Brisbane restaurant takes on hospo giant Merivale in surprise counterclaim over name

Sydney hospitality giant Merivale is being countersued over the name Establishment, after a Brisbane restaurant hit back at copycat accusations in the Federal Court.

The dispute began in February when Hemmes Trading Pty Limited (Justin Hemmes’ Merivale group) filed a lawsuit against Establishment 203 Pty Ltd, alleging the new upmarket Italian steakhouse in Fortitude Valley sought to “make substantial profits” by using an “identical” moniker to its Sydney CBD hospitality precinct Establishment.

Establishment 203, which denies the allegations, has since filed a counterclaim which seeks to remove Merivale’s Establishment trademark altogether.

It’s the latest development in a series of court cases involving Merivale, which have included an ongoing class action lawsuit alleging the company underpaid as many as 14,000 employees, and an appeal against the Inner West Council to turn 20 designated car parks into a beer garden at Marrickville pub The Vic (Vic on the Park).

The allegations follow widespread reports of a Totti’s lookalike restaurant in Paris, which prompted CEO Justin Hemmes to muse: “Don’t they say ‘imitation is the sincerest form of flattery’? I’m not sure I agree with that.”

Merivale seeks a court order to prevent Establishment 203 from using the name, as well as damages to compensate for the financial losses and dilution of Establishment’s licensing value caused by the similarity.

Merivale has used the Establishment mark to promote its hospitality precinct on George Street since the Sydney Olympics in September 2000, and says it now attracts around 20,000 customers each week to its bars, restaurants (including Mr. Wong and Sushi e), function spaces and a hotel.

Hatted restaurant Mr Wong is part of Merivale’s Establishment precinct.

Establishment 203 is the first restaurant from Stanbroke, one of the largest privately owned integrated beef and cattle companies in the world, based in Queensland. It opened in December with former Surfing the Menu host Ben O’Donoghue on board as executive chef, and Remon Van de Kerkhof (ex-Oncore by Clare Smyth) leading the front of house.

According to court documents, Merivale legal representatives asked Establishment 203 to cease using the name in November. They claim Establishment 203 refused to comply in “flagrant and contumelious disregard for the trademark owner’s rights” and will continue to do so “unless restrained” by the court.

Merivale lawyers argue the similarities in name present a “real risk” of confusing customers, leading them to mistakenly believe Establishment 203 is somehow endorsed by, licensed or otherwise commercially related to Establishment in Sydney.

Justin Hemmes in his new listening bar JAM.

In a defence filed late March, Establishment 203 denies the accusations, stating its name was chosen in good faith. The restaurant claims the name references the Stanbroke’s Establishment 203 abattoir in the regional Queensland town of Grantham, which has operated since 1997.

The Brisbane restaurant exclusively stocks steak from their Grantham abattoir, with a range of 14 different cuts of Angus, wagyu and grass-fed beef available on its From the Fire menu.

Establishment 203’s counterclaim seeks a court order to cancel and remove Merivale’s Establishment trademark. Their lawyers allege the mark fails to substantially distinguish Hemmes’ goods and services from those of other businesses − a requirement for trademark registration. Merivale denies the claim.

The dispute is ongoing, with parties ordered to file evidence ahead of the next case management hearing before Federal Court Justice Ian Jackman on July 17. The three-day hearing is scheduled for September 3.

But the hospitality giant will return to Federal Court beforehand, for a settlement hearing in an employment and industrial relations class action filed against associated entity M.R.V.L Investments Pty Ltd.

The lawsuit, brought by Adero Law on behalf of hospitality workers in 2019, alleges Merivale relied on an invalid Employee Collective Agreement, rather than the relevant industry award, to underpay up to 14,000 workers between 2013 and 2019.

Rory Markham from Adero Law is representing the group members in the underpayment class action against Merivale.

In March, Merivale reached a without-admission settlement with Adero Law, agreeing to a lump sum payment of $18,000,000 to cover all damages and costs − almost half of which is likely to go towards lawyers and the litigation funder.

The settlement agreement must gain approval of the Federal Court in order to proceed.

Hemmes Property Pty Ltd, another associated Merivale entity, also recently settled an appeal against the Inner West Council, which had initially declined an application to remove 20 on-site car parks at Marrickville pub The Vic, to use them as part of its extensive beer garden.

After a successful conciliation conference, the application was approved, allowing the outdoor area to function as a beer garden throughout the week, and until 2.30am from Thursdays to Saturdays.

Good Food reached out to Establishment 203 for comment. Merivale declined to comment.