Friday, April 4, 2014

Revisiting the Drake decision: when business names registrations go wrong

As I discussed in a recent blog post, registration of business names is mandatory in Australia and there are significant fines for not doing so.

The Australian Securities and Investments Commission  is now responsible for the regulation of business names and has been fairly restrictive in relation to registration of new business names which are similar to existing business names. So, to use a random example, “XYZ Finance” will not be permitted registration because it is too similar to “XYZ Financial Group”. Which might be fair enough, but what about where the business name applicant already has the business name “XYZ Finances”(the plural) registered as a business name? Is confusion likely then?

The Western Australian Supreme Court considered this in Barrie Drake v Commissioner for Corporate Affairs & Ors [1999] WASC 1049: Justice Owen stated:
“I think it is clear from the way the material was presented to the Court that the real issue in relation to the registration was whether the names are so similar that they were likely to cause confusion in the public mind.  The effect of the Minister’s direction under s9(1) is to prohibit registration of a name having that character.”
Unless the business names are likely to cause confusion, kin this case, having regard to the existing state of the registry, then the business name should be permitted to be registered.

If there has been an unreasonable exercise of administrative decision-making authority  to allow an ASIC registration for an unrelated business to prevent registration of the business name, then it is possible to seek an administrative review of the decision.
The test of what is reasonable is set out in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 229. The relevant section of this decision, which is accepted as fundamental law in Australia in the exercise of judicial discretion, is set out as follows:
"It is true that the discretion must be exercised reasonably. Now what does that mean? Lawyers familiar with the phraseology commonly used in relation to exercise of statutory discretions often use the word 'unreasonable' in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the things that must not be done. For instance, a person entrusted with a discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting 'unreasonably.' Similarly, there may be something so absurd that no sensible person could ever dream that it lay within the power of the authority. Warrington LJ in Short v Poole Corporation [1926] Ch 66 at 90, 91 gave the example of the red-haired teacher, dismissed because she had red hair. That is unreasonable in one sense. In another sense it is taking into consideration extraneous matters. It is so unreasonable that it may be described as being done in bad faith; and, in fact, all these things run into one another."

In Minister for Aboriginal Affairs v Peko-Wallsend (1986) 162 CLR 24 Mason J said that a decision may fail the Wednesbury test if the decision-maker failed to give appropriate weight to a relevant consideration. The relevant consideration here is that, in the example above, the applicant has the plural registered: it makes no difference to the effect and purpose of the Business Name Registration Act if the singular is also permitted to be registered.

1 comment:

  1. Registration should be mandatory for opening any business.Its important for saving rights of business and products and for many other important reasons. search trademarks