellowes and Son v. Fisher (1976) QB 122.

HEARING

BRISBANE
12:9:1986

COUNSEL for the applicant: Mr. L. Stephens instructed by L.S.J. Dyne

COUNSEL for the first, second and fifth respondent: Mr. A. Robb instructed by Hicks & Bennett

COUNSEL for the seventh respondent: Miss C. Cameron of Australian Government Solicitor

ORDER

Upon the undertaking in terms in paragraph 38 of Geoffrey James Ramsey on behalf of the first, second and third respondents, the application for interlocutory relief be dismissed.

The costs of the interlocutory proceedings be the first, second and fifth respondents' costs in the principal proceedings.

No order as to the costs of the sixth and seventh respondents.

The matter be mentioned at 9.15 a.m. Friday, 3 October 1986.

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

DECISION

Tracey Lee Wickham, the applicant, claims that Associated Pool Builders Pty. Ltd. and some of the other respondents are falsely representing that they have an affiliation or connection with her or that the pools which they manufacture or distribute have a sponsorship or approval which in fact they do not have.

2. This conduct is said to constitute misleading or deceptive conduct contrary to s.52 of the Trade Practices Act 1974 and also to involve a contravention of s.53(c) and (d).

3. She seeks interlocutory injunctions to restrain that conduct.

4. The applicant describes herself in her affidavit as a sportswoman, media personality and promoter. She deposes to an international sporting reputation. As a sportswoman she competed for Australia in two Commonwealth Games and won four gold medals for swimming. She held five world records in swimming events, and is the current record holder for the 400 and 800 metre distances. She won two gold medals in the World Championships in Berlin in 1978 and has been awarded an M.B.E. She has appeared in a number of television programmes and has been involved with a number of promotions.

5. On 10 September, that is, two days ago, she filed an application seeking an injunction to restrain a number of the respondents from the conduct to which I have referred. The injunction seeks to restrain the use in trade or commerce of the words, "Tracey Wickham", or any other colourable imitation thereof and the use in trade or commerce of a logo, in the shape of a letter "W", of two medal ribbons and medals. In particular, she seeks to restrain the publication in the 1987 edition of the Yellow Pages Telephone Directory of the words, "Tracey Wickham", or any words comprising them or the logo to which I have referred. Other auxiliary orders are sought.

6. By contract in February 1983, Miss Wickham and Associated Pool Builders Pty. Ltd., (hereafter called "A.P.B."), entered into an agreement whereby Miss Wickham authorised A.P.B. to use and exhibit her name and photograph in advertisements of A.P.B. swimming pools and in promotional and marketing material. She undertook to be available on reasonable notice to permit photographs to be taken for use by A.P.B and to endorse its products.

7. A royalty per pool was agreed to be paid, with Miss Wickham agreeing to make herself available upon reasonable notice for one personal appearance to promote A.P.B.'s swimming pools for every multiple of the sum of $1,000.00 of royalties that she received.

8. Clause 6 of the agreement provided:-

"Termination:-

This Agreement may be terminated -
(a) After the expiration of three (3) years from
the date hereof by one (1) month's notice in
by one party to the other, or

(b) Forthwith by Miss Wickham, if A.P.B. fails
to make payment to Miss Wickham of any
royalty due to her and such default
continues for a period of seven (7) days
after notice by Miss Wickham that she
requires payment of the royalty in
question."

That contract, which I will describe as a promotion agreement, was on foot for a number of years and, under it, not insubstantial sums by way of royalties were paid to Miss Wickham. However, difficulties arose between the parties in relation to it. In November 1984, A.P.B., under the name, Tracey Wickham Pools, and with the "W" medal logo, produced a circular dealing with the expansion of Tracey Wickham Pools to Sydney. On 14 January 1985, A.P.B. wrote to the applicant on a letterhead "Tracey Wickham Pools", and one may infer that Miss Wickham, at least from then onwards, knew of the use of that style of letterhead and advertising under the name "Tracey Wickham Pools".

9. On 5 December 1985, the then solicitors for Miss Wickham wrote complaining about the registration by A.P.B. as a business name of the name, Tracey Wickham Pools. In that letter the solicitors said, in part:-

"We are instructed that our client has never
consented to the company carrying on business
under her name and demands that it ceases doing so
forthwith. We further request that you
immediately file a notice of cessation of the
business name in the Corporate Affairs Office."

10. A search of the Register of Business Names shows that a number of business names, including or containing the words Tracey Wickham Pools, are currently registered. On 6 December 1985, the solicitors for A.P.B. complained of what was said to be non-performance by Miss Wickham of her obligations under that contract. Part of that letter said:

"We are instructed to request from you an
undertaking that you will comply with the
agreement in the future (if our client chooses to
renew the same) and that you will reasonably
promote our client's products."

11. On 10 December 1985, a letter in more acrimonious terms was sent by Miss Wickham's then solicitors. A.P.B.'s solicitor, by letter, on 11 December, continued the disagreement between the parties. On 18 December 1985, Miss Wickham's then solicitors wrote to the solicitors for A.P.B., saying in part:-

" 'Without Prejudice', we are instructed that our
client does not for the time being intend to take
steps to prevent your client trading under the
name 'Tracey Wickham Pools' however the business
name was registered without our client's consent
or knowledge, and she reserves her rights to take
such steps as she may see fit in the future to
prevent the unauthorised use of her name."

12. After some further correspondence, on 29 January 1986, the A.P.B's solicitors wrote to Miss Wickham's then solicitors to advise that "... pursuant to Clause 6(a) of the Promotion Agreement our client elects to give one (1) month's notice of the termination of the Agreement."

13. On 3 February 1986, Miss Wickham, through her solicitors, stated that she did not accept that the letter of 29 January was a valid notice, and herself gave notice of termination pursuant to clause 6(b), effective from 16 February 1986. That letter also contained an ultimatum concerning the non-payment of royalties:-

"Unless we hear from you by midday on Wednesday the
5th February, 1986 confirming your client's
acceptance of our client's requirements and
enclosing a statement for the number of pools sold
since February, 1983 and your client's cheque for
outstanding royalties, we have instructions to
commence proceedings without further notice."

14. On 11 February 1986, a letter enclosing a statement of royalty payments up to December 1985 was given. On 19 February 1986, Miss Wickham's then solicitors wrote a letter which in part said:-

"We note that in your telex of the 6th February,
1986, you assert that our client has no right to
demand that your client cease using the name
'Tracey Wickham Pools'. On our instructions, our
client granted to your client the right to carry
on business under the name 'Tracey Wickham Pools'
during the term of the agreement and we
respectfully suggest that the Court is unlikely to
accept your client's argument which is, as we
understand it, that our client granted to your
client the right to use her name in perpetuity in
consideration of an agreement capable of being
terminated by either party after the expiration of
three years from the date of commencement."

15. Also on 19 February, her then solicitors wrote to the solicitors for the first respondent. Part of that letter was in these terms:-

"We are instructed that unless we hear from you
within seven days that registration of the
business name 'Tracey Wickham Pools' has been
cancelled in every State where it has been
registered, and we receive your client's
undertaking not to represent that it has a
connection or affiliation with our client, we are
to commence proceedings for damages and an
injunction against your client."

16. On 19 June 1986, the then solicitors for Miss Wickham, again requested A.P.B. to cease using her name or photograph in advertisements and in promotional and marketing material, and continued:

"If all such advertising and material is not
withdrawn within twenty-one (21) days from the
date hereof, our client will take such action as
she may be advised to protect her rights."

17. At the end of July, letters were written by Miss Wickham's then solicitors to the Manager of Directories (Australia) Pty. Ltd., the Commissioner of Corporate Affairs, and the Trade Practices Commission, advising of Miss Wickham's objection to the form of advertisement then appearing in the Yellow Pages and, insofar as the Trade Practices Commission was concerned, requesting it to investigate alleged breaches of the Trade Practices Act. The Commission replied that its resources were finite and, on the priorities under which it operated, suggested that civil remedies were the route by which Miss Wickham should advance her interests.

18. There is no dispute that, since the termination of the promotion contract, A.P.B. has continued to use the name Tracey Wickham for promotion of its pools. The pools are, apparently, of high reputation, having won the 1985 Queensland Pool of the Year Award, and the 1985 National Pool of the Year Award.

19. The applicant's case is that, unless restrained, A.P.B. will infringe the goodwill that she has in her reputation, contravene ss.52, 53(c) and 53(d) of the Trade Practices Act 1974, and engage in passing off.

20. The first, second and fifth respondents assert that, at a lunch in December 1982 where a promotional agreement was discussed, an agreement was reached in respect of royalty and personal appearances. The second respondent, Geoffrey James Ramsey, deposes that:-

"...the applicant's then usual price for performing
a personal appearance was $500.00. We agreed with
her at the lunch that she would only have to do
one appearance for every multiple of $1,000.00 she
received, that is we agreed to double the rate of
payment to her. The reason for this was that we
told her at the lunch that the name of the
business would be Tracey Wickham Pools. We agreed
with her that in return for her selling to us the
name Tracey Wickham Pools that A.P.B. would pay
more than her usual rate."

21. A.P.B.'s case is that, for a consideration somehow represented in the consideration expressed in the written promotion agreement, there was, in effect, the sale in perpetuity by Miss Wickham of the name Tracey Wickham Pools and that, notwithstanding the termination of the promotion agreement in February 1986, contractually they are entitled to continue to conduct business under the name Tracey Wickham Pools, and, accordingly, that such conduct does not contravene ss.52, 53(c) or 53(d), or constitute passing off. Alternatively, they contend that Miss Wickham is estopped for a reasonable period from denying their entitlement to trade under the name "Tracey Wickham Pools".

22. On this interlocutory application, I must first consider whether there is a serious question to be tried.

23. If the promotion agreement was terminated in February 1986, then it is difficult, in the light of the promotional material and conduct of A.P.B., not to conclude that it is asserting an association or affiliation or sponsorship between its products and Miss Wickham. In particular, the Yellow Page advertisements which are sought to be enjoined contain the words "Tracey Wickham Pools" in quite large type with the W medal logo to which I referred and, below, the words "The name speaks for itself]" Advertisements to that effect are proposed to be inserted in the swimming pool section and the landscaping section of the Yellow Pages, and it is that imminent printing which leads to the urgency of this present application.

24. Notwithstanding the submission by counsel for the first respondent that the use of the name "Tracey Wickham Pools" does not imply a sponsorship or approval by Miss Wickham, without deciding whether the name itself has that consequence, in my view there cannot be much argument that the proposed advertisements indicate such a connection. Nevertheless, the question for trial is whether there is a basis for that sponsorship or approval.

25. In American Cyanamid Co. v. Ethicon Ltd. [1975] UKHL 1; (1975) AC 396, Lord Diplock (with whom Viscount Dilhorne, Lord Cross of Chelsea, Lord Salmon, and Lord Edmund-Davies agreed), referred to the supposed rule that the court is not entitled to take any account of the balance of convenience unless it has first been satisfied that if the case went to trial upon no other evidence than is before the court at the hearing of the application the plaintiff would be entitled to judgment for a permanent injunction in the same terms as the interlocutory injunction sought. At p.407, his Lordship stated:-

"Your Lordships should in my view take this
opportunity of declaring that there is no such
rule. The use of such expressions as 'a
probability,' 'a prima facie case,' or 'a strong
prima facie case' in the context of the exercise
of a discretionary power to grant an interlocutory
injunction leads to confusion as to the object
sought to be achieved by this form of temporary
relief. The court no doubt must be satisfied that
the claim is not frivolous or vexatious; in other
words, that there is a serious question to be
tried.
It is no part of the court's function at this
stage of the litigation to try to resolve
conflicts of evidence on affidavit as to facts on
which the claims of either party may ultimately
depend nor to decide difficult questions of law
which call for detailed argument and mature
considerations. These are matters to be dealt
with at the trial. One of the reasons for the
introduction of the practice of requiring an
undertaking as to damages upon the grant of an
interlocutory injunction was that 'it aided the
court in doing that which was its great object,
viz. abstaining from expressing any opinion upon
the merits of the case until the hearing':
Wakefield v. Duke of Buccleugh (1865) 12 LT 628,
629. So unless the material available to the
court at the hearing of the application for an
interlocutory injunction fails to disclose that
the plaintiff has any real prospect of succeeding
in his claim for a permanent injunction at the
trial, the court should go on to consider whether
the balance of convenience lies in favour of
granting or refusing the interlocutory relief that
is sought."

26. The High Court recently adopted this test in Murphy v. Lush (unreported, 27.6.86). The Full Court of the Federal Court (Sheppard, Morling and Beaumont JJ.) said in Epitoma Pty.Ltd. v. Australasian Meat Industry Employees' Union (No.2) (1984) 54 ALR 730 at 734:-

"In an application for an interlocutory injunction,
the court must inquire first whether there is a
serious question to be tried (see Australian
Coarse Grain Pool Pty.Ltd. v. Barley Marketing
Board of Queensland (1982) 46 ALR 398; 57 ALJR
425; Tableland Peanuts Pty.Ltd. v. Peanut
Marketing Board (1984) 52 ALR 651; 58 ALJR 283,
per Brennan J. at 284)."

27. There can be no argument that Miss Wickham clearly satisfies that test. The only problem in that regard is whether I may give effect to my impression of the strength of her case. In Pacific Hotels Pty. Ltd. v. Asian Pacific International Limited (unreported, 5.9.86), I stated:-

"The extent to which these principles admit of
exceptions is a controversial issue. (See C.
Gray, "Interlocutory Injunctions since Cyanamid",
40 CLJ 307, especially at 316-325.) One
suggested exception is where the facts of a case
are clear, and where 'the prospect of success is a
matter within the competence of the judge who
hears the interlocutory application' (Fellowes &
Son v. Fisher (1976) 1 QB 122 at 141 per Sir
John Pennycuick). This suggested exception has
been applied in a number of English cases,
including passing off cases (Newsweek Inc. v.
B.B.C. (1979) RPC 441; The Athletes Foot
Marketing Associates Inc. v. Cobra Sports Ltd.
(1980) RPC 343 at 349)."

28. Assuming that exception exists, the question in this present case is whether the facts are so ascertained as to permit a conclusion about the applicant's prospect of success. There are factual issues to be resolved involving the purport and effect of the luncheon conversation in December 1982. While I formed a tentative view as to the strong prospects of Miss Wickham's success on the issue of the contractual entitlement for which A.P.B. contends, that matter is properly one for the trial of this action, and will depend on an assessment of the accounts given by the parties to the conversations in question. That is a matter which cannot be determined without oral evidence, and the advantages which that gives in the resolution of conflicts between witnesses.

29. The position then is that a serious issue remains to be determined between the parties, and I have now to consider the balance of convenience. American Cyanamid Co. v. Ethicon Ltd. [1975] UKHL 1; (1975) AC 396 established the principles on which the discretion whether or not to grant an interlocutory injunction should be exercised.

30. Those principles usefully are set out by Browne L.J. in Fellowes and Son v. Fisher (1976) QB 122. The first principle is stated to be:-

"As to that, (i.e. the balance of convenience), the
governing principle is that the court should first
consider' whether, if the plaintiff succeeds at
the trial, he would be adequately compensated by
damages for any loss caused by the refusal to
grant an interlocutory injunction. 'If damages
...would be adequate remedy and the defendant
would be in a financial position to pay them, no
interlocutory injunction should normally be
granted, however strong the plaintiff's claim
appeared to be at that stage':"

And then follow six other principles. It is, in my view, on the first principle to which I have referred that Miss Wickham fails in her application for interlocutory relief, irrespective of the apparent strength of her claim.

31. No suggestion is made that the respondents lack the financial capacity to pay any damages ultimately awarded. Notwithstanding the difficulties of assessment of those damages, counsel for Miss Wickham correctly conceded that "it is possible to assess damages, but it would be difficult".

32. Any case involving an incursion of a person's goodwill or requiring a notional computation of foregone royalties, or that might have been earned had an injunction been granted, involves difficulties of assessment. But the difficulty of that assessment does not mean that damages are not an adequate remedy. One would expect that in those circumstances where, on a trial, a plaintiff's proprietary rights were held to have been infringed, any difficulties of assessment would be viewed beneficially towards the person whose rights had been infringed.

33. In the context of the negotiations between the parties, the dispute is essentially a commercial one and, if it be ultimately held that the first respondent is acting in a way that infringes Miss Wickham's rights, then a commercial assessment of what she ought to be paid for that unauthorised use of her goodwill and reputation is able to be made and there is nothing to suggest lack of capacity to pay it.

34. A further factor in considering the balance of convenience is that, because the application has not been brought until 10 September, shortly before the busiest months for selling swimming pools, and at a time when a large degree of the preparation and sales promotion for the forthcoming season has been embarked upon and financial commitments made, A.P.B. is now in a position where the damage that it would suffer will be considerably more than had an application been brought earlier.

35. Mr. Ramsey deposes that sales of swimming pools are slow in autumn and winter and considerably greater in spring and summer; that in September, October, and November he would expect the first respondent to sell at least 120 pool kits and stock levels will be built up in anticipation of that demand; that television advertising commencing Saturday, 13 September, has been booked and cannot be cancelled at this stage and that the liability of that advertising is in the order of $20,000.00.

36. The Queensland Pool and Spa Show run by the Queensland Swimming Pools Association, the major body of swimming pool manufacturers and sellers, in conjunction with the "Sunday Sun" newspaper, is scheduled to take place at the Brisbane Exhibition grounds on 19 to 21 September 1986 and, as part of the promotion of that show, A.P.B. has entered into an agreement to give away a swimming pool in return for advertising in the "Sunday Sun". Further promotional arrangements have been made with Kern Corporation Ltd. in opening a new centre at Sunnybank where another swimming pool has been provided by way of promotion of A.P.B. and the shopping centre. In addition, there are engineering drawings, advertising brochures and other material which will have to be replaced if it is restrained from using the name "Tracey Wickham Pools".

37. There are also the two advertisements costing $8,000.00 in the Yellow Pages. Only today has sufficient information appeared that it would be possible, were an injunction to be granted, for the content of those advertisements to be changed; but that is a matter which, in my view, does not affect the balance when viewed against the other expenses which will be thrown away should this injunction be granted on an interlocutory basis.

38. The final matter is delay. While one can understand the natural reluctance of Miss Wickham to resort to litigation and her hope that the matter could be resolved by negotiation, it is quite difficult to understand that the application was not commenced until 10 September. In that regard, the statement which appears in Snell's Principles of Equity, 28th Ed., (1982) at 644 is apposite. There the learned authors say:-

"...a lesser degree of acquiescence or laches
suffices to debar a plaintiff from interlocutory
relief than from obtaining a perpetual injunction;
the refusal of an interlocutory injunction is
merely a temporary rebuff, whereas the refusal of
a perpetual injunction at the trial of the action
'amounts to a decision that a right which has once
existed is absolutely and for ever lost.'
(Johnson v. Wyatt (1863) 2 De GJ & S 18 at 25,
per Turner L.J.). Moreover, interlocutory relief
is granted only in matters of urgency, so that a
plaintiff who delays thereby demonstrates the
absence of any urgency requiring prompt relief."

39. That is not to say that delay must necessarily result in that evidentiary conclusion being arrived at, but it is one of the matters to take into account. (See also Spry, The Principles of Equitable Remedies, 3rd Edition (1984), p.469 et seq.)

40. In this case, because of the delay, costs have been incurred which would have been avoided had a more timely application been made, and that is another telling factor against the grant of interlocutory relief.

41. The primary reason for which I refuse the application for interlocutory relief is that, in my view, if Miss Wickham can establish at trial contraventions of ss.52, 53(c), 53(d), or passing off, then damages will be an adequate remedy for her, and the respondents have the capacity to pay them.