WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Cherry Lane Group Pty Ltd v. Jason Sillery
Case No. DAU2019-0008
1. The Parties
The Complainant is Cherry Lane Group Pty Ltd, Australia, represented by Kenna Teasdale Lawyers, Australia.
The Respondent is Jason Sillery, Australia, represented by Somerville Legal, Australia.
2. The Domain Names and Registrar
The disputed domain names <cherrylanefinance.com.au>, <cherrylanegroup.com.au>, and <cherrylaneinsurance.com.au> are registered with Web Address Registration Pty Ltd.
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on March 27, 2019. On March 27, 2019, the Center transmitted by email to Web Address Registration Pty Ltd a request for registrar verification in connection with the disputed domain names. On March 29, 2019, Web Address Registration Pty Ltd, transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant, but providing contact details which differed from that in the Complaint. The Center sent an email communication to the Complainant on April 8, 2019, providing the registrant and contact information disclosed by the Registrar, and inviting the Complainant to submit an amendment to the Complaint. The Complainant filed an amended Complaint on April 9, 2019.
The Center verified that the Complaint, together with the amended Complaint, satisfied the formal requirements of the .au Dispute Resolution Policy (the “Policy”), the Rules for .au Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for .au Domain Name Dispute Resolution Policy (the “Supplemental Rules”).
In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on April 10, 2019. In accordance with the Rules, paragraph 5(a), the due date for Response was April 30, 2019. The Response was filed with the Center on April 29, 2019.
The Center appointed Warwick A. Rothnie as the sole panelist in this matter on May 9, 2019. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.
On May 10, 2019, the Complainant submitted a supplemental filing to the Center.
4. Factual Background
It appears that the Respondent was operating a business as a finance or insurance broker prior to July 2016 under the name, or names based on, Cherry Lane. He was a sole trader, but one Darrell Jolly worked in at least the finance business.
The Respondent registered the disputed domain names in his own name in connection with that business. According to the Registrar’s verification, the Respondent registered <cherrylanefinance.com.au> first on January 27, 2014 (the Panel notes that the Respondent claims to have registered this disputed domain name on April 13, 2015). He registered the other two disputed domain names on March 5, 2015. Apparently, he used his Australian Business Number, ABN 59 446 126 797, as the basis for these registrations.
The Complainant was established in July 2016. The directors and shareholders were Mr Jolly, the Respondent and one Aron Underwood.
In connection with the incorporation of the Complainant, the three directors entered into an agreement with each other. According to the Response, the Respondent agreed to transfer his then three existing businesses, Cherry Lane Finance, Cherry Lane Insurance, and Cherry Lane Property to the Complainant. Under the terms of the agreement, the three directors agreed to split the income and expenses of:
(a) the Cherry Lane Finance business in three equal shares between them;
(b) the Cherry Lane Insurance business, wholly to the Respondent and Mr Jolly; and
(c) the Cherry Lane Property business in two equal shares between Mr Jolly and Mr Underwood.
Otherwise the expenses of the Complainant were to be borne equally between the three of them.
Shortly after the Complainant was incorporated and the existing businesses transferred to it, the Respondent sent an email to (now) the Complainant’s IT services provider requesting registration of <cherrylaneproperty.com.au> “as a matter of urgency given the Company Name has been registered”.
Unfortunately, by November 2017, relations between the Respondent and the other directors had broken down. As a result, on February 14, 2018, the Complainant, the Respondent, and Messrs Jolly and Underwood entered into a Deed of Settlement and Release. The terms of the Deed of Settlement and Release included that:
(a) all assets of [the Complainant] other than the Cherry Lane Insurance business were retained by [the Complainant] (cl. 2.4);
(b) the Respondent resigned as a director and the secretary of the Complainant (cl. 2.2.1);
(c) the Respondent transferred his shares in the Complainant to Messrs Jolly and Underwood (cl. 2.2.2);
(d) the Respondent transferred his one third share in the Cherry Lane Finance business to Messrs Jolly and Underwood (cl. 2.2.3);
(e) Mr Jolly transferred his 50% share in the Cherry Lane Insurance business to the Respondent (cl. 2.5);
(f) the Respondent agreed not to solicit finance broking business from customers of the Cherry Lane Finance business (without prejudice to his right to approach them to provide insurance broking services) (cl. 2.3);
(g) Messrs Jolly and Underwood agreed not to solicit customers of the Cherry Lane Insurance business to provide insurance broking services to them (without prejudice to their rights to approach them to provide finance broking services) (cl. 2.6);
(h) the Respondent agreed to transfer the business names Cherry Lane Finance and Cherry Lane Insurance to the Complainant (cl. 2.2.6); and
(i) each party agreed to do all things reasonably necessary to give effect to the terms of the Deed (cl. 7.1.).
In about March 2019, the Complainant paid renewal fees to extend the licences of the disputed domain names for another 5 years. It also attempted to have the registrations of the disputed domain names changed from the Respondent to its own name. The Respondent became aware of this and, alleging the Complainant’s continuing directors were engaging in fraudulent conduct, either blocked this attempt or had the transfers reversed by the Registrar. According to the Respondent, this conduct is the subject of a police inquiry.
By this stage, the Respondent and Mr. Jolly were engaged in proceedings in the family law courts.
The Respondent also blocked further use of the disputed domain names, including the email accounts used by the Complainant and took down the Complainant’s websites at the disputed domain names.
Following requests from the Complainant’s solicitor to transfer the disputed domain names to the Complainant, the Respondent’s solicitor replied stating that the Respondent was prepared to lease the disputed domain names to the Complainant for AUD 250 per month.
The Respondent had earlier cancelled his Australian Business Registration in July 2017. He reactivated that registration on April 9, 2019.
5. Discussion and Findings
Paragraph 4(a) of the Policy provides that in order to divest the Respondent of a disputed domain name, the Complainant must demonstrate each of the following:
(i) the disputed domain name is identical or confusingly similar to a name, trade mark or service mark in which the Complainant has rights; and
(ii) the Respondent has no rights or legitimate interests in respect of the disputed domain name; and
(iii) the disputed domain name has been registered or subsequently used in bad faith.
Paragraph 15(a) of the Rules directs the Panel to decide the Complaint on the basis of the statements and documents submitted and in accordance with the Policy, these Rules and any rules and principles of law that the Panel deems applicable.
Apart from documents requested by the Panel pursuant to paragraph 12 of the Rules, neither the Policy nor the Rules expressly provide for supplemental filings. Their admissibility is therefore in the discretion of the Panel bearing in mind the requirements under paragraph 10 of the Rules to ensure that the proceeding is conducted with due expedition and both parties are treated equally, with each party being given a fair opportunity to present its case. See, e.g.,auDA Overview of Panel Views on Selected auDRP Questions, First Edition 2014 (“auDA Overview”), section 4.2.
In the present case, the Complainant’s supplemental filing seeks to respond to the Respondent’s allegations that the Complainant or one of its directors engaged in fraudulent conduct. Given the seriousness of that allegation, it is appropriate to admit the supplemental filing.
A. Identical or Confusingly Similar
The first element that the Complainant must establish is that the disputed domain names ares identical with, or confusingly similar to, the Complainant’s name, trade mark or service mark.
There are two parts to this inquiry: the Complainant must demonstrate that it has rights in a trade mark and, if so, the disputed domain name must be identical or confusingly similar to the trade mark.
Under the Policy, a complainant may invoke protection on the basis of a name. According to paragraph 4(a)(i), the name must be one in which the Complainant has rights.
The footnote to paragraph 4(a)(i) relevantly states:
“For the purposes of this [P]olicy, auDA has determined that a [‘]name … in which the complainant has rights[‘] refers to:
(a) the complainant’s company, business or other legal or trading name, as registered with the relevant Australian government authority; or
(b) the complainant’s personal name.”
The Complainant’s corporate name, Cherry Lane Group Pty Ltd, therefore, qualifies as a name in which the Complainant has rights for the purposes of the Policy.
According to the Australian Business Names Register, the Complainant is also the holder of the registered business names Cherry Lane Finance and Cherry Lane Insurance. That is consistent with the arrangements agreed under the Deed of Settlement and Release. Both names therefore qualify as business names registered with the relevant Australian government authority and so “names” for the purposes of the Policy.
On the question of identity or confusing similarity, what is required is simply a comparison and assessment of the disputed domain name itself to the Complainant’s trade marks. This is different to the question under trade mark law which can require an assessment of the nature of the goods or services protected and those for which any impugned use is involved, geographical location or timing. Such matters, if relevant, may fall for consideration under the other elements of the Policy. Moreover, it is usually permissible to disregard the top-level suffix, <.com.au>, for the purposes of this comparison as functional component of the domain name naming system. See for example, GlobalCenter Pty Ltd v. Global Domain Hosting Pty Ltd, WIPO Case No. DAU2002-0001, and auDA auDRP Overview 1.0, section 1.2.
Applying these approaches to the present case, the Panel finds that:
(a) the disputed domain name <cherrylanegroup.com.au> is identical to the Complainant’s corporate name (disregarding the formal corporate identifiers “Pty Ltd”);
(b) the other two disputed domain names are identical to the Complainant’s corresponding registered business names.
Accordingly, the Complainant has established the first requirement under the Policy.
B. Rights or Legitimate Interests
The second requirement the Complainant must prove is that the Respondent has no rights or legitimate interests in the disputed domain name.
Paragraph 4(c) of the Policy provides that the following circumstances may be situations in which a respondent has rights or legitimate interests in a disputed domain name:
(i) before any notice to you of the dispute, your use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or
(ii) you (as an individual, business, or other organization) have been commonly known by the domain name, even if you have acquired no trade mark or service mark rights; or
(iii) you are making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trade mark or service mark at issue.
These are illustrative only and are not an exhaustive listing of the situations in which a respondent can show rights or legitimate interests in a domain name.
The onus of proving this requirement, like each element, falls on the Complainant. Previous panels have recognized the difficulties inherent in proving a negative, however, especially in circumstances where much of the relevant information is in, or likely to be in, the possession of the respondent. Accordingly, it is usually sufficient for a complainant to raise a prima facie case against the respondent under this head and an evidential burden will shift to the respondent to rebut that prima facie case. See, e.g., GlobalCenter Pty Ltd v. Global Domain Hosting Pty Ltd, WIPO Case No. DAU2002-0001; auDA auDRP Overview 1.0, section 2.1.
It is not in dispute between the parties that the Respondent is no longer associated with the Complainant or its businesses and has no licence or consent from the Complainant to register or use the disputed domain names.
The Respondent accepts that, upon the execution of the Deed of Settlement and Release and his retirement from the business, the Complainant retained all assets of the businesses except for the assets of the Insurance business. (The “assets” retained by or designated for the Respondent did not include the right to carry on business under the name Cherry Lane Finance as that was one of the business names he expressly agreed to transfer to the Complainant).
The Respondent says, however, that the assets of the Complainant never included the disputed domain names as they are not property, but mere licences, and were never transferred by the Respondent to the Complainant.
It is clear from the documents agreed between the three original directors and shareholders in the Complainant, and accepted by the Respondent in his Response, that the businesses then being operated by the Respondent in his own name were transferred to the Complainant on its establishment with agreements between them about how the income derived from, and expenses incurred by, those businesses would be allocated between them. The transfer of the businesses to the Complainant necessarily carried with it all of the rights and interests owned by or used in the businesses except to the extent expressly (or by necessary implication) excluded from the transfer. The fact that the registrations of the disputed domain names were not formally transferred to the Complainant does not detract from its enforceable nature in equity against the Respondent.
The Respondent points out that the disputed domain names were not specifically dealt with in the Deed of Settlement and Release. As already noted, however, clause 2.4 provided that all assets remained with the Complainant other than the assets of the insurance business. The rights to use the disputed domain names associated with the business were plainly assets of the business. While the assets of the insurance business were excluded from the acknowledgement in clause 2.4, the business name, Cherry Lane Financial, was expressly transferred to the Complainant. The Respondent therefore could not continue the insurance business by trading under that name. Having transferred the business name, it could not be suggested that he could retain the disputed domain name. Amongst other things, the right to register it depended on the business name under 2012-04 - Domain Name Eligibility and Allocation Policy Rules for the Open 2LDs, Schedule C clauses 2 and 3.
Moreover, so far as the record in this proceeding shows, the Respondent had no interest in the use or control of the disputed domain names from his retirement from the Complainant in February 2018 for over a year until he received notification that the Complainant had renewed the then expiring disputed domain name registrations.
Alternatively, the Respondent contends he has a right to the disputed domain name <cherrylaneinsurance.com.au> because he carried on business under that name from early 2015 to February 2018. By the Deed of Settlement and Release, however, he agreed to transfer that business name to the Complainant and ceased any trading activities under that business name.
Accordingly, the Panel finds that, on the record in this case, the Respondent does not have rights or legitimate interests in the disputed domain names under the Policy. The Complainant therefore has established the second requirement under the Policy.
C. Registered or Subsequently Used in Bad Faith
In contrast to the Uniform Domain Name Dispute Resolution Policy (UDRP), the Complainant must establish that the disputed domain name has been either registered or subsequently used in bad faith by the Respondent under the third requirement of the Policy. Registration or use in bad faith are disjunctive requirements under the Policy, not conjunctive as under the UDRP. See auDA auDRP Overview 1.0, section 3.1.
The requirement of bad faith, as under the UDRP, typically implies an attempt to take advantage of the trade mark significance of the disputed domain name without permission.
The Respondent’s actions in cutting off the Complainant’s access to the disputed domain names through which it conducts its businesses, including taking down the Complainant’s websites, and demanding payment of AUD 250 per month to restore access and use in circumstances where he does not have rights or legitimate interests in the disputed domain names clearly qualifies as use in bad faith under the Policy.
The Respondent contends that not all conduct which is “not in good faith” constitutes “bad faith” for the purposes of the Policy, citing Bendigo Community Telco Ltd v. IT Company Pty Ltd, LEADR Case No. auDRP04/14. The circumstances of that case, however, are very different to the present situation. That case concerned a three letter acronym in circumstances where the Panelist assumed the respondent engaged in a business of registering such domain names for their intrinsic value and there does not appear to be any suggestion that the respondent knew of the complainant until the complainant approached the respondent seeking to acquire the domain name. Even then, the use made of the domain name did not seek to trade on the significance of the domain name as an acronym for the complainant. In addition, there was evidence suggesting that the complainant did not trade under its acronym or use it promotionally until after the respondent refused to transfer the domain name to it. That is not this case.
Accordingly, the Panel finds that the Respondent at least has used the disputed domain names in bad faith. The Complainant therefore has established the third requirement under the Policy.
For all the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the disputed domain names <cherrylanefinance.com.au>, <cherrylanegroup.com.au>, and <cherrylaneinsurance.com.au> be transferred to the Complainant.
Warwick A. Rothnie
Date: May 23, 2019