Advanced Medical Institute Pty Ltd v Channel Seven Sydney Pty Ltd

[2007] NSWSC 793

CITATION:	Advanced Medical Institute Pty Ltd & Anor v Channel Seven Sydney Pty Ltd [2007] NSWSC 793
HEARING DATE(S):	11 July 2007
JUDGMENT DATE :	24 July 2007
JUDGMENT OF:	Harrison J
DECISION:	(1) The defendant is released from the undertakings given by it on 16 October 2003. (2) I revoke the non-publication order made by me on 11 July 2007. (3) The plaintiffs are to pay the defendant’s costs.
CATCHWORDS:	DEFAMATION – undertakings “until further order” – application by defendant to be released from undertakings – principles to be applied on such an application – whether governed by principles of general application or constrained by the particular nature of the undertakings given in the face of a threatened defamation – whether significant change of circumstances established
CASES CITED:	Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc & Anor (1981) 148 CLR 170 Australian Broadcasting Corporation v O'Neill (2006) ALJR 1672; [2006] HCA 46 Baker v Beckett (Cohen J, 26 May 1998, unreported) Church of Scientology of California Inc & Anor v Reader's Digest Services Pty Ltd [1980] 1 NSWLR 344 Cutler v Wandsworth Stadium Ltd [1945] 1 All ER 103 In re the Will of F B Gilbert (dec) (1946) 46 SR (NSW) 318
PARTIES:	Advanced Medical Institute Pty Ltd (first plaintiff) Jacov Vaisman (second plaintiff) Channel Seven Sydney Pty Ltd (defendant)
FILE NUMBER(S):	SC 12672 of 2003
COUNSEL:	Mr A Leopold with Mr K Andronos (plaintiffs) Mr T Blackburn SC with Mr D Sibtain (defendant)
SOLICITORS:	Blake Dawson Waldron (plaintiffs) Mallesons Stephen Jacques (defendant)

- 20 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
DEFAMATION LIST

HARRISON J

24 July 2007

12672 of 2003 Advanced Medical Institute Pty Limited & Anor v Channel Seven Sydney Pty Limited

JUDGMENT

1 HARRISON J: By a notice of motion filed 3 July 2007, the defendant seeks an order that it be released from undertakings given by it on 16 October 2003. The undertakings were given by consent and without admissions. Despite the fact that the undertakings have apparently governed the relationship between the parties successfully for over three and a half years, the matter came before me as Duty Judge for the grant of relief on an urgent basis. I shall return to this issue.

2 The proceedings were originally commenced by a summons filed 13 October 2003 in which the plaintiff sought an injunction restraining publication by the defendant of a broadcast concerning the plaintiffs. The first plaintiff manufactures and distributes drugs, products and associated services relating to male sexual dysfunction. Upon the basis of promotional material broadcast by the defendant over the weekend preceding the original application, the plaintiffs sought to enjoin the defendant from broadcasting a programme, which the plaintiffs apprehended would be damaging to them and to their products and services.

3 When the matter came before Kirby J on 13 October 2003 the plaintiffs expressed concern about the likelihood that the defendant’s programme contained, or was likely to contain, a number of defamatory imputations. Those imputations were that the plaintiffs had each ripped off their various patients either in the treatment they had provided for impotence or the medication they had provided in the course of treatment. There was also the imputation, according to the plaintiffs, that the treatment had minimal effect in respect of the problems that the plaintiffs purported to address - namely, male impotence, erectile dysfunction and premature ejaculation.

4 Kirby J granted an ex parte interlocutory injunction. The defendant appeared. Undertakings given by the defendant four days later effectively maintaining the status quo, following a short hearing on the return of the summons, are the subject of the defendant’s present application. Those undertakings were as follows:-

“The Court notes the undertakings until further order of the defendant by its counsel without admissions:


1. not to publish of and concerning the plaintiffs or either of them any program containing the following words or words to substantially the same effect:

(a) “People being ripped off” ;

(b) “[any of the plaintiffs’ current products has] minimal if any beneficial effect” ;


(c) “involved in this scam and that’s I think a particularly distressing issue” ;

(d) “[The Therapeutic Goods Administration’s] chief medical adviser Dr John McEwen says Dr Vaisman’s company has found a clever but disturbing way around regulations governing medicines. Incredibly the nameless nasal spray isn’t even approved by his organisation, so it hasn’t undergone rigorous testing for safety” , unless containing words substantially to the following effect:

“[The Therapeutic Goods Administration’s] chief medical adviser Dr John McEwen says Dr Vaisman’s company has found a clever but disturbing way around regulations governing medicines. The current regulations do not apply to any of AMI’s products, so , incredibly the nameless nasal spray isn’t even approved by his organisation, so it hasn’t undergone rigorous testing for safety in Australia by the TGA ” ;
(e) “These people were adamant that it didn’t work and they would state that ‘It just doesn’t work, it didn’t do anything for me’” , unless immediately preceded by words substantially to the effect of “ [an employee or contractor of the first plaintiff] also took a lot of complaints indicating that for some people the medication does not work at all” ;

2. not to publish of and concerning the plaintiffs any program containing audio or visual material recorded at the first plaintiff’s premises consisting of a patient interview with an employee or contractor of the first plaintiff.”

5 It is important from the outset to understand the difference in approach to resolution of the present problem for which the parties respectively contended. Mr Blackburn SC who, with Mr Sibtain of counsel, appeared for the defendant, argued that the matter was to be determined having regard to the law regulating the grant of interlocutory injunctions in defamation actions. He argued that exceptional caution is required in determining whether or not to grant such an injunction and that, correspondingly, any application to release a party from undertakings that it had given, which operated, in effect, as an interlocutory injunction restraining a defamation, should be determined having regard to the principles regulating the grant of such injunctions. Mr Blackburn referred to Australian Broadcasting Corporation vO'Neill (2006) 80 ALJR 1672 at [16] and [19] per Gleeson CJ and Crennan J and per Gummow and Hayne JJ at [52] and [64], and Church of Scientology of California Inc & Anor v Reader’s Digest Services Pty Ltd [1980] 1 NSWLR 344 at [10] per Hunt J. In summary, the defendant contended that the correct test to be applied is whether there is material before the court, which would sustain the grant of an injunction.

6 Mr Leopold of counsel, who with Mr Andronos of counsel, appeared for the plaintiffs, argued that the law in relation to the question whether a court has power, otherwise than in the case of mistake operative at the time of giving it, to release a party from an undertaking, was governed by principles of general application unconstrained by the fact, as in the present case, that the subject matter of the undertakings was, or may have been, a threatened defamation. Mr Leopold referred to Adam P. Brown Male Fashions Pty Ltdv Philip Morris Inc & Anor (1981) 148 CLR 170 and Baker v Beckett (Cohen J, 26 May 1998, unreported).

7 It is convenient before proceeding further to compare the parties’ respective legal submissions.

8 Under the subheading Prior restraint of publication in defamation action, Gleeson CJ and Crennan J said the following: -

“ [16] In his widely quoted judgment in Bonnard v Perryman, in which Lord Esher MR, and Lindley, Bowen and Lopes L JJ concurred, Lord Coleridge CJ explained why "the subject matter of action for defamation is so special as to require exceptional caution in exercising the jurisdiction to interfere by injunction before the trial of an action to prevent an anticipated wrong" and why, when there is a plea of justification, it is generally wiser, in all but exceptional cases, to abstain from interference until the trial and determination of the plea of justification. First, there is the public interest in the right of free speech. Second, until the defence of justification is resolved, it is not known whether publication of the matter would invade a legal right of the plaintiff. Third, a defence of justification is ordinarily a matter for decision by a jury, not by a judge sitting alone as in an application for an injunction. Fourth, the general character of the plaintiff may be an important matter in the outcome of a trial; it may produce an award of only nominal damages.

[19] The principles were discussed, for example, in Chappell v TCN Channel Nine Pty Ltd . . . , National Mutual Life Association of Australasia Ltd v GTV Corporation Pty Ltd, and Jakudo Pty Ltd v South Australian Telecasters Ltd . As Doyle CJ said in the last-mentioned case, in all applications for an interlocutory injunction, a court will ask whether the plaintiff has shown that there is a serious question to be tried as to the plaintiff’s entitlement to relief, has shown that the plaintiff is likely to suffer injury for which damages will not be an adequate remedy, and has shown that the balance of convenience favours the granting of an injunction. These are the organising principles, to be applied having regard to the nature and circumstances of the case, under which issues of justice and convenience are addressed. We agree with the explanation of these organising principles in the reasons of Gummow and Hayne JJ, and their reiteration that the doctrine of the Court established in Beecham Group Ltd v Bristol Laboratories Pty Ltd should be followed. In the context of a defamation case, the application of those organising principles will require particular attention to the considerations which courts have identified as dictating caution. Foremost among those considerations is the public interest in free speech. A further consideration is that, in the defamation context, the outcome of a trial is especially likely to turn upon issues that are, by hypothesis, unresolved. Where one such issue is justification, it is commonly an issue for jury decision. In addition, the plaintiff's general character may be found to be such that, even if the publication is defamatory, only nominal damages will be awarded.”

9 Gummow and Hayne JJ said this: -

“ [52] In his reasons for judgment as one of the majority in Lovell v Lewandowski , Kennedy J, after a review of the case law and non-judicial writings on the subject, concluded that, as matters stood at intermediate appellate level in Australia, the position with respect to the grant or refusal of interlocutory injunctions in defamation actions is "exceptional", when compared with "the ordinary equitable principles upon which an interlocutory injunction can be granted". Kennedy J considered various reasons which had been assigned for the development of "exceptional rules" in this particular area. . . . At this point, it is sufficient to note that they concerned a reluctance to restrain freedom of speech, the policy of the law in favour of jury trials in defamation actions, and what was perceived at least in the past as the absence of a legal proprietary right in personal reputation. These considerations applied to final as much as, if not more so, to interlocutory relief by way of injunction.”

10 In Church of Scientology of California Inc & Anor v Reader's Digest Services Pty Ltd, Hunt J dealt with the matter as follows: -

“ (10) I accept as the settled law that the power to grant interlocutory injunctions in defamation cases must be exercised with great caution, and only in very clear cases. A plaintiff must establish that a subsequent finding by a jury that the matter complained of was not defamatory of him would be set aside as unreasonable; that there is no real ground for supposing that the defendant may succeed upon any defence of justification, privilege or comment, and that he, the plaintiff, is likely to recover more than nominal damages only. In particular, questions of privilege and malice are not normally appropriate to be decided upon an interlocutory application. Nor will an injunction go which will have the effect of restraining the discussion in the press of matters of public interest or concern. This principle has been extended to discussion of such matters in books.”

11 These, in summary, were the principles upon which the defendant relied. In contrast, the plaintiffs contended that the following extracts highlighted the proper approach.

12 In Adam P. Brown Male Fashions Pty Ltd v Philip Morris Inc & Anor, Gibbs CJ, Aickin, Wilson and Brennan JJ said the following: -

“We mention these matters in order to clarify and confine the matters that are in issue between the parties. Considerable argument was directed to the question whether a court has power, otherwise than in the case of mistake operative at the time of giving it to release a party from an undertaking, at least in the absence of the consent of the other party. But in our opinion a Court undoubtedly has such a power. Just as an interlocutory injunction continues "until further order", so must an interlocutory order based on an undertaking. A court must remain in control of its interlocutory orders. A further order will be appropriate whenever, inter alia, new facts come into existence or are discovered which render its enforcement unjust: . . . Of course, the changed circumstances must be established by evidence: Cutler v Wandsworth Stadium Ltd .”

13 One of the matters to which their Honours referred was the oft-cited statement of Sir Frederick Jordan in In re the Will of F. B. Gilbert (dec.) (1946) 46 SR (NSW) 318 at 323 as follows: -

“. . . I am of opinion that, . . . there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal.”

14 In Baker v Beckett (supra), Cohen J dealt with an application by defendants in proceedings, inter alia, for an order varying the terms of certain undertakings that they had given. His Honour said the following: -

“An undertaking given to the Court has the equivalent force of an injunction granted by that Court. An undertaking, accepted by the other party, is the equivalent of a consent order. It cannot be varied in the strict sense but if the party which has given it seeks its discharge and the substitution of a fresh undertaking then that application must be supported by evidence. Where a consent order or undertaking has been made or given until further order of the Court, there is a right to apply for discharge or modification, but only if there are good grounds for doing so. "Even in interlocutory matters a party cannot fight over again a battle which has already been fought unless there has been some significant change of circumstances, or the party has become aware of facts which he could not reasonably have known, or found out, in time for the first encounter. The fact that he capitulated at the first encounter cannot improve a party's position": Chanel Ltd v FW Woolworth & Co Ltd [1981] 1 All ER 745 at 751.”

15 The defendant submitted that the law regulating the grant of interlocutory injunctions in defamation actions is settled and that exceptional caution is required in determining whether or not to grant an injunction. The power will only be exercised in very rare cases. The defendant submitted further that (presumably in response to an application for an interlocutory injunction to restrain a defamation) it did not need to lead the evidence on which it relied but that it was sufficient for the defendant simply to suggest the relevant defence in a manner and with circumstances which show that there is a case for consideration by a jury or the trial judge as the case may be. Further, the defendant submitted that the special rule which applies to a defamation case cannot be avoided by the simple expedient of framing the plaintiff's case, not in defamation, but in injurious falsehood or similar. The court would not grant an injunction where its effect would be the same as an injunction that would not have been granted in defamation proceedings. The defendant cited authorities for these propositions. They may be accepted for present purposes as uncontroversial.

16 The difficulty with these submissions, however, is that they are largely beside the point of the present application. I disagree with the defendant’s submission that the question is whether there is material before the court that would sustain the grant of an injunction. The defendant's application before me did not energise the exercise of discretion to grant, or to refuse, an injunction to restrain a defamation. It did not bring forth a consideration of matters "so special as to require exceptional caution" in the way discussed in Australian Broadcasting Corporation v O'Neill (supra) at [16], [73] and elsewhere. For reasons which are unexplained, and which require no explanation, the defendant gave the undertakings which are the subject of the present application. The giving of those undertakings foreclosed upon, and thereby obviated, the need for Kirby J to revisit his grant of an ex parte injunction or to concern himself with the plaintiffs’ application to extend it in the face of the defendant's opposition to such a course. The defendant's consent to a regime, having the equivalent force of an injunction granted by the court, does not, in my opinion, render that "injunction" vulnerable to review in accordance with the principles clearly applicable to a consideration of whether or not to grant such an injunction on a contested basis in the first place. Significant weight must, in my opinion, be given to the fact of the defendant's original consent. But as the authorities upon which the plaintiffs rely reveal, that consent does not operate to estop the defendant from applying to set aside or vary its original undertakings, or as a waiver of its right to do so. Rather, the defendant will be given an opportunity, supported by evidence, to establish that there had been "some significant change of circumstances" or the discovery of facts that "could not reasonably have [been] known" on the earlier occasion.

17 It is unsurprising, in these circumstances, that the defendant made submissions in the alternative which were directed to meeting the plaintiffs’ submissions concerning the question of which was the correct test to apply. Indeed, in the present application, the defendant made submissions, which it sought to support by evidence, that the circumstances had in fact changed in a way that warranted its release from the original undertakings. The defendant relied upon the affidavit of Justine Melissa Munsie sworn 3 July 2007 and to considerable material annexed or exhibited to that affidavit. Ms Munsie was not cross examined on her affidavit. The following things emerge from it.

18 First, the first plaintiff's website (as at 20 June 2007) claims that it has "been providing the opportunity for individuals to improve their sexual health for the past 14 years" and that its "doctors are highly trained in the treatment of premature ejaculation and erectile dysfunction and have reported great success using the patented NASAL DELIVERY SYSTEM". It goes on to claim, "For the first time in the world anti-ejaculatory effect of such a system is achieved when it used (sic) as little as 30 minutes prior to intercourse".

19 Secondly, at the time the undertakings were given the plaintiffs were the first and second respondents in proceedings commenced in the Federal Court of Australia by the ACCC. In those proceedings, the ACCC sought declarations, injunctions and orders for breaches of Part V of the Trade Practices Act 1974 in respect of numerous representations made by the plaintiffs about impotence and erectile dysfunction and premature ejaculation treatments offered by the first plaintiff.

20 On 2 December 2003, the plaintiffs consented to injunctions and declarations and to a regime including:

(a) corrective advertising once a week for six weeks in each of the publications in which the offending advertisements had appeared;

(b) using best endeavours to have a corrective statement published for six weeks on the website of the Channel 9 programme "A Current Affair";

(c) full refunds to be provided to persons who had sought but not received refunds on account of the ineffectiveness of the first plaintiff's treatments;

(d) the implementation of a trade practices compliance programme to be audited at the end of three years.

21 Thirdly, in 2004 the ACCC commenced fresh proceedings against the first plaintiff in the Federal Court claiming breaches of s 52 Trade Practices Act arising out of newspaper advertisements which represented that:

(a) the first plaintiff's nasal spray had cured a celebrity, Mr Ian Turpie, of impotence, and that

(b) Mr Turpie had publicly disclosed this in an interview in the presence of his wife.

22 Fourthly, in granting the declarations of breach, Lindgren J found, inter alia, that:

(a) Mr Turpie had never suffered from such dysfunction or used the first plaintiff's product to overcome such a problem;

(b) the interview had never taken place;

(c) every statement in the advertisement was untrue.

23 Fifthly, while his Honour was not prepared to find, because of conflicting evidence, that the second plaintiff actually knew that Mr Turpie had never had need of the spray or used it to cure impotence, his Honour found that:

(a) "the truth or untruth of the advertisement did not matter at all to [the second plaintiff]";

(b) when [the second plaintiff] was asked by the first plaintiff's general manager whether the advertisement was true, [the second plaintiff] said "Who gives a fuck?”;

(c) the second plaintiff would have published the advertisement even if he had possibly known it was untrue;

(d) in general, the second plaintiff was an unsatisfactory witness.

24 Sixthly, since the defendant gave the undertakings, the conduct of the plaintiffs in offering their treatment for erectile dysfunction has been widely publicised, including public discussion of the two proceedings commenced by the ACCC.

25 Seventhly, since the defendant gave the undertakings, the plaintiffs have continued to advertise their products and services widely throughout Australia. The plaintiffs have issued press releases and other publicity material concerning the way in which they have been portrayed in the media, including by the defendant in its "Today Tonight" programme.

26 Eighthly, there is said to be a close and uncontradicted connection between the second plaintiff and Heart Check Australia Pty Ltd and that the assertion by Mr Richard Doyle, a spokesman for Heart Check, that "any claim that the Heart Check Group is owned by [the plaintiffs] is inaccurate" is false.

27 Ninthly, the operations of Heart Check have been criticised by Federal Health Minister and Professor Michael Fenely, President of the Cardiac Society of Australia and New Zealand.

28 Tenthly, the defendant has recently prepared and broadcast reports on its "Today Tonight" programme concerning the plaintiffs and Heart Check, including a story broadcast on 28 May 2007 about Heart Check and the advertisement and effectiveness of its services, and a story broadcast on 8 June 2007 about the plaintiffs and the advertisement and effects of their products. The defendant has received correspondence from several viewers about the plaintiffs, their products and advertising and also about the services provided by Heart Check, which correspondence has been overwhelmingly critical of them. The second of these broadcasts included interviews with some of the plaintiffs’ past clients and staff members as well as health professionals, all of whom were critical of the plaintiffs and/or their products.

29 The defendant then submitted that, on the basis of this material, it is demonstrated that the plaintiffs are aggressive marketers of their products “with an appalling record for honesty”, as a result of which they were obliged in late 2003 to consent to the corrective regime referred to above in par [20]. The defendant submitted that the judgment of Lindgren J "reflects dishonesty" on the part of the plaintiffs: see, for example, pars [79] and [224] of his Honour’s judgment.

30 It was further submitted on behalf of the defendant that the plaintiffs have what was described as a "lamentable record of integrity in marketing their products". Moreover, the defendant proposed, subject to being released from the constraints imposed by the undertakings, to establish a series of matters set out in Ms Munsie's affidavit. It is convenient for present purposes to recall those matters verbatim: -

“ 38 I am informed by [Warren] Coatsworth and believe that Seven is preparing a further report concerning the plaintiffs which it proposes to broadcast in the week commencing 9 July 2007. The further report may include words to the effect, or substantially to the same effect that:

(a) its customers are being "ripped off";

(b) certain of the plaintiffs’ products have minimal if any beneficial effect;

(c) the plaintiffs’ practices amount to a scam, which is distressing;

(d) the plaintiffs have found a way around regulations governing medicines and their nasal spray is not approved by the Therapeutic Goods Administration;

(e) people claim that the plaintiffs’ products don't work.

39 Seven proposes to rely on the defences of truth, fair comment at common law, honest opinion and/or qualified privilege to defend any defamatory imputations arising out of such statements and in particular will rely on the evidence of former patients, former staff of the first plaintiff, medical professionals and health administrators to prove those matters.

40 I believe that the activities of the plaintiffs are a matter of legitimate public concern. Seven’s business is the broadcasting of television programs, including news programs. One of the obligations imposed upon Seven by the Broadcasting Services Act 1992 . . . is to provide a service or services that, when considered together with other broadcasting services available in the licence area of the licence (including another service or services operated by the licensee), contributes to the provision of an adequate and comprehensive range of broadcasting services in that licence area. I am informed by Warren Coatsworth and believe that Seven considers that its news and current affairs programs, including its Today Tonight program, contribute to fulfilling that obligation.

41 The activities of the plaintiffs and what I am informed and believe to be their closely associated company, Heart Check, are at the moment highly topical and Seven is currently restrained from engaging in legitimate public discussion of those activities by undertakings given over three years ago in different circumstances.

42 In order properly to explore the issues and broadcast the matters described in paragraph 38 above, Seven needs to be released from the Undertakings.”

31 It was contended on behalf of the defendant that it was not required or obliged, on an interlocutory hearing of this type, to present all the evidence upon which it relied. Unless I have misapprehended that submission to be made in the context of the defendant's principal contention (i.e. that its application to be released from its undertakings should be determined having regard to the principles applicable to the grant of an injunction restraining a defamation) - in which context it would have been correct - I cannot accept it: see Baker v Beckett (supra). If the relevant test is the discovery of new facts, it is difficult to see how that test could be satisfied without proof of those facts. In any event, "the changed circumstances must be established by evidence": Cutler v Wandsworth Stadium Ltd [1945] 1 All ER 103.

32 In summary the defendant contended that the circumstances in which the original undertakings were given make it clear that they were adapted to meet a particular broadcast that was then imminent. The defendant submitted that the continuance of the undertakings is no longer appropriate in circumstances which reduce to the following series of propositions: -

(a) the matter, which commenced over three and a half years ago, has not proceeded towards a final hearing;

(b) the relevant broadcast to which the undertakings were adapted no longer has currency;

(c) matters have emerged since the giving of the undertakings which have given the prohibited statements currency;

(d) the defendant has been restrained from doing that which others were doing and which, but for the non-publication order made by me pending my decision in this application, it would still be permitted to do;

(e) the plaintiffs have taken no steps whatever to bring the matter to finality; the plaintiffs cannot in these circumstances insist on the undertakings being treated as final orders when they were only ever agreed to as an interlocutory regime.

33 Does the evidence then, upon which the defendant relies, establish or amount to some significant change of circumstances? It is appropriate to frame the question in this way, because the defendant does not contend for the existence of facts of which it has only now become aware and which it could not reasonably have known, or found out, in time for use in the original hearing.

34 The question of whether or not there has been a change, let alone a significant change, in circumstances must clearly be determined having regard to the circumstances as they existed when the undertakings were given. In addition, it seems to me that regard must be had to the scope and content of the undertakings themselves in order to provide a relevant framework within which to make the enquiry.

35 The burden of the original undertakings was to provide protection to the plaintiffs against publications conveying imputations that their products or services were worthless or overpriced and offered minimal, if any, medical or therapeutic benefit or effect. The transcript of the hearing before Kirby J on 14 October 2003 supports the proposition that the plaintiffs were concerned that the threatened broadcast would produce a clearly unfavourable view of the plaintiffs and their products and services before they had been given a proper, or indeed any, opportunity to respond to the allegations. The plaintiffs were concerned that they would be portrayed as overchargers, swindlers and charlatans.

36 In response to these matters the plaintiffs urge upon me that nothing has changed: there has not been a change in circumstances, let alone a significant change. For example, the plaintiffs point to submissions made by counsel who appeared for the defendant on 14 October 2003 upon the return of the injunction before Kirby J. At that time Mr McHugh of counsel sought to tender a newspaper article from the Sydney Morning Herald of the previous day, which he informed the court was "relevant to show that the subject matter of the discussion of the two plaintiffs’ therapeutic practices [was] a current topic of public debate". The plaintiffs submit that this demonstrates that it cannot avail the defendant now to refer to the level of public debate as an argument in favour of a significant change in circumstances from those existing at the time the undertakings were given.

37 Similarly, the plaintiffs rely upon what Mr McHugh said a little later in the proceedings. The following quote is taken from page 22 of the transcript: -

“McHUGH: . . . Far from being an exceptional case, involving issues of privacy or personal sexuality or morality, a genuine public interest in the ventilation of the subject matter and all already ventilated in the mass media.”

38 The plaintiffs’ proposition is simple and robust. There is no new evidence, nothing has changed, and the position remains as it did in October 2003. The first Federal Court proceedings were concerned with dishonest advertising and the outcome of those proceedings is completely irrelevant. There was no reference to the plaintiffs’ nasal delivery technique and the obligation imposed upon the plaintiffs to commit to a regime of corrective advertising can be wholly disregarded. The second Federal Court proceedings were unrelated to the six specific and individual matters, which are the subject of the original undertakings. I was referred in particular to par [320] of the judgment of Lindgren J in the following terms:

“I accept AMI’s submission, however, that there should not be either an injunction or an order for corrective advertising. The sorry events are long past and there has long since ceased to be any threat of repetition. The Letter of Agreement contract expired in about July 2004. The representations made in the Advertisement have long since ceased to have any influence that might be overcome by corrective advertising.”

39 The plaintiffs submit that the defendant’s submissions in relation to the Heart Check complaints, and those which deal with the alleged connection between that business and the plaintiffs, is equally, if not more, irrelevant to the present debate.

40 Not all the matters upon which the defendant relies strike me as amounting to a significant change in circumstances. However, in my opinion, some of them do.

41 Each of the proceedings in the Federal Court of Australia does so. For example, the result of the first proceedings was that the plaintiffs were required to implement a campaign of corrective advertising. The details of this campaign have already been described. It was an extensive campaign and, as the defendant emphasises, was implemented following the giving of the undertakings that are the subject of the present application.

42 Even more significantly, in my view, are the proceedings before Lindgren J. The hearing was public. The judgment was long and exposed in considerable detail at least some important aspects of the plaintiffs’ business practices. No application was made to restrict or to restrain publication of the judgment and it became and remains widely available and subject to scrutiny in the public domain. The judgment publicly promoted that the first plaintiff, over a period between March and April 2004, in trade or commerce engaged in conduct that was misleading or deceptive in contravention of Commonwealth legislation by causing an advertisement to be made in various parts of Australia that contained representations that its nasal delivery system had cured or alleviated impotence or erectile dysfunction of an Australian celebrity in circumstances which were at odds with the true position.

43 Each of the proceedings in the Federal Court of Australia commenced by the ACCC generated public discussion concerning the plaintiffs and the advertisement of their products.

44 Annexed to Ms Munsie's affidavit is a copy bundle of media clippings about the plaintiffs and their products, including discussion of the Federal Court proceedings to which I have referred. These have been published since the undertakings were given. They demonstrate that the plaintiffs have been both actively and passively involved in utilising the media to raise the profile of male sexual dysfunction and to promote their products and services in this context. For example, an article appearing on the FairfaxDigital website theage.com.au on 8 February 2005 quoted the second plaintiff extensively. It included the following paragraph:-

“Vaisman spends $4.5 million a year on advertising. ‘If I don't bombard with my aggressive adverts,’ he says, ‘men won't come’.”

45 An article from the Sunday Telegraph by Neil Mercer on 29 October 2006 would appear clearly to have presented the second plaintiff with an opportunity to promote the plaintiffs’ products and services in the context of a discussion about male sexual dysfunction, the success of the plaintiffs’ business, competition from large pharmaceutical companies and the ACCC proceedings in which it was alleged that the first plaintiff’s claims about its impotence cure were misleading and deceptive. The second plaintiff was quoted extensively in the article.

46 The plaintiffs have issued press releases, copies of which are also annexed to Ms Munsie's affidavit. One of these apparently issued on 8 June 2007, purported to rebut what it referred to as "recent misleading accusations from Today Tonight". Two paragraphs from the press release were in the following terms: -

“AMI has been subject to several false and misleading reports about its men's health medical business in recent weeks. After attempting to address these with Channel Seven, Today Tonight refused to allow the company to record it (sic) proposed reply for broadcast or public record.

AMI it was not confident of a fair or ethical portrayal of its interview and accordingly elected not to participate in an interview with Today Tonight.”

47 What this material reveals, in my opinion, is that the plaintiffs have been the subject of considerable publicity, some wanted and some unwanted, some solicited and some unsolicited, in which the monetary and therapeutic value of their products and services have been discussed in detail. Although the particular words have not been used, much of this material has clearly been directed at demonstrating that nothing that the plaintiffs do or offer could properly, or even vaguely, be regarded as a rip off or anything like it. Similarly, the material clearly promotes the notion that, far from having "minimal if any beneficial effect", the plaintiffs’ products and services offered genuine medical and therapeutic benefits and, both expressly and by implication, are effective in curing or reducing the incidence of male sexual dysfunction, particularly impotence (erectile dysfunction) and premature ejaculation.

48 In my opinion these matters amount to a significant change in the circumstances, as they existed at the time the undertakings were given. The undertakings isolate what were presumably then perceived by the plaintiffs to be offending imputations in the proposed broadcast. One might reasonably have assumed that the plaintiffs at least would have drawn back from conduct that had the tendency to re-enliven scrutiny of the very topics that the undertakings sought to enjoin. On the contrary, the plaintiffs would appear actively to have promoted public consideration, in discussion of their products and services, in ways directed towards rebutting or discrediting the imputations the subject of the undertakings whilst at the same time shielding behind the protection which they offered.

49 In my opinion this all demonstrates that "there has been some significant change of circumstances". It demonstrates as well, in my opinion, facts of which the defendant could not reasonably have known, or found out, in time for the first encounter. By this I mean to emphasise that the defendant could not reasonably have known, or found out, at the time the undertakings were given, either that the plaintiffs products and services would be the subject of the type of scrutiny given to them as the result of two sets of proceedings in the Federal Court of Australia on the one hand, or that the plaintiffs would so actively and aggressively be engaged in the advertising of their products and services or co-operate so enthusiastically in the publication of comment upon them, on the other hand.

50 Some further matters also need to be mentioned. In Baker v Beckett (supra), Cohen J made some remarks to which it is instructive to refer. They are, relevantly, as follows:-

“The tests to which I have referred relate to interlocutory orders or undertakings given until further order. There was no such provision in the existing undertakings. Normally, on an interlocutory application, an injunction or undertaking will be continued until the hearing, and sometimes until further order. In the absence of any limitation of time it can only be assumed that the undertakings were intended to continue until the hearing of the proceedings. When the undertakings were given, consent orders were made as to the pleadings and it was noted that the plaintiff would be seeking to have the proceedings expedited.

Although the undertakings in their literal form are of a permanent nature, it must be accepted that they could be no more than of an interlocutory nature, to continue until the matter is heard on a final basis. As noted above, a Court has control over its own interlocutory orders, and can vary them if the circumstances require it. Assuming that there remained an implied agreement that they would continue until further order, there is nothing in the application before me which, on the principles set out above, would justify those undertakings being varied or discharged.”

51 Clearly the position is different in the present case. The undertakings that I am considering were given "until further order". They were not given without any limitation of time and the assumption to which his Honour referred in the passage just quoted does not apply, or if it does, it does not apply with the same force. In my opinion the undertakings were not given in circumstances that imply that they would continue until the matter is heard on a final basis.

52 Counsel for each side sought to embrace the respective failure of the other to bring the matter on for hearing in a timely way. The evidence does not permit me to come to a satisfactory conclusion about what caused such a notable, but bilateral, absence of enthusiasm to prosecute the proceedings to become so entrenched. It is difficult to see how the scales are not evenly balanced on this issue, with the plaintiffs content to remain quiescent but protected on the one hand, and the defendant equally content to remain burdened by the undertakings until programming imperatives ultimately dictated a different view on the other hand. (The plaintiffs to this very day have not filed a statement of claim).

53 In this last respect I have already referred to the fact that the application to be released from the undertakings came before me as an urgent matter in the common law Duty Judge list. When one has regard to the time that has elapsed since the undertakings were given, and the fact that, as far as I can discern, neither party, but in particular the defendant, has taken any meaningful step to bring the proceedings to a conclusion, it is tempting to feel that the matter was listed inappropriately.

Orders

54 I make the following orders: -

1. The defendant is released from the undertakings given by it on 16 October 2003.

2. I revoke the non-publication order made by me on 11 July 2007.

3. The plaintiffs are to pay the defendant’s costs.

**********

- 21 -