Ampelite Fibreglass Pty Ltd v Alsynite Roofing Products Pty Ltd

[2000] FCA 984

FEDERAL COURT OF AUSTRALIA

Ampelite Fibreglass Pty Ltd v Alsynite Roofing Products Pty Ltd
[2000] FCA 984

PRACTICE & PROCEDURE – interlocutory injunction – promotional brochure relating to reinforced fibreglass roof sheeting – whether serious question to be tried as to falsity of representations – balance of convenience.

Trade Practices Act 1974 (Cth), ss. 52, 53(a), 53(c).

Bristol-Myers Squibb Australia Pty Ltd v Astra Pharmaceuticals Pty Ltd (1999) 45 IPR 144, applied.
Bullock v Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464, cited.
Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177, cited.
Duracell Australia Pty Ltd v Union Carbide Australia Pty Ltd (1988) 14 IPR 293, cited.
Philips Electronics NV v Remington Products Australia Pty Ltd (1997) 39 IPR 283, cited.
Carlton & United Breweries (NSW) Pty Ltd v Bond Brewing (New South Wales) Ltd (1987) 76 ALR 633, cited.
Sterling Winthrop Pty Ltd v The Boots Company (Australia) Pty Ltd (1995) 32 IPR 361, cited.

AMPELITE FIBREGLASS PTY LTD v ALSYNITE ROOFING PRODUCTS PTY LTD & ORS
V 385 OF 2000

SACKVILLE J
25 JULY 2000
SYDNEY (HEARD IN MELBOURNE)

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 385 OF 2000

BETWEEN:

AMPELITE FIBREGLASS PTY LTD
APPLICANT

AND:

ALSYNITE ROOFING PRODUCTS PTY LTD
FIRST RESPONDENT

PHILLIP LLOYD HARRY
SECOND RESPONDENT

DENIS ANDREW MATULIN
THIRD RESPONDENT

CLIFFORD GERARD CAPIRON
FOURTH RESPONDENT

LASERLITE AUSTRALIA PTY LTD
FIFTH RESPONDENT

ROD KING
SIXTH RESPONDENT

JUDGE:

SACKVILLE J

DATE OF ORDER:

25 JULY 2000

WHERE MADE:

SYDNEY (VIA VIDEO-LINK TO MELBOURNE)

THE COURT ORDERS THAT:

1.   Upon the applicant giving the usual undertaking as to damages, until further order, the first respondent, by its servants, agents or otherwise, be restrained from making, in trade or commerce, the following representation:

that it has conducted weatherometer or other testing which establishes that, after ten years’ exposure to weather, gel coat fibreglass sheeting manufactured by the applicant will lose in excess of fifteen per cent of its light transmission properties.

2.The costs of the interlocutory proceedings be costs in the cause.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 385 OF 2000

BETWEEN:

AMPELITE FIBREGLASS PTY LTD
APPLICANT

AND:

ALSYNITE ROOFING PRODUCTS PTY LTD
FIRST RESPONDENT

PHILLIP LLOYD HARRY
SECOND RESPONDENT

DENIS ANDREW MATULIN
THIRD RESPONDENT

CLIFFORD GERARD CAPIRON
FOURTH RESPONDENT

LASERLITE AUSTRALIA PTY LTD
FIFTH RESPONDENT

ROD KING
SIXTH RESPONDENT

JUDGE:	SACKVILLE J
DATE:	25 JULY 2000
PLACE:	SYDNEY (HEARD IN MELBOURNE)

REASONS FOR JUDGMENT

The Claim for Interlocutory Relief

1. The applicant (“Ampelite”) seeks interlocutory orders against the first respondent (“Alsynite”). The claim is based on what is said to be Alsynite’s misleading and deceptive conduct in contravention of ss. 52, 53(a) and 53 (c) of the Trade Practices Act 1974 (Cth) (“TP Act”).

2. Alsynite has published and distributed a brochure (the “Brochure”) promoting a product known as “Alsynite Ultra”, a form of film-coated reinforced fibreglass roof sheeting. Ampelite seeks orders in substance restraining Alsynite from repeating what are said to be misleading or deceptive representations made in the Brochure. In addition, Ampelite seeks orders in the nature of corrective advertising.

   The Brochure

3. Both Ampelite and Alsynite manufacture and sell fibreglass roofing products. Among the products manufactured and sold by each of them is reinforced polyester fibreglass roof sheeting manufactured using a process of gel coating. Ampelite’s product is known as “Wonderglas GC”, while Alsynite’s product is called “60 GC”. Ampelite produces a much greater quantity of gel coat roofing products than does Alsynite.

4. Alsynite also manufactures two film-coated products of fibreglass roofing products.  One is marketed under the name “Everlite R74” and is described as a 301 film coated fibreglass product.  The other is known as Alsynite Ultra.  The latter product is manufactured using a high performance polyester film supplied by Du Pont (Australia) Ltd (“Du Pont”).  The film used for Alsynite Ultra is described in the Brochure as “ultra violet surface protection film A15”, but the affidavits describe the film as Du Pont’s “389 film product”.

5. The front of the Brochure published and distributed by Alsynite is reproduced below:

6. The reverse of the Brochure identifies what are said to be the “Special Features” and “Applications” of Alsynite Ultra:

   “Special Features
   UV absorbing – protects the sheeting substrate from degradation.
   Excellent surface erosion properties.
   Good light transmission for extended life.
   Good colour fastness properties therefore less prone to fading.
   Good resistance to common place chemicals.
   Strong, durable and resistant to harsh climates.

   Applications
   Alsynite Ultra is the perfect sheeting for Industrial and Commercial skylite projects that specify long life light transmission. It has superior performance when compared to ‘Standard’ G.R.P. sheeting and can be combined with the Alsynite fire retardant resin systems to comply with the General requirements of Class 2 to 9 buildings of the Building Code of Australia.

   Due to the superior surface coating system, suitable applications for Alsynite Ultra are factory roof lights, building skylite sidings, sports venues, shopping centre skylights, traffic signs, advertising facades, light diffusers and many other applications that require excellent performance qualities that only Alsynite Ultra can offer.”

7. The Brochure was first issued on or about 1 November 1999, although it appears not to have come to the attention of Ampelite until 10 March 2000 when Mr Ed Verhagen, the joint managing director of Ampelite, saw a copy.

   The Claims in the Interlocutory Proceedings

8. Ampelite instituted the present proceedings on 6 June 2000. The application filed at that time included a claim for interlocutory relief, although not in the terms ultimately pressed by Mr Wyles (who appeared for Ampelite).  In the course of the interlocutory hearing, Ampelite was given leave to file an amended application and an amended statement of claim in order to ensure that both the relief claimed and the allegations made by it were encompassed by the pleadings.

9. As Mr Wyles ultimately framed the case, Ampelite alleged that the Brochure made four representations. These were set out in Ampelite’s amended statement of claim as follows:

   “(a)that gel coat reinforced polyester fibreglass sheeting, including gel coat products manufactured by Ampelite, were weatherometer tested for the purposes of producing the graph in the brochure headed “Alsynite Ultra”…;

   (b)that the weatherometer testing established that Alsynite Ultra will possess better light transmission performance over time than all gel coat roofing products, including those manufactured by Ampelite;

   (c)that the weatherometer testing established that after 10 years’ actual exposure to weather, gel coated reinforced polyester fibreglass sheeting manufactured by Ampelite will have lost in excess of 15% of its light transmission properties;

   (d)that the Alsynite product after 10 years actual exposure to the weather will have lost only approximately 10% of light transmission”.

10. It will be seen that the first three alleged representations are representations as to existing facts. Each concerns the scope or results of the testing undertaken by Alsynite. The fourth alleged representation was characterised by Mr Wyles as a representation as to a future matter, namely the likely performance of the “Alsynite product” (that is, Alsynite Ultra).  A representation as to any future matter, if made by a corporation, is taken to be misleading if the corporation does not have reasonable grounds for making the representation: TP Act, s 51A(1).

11. Ampelite contended that there was a serious issue to be tried as to whether each of the representations made by Alsynite was misleading or deceptive.  The particulars of falsity formulated by Mr Wyles in respect of each alleged misrepresentation were as follows:

    (a) The first representation was false because Alsynite did not test any gel coated products manufactured by Ampelite. It tested only its own gel coat product (60 GC). The class of persons who is likely to read the brochure would or might be misled because many in the class would assume that Alsynite had tested Wonderglas GC, by far the best known gel coat reinforced polyester fibreglass roof sheeting product in the Australian market.

    (b) The second representation was false for essentially the same reason. Since Alsynite had not tested Wonderglas GC, any representation that its testing had established the superiority of Alsynite Ultra over Ampelite’s product had to be false.

    (c) The third representation was false for the same reason.  In addition, Alsynite’s testing was so deficient as to preclude any conclusion to be drawn about the loss of light transmission properties by 60 GC (Alsynite’s gel coated product) over a ten year period, let alone the loss of light transmission properties of Wonderglas GC (Ampelite’s gel coated product) over a similar period.

    (d) Alsynite had no reasonable grounds for making the representation as to the likely rate of retention of Alsynite Ultra’s light transmission qualities over a ten year period. This was so for two reasons.  First, Alsynite’s testing was deficient and thus provided no reasonable grounds for the prediction.  Secondly, Du Pont had carried out weatherometer tests comparing the light transmission qualities of various fibreglass reinforced polyester sheets over different periods of time. The Du Pont tests showed that the light transmission quality of Melinex 389 film, the film applied to the top surface of the sub-structure of Alsynite Ultra, varied from 82 per cent to 57 per cent after the equivalent of 6.25 years exposure. This was a reduction of over 30 per cent, very much greater than the 10 per cent or so claimed by Alsynite over a much longer period. Moreover, so it was argued, the evidence showed that Alsynite had known of the Du Pont studies at least since March 2000, yet it had continued to distribute the Brochure.

12. I should record that in the course of the hearing Mr Wyles, on behalf of Ampelite, sought to rely on a further particular of falsity, namely that the process undertaken by Alsynite could not accurately be described as “weatherometer testing” and that therefore the Brochure had inaccurately described the testing process. Mr Wyles conceded that the allegation had neither been pleaded nor particularised in the statement of claim. Perhaps more importantly for present purposes, it had not been referred to in the written submissions filed, in accordance with directions, prior to the hearing.

13. Mr Clarke, who appeared for Alsynite, objected to this proposed addition at the hearing to Ampelite’s foreshadowed case. He submitted that, had Alsynite been aware of the “weatherometer” issue, it would have been likely to call further evidence. I took the view that an adjournment of the hearing was not practicable, bearing in mind that it had been arranged at short notice utilising the services of an interstate judge. In these circumstances, I concluded that the interests of justice required me to refuse leave to Ampelite to raise the additional issue at this interlocutory hearing.  It will not be precluded from raising the issue in its claim for final relief.

    The Categories of Roofing Materials

14. There was some disagreement between the evidence of Mr Verhagen of Ampelite and Mr Matulin of Alsynite as to the composition of, and the manufacturing process for, various kinds of fibreglass roofing materials. There was, however, considerable common ground. The following description of the three categories of products referred to in the Brochure is taken largely from Mr Matulin’s affidavits.

15. The three products, namely 301 film coated fibreglass, gel coat fibreglass and Alsynite Ultra, share a similar sub-structure (which Mr Verhagen described as a “sub-strate”). The sub-structure comprises polyester resin (described by Mr Verhagen as an orthophtalic resin) and glass fibre. Each product has a distinctive surface coat or top layer applied to the sub-structure. The nature of the surface coat determines the effectiveness of the product in withstanding surface erosion and “weathering”. The latter expression encompasses the processes which adversely affect fibreglass: hazing, yellowing and loss of light transmission. (Mr Matulin described each of these processes as “separate” from the others, but they appear to overlap). Hazing is the dulling of the surface caused by micro-crazing which diffuses light and can reduce light transmission. Yellowing discolours the sub-structure and can also reduce light transmission.  Loss of light transmission, as the phrase implies, refers to the reduction in the percentage of light transmitted through the product.

16. As I have noted, Alsynite manufactures and distributes 301 film coated fibreglass under the trade name “Everlite R74”. The manufacturing process involves applying a particular polyester film to the surface of the sub-structure in order to provide protection from erosion. According to Mr Matulin, the polyester film has limited weathering properties, although the weathering performance of the product depends to some extent on the quality of the polyester resin and glass fibre used to make up the sub-structure. An important variable appears to be the extent to which concentrated chemical additives that resist ultra-violet rays (“UV additives”) are incorporated into the sub-structure to resist weathering.

17. Generally speaking, gel coat fibreglass uses the same sub-structure as 301 film coated fibreglass. Instead of applying a polyester film to the surface, however, the process involves applying a concentrated polyester resin which contains a high proportion of UV additives. The name “gel coat fibreglass” derives from the fact that the top layer of polyester resin is applied in a semi-hardened gel state. Since the gel coat layer contains UV additives, it provides better weathering qualities than 301 film coated fibreglass. The coat has a tougher surface than the film and therefore has a greater capacity to resist surface erosion.

18. According to Mr Verhagen’s first affidavit, the only gel coated fibreglass reinforced polyester sheeting manufactured and sold in Australia since January 1999 has been Ampelite’s Wonderglas GC.  This claim is not completely accurate.  In fact, Alsynite has produced and marketed its own product, 60 GC, since about late 1994, although its sales since mid-1999 have been very limited or non-existent.  (Mr Matulin attributed the limited recent sales of 60 GC to the fact that Alsynite Ultra is a superior product.  Be that as it  may, I infer from the evidence that Alsynite has done very little to promote 60 GC for at least the past year.)

19. Ampelite and Alsynite use the same gel coat resin in the production of Wonderglas GC  and 60 GC. This resin is known by the industry name “Silmar S-996”.  It is applied at a minimum thickness of 100 microns.  The sole importer of Silmar S-996 is Huntsman Chemical Company of Australia Ltd (“Huntsman”). The following table shows the quantities of Silmar S-996 purchased by Alsynite and Ampelite from Huntsman during the period 1994 to May 2000:

Kilograms of Silmar S-996 sold by Huntsman	To Alsynite	To Ampelite
1994	Nil	4,697
1995	20	8,504
1996	1,821	15,777
1997	Nil	20,634
1998	2,041	33,081
1999	2,270	27,673
2000 (to May)	Nil	16,327
TOTAL (kilograms)	6,152	126,693

It is clear from this table that Alsynite’s sales of 60 GC have been small when compared with Ampelite’s sales of Wonderglas GC.

1. According to Mr Matulin, Alsynite Ultra represents the “next generation” in film coated fibreglass products. Whether or not that description is warranted, the Du Pont 389 film applied to the substructure is a high performance polyester film which includes concentrated UV additives in order to improve the product’s weathering qualities.  The polyester film is applied at a thickness of 20 microns.  Alsynite has manufactured Alsynite Ultra since February 1998 and commenced selling the product in March 1999.  Ampelite also produces what Mr Verhagen referred to as “389 film coated fibreglass” as part of its product range.  I was informed that the product is marketed under the trade name “Permaglas”.

2. The graph depicted on the front of the Brochure was based upon accelerated weathering tests undertaken by Alsynite using an accelerated weathering tester known as “QUV”.  The tests were conducted using samples of products manufactured by Alsynite itself.  The gel coat fibreglass roofing product tested by Alsynite was its own 60 GC. Alsynite did not conduct any tests to assess the light transmission qualities of Wonderglas GC.

3. Alsynite’s testing was conducted in an in-house testing laboratory. The laboratory had been accredited by the National Association of Testing Authorities from 1963 until 1995. The registration related specifically to “artificial weathering tests on glass fibre reinforced plastic sheet material using the operating conditions specified in testing method ASTM 53”. Although Alsynite relinquished its registration in 1995, Mr Matulin’s unchallenged evidence was that the methods subsequently adopted continued to comply with the standards specified by the relevant authority.

   Principles

4. There was no dispute between the parties as to the approach to be followed on an application for interlocutory relief. The position was summarised recently by Weinberg J in Bristol-Myers Squibb Australia Pty Ltd v Astra Pharmaceuticals Pty Ltd (1999) 45 IPR 144, at 163 [91]:

   The court must be satisfied that the evidence establishes that there is a serious question to be tried, that the balance of convenience favours the grant of injunctive relief and there are no discretionary reasons for refusing the relief sought. Once the court is satisfied that there is a serious question to be tried in relation to any particular representation, the strength of the applicant’s case in relation to that representation may be taken into account when considering the balance of convenience and the exercise of the court’s discretion.

   See also Bullock v Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464, at 472, per Woodward J (with whom Smithers and Sweeney JJ agreed).

   Serious Issue to be Tried

   The Representations

5. Alsynite argued that Ampelite had failed to establish that there is a serious issue to be tried that the Brochure conveyed any of the four alleged representations. In particular, in relation to the first three alleged representations, Mr Clarke contended that the Brochure conveyed merely that tests had been conducted on Alsynite’s own gel coat product. He submitted that the Brochure neither stated nor implied that Alsynite had tested Wonderglas GC.

6. In assessing whether the Brochure conveyed the representations alleged, it is necessary to take into account the responses of persons likely to read or be influenced by the Brochure: Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 (FC). In the present case, the evidence showed that gel coat fibreglass roofing products were typically supplied to contractors, wholesalers and retailers of roofing products and building owners. Purchases were often made on the recommendation of architects. The representations conveyed by the Brochure must therefore be assessed by reference to the likely responses of potential purchasers or users of gel coat fibreglass roofing products (including architects). It is also appropriate to take into account that the Brochure is generally likely to be read by persons who have a reasonable knowledge of roofing products and who are likely to spend or recommend the expenditure of a significant amount on the product (cf Duracell Australia Pty Ltd v Union Carbide Australia Ltd (1988) 14 IPR 293, at 299, per Burchett J).

1. Having regard to these matters, I think that Ampelite has established that there is a serious issue to be tried as to whether Alsynite represented in the Brochure that it had tested Wonderglas GC in order to produce the results recorded in the graph. There was evidence to the effect that many potential customers associate gel coat fibreglass roofing products exclusively with the brand name Wonderglas GC. Given the fact that Wonderglas GC constitutes the great bulk of such products sold in Australia, this evidence is not altogether surprising. A further factor to take into account is that the Brochure specifically identified Alsynite Ultra by its brand name, but used the generic expression “gel coat fibreglass” to describe 60 GC, the product in fact tested.  I do not attribute any sinister motive to Alsynite in not using the brand name “60 GC” to describe the gel coat product it tested.  But the use of the generic expression increases the likelihood that readers of the Brochure would understand it to refer to Wonderglas GC.  Moreover, there was evidence from one experienced building contractor that he had understood the Brochure to refer to Wonderglas GC. (There was evidence from a second contractor and a plumber as to their understanding of the Brochure, but their evidence did not carry the matter very far).

2. There is also a serious issue to be tried as to whether the Brochure represented that Alsynite Ultra will lose only about ten per cent of its light transmission qualities after ten years of actual exposure to the weather.  It is true that the graph purports to record only light transmission properties after weatherometer testing.  But it is at least arguable that a reasonable member of the relevant class would read the graph, when taken with the text immediately below it, as making a statement as to the light transmission qualities of Alsynite Ultra in actual weather conditions.

   Falsity of the Representations

3. Alsynite did not suggest that it had tested Wonderglas GC for the purposes of preparing the graph reproduced in the Brochure. It follows that there is a serious issue to be tried as to whether the Brochure falsely represented Alsynite had in fact tested Wonderglas GC in order to make findings as to the light transmission qualities of gel coat fibreglass products.  This conclusion suggests that there is also a serious issue to be tried as to whether the first three representations were likely to mislead or deceive persons who might be expected to read the Brochure.

4. There is, however, a further question to consider. Mr Clarke submitted that, on the evidence, there is no relevant difference between the composition and manufacture of 60 GC and that of Wonderglas GC. According to Mr Clarke, if this is correct it must follow that any results obtained from the testing of 60 GC apply equally to Wonderglas GC. As I understood his argument, he contended that the substantial similarity of the two products meant that potential customers would not be misled or deceived by the Brochure.  They would not be deceived because Alsynite’s testing allowed it to compare the light transmission properties of Alsynite Ultra and 60 GC.  Since there was no significant difference between 60 GC and Wonderglas GC, the test results could be extrapolated to a comparison between the light transmission properties of Alsynite Ultra and those of Wonderglas GC.  Mr Clarke argued in the alternative that the absence of any significant difference between the composition of GC 60 and that of Wonderglas GC went to assessing the balance of convenience and suggested that no interim relief should be granted to Ampelite.

5. In my opinion, the evidence at this interlocutory stage of the proceedings suggests that there is no material difference between 60 GC and Wonderglas GC, so far as their composition, process of manufacture and performance in actual weather conditions are concerned. The evidence is consistent with the following:

   ·     The top layer of concentrated polyester resin used in both products is Silmar S-996, obtained from the same supplier, Huntsman.

   ·     The minimum thickness of the top layer of resin in each case is 100 microns.

   ·     It is the top layer that is the principal, if not the sole determinant, of the light transmission qualities of each product over time.

   ·     The process of manufacture of each of the products is substantially the same (as appears from diagrammatic representations of each process admitted into evidence).

6. Mr Verhagen’s evidence was intended to suggest that the manufacturing process used for Wonderglas GC is significantly different from that used for 60 GC.  It must be said, however, that his evidence on this issue was by no means as clear as it might have been.  Mr Verhagen did not, for example, point to any specific differences between the two processes.  He said that the gel coat resin had to be heated to a precise temperature in order to transform it to a particular consistency.  But he did not reveal the precise temperature and there is nothing to indicate Alsynite heats its resin to a different temperature.  Nor did Mr Verhagen explain how, if at all, the consistency of the gel coat resin applied in the production of Wonderglas GC varied, or might vary, from the consistency of the gel coat resin applied in the production of 60 GC.  The mere fact that a trained person monitors the production process (as Mr Verhagen deposed) does not mean that the two processes are significantly different.

7. Of course, the evidence adduced at trial may establish that the processes of manufacture are significantly different and that each product performs differently in actual weather conditions.  On the material before me, however, Ampelite has not established that there is a serious question to be tried as to whether GC 60 and Wonderglas GC are significantly different in their process of manufacture and composition and in their performance under actual weather conditions.

8. It will be recalled that Ampelite also argued that the third representation was likely to mislead or deceive readers of the brochure because Alsynite’s testing did not allow any conclusion to be drawn about the loss of light transmission properties by 60 GC over a ten year period.  It followed, according to Mr Wyles, that any statement as to the loss of light transmission properties of gel coated fibreglass roofing products in general (including Wonderglas GC) could not be supported by the tests actually carried out by Alsynite.  The force of this argument depends upon the interpretation of the affidavit evidence read on behalf of Alsynite at the hearing.  It must be said that some of this evidence, like much of the other evidence in the case, was imprecise and ambiguous. 

9. In one of his affidavits, Mr Matulin gave evidence of the testing procedure used by Alsynite.  A 301 film coated fibreglass roofing sample was subjected to “real-life exposure” for one year.  That sample was then compared with various samples of 301 film coated fibreglass roofing that had been exposed to simulated weathering in the accelerated weathering tester known as “QUV”.  The 301 film sample that had been subjected to “real life exposure” for one year matched a sample which had been exposed in the QUV to simulated weathering conditions for 1,460 hours.  On this basis, Alsynite determined that 1,460 hours of exposure in the QUV was equivalent to one year’s exposure to natural conditions in temperate Australia.

10. Although the affidavits of Mr Matulin and Mr Edwards (who actually conducted the tests) are ambiguous on the point, it seems that Alsynite assumed that the results for the 301 film product could be applied to gel coat fibreglass roofing products.  In other words, it was assumed that 1,460 hours exposure of the gel coat fibreglass in the QUV would be equivalent to one year’s “real life exposure” to weather conditions in temperate Australia, just as it was in the case of the 301 film product.  The same assumption appeared to have been made in relation to Alsynite Ultra.

11. Having made the assumption that the results obtained from the simulated exposure to weather conditions of the 301 film product could be applied to gel coat fibreglass and to Alsynite Ultra, Alsynite made a further critical assumption.  This was that the rate of loss of light transmission after the first year’s exposure to natural conditions (or the simulated equivalent) would be more or less constant over time.

12. I must confess that at first I did not think the affidavits of Mr Matulin and Mr Edwards should be read in this way.  I was influenced by the fact that, in the absence of expert evidence, an assumption of almost heroic proportions would be needed to extrapolate from the effects of one year’s simulated exposure to weather conditions to the consequences of ten years’ exposure (simulated or actual) to weather conditions.  Indeed, in argument I expressed a strong preliminary view to Mr Wyles that the affidavits must have been intended to convey that Alsynite had actually conducted tests on the gel coat fibreglass product simulating exposure to natural conditions in temperate regions of Australia over a ten year period.

13. Having re-read the material, I think my initial reaction unjustifiably rewarded the ambiguous manner in which Alsynite has presented this aspect of its evidence.  In my opinion, Mr Wyles is correct when he says that the natural reading of the relevant paragraphs of the affidavits is that Alsynite did indeed extrapolate by an arithmetical calculation based on one year’s simulated exposure to natural conditions.  That view is reinforced by the graph reproduced in the Brochure, which suggests that the rate of loss of light transmission for all three types of products is more or less constant over a period of fifteen years.  I take into account, too, that it would have been a very simple matter indeed for Mr Edwards to have explained in his affidavit that he had carried out (if he did) tests simulating exposure of gel coat fibreglass roofing to weather over a ten year period.

14. In my opinion, Ampelite has demonstrated that there is a serious issue to be tried as to whether Alsynite’s testing allowed any conclusion to be drawn about the loss of light transmission properties by 60 GC, or by gel coat fibreglass roofing products generally, over a ten year period.  I take into account that Alsynite appears to have assumed that the relationship between simulated and actual exposure in relation to the 301 film product can be applied without qualification to gel coat fibreglass roofing products.  I also take into account the fact that Alsynite appears to have assumed a simple arithmetical progression over a period of fifteen years, based on only one year’s simulated exposure to natural conditions.  Of course, it may be that expert evidence will ultimately establish the validity of these assumptions.  It may also be that Alsynite will be able to produce more detailed evidence of tests actually conducted which support the conclusion reached.  On the current state of the evidence, however, there is a serious issue to be resolved at a final hearing.

15. So far as the fourth representation is concerned (that Alsynite Ultra would lose only approximately ten percent of light transmission after ten years’ actual exposure to weather), the apparent gaps in Alsynite’s testing procedures lead me to conclude that there is a serious issue to be tried as to whether Alsynite had reasonable grounds for making the representations.

16. In my opinion, Ampelite also has established that there is a serious issue to be tried as to whether the fourth representation in the Brochure was misleading or deceptive, having regard to Alsynite’s knowledge of Du Pont’s test results relating to the light transmission properties of “D389-SAB3”.  The evidence, although somewhat equivocal, suggested Alsynite was aware of Du Pont’s test results by about April 2000.  There is also evidence that Du Pont’s tests indicate that “D389-SAB3” lost nearly thirty percent of its light transmission capability after simulated exposure to weather conditions for a period of less than ten years.  There is other evidence which is capable of justifying an inference that Du Pont’s “D389-SAB3” film is the critical component in Alsynite Ultra and therefore determinative of its light transmission qualities over time.

17. Mr Clarke made some trenchant criticisms of the state of the evidence relating to the Du Pont tests and, in particular, the applicability to those tests to Alsynite Ultra.  Those criticisms lead me to think that Ampelite’s case, in so far as it depends on Alsynite’s knowledge of the Du Pont tests, is relatively weak.  Nonetheless, despite the sketchy state of the evidence, it is in my view sufficient to establish that there is a serious issue to be tried.

    Balance of Convenience

18. In order to assess the balance of convenience, it is necessary to consider the orders sought by Ampelite.  Ampelite seeks to restrain Alsynite, by itself, its servants or agents, from representing in trade or commerce that:

    “(a)gel coat reinforced polyester fibreglass sheeting, including gel coat products manufactured by Ampelite were weatherometer tested for the purposes of producing the graph in the [B]rochure;

    (b)the weatherometer testing established that Alsynite Ultra will possess better light transmission performance over time than all gel coat roofing products, including those manufactured by Ampelite; or

    (c)after ten years’ exposure to weather, gel coated reinforced polyester fibreglass sheeting manufactured by Ampelite would have lost in excess of fifteen percent of its light transmission properties.

19. Ampelite did not include in its proposed short minutes an order restraining Alsynite from continuing to make the fourth representation in the Brochure.  I assume that this was an oversight and that Ampelite also seeks an order restraining Alsynite from representing that:

    “(d)Alsynite Ultra, after ten years’ actual exposure to the weather, will have lost only approximately ten percent of light transmission.”

20. Alsynite pointed to several matters suggesting that the balance of convenience lies against the grant of injunctive relief (assuming that Ampelite had established that there is a serious issue to be tried as to whether Alsynite had engaged in misleading or deceptive conduct).  Mr Clarke relied on three main factors:

    ·     Ampelite had adduced no evidence that it had suffered losses of sales revenue by reason of the Brochure, despite having known of the existence of the Brochure since March 2000;

    ·     Ampelite had delayed for over two months before commencing the proceedings in this Court; and

    ·     any injunctive relief could well disrupt the marketing program for Alsynite Ultra, which accounts for some eighty percent of Alsynite’s sales of industrial fibreglass roofing material in Australia.

21. Each of these considerations carries some weight, although none is decisive of itself against the grant of interlocutory relief.  Mr Verhagen deposed that the Brochure had caused financial loss to Ampelite, but he did not support that assertion by any accounting evidence.  The extent to which the Brochure is likely to harm Ampelite’s business is therefore largely a matter of speculation, although an inference can be drawn that at least some damage is likely if the Brochure remains in circulation.

22. The delay in the institution of proceedings is not adequately explained in the evidence, although Mr Verhagen’s evidence justifies some of the delay.  In the absence of evidence from Alsynite that it was prejudiced by the delay, Ampelite’s tardiness is not a fatal obstacle to the grant of relief: Philips Electronics NV v Remington Products Australia Pty Ltd (1997) 39 IPR 283, at 301, per Lehane J; cf Carlton & United Breweries (NSW) Pty Ltd v Bond Brewing (New South Wales) Ltd (1987) 76 ALR 633 (FC). Yet the delay of some two months before proceedings were commenced is a factor to consider in determining the scope of relief to be granted to Ampelite. If an applicant is to seek interlocutory relief from the Court on the basis that its claim requires urgent attention, it should ensure that proceedings are commenced as soon as reasonably practicable or appropriate in the circumstances.

23. Alsynite’s own evidence of prejudice, should orders be made against it, was somewhat general.  Nonetheless, it is clear enough that orders requiring the reformulation of a significant component of Alsynite’s marketing program can be expected to cause significant inconvenience to that program.

24. In the circumstances of this case, I think the balance of convenience should be assessed separately by reference to each of the four representations said to be misleading and deceptive.

25. The balance lies against granting relief in respect of the first two representations.  A key consideration here is my conclusion that, on the evidence adduced thus far, it has not been shown that there is any material difference between 60 GC (the gel coat product tested by Alsynite) and Wonderglas GC (Ampelite’s gel coat product).  Any representation by Alsynite that Wonderglas GC had been tested in the course of producing the results recorded in the Brochure would be unlikely, of itself, to mislead a potential customer into purchasing a roofing product manufactured by Alsynite instead of one produced by Ampelite.  Taking this into account, the balance of convenience is against granting relief to Ampelite.

26. The position with respect to the third order sought by Ampelite is different.  The authorities have emphasised that where comparative advertising is undertaken, particular care must be taken to ensure that the products are accurately compared: Sterling Winthrop Pty Ltd v The Boots Company (Australia) Pty Ltd (1995) 32 IPR 361, at 364-365, per Tamberlin J (and authorities cited there). Such advertising can be misleading if it includes a statement for which the scientific evidence is inadequate: Sterling Winthrop, at 365.  As I have found, there is a serious issue to be tried as to whether Alsynite misrepresented the significance of its test in calculating the light transmission properties of Wonderglas GC, the product of a competitor.  This involves a question of comparative advertising.  I think that the balance of convenience lies in favour of granting relief to Ampelite in respect of a representation which arguably is false and which could be understood by potential customers as demonstrating that its product is less effective than its competitors in maintaining light transmission qualities.

27. The form of order suggested by Ampelite would restrain Alsynite from representing in trade or commerce that Ampelite’s product (Wonderglas GC), after ten years’ exposure to weather, will lose in excess of fifteen percent of its light transmission properties.  The order should be narrower than this formulation.  The falsity of the representation is said to lie in the fact that Alsynite’s testing provides a basis for the statement about the light transmission properties of Wonderglas GC.  Thus Alsynite should be restrained from representing in trade or commerce that it has conducted weatherometer or other testing which establishes that, after ten years’ exposure to weather, gel coat fibreglass sheeting manufactured by Ampelite will lose in excess of fifteen per cent of its light transmission properties.  This form of order does not necessarily mean that Alsynite is free to make other representations about the light transmission qualities of Wonderglas GC or other Ampelite products.  Whether any such representations are misleading or deceptive will depend on what is said and the basis for the claim.

28. The position with respect to the fourth representation is more finely balanced.  The representation relates to the future performance of Alsynite’s own product, Alsynite Ultra.  There is a serious issue to be tried as to whether Alsynite had reasonable grounds for making the representation.  But this representation does not involve a comparison with any of Ampelite’s products.  To the extent that Ampelite’s case on falsity rests on the Du Pont testing, I would characterise it as relatively weak at this stage.  Moreover, the effect of an interlocutory order preventing Alsynite from making statements about the performance of its own product might have particularly serious consequences for its marketing program.  On balance, I do not think that any order should be made in respect of the fourth representation.

1. Little attention was devoted in argument to Ampelite’s claim for an order in the nature of corrective advertising.  The form of order suggested by Mr Wyles would require Alsynite to repudiate publicly any representation that Ampelite’s gel coated product possesses light transmission qualities inferior to those possessed by Alsynite.  This is a very ambitious claim in interlocutory proceedings.  The evidence simply does not warrant such an order being made at this stage of the litigation.

   Conclusion

2. Alsynite should be restrained, until further order, from representing in trade or commerce that it has conducted weatherometer or other testing which has established that after ten years’ exposure to weather, gel coat reinforced polyester fibreglass sheeting manufactured by Ampelite will lose in excess of fifteen per cent of its light transmission properties. No other restraining orders should be made pending trial.  The costs of these interlocutory proceedings should be costs in the cause.

I certify that the preceding fifty-five (55) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville.

Associate:

Dated:            25 July 2000

Counsel for the Applicant:	Mr M.D. Wyles
Solicitor for the Applicant:	MacPherson and Kelley
Counsel for the 1st-4th Respondents:	Mr M. Clarke
Solicitor for the 1st-4th Respondents:	Dunhill Madden Butler
Date of Hearing:	17 & 18 July 2000
Date of Judgment:	25 July 2000