Salvatore Mercogliano and Others v Tampas Nominees Pty Ltd and Others [1993] FCA 419 (1 September 1993)

FEDERAL COURT OF AUSTRALIA

SALVATORE MERCOGLIANO AND OTHERS v. TAMPAS NOMINEES PTY LTD AND OTHERS
No. VG524 of 1993
FED No 699
Number of pages - 7
Contempt of Court

COURT

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION NORTHROP J

CATCHWORDS

Contempt of Court - breach of injunction - whether terms of injunction sufficiently clear - whether use of word "otherwise" restricted application of following term of injunction - ejusdum generis principle

HEARING

MELBOURNE, 12 August 1993
1:9:1993

Counsel for Applicant: Mr R.C. Macaw QC with Mr J.F. Styring

Solicitors for Applicant: Barker Gosling

Counsel for Respondent: Dr C.L. Pannam QC with Mr I.W.J. Bowditch

Solicitors for Respondent: Privitelli

ORDER

The Applicants' Motion, notice of which is dated 6 August 1993, be refused with costs.
Note: Settlement and entry of orders is dealt with in Order 36 of The Federal Court Rules

DECISION

NORTHROP J By motion, notice of which is dated 6 August 1993, the applicants are seeking a number of orders including orders that the respondents, Tampas Nominees Pty Ltd (Tampas) and Frank Mazzacca (Frank) be judged guilty of contempt of court in connection with this proceeding, that they be punished in relation to that contempt and that they pay the applicant's costs of the motion on a solicitor/client basis with those costs to be taxed forthwith. It is proposed to consider the motion for contempt first.

2. The facts relevant to the motion are not in any real dispute. For many years the applicants have conducted a bistro and restaurant business at 132-136 Lygon Street Carlton under a number of trading names including Pizza By The Metre. In about December 1992 Tampas commenced using the name Pizza Al Metro outside its premises at 152 Lygon Street Carlton in which it carried on the business of a bistro and restaurant. The applicants issued their application on 24 December 1992. They sought, among other claims for relief, injunctions against Tampas and its directors, the other respondents, being Frank and Margaret Mazzacca. The claims were based on a number of causes of action including claims based upon the Trade Practices Act 1974. On 7 January 1993 the Court made a number of orders including the following:
"1. Interlocutory injunction restraining the Respondents by

themselves, their employees or agents or otherwise howsoever
from conducting or promoting the First Respondent's business
in trade or commerce by using any sign visible from the
exterior of the premises at 152 Lygon Street, Carlton which
includes the expressions "Pizza a Metro", Pizza Al Metro" or
"Pizza by the Metre" or from otherwise using any of those
expressions in a way which suggests that it is part of the
name or style of the First Respondent's business.
2. Interlocutory injunction restraining the Respondents by
themselves, their employees or agents or otherwise howsoever
from representing the First Respondent's business as that of
the Applicant's or any of them or having the sponsorship or
approval of or being affiliated or connected with the
business of the Applicants or any of them."

3. It is to be assumed that these orders are to operate until the hearing and determination of the application or until further order.

4. There is no evidence to suggest that the respondents have made use of any of the names mentioned in the order by using them in any sign visible from the exterior of the premises at 152 Lygon Street Carlton since 7 January 1993. Since that date, however, Tampas has by way of transfer become registered as carrying on business under the name Pizza By The Metre under the Business Names Act 1962 (Vic). Tampas became so registered by way of transfer from the previous proprietor on 4 February 1993. The records show that the previous proprietor had become the registered proprietor of that name on 29 January 1993, had started the business on 3 November 1992 and had transferred the name to Tampas on 4 February 1992.

5. As a result of correspondence from the solicitors for the applicants to the Commissioner for Corporate Affairs, Victoria, the Commissioner made investigations to ascertain whether Tampas was in fact carrying on business under the registered name Pizza By The Metre. Thereafter, Frank acting as a director of Tampas signed a number of documents to produce to the Commissioner for the purpose of showing that Tampas was carrying on business at 152 Lygon Street under the business name Pizza By The Metre. These included a small number of letterheads in the name of Pizza By The Metre, the opening of a bank account in that name and instructions to suppliers of goods to Tampas to address in future the invoices to Pizza By the Metre. There is no doubt that Tampas and Frank, who in reality controls Tampas, engaged in this course of conduct with the specific intention of establishing the fact that it was carrying on business under the business name Pizza By The Metre at 152 Lygon Street Carlton. I accept that Frank did this deliberately but in the belief that in so acting neither he nor Tampas was acting in breach of the orders set out above. It is fair to say also that the cheque account was used for a very limited purpose and was not used for the business of Tampas. It also appears that, by doing this, Tampas, to some extent, was engaging in a course of deception. At the same time it is clear that neither Tampas nor Frank was engaging in any action whereby they were using signs visible from the exterior of the premises at 152 Lygon Street Carlton as referred to in order 1 of the orders made on 7 January 1993.

6. In conformity with the requirements of O 40 r 6 of the Federal Court Rules, the applicants provided a statement of charge against Tampas and Frank. This was a long document and need not be set out in full. As against Tampas, it stated that Tampas was in breach of the injunction and that since 7 January 1993 it had used the expression Pizza By The Metre in a way in which suggests that it is part of the name or style of the business of Tampas. Particulars are then given of documents signed by Frank in relation to the business name dealings, the bank accounts and the orders to its suppliers. As against Frank, the statement alleged that since 7 January 1993 he had used the expression Pizza By The Metre in a way in which suggested that it is part of the name or style of the business of Tampas. The particulars related to the documents he had signed in relation to the registration of the business name.

7. At the hearing, the facts alleged in the particulars of statement of charge were not challenged, but Frank relied on an affidavit to the effect that he, together with his wife, as the directors of Tampas, did not think, and still do not think, that the conduct alleged constituted any breach of injunction. This was on the basis that in no way was there any financial advantage to be gained from the use of the name Pizza By The Metre in a way that they did, that they had made no use of that phrase to attract custom to the business of Tampas and that accordingly there could be no breach of the injunction. It also stated that the previous proprietor of the name Pizza By The Metre had been using that name for some time but was not then trading under that name and that he thought that if he became registered as the proprietor that could prevent the applicants from obtaining registration of that name. He also said that he knew that if he obtained registration of the name he had to show that he was using it and so he engaged in the conduct the subject of the particulars contained in the statement of charge. I accept his evidence as set out in his affidavit sworn 11 August 1993, part only of which has been referred to.

8. In passing, it is noted that the applicants did not serve the respondents personally with the order made on 7 January 1993 as required by O 37 r 2 of the Federal Court Rules. However, there is no doubt that Tampas and Frank knew of the terms of the order. In the circumstances, and having regard to what was said by Burchett J in Windsurfing Industries Inc v Sailboards Australia Pty Ltd [1986] FCA 384; (1986) 69 ALR 534, and the fact that counsel for Tampas and Frank expressly did not seek to rely on any technicalities, I express no view on whether O 37 r 2 applies in this case. I draw attention to the motion which seeks, among other things, an order that Tampas and Frank be punished in relation to the contempt. The nature of the punishment is not specified. The punishment could include imprisonment. However, in the course of submissions, counsel for the applicants indicated that in addition to the order for costs, the orders sought were that Tampas:

"(a) forthwith notify all suppliers, National Australia Bank and
all other persons in dealings with whom it has used the
business name "Pizza by the Metre" since 7 January 1993 that
by reason of the order of the Honourable Mr Justice Ryan
made in this proceeding on 7 January 1993 it was not
entitled to use that business name;
(b) within seven days of the date hereof file and serve an
affidavit verifying that the requirements of paragraph (a)
have been met."

9. In approaching the issue of contempt, the first step is to construe the order of the Court which it is said has been offended. I refer to, and, with respect, agree with the opinion expressed by Southwell J in McNair Anderson Associates Pty Ltd v Hinch (1985) VR 309 at 311 and 312:

"Mr Winneke QC, who appeared with Mr Hayne for the plaintiff,
submitted that it was not open to the Court to go behind the
order, either by reference to the transcript or to the reasons for
judgment. He referred to Australian Consolidated Press Ltd v
Morgan [1965] HCA 21; (1965) 112 CLR 483 at p503 where Windeyer J said: "Those
who give undertakings to a court are bound by the language they
use. If its true meaning, although not immediately plain, can be
ascertained according to ordinary rules of construction, then the
person giving the undertaking is bound by it in that sense."
In my opinion, no different principle can be applied where
injunctions, rather than undertakings, are under consideration.
For my part I would have thought it would seldom be permissible in
proceedings for contempt to go behind the order and to examine the
reasons for judgment as an aid to construction of the order.
Borrie and Lowe in Law of Contempt, 2nd ed p395 say: "It is
clearly established that a person will not be held guilty of
contempt for breaking an injunction unless the terms of the
injunction are themselves clear and unambiguous." Accordingly,
one must first look at the order and decide whether it is clear
and unambiguous in its terms. If it is, then it is unnecessary to
look beyond it in order to aid construction: if it is not clear
and unambiguous in its terms, a breach of it could not be proved."

10. The views expressed in the quotation from Borrie and Lowe are consistent with the majority opinion expressed by Windeyer and Owen JJ in Australian Consolidated Press Limited at 506 and 515 to 516 respectively.

11. In construing the terms of the injunction granted, it is necessary to have regard to the way in which the applicants are basing their claims. These include breach of an agreement, breach of the Trade Practices Act, breach of the Fair Trading Act (Vic) and passing off. The complaints relate to the use being made by Tampas of the names in relation to its business premises which are close to the applicants' business in Lygon Street Carlton. It is fair to say that the persons who are likely to be affected by the actions of Tampas are those persons who are visiting Lygon Street, either with the intention of eating at a restaurant and who are attracted by the business name of Pizza By The Metre or who are attending Lygon Street with the intention of going to a restaurant called Pizza By the Metre. In this regard it is interesting to note the form of the order sought by the applicants at the hearing before the Court on 7 January 1993, namely:

"1. An interlocutory injunction restraining the Respondents by
themselves, their employees or agents or otherwise howsoever
from:
(a) conducting or promoting the First Respondent's
business in trade or commerce under or by reference to
a name or style which includes the expression "Pizza A
Metro", "Pizza Al Metro" or "Pizza by the Metre";
(b) otherwise representing the First Respondent's business
as that of or having the sponsorship or approval of or
being affiliated or connected with the business."

12. These words are very different from the words in the order. They make no reference to the respondents' business at 152 Lygon Street nor to signs to be seen from outside those premises.

13. Counsel for the applicants contended that order 1 of the order of 7 January 1993 contained two discrete injunctions, namely an injunction restraining the respondents "from conducting or promoting (the business of Tampas) in trade or commerce by using any sign visible from the exterior of the premises at 152 Lygon Street Carlton which includes the expression ... Pizza by the Metre" and, second, an injunction restraining the respondents from conducting or promoting the business of Tampas in trade or commerce "from otherwise using any of those expressions in a way which suggests that it is part of the name or style of the respondents' business". He contended that the facts proved in the case fall squarely within the second of those injunctions. He said that the use of the name Pizza By The Metre in relation to the business name registration, the bank, the letterheads and the notice to suppliers was making use of the name Pizza By The Metre in a way which suggests that it (the name) is part of a name or style of the business of Tampas. This is correct, but this is not the end of the matter.

14. The words "other" and "otherwise" are words of indefinite meaning. A reference to the large number of cases listed in Stroud's Judicial Dictionary under the headings "other" and "otherwise" illustrates the difficulty experienced in giving a meaning to those words. Much of the legal learning associated with the ejusdum generis principle arises from the meaning to be given to the words "other" and "otherwise". A reference to dictionaries is of no great assistance since the definitions given to the word "otherwise" include the word "other" which itself causes the uncertainty. Probably, having regard to the meanings given to the word "otherwise" in the Shorter Oxford English Dictionary and in the Macquarie Dictionary, the most appropriate meaning to be given to the word "otherwise" where last appearing in Order 1 of the injunction, is "in any other way". The problem remains since this then raises the question of what limitation, if any, should be given to the absolute words of the order.

15. Counsel for respondents contended that, on the proper construction of order 1 of the injunction, the word "otherwise" where last appearing limited the proscribed conduct to conduct "in relation to the promotion and presentation of the business to potential customers". Counsel for the applicants disputed that contention and asserted that the word "otherwise" was a word of extension and should not be construed so as to limit the conduct to a kind similar to that referred to in the first part of the order. Counsel contended further that the use of the name by Frank and Tampas in dealings with officers of the Commissioner for Corporate Affairs, the suppliers of the goods and to the bank constituted conduct directed to the public, either directly or indirectly, in breach of the injunction. This latter contention is not accepted. It is too remote.

16. Order 1 must be considered as a whole. It relates to the business of a bistro and restaurant being conducted by Tampas at 152 Lygon Street Carlton. The order was made in circumstances where the applicants were conducting a similar type of business nearby in Lygon Street. The applicants had established that they had a reputation in the name Pizza by the Metre in respect of their business. It had been held that the respondents, by using the name in respect of the business being carried on by Tampas at 152 Lygon Street, had engaged in conduct which was misleading or deceptive or likely to mislead or deceive within the meaning of s52 of the Trade Practices Act. The classes of persons likely to be misled or deceived were those who might desire to eat pizza and were influenced by the name "Pizza By The Metre" or went to the area with the intention of eating at Pizza By The Metre but went to the business of Tampas instead of that of the applicants. The whole of the first order is founded, in that context, on conduct taking place at or about 152 Lygon Street Carlton in connection with the use of the name, among others, Pizza By The Metre. The first part of the order refers specifically to "using any sign visible from the exterior of the premises". This would not prevent the use of a sign within the premises which was not visible from the exterior of the premises. It would appear that the first injunction of order 1 would not prevent Tampas from continuing to make pizza in a manner to enable it to be purchased "by the metre". A sign inside its business premises at Lygon Street which was not visible from outside the premises and which advertised pizza by the metre would not, presumably, constitute a breach of the terms of the injunction.

17. The second injunction of the first order continues "or from otherwise using (the name Pizza By The Metre) in a way which suggests that it is part of the name or style" of the Tampas business. There must be some limitation placed on this as a result of the use of the word "otherwise". It is difficult to see how this part of the order, in the absence of further evidence, would prevent the respondents conducting a bistro and restaurant under the name Pizza By The Metre in, say, Perth or Sydney. Likewise with respect to Frankston. The whole context of the first part of the order suggests that the conduct must be at or in the vicinity of 152 Lygon Street Carlton and that the conduct must be such as to be likely to mislead or deceive potential customers at or in the vicinity of 152 Lygon Street Carlton. Hence, the word "otherwise" limits the application of the following words to other conduct occurring at or in the vicinity of 152 Lygon Street Carlton.

18. In any event, this is a case where the principles enunciated by the majority of the High Court in Australian Consolidated Press Ltd v Morgan apply. That case involved an undertaking given to the court, but the same principles apply to an order of the Court. At 516 Owen J said that ambiguity and lack of precision in the undertaking were such that a finding of contempt should not be made. The full passage is set out at 515-516:

"For the purpose of the present proceedings it is sufficient, I
think, to refer to two cases. The first is Iberian Trust Ltd v
Founders Trust and Investment Co (1932) 2 KB 87. There the
plaintiff, which had transferred certain shares to the defendant,
sought a declaration that it was entitled to a return of a certain
proportion of those shares. The action was tried by Rowlatt J who
declared that the plaintiff was entitled to "the return by the
defendant" of the shares in question and ordered that "the
plaintiff do have a return of the said shares within fourteen days
from the date hereof". The shares were not returned and the
plaintiff sought to enforce the order by attachment of two of the
defendant's directors. Luxmoore J said: "In terms, the order
does not direct the defendant company to do anything - it says:
'that the plaintiff do have a return of the said shares within
fourteen days'. Am I to spell out of that an order on the
defendant company to do something? I think not. If the Court is
to punish anyone for not carrying out its order the order must in
unambiguous terms direct what is to be done" at p95. The second
case is Redwing Ltd v Redwing Forest Products Ltd (1947) 177 LT
387. The defendant in a passing off action had given certain
undertaking which were embodied in an order of the Court. The
plaintiff alleged that the undertaking had been broken and sought
to have the defendant's directors attached for contempt of court
and the defendant's property sequestrated. Jenkins J refusing the
application, said: "I cannot say I think that the undertakings
contained in the order were clearly drawn and I cannot say I
regard the questions of construction involved in them as entirely
easy questions, but in my judgment, a defendant cannot be
committed for contempt on the ground that upon one of two possible
constructions of an undertaking being given he has broken his
undertaking. For the purpose of relief of this character I think
the undertaking must be clear and the breach must be clear beyond
all questions" at p390.
With these statements of general principle I agree. In my opinion
the ambiguity of and lack of precision in the appellant's
undertaking which, it should be remembered, was originally drawn
by the respondents' solicitors in the District Court proceedings
are such that a finding of contempt should not be made."

19. At p506, Windeyer J said:

"I express no opinion as to the correctness of the construction of
the appellant's undertaking that Else-Mitchell J adopted. I do
not mean to say that it was erroneous. But it seems to me
impossible to say that the undertaking was clear or that a breach
of it was certainly established. I agree in the view that my
brother Owen expresses in the judgment that he is about to deliver
that on this ground, if on no other, the appeal should be
allowed."

20. Even if I am wrong in the construction I have given to the second injunction in order 1, it seems to me impossible to say that the order was clear or that a breach of it was certainly established. The ambiguity and lack of precision of the order are such that a finding of contempt should not be made.

21. The motion for contempt is refused with costs.

22. The other order sought by the notice dated 6 August 1993 is that Giacinto Mazzacca be added as a respondent to the proceeding with consequential orders. The basis of the motion is that Giacinto signed one of the documents addressed to a supplier of goods to Tampas to invoice the goods in the name of Pizza By The Metre. It appears that Giacinto is the son of Frank and was directed by Frank to sign the document. There is no evidence that Giacinto in any way exercises control of Tampas. At the most he is an agent of Tampas. There is no reason for joining him as a respondent. Accordingly that motion is refused also.