Case: Conagra Inc v McCain Foods (Aust) Pty Ltd [1992] FCA 159 ; (1992) 33 FCR 302
Outcome: considered
In Conagra Inc v McCain Foods (Aust) Pty Ltd [1992] FCA 159 ; (1992) 33 FCR 302 at 355 Gummow J, sitting as a member of the Full Court, observed that: Within the passing off action, there is an accommodation and adjustment of three competing interests. First that of the plaintiff in protecting the commercial advantages flowing from his efforts and investment, secondly that of the defendant in being free to attract purchasers for his goods and services by what appears to him to be an effective means, and thirdly that of consumers in selecting between competing goods and services without the practice upon them of misrepresentations. 106 Anakin and Gold Kings' claim for damages for infringement of trade mark fails (see [52] above). For this reason claims made by Anakin and Gold Kings for damage to the value of the Trade Mark and for loss of the ability to licence others to use the Trade Mark are not of themselves sustainable. This is probably of limited significance in view of my finding that the claims for damages for passing-off and pursuant to s 82 of the Trade Practice Act succeed. The tort of passing off is concerned to prevent unfair competition and thus damage to a trader's goodwill ( Conagra Inc v McCain Foods (Aust) Pty Ltd per Lockhart J at 308). Section 82 provides for the recovery by a person who suffers loss or damage by conduct of another person done in contravention of s 52 or s 53 of that Act of the amount of that loss or damage. The following consideration of the damage allegedly suffered by Anakin and Gold Kings is limited to their claims for passing off and under the Trade Practices Act . 107 Anakin and Gold Kings alleged that they have lost the opportunity to make a profit on the sale of cooked meat to the respondent's restaurant. The evidence does not support this allegation. There is no reason to conclude that if the respondent had not engaged in conduct inconsistent with the norms established by s 52 and s 53 of the Trade Practices Act it would have purchased cooked meat from Anakin or Gold Kings or one of them. 108 Mrs Chau gave evidence that in about June 2005 she and her son had discussed opening BBQ King restaurants in Epping and Chatswood. She did not indicate whether she envisaged that these suburban restaurants would be operated by one or other of the applicants or, like the BBQ King Express outlets, by PAAC Group Pty Ltd which is not an applicant in this proceeding. No other director of an applicant gave evidence on this topic. It is conceded by the applicants that no steps have been taken by any of them to open a BBQ King restaurant in Epping. I am therefore sceptical about Mrs Chau's suggestion that a BBQ King restaurant has not been opened in Chatswood because to do so would create confusion with the respondent's restaurant. I am not satisfied that conduct of the respondent has resulted in Anakin or Gold Kings, or either of them, losing the opportunity to open additional BBQ King restaurants. 109 The applicants submitted that it can reasonably be inferred that the custom of the Chatswood restaurant includes the custom of persons who know of the BBQ King restaurant and, being under a misapprehension that the Chatswood restaurant is associated with the BBQ King restaurant, eat at the Chatswood restaurant rather than travel to the city to eat at the BBQ King restaurant. I accept that this inference should be drawn. First, I am satisfied that the respondent decided to operate its restaurant under the name Chatswood BBQ King because it considered that by doing so it might benefit from the reputation of the BBQ King restaurant. I see no reason to assume that its judgment in this regard was not correct (see Conagra Inc v McCain Foods (Aust) Pty Ltd per Lockhart J at 345 and the cases there cited). The evidence adduced by the applicants from customers who assumed a connection between the BBQ King restaurant and the respondent's restaurant provides support for this approach. 110 Precise evaluation of the damage suffered by Gold Kings by reason of the respondent's conduct is impossible. As mentioned above, the respondent's restaurant opened on 25 September 2005. A comparison of Gold Kings' trading accounts for the years ending 30 June 2005 and 30 June 2006 reveal that both its trading income and its gross profit from sales enjoyed a modest increase in the financial year in which the respondent's restaurant opened. A comparable increase in gross profit from sales in comparison with the previous year had been achieved by Anakin in the financial year ending 30 June 2004. 111 The financial records of the respondent indicate that it has traded at a loss since opening its restaurant in Chatswood. It is, however, probably more significant for present purposes to concentrate on its gross profit on trading in the two years for which its financial records are available. Its trading statement for the year ending 30 June 2006 shows gross profit on trading of $234,146.33. Its trading statement for the year ending 30 June 2007 shows gross profit on trading of $270,954.36. I infer that its gross profit on trading for the year ending 30 June 2007 would probably have also shown a modest increase over the previous year and thus have been in the order of $300,000.