Australian Competition and Consumer Commission v Unilever Australia Ltd

[1997] FCA 1470

FEDERAL COURT OF AUSTRALIA

TRADE PRACTICES - misleading and deceptive conduct - goods labelled as being “Made in Australia” - goods labelled as “Product of Port Lincoln Tuna Processors Pty. Ltd., South Australia” and “Product of Australia” - principal raw materials sourced partly from overseas - extensive nature of processing of raw materials in Australia - effect upon consumer’s perception as a result of label - representations to be considered in context of particular product and production processes - representations not misleading or deceptive.

TRADE PRACTICES - misleading and deceptive conduct - newsletter and television representations that tuna caught in Port Lincoln South Australia - significant proportion  caught outside Australian waters - misleading and deceptive conduct.

TRADE PRACTICES - misleading and deceptive conduct - consideration of factors for determining appropriate relief - extent of publication - whether public actually misled - state of mind of respondent - steps taken by respondent to rectify contravention.

Trade Practices Act 1974 (Cth), ss 52(1), 53(eb)

Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1981-1982) 149 CLR 191 considered and applied
Australian Competition & Consumer Commission v Lovelock Luke Pty Ltd (Lockhart J, 24 October 1997, unreported) considered and applied
Netcomm (Australia) Pty Limited v Dataplex Pty Limited (1988) 81 ALR 101 considered and applied
QDSV Holdings Pty Limited v Trade Practices Commission (1995) 59 FCR 301 considered and applied
ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 considered and applied

AUSTRALIAN COMPETITION & CONSUMER COMMISSION v UNILEVER AUSTRALIA LIMITED
SG 53 of 1996

MANSFIELD J
ADELAIDE

22 DECEMBER 1997

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SG 53  of   1996

BETWEEN:	AUSTRALIAN COMPETITION & CONSUMER COMMISSION APPLICANT
AND:	UNILEVER AUSTRALIA LIMITED RESPONDENT
JUDGE:	MANSFIELD J
DATE OF ORDER:	22 DECEMBER 1997
WHERE MADE:	ADELAIDE

THE COURT DECLARES THAT:

1. The respondent, by publishing the Christmas 1995 John West Best Selections newsletter within South Australia with its accompanying letter and by publishing the Port Lincoln wharf television commercial with the tuna slices tag appended,

(i)has engaged in misleading or deceptive conduct or conduct that is likely to mislead or deceive in trade or commerce contrary to s 52 of the Trade Practices Act 1974 (Cth)

(ii)has made a false and misleading representation concerning the place of origins of goods contrary to s 53(eb) of the Trade Practices Act 1974 (Cth)

in that it has represented thereby that the tuna in the product known as John West tuna slices is caught from Port Lincoln in South Australia when it is caught outside Australian waters and processed in Thailand.

1. The respondent, by publishing the Christmas 1995 John West Best Selections newsletter within South Australia with its accompanying letter and by publishing the March 1996 John West Best Selections newsletter within South Australia with its accompanying letter,

(i)has engaged in misleading or deceptive conduct or conduct that is likely to mislead or deceive in trade or commerce contrary to s 52 of the Trade Practices Act 1974 (Cth)

(ii)has made a false and misleading representation concerning the place of origins of goods contrary to s 53(eb) of the Trade Practices Act 1974 (Cth)

in that it has represented thereby that the tuna in John West tuna is caught from South Australia or is sourced from South Australia when a significant proportion of it is not caught from South Australia and is not sourced from South Australia nor is it caught in Australian fishing waters.

THE COURT ORDERS THAT:

1. The respondent be restrained for a period of two years from the date of this order from publishing or causing to be published any statement that tuna in John West tuna is caught in or from South Australia or in Australian fishing waters unless that statement also specifies that tuna in John West tuna is also caught in waters outside Australian fishing waters and is imported.

1. The respondent is given liberty to apply to vary or discharge the injunction hereby granted in the event that, in the circumstances then obtaining, all tuna in John West tuna is caught in or from South Australia or in Australian fishing waters.

The parties are given liberty to speak to the form of the declarations and order.

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

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SG 53 of 1996

BETWEEN:	AUSTRALIAN COMPETITION & CONSUMER COMMISSION APPLICANT
AND:	UNILEVER AUSTRALIA LIMITED RESPONDENT
JUDGE:	MANSFIELD J
DATE:	22 DECEMBER 1997
PLACE:	ADELAIDE

REASONS FOR JUDGMENT

INTRODUCTION

The applicant Australian Competition & Consumer Commission (“the ACCC”) is incorporated under the Trade Practices Act 1974 (“the Act”).  There is no issue as to its status to bring and maintain this action.

The respondent Unilever Australia Ltd (“Unilever”) is a corporation which is a wholly owned subsidiary of Unilever Australia (Holdings) Pty Ltd which is in turn the holding company for the Unilever Group in Australia.  Seakist Foods Ltd is also a wholly owned subsidiary of that company.  Unilever is, and at material times has been, the registered proprietor of the business name Unifoods registered at least under the Business Names Act 1996 (SA) and its legislative predecessor.  Its business, through its Unifoods division, includes the selling by wholesale of fish products including canned tuna marketed under the name “John West”.  The name John West is a prominent brand name promoted by Unilever, at least throughout Australia.

Port Lincoln Tuna Processors Pty Ltd (“Port Lincoln Tuna Processors”) is a company incorporated in South Australia whose principal activity is tuna processing in Port Lincoln.

Pierre Lindsay Guillott (“Mr Guillott”) has been the factory manager of Port Lincoln Tuna Processors since 1981, including having responsibility for the canning of John West tuna products.  He is responsible for scheduling production, organising factory resources, supervising factory staff, ensuring product quality standards are met, developing production methods, and dealing with customers.  Its customers include Unilever, for John West tuna and Seakist tuna products.  It also produces canned tuna under the Jenny Craig and Farmland brands.  Apart from canning tuna sold under those labels, Port Lincoln Tuna Processors also prepares fresh whole bluefin tuna for export to Japan for sashimi.

The Port Lincoln Tuna Processors premises are registered under the Export Control Act 1982: Export License Number Ten, issued by the Commonwealth Department of Primary Industries and Energy. It authorises the operations of dismembering seafood, producing canned fish and poultry meat products, packing fish, freezing fish, and storing either frozen or refrigerated fish or poultry. Under that registration, it has exported John West tuna, and other products overseas. It is, as part of the registration, regularly subject to Australian Quarantine and Inspection Service quality assurance inspections.

Since 1 January 1995 Port Lincoln Tuna Processors has maintained in a comprehensive way incoming raw material records, as well as product history records, which recorded dates of production, type of fish, tonnage, product code and the like in a form which was taken from rougher working notes and from some primary records.  Prior to that time, its records were not produced so coherently and conveniently in that way.

In this application, the ACCC alleges that Unilever has breached ss 52 and 53(eb) of the Act in several ways in the course of its promotion and sale of John West canned tuna (“John West tuna”).

Section 52 of the Act is well known. Section 52(1) provides:

“A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”

Section 53(eb) provides:

“A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services -

. . .

(eb)make a false or misleading representation concerning the place of origin of goods;

. . .”

There was no point of discrimination between those two sections or their application to the facts as contended for in submissions.  For the purposes of this judgment, therefore, I shall deal with the allegations made of breaches of those two sections together.  I also observe that there was no issue that Unilever is a corporation nor that its promotion and sale of John West tuna was in trade and commerce, nor that John West tuna were goods.

The four particular allegations made by the ACCC are that those sections were each breached by Unilever:

1. By representing in a promotional newsletter entitled ‘John West Best Selections’, Christmas 1995 issue (“the Christmas 1995 newsletter”), distributed to about 50,000 persons throughout Australia, that John West tuna is caught from, and canned in, South Australia.

It is said by the ACCC that on occasion all or part of the tuna in some cans of John West tuna, and on all occasions the whole of the tuna contained in the John West tuna product called John West tuna slices, is not caught from South Australia but is imported.  It is further said that the tuna in John West tuna slices is canned from Thailand.  Where it is necessary hereafter, I shall call that particular range of product “John West tuna slices”.

1. By representing in the newsletter ‘John West Best Selections’, March 1996 issue (“the March 1996 newsletter”), similarly distributed, that:

·John West tuna other than John West tuna slices is sourced from Port Lincoln in South Australia, and

·John West tuna slices are sourced from Thailand because of availability of fish species and production capabilities, (this representation was not claimed to fall under the mantle of s 53(eb) of the Act), and

·over 90% of John West tuna is sourced from Port Lincoln.

It is said by the ACCC that part of the tuna contained in some cans of John West tuna other than John West tuna slices and all of the tuna contained in some cans of such John West tuna is not sourced from Port Lincoln in South Australia but is imported, and that less than 90% of John West tuna is sourced from Port Lincoln.  It is further said that one reason for sourcing tuna slices from Thailand is that Unilever perceives labour costs to be lower in Thailand.

1. By representing in a television commercial (“the Port Lincoln wharf television commercial”) broadcast in the period January-March 1995 in Sydney, Melbourne and Brisbane and in January 1996 in Port Lincoln that:

·the tuna in John West tuna slices

.is selected at Port Lincoln, and

.is caught from Port Lincoln, and

·all tuna in John West tuna is caught from Port Lincoln.

It is said by the ACCC that the tuna in John West tuna slices is neither caught from nor selected at Port Lincoln, but is imported, and that some of the tuna in John West tuna is not caught from Port Lincoln.

1. By providing by wholesale to supermarkets and other retailers John West tuna, other than John West tuna slices, labelled with an “Australian Made” logo and described as ‘Product of Port Lincoln Tuna Processors Pty. Ltd., Sth. Aust.’ or ‘Product of Port Lincoln Tuna Processors Pty. Ltd., South Australia’ and, in the case of the product known as Tuna Tempters (which are not canned by Port Lincoln Tuna Processors) labelled with the words “Product of Australia”.  That presentation of John West tuna by Unilever is defined in the statement of claim as “the label representation”.  It is convenient for the purposes of this judgment to adopt that definition.

The allegations of the ACCC with respect to the label representation are as follows: 

“15.1The label representation represents and would cause a significant portion of the consumers reading it to believe that the tuna in the cans bearing the label representation is not imported tuna, whereas on occasions the whole or part of the tuna in such cans is imported in that:

(a)over 75% of the tuna received by Port Lincoln Tuna Processors Pty Ltd for canning is imported tuna;

(b)over 95% of Port Lincoln Tuna Processors Pty Ltd's canned tuna is sold to Unilever.

15.2The label representation, as it appears on cans other than "Tuna Tempters" cans, represents that the tuna in the cans bearing that representation is a product of South Australia whilst on occasions the whole or part of such tuna is not a product of South Australia.

15.3The label representation represents the tuna in the cans bearing that representation is processed in Australia, whereas on occasions such tuna is partly processed outside Australia in that:

(a)over 75% of the tuna received by Port Lincoln Tuna Processors Pty Ltd for canning is imported tuna;

(b)over 95% of Port Lincoln Tuna Processors Pty Ltd's canned tuna is sold to Unilever;

(c)at least 25% of the tuna imported by Port Lincoln Tuna Processors Pty Ltd for canning is partly processed outside Australia.

15.4The label representation as it appears on "Tuna Tempters" cans represents that the tuna in the cans bearing that representation is not imported tuna whereas on occasions the whole or part of the tuna in such cans is imported.  Over 85% of the tuna canned as Tuna Tempters is imported."

One matter put forcefully by counsel for Unilever, Mr Bathurst QC, was that the alleged representations are not explicitly made in the publications upon which they are based, but are interpretations of the actual communications.  It will therefore be necessary to refer in detail to the terms of the publications complained of.

Before doing so, I note some other uncontested background matters.

The Advance Australia Foundation (In Liquidation) (“the AAF”) is a company incorporated in the Australian Capital Territory.  Its principal activity is the promotion of Australian industry and commerce.  One of its activities prior to its liquidation on 17 July 1996 was to license companies to use its ‘Australian Made’ symbol or mark, which is the Australian Made symbol referred to above (hereinafter called ‘the Australian Made logo’).  That symbol is triangular in shape, with a white border on the base of which appears the printed words ‘AUSTRALIAN MADE’ and the inner triangle has a gold stylised kangaroo on a green background.

Unilever acquired ownership of the Australian business of John West Foods Ltd, and merged its operations into its Unifoods division in 1989.  At the same time it acquired certain other product brands from another company, including the Seakist Brand by acquisition of Seakist Foods Ltd.  Thus, since 1 January 1989, Unilever has marketed and sold both the John West and Seakist products initially through a subsidiary Unifoods Pty Ltd, and since January 1995 through its Unifoods division.

It was only after Unilever’s acquisition of the John West brand that the one marketing focus was directed towards promoting John West tuna as product made or produced in Australia, and to market it with the Australian Made logo.  As a result, from 1991 Port Lincoln Tuna Processors was engaged to can within Australia all tuna that was produced under the John West label.  That range of products has included:

Style  Size

Chunk in Brine  425g, 185g
  Chunk in Oil  425g, 185g, 100g

Style  Size

Chunk in Springwater  425g, 185g
  Sandwich in Oil  185g, 100g
  Tuna and Onion  185g, 100g
  (100g now
  transferred to
  Tempters)
  Tuna Spread  100g
  Tempters  (All 100g)
  Chilli
  Lemon Grass, Lime and Ginger
  Zesty Vinaigrette
  Sun Dried Tomatoes & Basil
  Lemon & Cracked Pepper
  Tuna with Onion

In late 1992, a new product range of tuna slices was introduced, canned in an oblong rather than a round can, and imported in cans from Thailand.  The four products in that range, available in 130g or 125g cans are:

Tuna Slices in vegetable oil

Smoked Tuna Slices in vegetable oil

Tuna Slices in Springwater

Smoked Tuna Slices in Springwater.

The procedure by which Unilever gets its John West tuna from Port Lincoln Tuna Processors is not a complex one.  It places an order, more or less regularly, specifying the particular product or products required by type, size and number of cases.  The tuna allowed to be used is generally one of three types:  southern bluefin tuna, skipjack tuna or yellowfin tuna.

The canned tuna market in Australia is relatively confined.  The leading brands of canned tuna are the John West brand, the Seakist brand, and the Greenseas brand (marketed by H J Heinz Co Aust Pty Ltd or one of its subsidiaries; it is not necessary to identify the particular company and I shall hereafter call the relevant entity “Heinz”), although there are several other brands or ‘generic’ brands which also have a significant share of the market.  The Australian retail market for canned tuna products is of the order of $120 million annually.

The only tuna canneries in Australia are the Heinz cannery at Eden in New South Wales and the Port Lincoln Tuna Processors cannery.

It is the allegations with respect to the label representation which have attracted the major part of the trial, and are clearly the allegations of most significance to Unilever.  It does not really dispute making the three publications referred to in (1)-(3) above, although the extent of the publication of the two newsletters is disputed, and it acknowledges that to some degree those publications contain misleading information.  It says that such misleading information was accidental and isolated, and was rectified once the problem was brought to its attention.  It strenuously disputes that its labelling either conveys the label representation, or that it is either misleading or deceptive.

The case, therefore, is largely but not entirely about whether Unilever was entitled, in the particular facts of the matter, to use the ‘Australian Made’ symbol on the product and to describe John West tuna as a product of Port Lincoln Tuna Processors.  Unilever maintains a clear distinction is to be drawn between the product which is John West tuna on the one hand, and the primary ingredient namely tuna on the other.

THE HISTORY OF THE ALLEGATIONS AND THE RESPONSES

The ACCC has submitted that the history of the matters put to Unilever, and its responses, is relevant to the question of any relief to which it claims to be entitled under the Act. That history is also a convenient way to describe some of the largely uncontested facts in this matter, so it is convenient to deal with those matters at this point. The following represents my findings on the evidence in relation to them. Where there is a significant matter of dispute, I have either explicitly noted the matter and deferred the expression of my views about it until later in this judgment, or I have discussed the evidence I have regarded as of especial significance to the point and have expressed my reasons for my findings about it. The consequence, is that matters relating to the complaints dealing with the Christmas 1995 newsletter and the March 1996 newsletter, and with the television advertisement, are largely dealt with in this section of my judgment.

Before turning to that history, I note briefly the evidence led by the ACCC at the trial.  It led evidence from a number of witnesses whose role was the process of investigating and collating materials, and formally proving them at trial.  Those witnesses were Leanne Margaret Hanna, Project Officer of the ACCC, Steven Vince Cullimore, Acting Assistant Director of the ACCC in its Adelaide Office, Martin Harcourt Watson, Customs Officer working in the Commercial Services Branch of the Australian Customs Service, each of who was briefly cross-examined, and the deponents Helen Jennifer King, Law Clerk, as to certain media publicity in South Australia in late 1994 and early 1995 about the Tunarama Festival at Port Lincoln over the period 26-29 January 1995; David Kuchel, Marketing Services Manager, Advertiser Newspapers Ltd as to the circulation of the Advertiser and the Sunday Mail newspapers; Rowland Whittell-Webb, Field Services Manager, New South Wales Office of Marine Safety and Port Strategy as to the movements of the vessel Western Pacific in and out of the port of Eden in New South Wales; Debra Jean Lee, Festival Co-ordinator, Tunarama Incorporated providing details of the annual Tunarama Festival held at Port Lincoln each January; Ian Gow, Manager, Australia Independent and Media Data Pty Ltd, as to the extent of print and television commercials for John West tuna from 1991 to 1995, Dion Weston, Chief Executive Officer, Spencer Gulf Telecasters Ltd, which company is the operator of Central GTS/BKN television from Port Pirie and which has a potential viewing audience of about 140,000 including the residents of Port Lincoln, as to commercials broadcast in December 1995 and January 1996 promoting the Tunarama Festival; Maria Francine Coffill O’Brien, Solicitor, about the purchase of certain John West tuna on 6 July 1996, and of the nature of Unilever’s John West televisions commercials; and Leslie Anne Matthews, Group Account Director, McSpedden Carey advertising agency, also about Unilever’s marketing of its John West products who was also briefly cross-examined.

I have no doubt that each of those witnesses were truthful and reliable and I have no hesitation in accepting their evidence where it relates to matters within their own knowledge.  Counsel for Unilever did not in fact submit that I should take any other view, except in relation to Ms Hanna’s conversation with Mr Vikas of Unilever on 2 February 1996 which I deal with below.

I refer separately to the evidence led by Unilver when addressing the individual maters to which that evidence referred.

The John West Best Selections newsletter is internally produced by Unilever twice yearly, once around Christmas and once around Easter, and normally under a covering letter from Unifood’s Senior Home Economist.  It is distributed Australia wide to about 50,000 persons or households, whose details are recorded on a data base.  In late 1995, in an attempt to penetrate the South Australian market in which the SAFCOL brand had prominence, it was proposed to include in the covering letter for South Australia a section specifically focussing on John West’s connection to South Australia.  It was that covering letter with the Christmas 1995 newsletter which first attracted the ACCC’s attention.  It is the covering letter which contains the text complained of.  I accept the evidence as to its distribution and so I find that the offending covering letter was distributed to about 3,900 persons or households, all in South Australia.  The covering letter circulated with the newsletter within other States and Territories did not include the text complained of.  Hence the relevant publication is relatively confined.

The covering letter circulated within South Australia is in a chatty style.  It contained the following paragraph:

“Did you know that John West tuna is caught and canned from right here in South Australia?  In fact the only other brand from South Australia is Seakist!  Not many people know that the Safcol brand, commonly believed to come from South Australia also, actually comes from Thailand.  Remember, support your local industry, the Port Lincoln Tuna Processors, and buy Australian.”

The Christmas 1995 newsletter itself was of four pages, containing short messages, promotional material and recipes.  It is not, of itself, a document about which the ACCC complains.  It was said, however, that the Christmas 1995 newsletter provides a context for the particular communication complained of, in particular by re-affirming the promotional theme which is clearly evidenced from other material that the John West products are of the best quality, and have health giving or health enhancing features.

That publication came to the attention of the ACCC.  On 30 January 1996, it wrote to Unilever (the letter was directed to John West Foods Ltd, but no point of discrimination was sought to be made within the corporate structure of Unilever, and I shall hereafter refer to Unilever only) reporting of a complaint it had received that Unilever had misrepresented the country of origin of its canned tuna products.  After referring to the covering letter asserting that John West tuna is caught and canned in South Australia, it drew attention to the fact that the words ‘Produced in Thailand’ appear on some packaging of John West tuna, specifically referring to John West tuna slices in vegetable oil, smoked tuna slices in vegetable oil, and smoked tuna slices in springwater.  Packaging confirms those matters, and Unilever accepts that its products so labelled are in fact packaged in Thailand from tuna not caught in Australian waters or by Australian fishing vessels.

Thus, the original complaint was a rather refined one.  It was that the covering letter asserted John West tuna is caught and canned in South Australia, whereas the John West tuna slices were packaged showing they were produced in Thailand.  As subsequent events have shown, there is truth in the schoolboy verse:

‘Large streams from little fountains flow,

Tall oaks from little acorns grow.’  (Everett, 1769-1813)

The ACCC sought information as to where the tuna in John West tuna is caught and canned, as to the distribution of the covering letter, and as to John West’s general advertising regarding the origin of John West tuna.

The response to the ACCC from Unilever dated 12 February 1996 under the hand of George Vikas (“Mr Vikas”), then Marketing Manager, John West products, referred to the covering letter to the Christmas 1995 newsletter as referring generally to the source of John West tuna.  It acknowledged that that general reference, so as to include within its ambit John West tuna slices was erroneous.  It was said to be an oversight.  The response confirmed that John West tuna slices are all canned in Thailand using fish caught “in the open ocean (excluding Eastern Tropical Pacific areas)”.  In relation to the tuna in other John West tuna, it asserted:

“All other John West Tuna products including 100g/185g/425g can sizes across Brine, Springwater, Oil and Tuna & Onion & Tuna Spread are canned from Port Lincoln South Australia and caught in Australian waters, or if local quota exceeded, from imported raw material.  Wherever possible, all local catch raw material is used.  Should further information be required, suggest contact Mr Brian Jeffries of the Tuna Boat Owners Association.”

It also suggested a form of correction to the letter accompanying the Christmas 1995 newsletter proposed to be published.  That response further provided information that in the first quarter of 1995, the core range of John West tuna was advertised on television in Sydney, Melbourne and Brisbane via “a Port Lincoln supered commercial” and that tuna slices specifically were supported in the fourth quarter of 1995 with a dedicated fifteen second commercial.

Unilever thereby acknowledged its error in asserting in the covering letter accompanying the Christmas 1995 newsletter that John West tuna is caught and canned in South Australia to the extent that John West tuna slices were in fact caught outside South Australia and canned, as its labelling suggested, in Thailand.  It proposed a form of corrective statement.  That response however did not allay the ACCC’s wider concerns.

There is some dispute as to the terms of a telephone conversation between Ms Hanna of the ACCC and Mr Vikas which took place prior to that letter on 2 February 1996.  That dispute is about whether the ACCC approved the terms of the proposed corrective statement.  Ms Hanna impressed me as a careful and conscientious person, and one who would have been cautiously aware of what she said in such a conversation.  I accept her evidence that she did not explicitly approve the wording of the corrective statement which subsequently appeared with the March 1996 newsletter.  I also accept her evidence that the proposed corrective statement was not was read to her, and that she said no more than words to the effect that, at a minimum, the ACCC would want the acknowledged misrepresentation which had appeared with the Christmas 1995 newsletter to be corrected, and that she gave as an example the printing of an apology in the next John West Best Selections newsletter.  In doing so, I am not to be taken as being critical of Mr Vikas.  He himself acknowledged that his recollection of the conversation or of the precise sequence of events was not clear, and as often occurs, I think he probably drew a little more from the conversation that the precise words of Ms Hanna might have warranted.  She was a careful person who took notes at the time, and was alert to not committing the ACCC to any agreed course of action.  I do accept that the prospect of a correction in the next newsletter was discussed and that its general content may have been discussed.  I find, however, that the ACCC through Ms Hanna did not expressly approve the form of words which came to be published.  The copy letter from the ACCC of 30 January 1996 upon which Mr Vikas prepared the draft response in handwriting also includes as part of the draft a reference to the telephone conversation with Ms Hanna, and tends to suggest the draft was prepared after that conversation.  There was no evidence within it to suggest the draft was prepared in stages.

One other feature of that conversation, which provides essentially the only evidence of the ACCC on the topic going to one of its complaints, is that Mr Vikas told Ms Hanna that John West tuna slices were not produced within Australia “due to the cost of labour and John West's manufacturing capabilities” (to quote from Ms Hanna’s note of the conversation).  I accept that Mr Vikas, in his discussion with Ms Hanna, on 2 February 1997, did say to her that tuna slices were not produced in Australia due to manufacturing capabilities.  Ms Hanna’s note also refers to “cost of labour”.  At that point, that particular issue was not one of especial focus in the sense that it was already in contemplation as the basis of a further misrepresentation possibly to be alleged.  Neither person, but in particular Mr Vikas, in that context, was likely to be focussing carefully on the particular words used, such that they would constitute a reliable basis for an admission of fact.  Even if Mr Vikas did say that one reason was the cost of labour, (as he probably did) I would not be satisfied that that was the reason or the principal reason why John West tuna slices were imported.  The real consideration, on his evidence, for John West tuna slices being produced in Thailand is production capabilities.  Mr Vikas also impressed me as a truthful witness, willing to acknowledge deficiencies in his memory and to accept as probable certain statements, albeit their context may not have been fully apprehended.  He acknowledged that he may have written the draft response or parts of it, including the proposed corrective statement, after the conversation.  Subject to preferring Ms Hanna’s version of the conversation as more reliable, I accept Mr Vikas as both a truthful and reliable witness.

I therefore accept that the main reason why John West tuna slices are produced in Thailand is the availability of production facilities.  I do not find, on the evidence, that one reason for that happening is Unilever’s perception as to labour costs being lower in Thailand.  Accordingly, one aspect of the allegations relating to the March 1996 issue of the newsletter John West Best Selections, as set out in (2) above, is not made out.

Whilst dealing with Mr Vikas’ evidence as to these events, I also now record my findings as to his state of mind about the statements in the letter accompanying the Christmas 1995 newsletter.

Although that letter was drafted by others, Mr Vikas accepted the responsibility for its content.  I accept his evidence that it did not occur to him at the time that the letter may have conveyed an erroneous representation as to the source of John West tuna slices, nor that in any other way that it might be misleading.  I find that, at the time, he believed that (putting aside John West tuna slices) some 80% or more of the tuna in John West tuna was caught by the Port Lincoln fishing fleet and up to 20% was sourced from imported whole frozen tuna.

I return to the narrative.

It was Mr Vikas who was then responsible, upon receipt of the ACCC’s letter of 30 January 1996, for considering it and then preparing a draft response which came to appear in Unilever’s letter of 12 February 1996 to the ACCC.  The correction proposed in that letter then appeared in the letter accompanying the March 1996 newsletter.  For the same reasons as previously given, I find that that letter was circulated only in South Australia to about 3,900 people or households.

The corrective statement was in the following terms:

“In our Christmas edition, we mentioned that John West Tuna is caught and canned from right here in South Australia.  In fact, over 90% of John West Tuna is sourced from Port Lincoln, South Australia - this accounts for over 95% of the Port Lincoln Tuna Processors canned production!  Our policy is to source Australian product wherever possible.  Due to availability of fish species and production capabilities, our Tuna Slices are sourced in Thailand from a John West approved cannery, having passed our stringent quality assurances and ongoing exhaustive product compliance testing procedures.  Furthermore, only the best quality Tuna caught by dolphin friendly fishing methods is used.”

Although also relevant only to the later considerations in my judgment, I note at this point that the ACCC accepts that the original complainant to it about the terms of the letter accompanying the Christmas 1995 newsletter was not misled or deceived by that document that John West tuna slices were in fact produced other than in Thailand, as the packaging clearly shows.  Nor is the ACCC aware of any other complainant who claims to have been misled on that particular topic by that letter or by the television commercial shortly to be referred to.  Further, whilst finding that Ms Hanna did not approve the terms of the then proposed corrective statement, in my view it is also of significance that the ACCC, having suggested an apology through Ms Hanna’s telephone conversation with Mr Vikas on 2 February 1996, and having received by letter dated 12 February 1996 Unilever’s suggested form of qualification or apology, did not express to Unilever either its disagreement with, or any comments upon, that form of words, including in particular that the form of words proposed might adversely compound Unilever’s position in relation to the ACCC’s consideration of the matter.  That appears nevertheless to have happened, as the March 1996 newsletter now provides the foundation for one of the ACCC’s complaints.  I do not criticise the ACCC for not having done so, both for timing reasons and because of the limited information it had available to it at the time.  The significance really lies in the state of mind of Unilever at the time.  I think it was reasonable, in the circumstances, for Unilever to think that the form of words suggested to the ACCC to meet the complaint based upon the Christmas 1995 newsletter was satisfactory to the ACCC, even though that was not in fact the case.

As the pleadings indicate, that corrective statement led to the ACCC concerns extending in two ways:  firstly, that it may not be correct that over 90% of John West tuna is “sourced” from Port Lincoln, and secondly but less importantly in the context of this case, that the reason that its tuna slices were sourced from Thailand may not have been accurately stated.  I have dealt with that second concern above.  The detailed findings as to the source of tuna are set out below, under that heading, but I observe at this point that significantly less than 90% of the tuna in John West tuna is caught by the Port Lincoln fishing fleet or in Australian waters.  It is convenient to note at this point that the evidence shows that the tuna used by Port Lincoln Tuna Processors in John West tuna includes tuna caught by vessels which are part of the Port Lincoln fishing fleet, tuna caught in international waters by foreign registered vessels first landed whole in Australia, tuna caught outside Australian territorial waters first landed whole at a foreign port but then transhipped in containers whole and frozen to an Australian port, and tuna caught outside Australian territorial waters, and first landed whole at a foreign port where it is partly treated and then transhipped in containers as loins to an Australian port.

Thus, that corrective statement initially led to the question as to the source of the tuna used by Unilever in John West tuna, and later in time when the evidence available to the ACCC became clearer, as to whether Unilever was acting in breach of the Act in labelling its John West tuna canned by Port Lincoln Tuna Processors as ‘Australian Made’ and as the product of Port Lincoln Tuna Processors.

Before turning to that wider question, I deal with the Port Lincoln wharf television commercial.  John West products generally are advertised mainly on television, with a concentration around the Christmas and Easter periods.  The Port Lincoln wharf television commercial was made in January 1994 and depicts a conversation at Port Lincoln.  It has a standard twenty seven second content, and three optional tags of three seconds as a final scene.  The relevant final scene depicts, on one side of the screen, the product John West smoked tuna slices and is both captioned and accompanied by a voice-over that ‘the best is now sliced’.  That final scene was called in the evidence “the tuna slices tag”.  It clearly represents that tuna in John West tuna slices is caught from Port Lincoln.  It is also said to represent that the tuna in John West tuna generally is caught from Port Lincoln.  As I have noted in relation to the source of tuna for John West tuna slices, Unilever acknowledges that it is not caught from Port Lincoln, and that it is canned in Thailand.

The evidence, including that of Ms Matthews, shows that in the period 19 February to 15 April 1995 the Port Lincoln wharf television commercial, with the tuna slices tag, was broadcast in Sydney and Melbourne.  It was also aired in January 1996 on GTS Port Pirie television at no cost to promote the Port Lincoln Tunarama Festival.

That commercial is one of four John West tuna “image” thirty second television commercials produced since 1990, all of which have been shown either on national or selected state television.  Those four commercials have been:

1. that filmed at Port Lincoln, and being the one which, with the tuna slices tag, is the subject of specific complaint in this application; it has also been shown with a tuna tempters tag and with a combined tuna in brine, tuna in canola oil and tuna in springwater tag,

1. one filmed at the Birkenhead fish markets in Sydney, which has been shown with a tuna in canola oil tag, and a combined tuna in brine, tuna in canola oil and tuna in springwater tag,

1. one filmed earlier than the Port Lincoln wharf television commercial, but also situated on a wharf near Perth, and

1. one filmed somewhat earlier, in Japan, and depicting a character journeying to Japan in search of the best tuna only to be told that it is in Australia.

The transcript of the Port Lincoln wharf television commercial is as follows:

“Opening Scene:       The advertisement begins with a view of a jetty with two boats moored on either side with the words captioned across the bottom of the screen in white

“Port Lincoln,
  South Australia”

with “Port Lincoln” larger than “South Australia”.

This is followed by a close up of two men on the jetty, a bearded fisherman with a blue beanie, who is spreading ice over tuna in large tubs, and a younger man standing with his hands in this [sic] pockets, presumably the customer.

Dialogue than takes place as follows:

Customer:They tell me that the best tuna in the world’s caught around here.

Fisherman:That’s right.

Customer:This stuff’s shocking - its dark and stringy.

[The camera focuses on a tub of large tuna in ice]

Fisherman:Dark and stringy?

Customer:No chance of John West bashing your door down, is there?

Fisherman:Mate, I sold ‘em a truck load of my tuna this morning.

[A large man with a moustache wearing a white jumper, a brown beanie and fisherman’s overalls approaches from behind the customer]

Customer:So now you’re trying to sell me the tuna that John West rejected?

Fisherman:My brother caught this tuna with his own hands - he reckons we’ll sell the lot.

Customer:Well, your brother must be ...  [Sees the brother, the bigger man with the moustache wearing the white jumper, who approaches from behind and puts his right hand on the tub of tuna] ...  a very persuasive and articulate gentleman.

Fisherman:[Crosses his arms]  He’s big an’ all ...

Customer:[Turns ruefully back to the fisherman]

Closing Scene:           One of three three second tags, each showing selected John West tuna products with a voice over of a John West slogan with a caption.”

and the tuna slices tag to which produces the focus for the complaint about that commercial, is as follows:

“Tag A           A box of John West Smoked Tuna Slices is situated to the left of the screen, and a can of John West Tuna in Canola Oil with an Australian made logo visible to the right, with a plate of tuna on lettuce and what appears to be brown bread at the front.  This is captioned up the top of the screen in white “The best is now sliced” and is accompanied by a voice-over “John West - the best is now sliced”.”

Although relevant only at a later stage of my judgment, it is convenient to record some findings as to Unilever’s plans and awareness with respect to the Port Lincoln wharf television commercial.  I find that John West tuna slices has always been accurately labelled ‘Produced in Thailand’.  I also find that it did not occur to Mr Vikas that the Port Lincoln wharf television commercial with the tuna slices tag might (inaccurately) suggest that John West tuna slices were produced at Port Lincoln.  I further find that, to his knowledge, no complaint or query had been received with respect to it.  Once the specific advertisement directed to promoting John West tuna slices, also in evidence, and about which there is no criticism in these proceedings, was produced in about October 1995, I accept that Unilever did not thereafter intend to use the Port Lincoln wharf television commercial with the tuna slices tag.  Unilever has now given specific instructions that it not be used.  I also accept that it was whilst Mr Vikas was on holidays that someone else selected the Port Lincoln wharf television commercial with the tuna slices tag for promotional use for the 1996 Tunarama festival at Port Lincoln.

Ms Hanna then pursued further inquiries, including on 26 February 1996 buying by retail certain cans of John West tuna.  The labelling included the Australian Made logo, and words indicating those cans were the product of Port Lincoln Tuna Processors.  As it ties in with other evidence as to the source of tuna in the two cans purchased, I note that the 185g can of John West tuna in canola oil she then purchased had stamped on its base the number 31 EX10 5341 and the 185g can of John West tuna in springwater she purchased had stamped on its base the number 43 EX10 5356.  That coding is part of the data enabling identification of the source of tuna in John West tuna.  There was other evidence also of the purchase of five cans of 100g John West ‘Tuna Tempters’ on 6 July 1996 also bearing similar numbers stamped on the base.  The issues by that point had extended beyond the source of the tuna in John West tuna slices, including as to the propriety of Unilever using the Australian Made logo and the description ‘Product of Port Lincoln Tuna Processors’ on John West tuna canned by Port Lincoln Tuna Processors.  For the sake of completeness, I note that on 4 and 5 June 1996 Ms Hanna bought by retail from three separate shops four further cans of John West tuna and noted twenty eight cans including the stamped coding on the base.

In the meantime, on 10 May 1996 the ACCC had written to Unilever enumerating its allegations, largely as later reflected in the statement of claim in this application, and inviting a response including as to possible action which might be taken by Unilever.  Unilever responded by letter dated 24 May 1996.  In relation to the Christmas 1995 newsletter it said:

“The Best Selections publication did not, of course, expressly represent that all John West tuna is caught and canned in South Australia.  John West understands that the ACCC’s concern is that the statement about John West tuna might be taken as a reference to all John West tuna.”

It then asserted a conversation between Mr Vikas and a Ms Susan Carr in which Ms Carr is said to have indicated that the correcting statement in the March 1996 newsletter “sounded fine”, as allegedly confirmed by Unilever’s letter to the ACCC of 12 February 1996, and that in fact Unilever considered the remedial statement made was “sufficient and appropriate”.  I find that conversation was the one with Ms Hanna on 2 February 1996.  I have recorded above my findings as to the content of that conversation.  In relation to the Port Lincoln wharf television commercial with the tuna slices tag, Unilever pointed out that the commercial recently had been broadcast twice only and only in the vicinity of Port Lincoln to a potential audience of around 19,500 people, during January 1996.  It added:

“John West does not admit that broadcast of the advertisement constituted a breach of the Act.

It has not broadcast the advertisement with a Tuna Slices “tag” since the week referred to in January 1996.

It will not transmit that particular advertisement with a Tuna Slices tag.

It will not represent that the tuna used in Tuna Slices is caught by Port Lincoln fisherman and selected by John West at Port Lincoln in South Australia while the position remains as it presently is, namely that such a representation would be untrue.

Having regard to the nature of the misrepresentation alleged, the fact that at most it would only be implied from the content of an advertisement, the absence of any broadcast since January 1996 and the limited audience reached, John West does not believe this to be an appropriate subject matter for corrective advertising.”

The next complaint it dealt with was that of labelling John West tuna as a product of Port Lincoln Tuna Processors when it contained significant amounts of imported tuna.  Unilever pointed out that Port Lincoln Tuna Processors is a Port Lincoln based South Australian company, whose business includes buying, processing and selling tuna in accordance with specifications provided by Unilever, and that each can of John West tuna bearing those words is in fact wholly produced by that company.  Unilever did not, therefore, accept that the statement is misleading.  Its observation that

“There is no claim made, expressly or impliedly, in the words set out that any or all of the tuna in each can is not imported.  I do not believe that a consumer would come to that conclusion from the words used.

If the ACCC’s complaint was well-founded, it would prevent any company which is engaged in the production of goods from raw materials, from representing that it has "produced" those goods, at least without a separate qualifying statement or explanation saying that the raw materials used by them did not wholly originate in the country in which the corporation was located.”

really presents a focus on one of the difficult matters to be resolved on this application.

Finally, in relation to the complaint arising from use of the Australian Made logo, it again disputed that its use was misleading, and claimed that the production processes for John West tuna qualify for use of that logo, as licensed by the AAF and based upon its criteria.  Thus, it contended, consumers would understand what the use of the Australian Made logo was and would not be misled.  It added:

“If John West is wrong, and consumers (or even a substantial minority of consumers) would take more from the use of the AAF logo, then it remains true to say John West’s tuna (other than Tuna Slices) is "Australian made".  The steps and processes carried out by Port Lincoln Tuna Processors Pty Limited have taken place entirely in Australia.  They have made raw tuna into the product which is sold in retail stores.

If the origin of raw materials for goods sold under the "Australian Made" mark is relevant, then the fact is that the John West product is predominantly Australian, including approximately 80% of the unprocessed tuna.  This excludes John West Tuna Slices.  The logo is not used on John West Tuna Slices.”

and as to the source of the tuna

“The percentage of John West tuna sourced from the fishing fleet based in Port Lincoln (as opposed to sourced from fishing fleets based in other countries) varies from year to year.  The best information I have is that, on the present breakdown, approximately 80% of tuna supplied by quantity for John West (exclusive of Tuna Slices) is from the Port Lincoln based fishing fleet.”

Subsequent correspondence confirmed that, putting aside the matters arising from the representations as to the source of tuna used in John West tuna slices, there is a substantial issue about Unilever’s entitlement to use the Australian Made logo and to describe John West tuna (except for tuna slices) as product of Port Lincoln Tuna Processors.

SUMMARY OF ISSUES

The above material illustrates that the ongoing issues in this matter concern whether, in respect of John West tuna canned by Port Lincoln Tuna Processors, Unilever is entitled to use the Australian Made logo and to describe John West tuna as the product of Port Lincoln Tuna Processors.  It asserts an entitlement to do so generally, even though a significant proportion of the tuna used by Port Lincoln Tuna Processors in canning John West tuna is not caught by the Port Lincoln fishing fleet or in Australian waters.  Unilever accepts that it may not do so in respect of John West tuna slices, which are canned and packaged in Thailand.

Unilever does not seriously contest that the letter which accompanied the Christmas 1995 newsletter was misleading or deceptive in suggesting that Port Lincoln was the source of John West tuna slices.  It was in fact Thailand.  However, it points out that:

• the circulation of that particular letter was to 3,900 persons or households in South Australia only, as the newsletter circulated in other States was with a different covering letter

• it took steps to correct the misrepresentation, including seeking the approval of the ACCC to the proposed form of that correction, through the letter also circulated in South Australia with the March 1996 newsletter

• there is no evidence of any person actually being misled by the letter, and accordingly there is no need for any declaratory or other relief in respect of that breach of the Act.

Its response to the complaint based upon the March 1996 newsletter, which is founded essentially upon the statement

“In fact over 90% of John West tuna is sourced from Port Lincoln, South Australia.  This accounts for over 95% of the Port Lincoln Tuna Processors canned production”,

Unilever contends that that is not misleading or deceptive, because it conveys by use of the word “sourced” no more than “made” as distinct from “caught”, and that in fact over 90% of the tuna which goes into John West tuna is canned at Port Lincoln by Port Lincoln Tuna Processors.  I find as a fact that the sale of John West tuna slices amounted to about 1.5% of the market for canned tuna in Australia and about 11% of the sales of John West tuna in Australia.  If the contention be correct as to the meaning of the statement, then I would find that the statement is not misleading or deceptive.  I consider below the construction of the statement contended for by Unilever.

In relation to the Port Lincoln wharf television commercial with the tuna slices tag, Unilever again accepts that it represents that John West tuna slices are from tuna caught and selected at Port Lincoln, and that that is not the case.  It contends that:

• it is only the tuna slices tag at the end of the Port Lincoln wharf television commercial which makes the commercial misleading

• the commercial does not otherwise suggest that all tuna in John West tuna is caught off Port Lincoln

• the use of that commercial in respect of tuna slices has been discontinued

• steps have been taken to ensure that adding the tag relating to tuna slices to the Port Lincoln wharf television commercial will not recur

so that again there is no need for any declaratory or other relief.

The main dispute related to the allegations in the statement of claim concerning John West tuna (other than tuna slices) being labelled with the Australian Made logo and with words that they are the product of Port Lincoln Tuna Processors, or in the case of John West tuna tempters (which are canned elsewhere) concerning the claim that they are the product of Australia.  The ACCC’s contention is that, by those representations, Unilever represents, and would cause a significant proportion of consumers reading such labels to believe, that

“the tuna in the cans bearing [that labelling] is not imported tuna”,

and that the tuna in those cans is therefore a product of Australia or South Australia.  As is clear from the detailed allegations in the statement of claim set out above, and that brief summary, ACCC asserts that the label representation identifies and refers to the source of the tuna itself, rather than to the John West tuna product as it is canned and marketed, or at least includes reference to the source of the tuna.  Unilever contends that it is not correct to measure what is represented by the label representation by reference to the amount of imported tuna used in the canning process; it is but part of the processing of the raw materials.  Thus, it says, the misrepresentation pleaded is expressed as a negative because it reflects an artificial and contrived construction of the label representation.  That, it says, is the reason why there is no evidence of consumers actually being misled.  Its case is that the label representation accurately represents that the product described as John West tuna was made in Australia, in that the raw tuna and the other ingredients were “transformed”  (to use counsel’s word) into a food by a manufacturing process.  Unilever maintains that position, even with respect to the tuna loins which account for (it says) some 5% of the John West tuna canned at Port Lincoln, and which are shipped from Thailand in containers after having been cooked there for the purpose of producing the loins from the whole fish.  In addition, Unilever says that there has only been a limited extent of production of John West tuna by Port Lincoln with tuna loins imported from Thailand, and that it has, since it learned of that sourcing of tuna, taken steps to prevent it from recurring.

Unilever itself instituted proceedings against the ACCC for declaratory relief with respect to its asserted entitlement to make the label representation.  Shortly after, the subject proceedings were instituted by the ACCC.

The evidence adduced by the ACCC was directed largely to showing the source of the tuna used by Port Lincoln Tuna Processors in canning the John West tuna (other than tuna slices), and in particular to showing that a significant proportion of the tuna canned by Port Lincoln Tuna Processors was neither caught by the fishing fleet operating from Port Lincoln, nor caught by other Australian registered ships, nor caught within Australian waters.  I shall refer to that evidence, and make findings about it below.  The evidence of Unilever, apart from evidence going to that issue, was directed to showing the nature of the processing of tuna by Port Lincoln Tuna Processors to produce John West tuna (other than tuna slices).  I shall refer also to that evidence, and make findings about it separately.  In the end, there was not a great deal of contest among witnesses, or on documents, on those issues, particularly as to the source of the tuna used by Port Lincoln Tuna Processors in canning John West tuna, so it will not be necessary to go into the detail of that evidence too deeply.

The production of John West tuna by Port Lincoln Tuna Processors is obviously a substantial one.  Apart from the size of that activity being indicated to some extent by the weight of tuna canned over a period of time by Port Lincoln Tuna Processors, its invoices to Unilever for production of John West tuna for the month of December 1995 indicate production of some hundreds of thousands of cans for that month.  Whilst there would no doubt be seasonal fluctuations and fluctuations for other reasons, clearly the production volume is very high.

I turn then to the particular factual findings which I was asked to make.

TUNA STOCKS AND FISHERIES

The evidence on this topic was uncontroverted.  It was presented by Dr J S Gunn, (“Dr Gunn”) currently Senior Fisheries Scientist with the CSIRO.  He was clearly well qualified to give it, and I accept his evidence.  It related to the three tuna species known as yellowfin tuna, skipjack tuna, and bigeye tuna.  It did not deal with southern bluefin tuna.  On the evidence, most of the tuna used by Port Lincoln Tuna Processors in the canning of John West tuna was either skipjack tuna or yellowfin tuna.

Skipjack tuna occur in all oceans of the world, and are most abundant between latitudes 10°N and 10°S, although in the Pacific Ocean at least some move further south and are caught along the southern and south eastern coast of Australia and the north island of New Zealand in the warmer months.  They are “oceanic rather than coastal”.  They spawn throughout the year, but only when conditions are suitable including water temperature over 25°C, both well into the Pacific Ocean but also closer to the Asian and Australian land masses.  The preferred scientific view, so far as relevant to the present case, is that the skipjack tuna caught along eastern Australia are indistinguishable on the basis of available genetic testing from other skipjack tuna in the Western Pacific Ocean, and similarly that skipjack tuna in the Indian Ocean are also of or from a single genetic stock continuously distributed across the Indian ocean.

Skipjack tuna in the Pacific Ocean are migratory, and move into the higher latitudes north and south along the east coasts of Australia, New Zealand and Japan with current transporting warm tropical water.  The movement is mainly limited to a few hundred miles but is sometimes much greater, especially associated with currents.

Thus, Dr Gunn says, skipjack tuna caught off the coasts of New South Wales, Tasmania, Victoria and South Australia are migrants from the tropical regions of the western Pacific Ocean following the South Equatorial current and then the East Australian Current, having moved into (and out of) Australian waters on a seasonal basis.

Yellowfin tuna have a similar distribution, often mixed with skipjack tuna.  They inhabit all oceans in tropical and subtropical areas between latitudes 40°N and 40°S and are limited usually to water temperature greater than 15°C.  They range through the oceanic waters of the Australian Fishing Zone except for the cooler waters of southern Tasmania and of the Great Australian Bight.  They too make seasonal movements associated with warm water current.  Spawning occurs only when water temperature exceeds 26°C, but occurs all year round when that condition exists and including in the tropical regions of the Australian Fishing Zone during the warmer months.  Unlike skipjack tuna, there are at least two genetic stocks of yellowfin tuna distinct in relation to the western Pacific and eastern Pacific areas, and possibly a third genetic stock in the central Pacific area around Hawaii.  The stock in the western Pacific Ocean is considered to belong to one genetic unit.  There are also two genetic stocks of yellowfin tuna in the Indian Ocean, an eastern stock which occurs off the Australian west coast, and a western stock.

As with skipjack tuna, yellowfin tuna are capable of migrating over many hundreds of miles although the majority traverse much smaller distances, including seasonal migrations from tropical waters and the Coral Sea down along the Australian east coast.  It is likely similar seasonal migration occurs from the waters around Indonesia down Australia’s west coast.

Bigeye tuna distribution is much like that of yellowfin tuna, although they prefer much deeper water than the surface-oriented yellowfin tuna.  They also tend to concentrate more on the eastern and western sides of the Pacific ocean, with discontinuity in distribution in the central Pacific area.  They also do not appear to migrate as readily or as extensively as the skipjack or yellowfin tuna.  Spawning is also more focussed on the western and eastern Pacific areas, again at water temperature above 26°C.  Whether bigeye tuna caught in Australian waters are part of one common genetic stock is presently unknown.

Bigeye tuna migratory habits are less recorded than of other tuna species.  The available data shows they are capable of moving substantial distances, but prefer to stay in an area for extended periods or return to it.

The tuna fisheries of the Western Pacific Ocean are now recognised as the world’s largest industrial fishery.  It involves an annual harvest in excess of one million tonnes, principally skipjack tuna (75%) and yellowfin tuna (20%).  Purse seining takes about 78% of that catch, principally large vessels from the United States, Japan, Korea and Taiwan.  The Australian tuna fisheries’ catch is relatively small both in weight and value; in 1993 the skipjack tuna catch was 4,200 tonnes and the yellowfin tuna catch was 740 tonnes and other tuna varieties including bigeye tuna 360 tonnes (excluding the Southern Bluefin Tuna catch).

Within the region of the Western Pacific Ocean, each nation has an Exclusive Economic Zone, but there are two “open spaces” or significant regions of international water.  Much of the catch of the US fleet in particular is taken from those two regions.

Within the Australian Exclusive Economic Zone, tuna is caught by smaller owner-skipper longline vessels, as well as a handful of larger purse seiners catching mainly for the Australian canning industry, and under bilateral access agreements negotiated annually by Japanese longline vessels for the Japanese domestic markets.

THE SOURCE OF THE TUNA

The tuna used by Port Lincoln Tuna Processors in canning John West tuna in the relevant period comes from several sources:

1. tuna caught by the Port Lincoln fishing fleet;

1. tuna caught in international waters by foreign registered vessels, namely the Carol Linda and the Western Pacific, and first landed at an Australian port as whole frozen fish;

1. tuna caught in international waters by foreign registered vessels and landed at an overseas port then transhipped in containers to Australia as whole frozen fish; and

1. tuna caught in international waters by foreign registered vessels and landed at an overseas port, partly processed in that country to the status of loins, and then transhipped in containers to Australia as frozen loins.

The information relating to the source of the tuna used by Port Lincoln Fish Processors covers the period from 1 January 1995 to 17 July 1996.  It has been provided firstly by the Australian Customs Service, which information has been tabulated and verified by an appropriately qualified officer.  The information it discloses includes each entry of frozen tuna and of “prepared” tuna (or tuna loins) by Port Lincoln Tuna Processors over that period with the date of entry, the description of the tuna imported, the origin of the tuna, the weight of the tuna, the port of loading, and the shipping container numbers.  Those records show that, in that period, six entries under separate bills of lading of raw frozen tuna totalling in weight 3,006.439 tonnes shipped from overseas ports in containers except for one “bulk cargo”.  They also disclose, in that period, twenty entries under separate bills of lading of “prepared” tuna or tuna loins totalling in weight 933.171 tonnes shipped from overseas ports in containers.  The total tuna imported in containers by Port Lincoln Tuna Processors over that period is therefore 3,939.610 tonnes.  Additional records of the Australian Customs Service enable the entry of the bulk cargo referred to to be identified as being 1,020 tonnes of frozen whole tuna, landed at Port Lincoln on 11 May 1995 from the vessel Carol Linda, an American registered fishing vessel, fishing in international waters of the Western Pacific Ocean.

Those records then mesh with records of Port Lincoln Tuna Processors, including its Incoming Raw Materials records and its Product History records, and its records from its “Tuna Journal” as to the tuna provided from the Port Lincoln local fishing fleet including the vessels Boston Bay, Maria Luisa, Leonard Star, Angelica S and Linda Rosa, and from the foreign registered vessels Western Pacific and Carol Linda.  They also mesh with the primary importation records relating to each entry including those of the customs agent for Port Lincoln Tuna Processors, namely Danzas Pty Ltd.  Similar information from the Australian Customs Service in respect of importation of tuna by Heinz was procured.  It disclosed an entry on 27 February 1995 of whole frozen tuna from the vessel Western Pacific, landed at Eden in New South Wales on 5 January 1995, and totalled 2,496.839kg.  Further, records of the Australian Fisheries Management Authority prove that the Western Pacific is a foreign fishing vessel which was prohibited from catching tuna within the Australian Fishing Zone.  The inference which I draw is that that tuna was caught in international waters, or at least outside the Australian Fishing Zone.  It was so treated by both parties.

From those records, the ACCC sought to establish the total of tuna meat actually received by Port Lincoln Tuna Processors during the period 1 January 1995 to 31 July 1996, the extent to which during that period its tuna was imported and on the other hand was “sourced” from Port Lincoln, and the extent to which tuna meat not sourced from Port Lincoln or from the Australian Fishing Zone or from Australian territorial waters was used in the production of John West tuna.  The latter step was specifically necessary because, during the period in question, Port Lincoln Tuna Processors canned tuna under both the John West name and under the Seakist brand name, as well as to a smaller extent from wholesalers or distributors under the names Farmland, Jenny Craig, and one or two generic brands.  On some days, Port Lincoln Tuna Processors canned only John West tuna, and on other days it canned both John West tuna and other brands.  As the precise detail as to the source of tuna used on mixed production days which went into John West tuna cannot be established, it is necessary to consider separately those production days.

The end result of the process of identification, production, inspection, and analysis of the Port Lincoln Tuna Processors’ records as maintained since 1995, and of those records, was reflected in the report of Ms Hillary Elizabeth Orr (“Ms Orr”), Chartered Accountant.  It was not challenged.  I accept her analysis.  It was not suggested that she had regard to any inappropriate material in completing it, or that she has misunderstood any of the primary materials on which she relied.

The task of assembling and reviewing that material was clearly a very substantial one; the fact that there was common acceptance as to its reliability, and of the picture which it then presented, reflects the thoroughness with which it was assembled and collated by officers of the ACCC.  As there was no dispute as to Ms Orr’s evidence, and indeed her report was adduced by Unilever based on the extensive primary material so assembled, it is not necessary to go into the detail of how those primary materials lead to the conclusions which she expressed in her report.  In particular, it is not necessary to refer to the coding system used by Port Lincoln Tuna Processors in John West tuna which I briefly noted when referring above to Ms Hanna’s inquiries.

Accordingly, I find that for the period 1 January 1995 to 31 July 1996 Port Lincoln Tuna Processors, on days when only John West tuna was canned, used a minimum of 4124.798 tonnes of tuna in John West tuna.  Of that amount, 2031.472 tonnes (or 49.3%) was tuna caught by Port Lincoln based fishing vessels, 502.580 tonnes (12.1%) was tuna caught by the Carol Linda and the Western Pacific in the Western Pacific Ocean, and 1590.746 tonnes (38.6%) was from tuna imported either whole or in loins in containers from overseas.  The break up, as Ms Orr presented it, is as follows:

Source of Tuna  Tonnes  %

Tuna from Port Lincoln vessels            2031.472  49.3
                  Tuna from ‘Carol Linda’  282.129  6.8
                  Tuna from ‘Western Pacific’                   220.451  5.3
                  Tuna from containers (whole)               1450.936  35.2
                  Tuna from containers (loins)                   139.810     3.4
  4124.798  100.0

That analysis does not take into account ‘mixed’ production days, that is days when Port Lincoln Tuna Processors processed canned tuna products in part for the John West label and in part for other labels.  No allocation can be made from available records as to what amount of tuna was processed on such days for John West products.  The Port Lincoln Tuna Processors production on ‘mixed’ production days, which totalled 89 of the 281 production days over that period on which some John West tuna was canned, was 2,294.330 tonnes and the detailed break up of the source of the tuna so canned is:

Source of Tuna  Tonnes  %

Tuna from Port Lincoln vessels            1006.980  43.9
                  Tuna from ‘Carol Linda’  519.894  22.7
                  Tuna from ‘Western Pacific’                   234.739  10.2
                  Tuna from containers (whole)                 516.587  22.5
                  Tuna from containers (loins)                     16.130     .7
  2294.330  100.0

Mr Guillott explained how that mix of sources of tuna came about.  He confirmed that Port Lincoln Tuna Processors “sources” its raw tuna by preference from vessels operating from Port Lincoln, but also buys tuna from foreign registered vessels that fish in the Western Pacific Ocean and first land their catch at either Eden in New South Wales or at Port Lincoln, namely the Carol Linda and the Western Pacific, and sometimes buys tuna from the Heinz cannery at Eden (Heinz also on occasions buys tuna from Port Lincoln Tuna Processors).  Seasonal variations, bad weather and fishing quotas have led to Port Lincoln Tuna Processors also needing to buy tuna from international fish brokers from time to time, from their South East Asian offices.  He acknowledged that occasionally, when raw tuna is unavailable, it has purchased small quantities of tuna loins from Thailand.  It would be fair to observe that his affidavit evidence tended to understate the extent to which Port Lincoln Tuna Processors procured tuna or tuna loins from overseas.

Given the impossibility of isolating the tuna used in John West tuna, or its derivation, on mixed production days, it is not possible to make exact findings.  The canning of John West tuna on days when only John West tuna was canned accounts for just under two-thirds of the total tuna used for canning tuna products in that period.  There is no need for absolute precision in my findings for the purposes of this case.  I find that the tuna used by Port Lincoln Tuna Processors in canning John West tuna in the period 1 January 1995 to 31 July 1996 was as follows:

• about half was tuna caught by the Port Lincoln fishing fleet

• about one third was tuna caught in international waters by foreign registered vessels and landed at an overseas port then transhipped in containers to Australia as whole frozen fish

• between about five and fifteen percent was tuna caught in international waters and first landed at an Australian port as whole frozen fish

• a relatively insignificant amount, up to a few percent, was tuna caught in international waters by foreign registered vessels and landed at an overseas port, partly processed in that country to the status of loins, and then transhipped in containers to Australia as frozen loins.

It follows that if the representations complained of are to be understood as referring to the source of the tuna in John West tuna, it would not be correct to state generally that that tuna was caught from South Australia or from port Lincoln.  Nor, on that understanding, would it be correct to state generally that that tuna was “sourced” from Port Lincoln, if “sourced” refers to where the tuna was caught.  Nor, on that understanding, would it be correct to state generally that that tuna was the product of Port Lincoln Tuna Processors or was the product of Australia.  As noted above, one critical question is whether that is in fact what the representations complained of convey or may convey.

UNILEVER’S AWARENESS OF THE SOURCE OF TUNA

Before discussing this topic briefly, I acknowledge that Unilever’s state of mind can not provide a defence to the breaches alleged, if they are otherwise made out.  It may be relevant to the relief which is granted on the application of the ACCC.

Mr Guillott’s evidence also shows that over time the type of tuna, and the means by which it has been procured, have varied.  In the late 1980s, or early 1990s, much of the tuna canned by Port Lincoln Tuna Processors was bluefin tuna, although some skipjack tuna and some yellowfin tuna was used.  At that time, the tuna canned was also provided from the catch of the Port Lincoln fishing fleet.  The introduction of quotas on the tuna caught in Australian Fishing Zone has been a major factor which has caused that position to change.

Specifications for John West tuna were provided to Port Lincoln Tuna Processors by Unilever from time to time, as identified by Mr Guillott.  In each case the requirement included as raw material:  clean, whole or wholesome, sound fish.  The finished product specification was broken into sections headed:  Scope, Description, Composition and Quality Factors, Regulations, Processing, Records, Packaging, Palletisation, Specific Unifoods Requirements.  There are various subheadings dealing with a number of issues.  Clearly the predominant ingredient is the tuna fish itself, although the ingredients include up to eight other specified items, and as it was noted specifically in submissions, I note that the finished product quality required the colour to be characteristic of the species and the flavour/odour to be characteristic of the species.

On 6 August 1996, after these proceedings had been instituted and while the ACCC was investigating the question of the source of the tuna used by Port Lincoln Tuna Processors in John West tuna, Port Lincoln Tuna Processors informed Unilever of the information it had provided to the ACCC as to the percentages of skipjack and yellowfin and other tuna and of tuna loins used by it in those products over the three periods 31 January 1995 to 30 June 1995, 30 June 1995 to 22 December 1995, and 22 December 1995 to 31 July 1996:  the percentage of loins so used for each of those periods respectively was 5.24%, 0.27%, and 1.75%.  The process of awareness of Unilever as to such matters is more clearly revealed in the evidence of Kenneth Raymond Towers, (“Mr Towers”) Senior Buying Manager for the Unifoods John West division of Unilever.  I accept his evidence.  His knowledge extends back beyond 1989 as he was previously employed by John West Foods Ltd from 1978.  His responsibilities include ensuring quality standards for John West products and that its marketing requirements are complied with.  His evidence dealt in part with the marketing focus of John West tuna described above.

Mr Towers made spasmodic oral inquiries of Port Lincoln Tuna Processors as to the percentage of tuna caught by Australian fishing boats used by it in canning John West tuna over the period 1991.  He was told that it was around 80% tuna caught “locally” or “off Port Lincoln”.  Over that period, and much more frequently than he made such inquiries, he urged the use of more tuna caught by the Port Lincoln fishing fleet.  He was motivated by comparative costs considerations in doing so.

It was only as the inquiries concerning this matter were being made that his focus became more specific.  I accept his evidence that, until that time, he as the person responsible within Unilever had no suspicion, nor any reason to suspect, that imported tuna loins were being used from time to time by Port Lincoln Tuna Processors in the canning of John West tuna.  That was not in accordance with the specifications provided by Unilever.  On 6 August 1996 he received from Port Lincoln Tuna Processors through Mr Guillott information to the contrary.  He promptly positively directed that no imported loins were to used in any Unilever products.  The major reason was quality control:  all processing from the whole raw first stage was required to be carried out at Port Lincoln Tuna Processors’ cannery where Unilever had its own quality control officer or ‘compliance sampling employee’.

The initiating event for his more specific focus appears to have been the letter from ACCC to Unilever of 10 May 1996.  It raised concerns as to mislabelling (reflected in the application and statement of claim in this matter), and nominated a range of orders which the ACCC might accept including the use of alternative packaging when tuna caught in local Australian waters is unavailable.  It prompted Mr Towers to seek from Port Lincoln Tuna Processors information as to

“the proportion of locally caught fish versus imported raw material you use in our canned products produced in your canner.”

The reply was received in the following terms on 21 May 1996:

“In regards to your enquiry concerning our source of raw materials there are several factors which must be considered.  Port Lincoln Tuna Processors is the only tuna canning company in Australia to own their own fishing fleet and our season ranges between 6-7 months of the year.  As fishing catches vary from season to season it is difficult to predict catches but, as has been the case in previous years, 80% of our supply may be locally caught.”

I interpose that that correspondence is consistent with the asserted state of belief of Mr Towers prior to that time, and I accept that he had not earlier required any formal documentation from Port Lincoln Tuna Processors to prove that which had been asserted to him.  I find that that general picture had been conveyed periodically by Port Lincoln Tuna Processors in the past.

So far as Unilever was concerned, the picture has changed somewhat since then, clearly prompted by the ACCC seeking further information from Port Lincoln Tuna Processors.  In late June 1996, Mr Guillott told Mr Towers that the locally caught fish component may be less than 80%, and on 5 August 1996 he first told Mr Towers that material provided to the ACCC would show the use in John West tuna of a small quantity of around 5% of tuna loins imported from Thailand.  That information was, at Mr Towers’ request, confirmed by the facsimile of 6 August 1996 referred to above.

I find that it was only at about that date that Unilever knew, or indeed had reason to suspect, that Port Lincoln Tuna Processors had from time to time used tuna loins imported from Thailand in canning John West tuna.  I have not overlooked an occasion in mid 1994 when a customer complained of having found a ‘Product of Thailand’ label inside a can of tuna but I accept that Mr Towers was told, and accepted, that that must have occurred by a disgruntled employee of Port Lincoln Tuna Processors putting the label there and that no tuna loins were used in Unilever products.  One additional reason why that would be the case is that, on the evidence, imported tuna loins are some three times the cost of whole raw fish.

Mr Vikas also gave evidence on this topic.  He has overall responsibility for all aspects of the marketing strategy for John West products, at least since early 1995, although for some years prior to then he was involved in that strategy including for John West tuna.  I accept his evidence also that until about mid 1996, he believed that about 80% of the tuna canned by Port Lincoln Tuna Processors for John West was caught by the local Port Lincoln fishing fleet, and up to about 20% was imported whole frozen fish, and further that no imported tuna loins were used in the canning of John West tuna.  He has since come to learn, as is accepted to be the case, that some imported processed tuna loins have been used for that purpose, as well as whole tuna caught in international waters and first landed in Australia.

For similar reasons, I conclude that it has been proved that the Port Lincoln wharf television commercial does represent that the tuna in John West tuna slices is selected and caught at Port Lincoln.  To that extent, I find it is misleading.  I have carefully considered the Port Lincoln wharf television commercial, both by itself and in the evidentiary context urged upon me by the ACCC.  I am not satisfied that it conveys that all tuna or any particular proportion of the tuna in John West tuna is caught off South Australia or by the Port Lincoln fishing fleet.  Neither its presentation nor its words do so.  It certainly represents that some tuna used in John West tuna has that derivation, but that is not the representation alleged.  That representation, in any event, would not be misleading.  Accordingly, I reject that aspect of the ACCC’s allegations concerning the Port Lincoln wharf television commercial.

There remains to consider the label representation.  The real issue between the parties, ultimately, was what the presentation of John West tuna with the Australian Made logo, and words like ‘Product of Port Lincoln Tuna Processors’ relevantly convey.  In the case of the product John West tuna tempters, the presentation is with the Australian Made logo and the words “Product of Australia”, but the real question is much the same.  My findings as to the source of the tuna used in John West tuna would make that presentation misleading if it were to convey, as the ACCC alleges, that all or almost all of the tuna used in John West tuna is not imported tuna.  The ACCC, correctly in my view, categorises tuna as imported tuna, whether the tuna comes into Australia as whole frozen fish caught in the Western Pacific ocean by being first landed in Australia, or by being first landed overseas and transhipped to Australia in containers.  I do not need to really address any difference in views on that score for present purposes, because in any event I have found that probably a little over one third of the tuna used in John West tuna is caught in international waters and first landed overseas and then transhipped to Australia in containers as whole frozen fish.  Nor, for the same reason, do I need at this point to address the significance, if any, of the relatively insignificant amount of tuna imported as frozen tuna loins.

In determining whether the style of presentation of John West tuna conveys the label representation, as alleged by the ACCC, it is necessary to identify the relevant class of persons to whom that presentation is made.  It is by reference to that group that it is to be determined whether that presentation is misleading or deceptive or likely to mislead or deceive, or misrepresents the place of origin of John West tuna.  In Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1981-1982) 149 CLR 191 at 199 Gibbs CJ said:

“Section 52 does not expressly state what persons or class of persons should be considered as the possible victims for the purpose of deciding whether conduct is misleading or deceptive or likely to mislead or deceive.  It seems clear enough that consideration must be given to the class of consumers likely to be affected by the conduct.  Although it is true, as has often been said, that ordinarily a class of consumers may include the inexperienced as well as the experienced, and the gullible as well as the astute, the section must in my opinion be regarded as contemplating the effect of the conduct on reasonable members of the class.  The heavy burdens which the section creates cannot have been intended to be imposed for the benefit of persons who fail to take reasonable care of their own interests.  What is reasonable will of course depend on all the circumstances.”

See also Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 per Deane and Fitzgerald JJ at 202.

I accept the submission of Unilever that the relevant group comprises those members of the public who may purchase by retail canned tuna products.  As a matter of scientific knowledge, substantial tuna fisheries are geographically widespread and tuna are essentially migratory though to varying degrees.  I have made detailed findings on those matters earlier in these reasons.  I find, however, that the members of the public to whom the style of presentation of John West tuna was directed, or at least a substantial proportion of them, would enjoy no such knowledge.  There was no evidence to suggest otherwise.  Thus the question for the Court to determine objectively, in the light of the group of persons so identified, is not on the basis that all or a significant proportion of that group of persons had that scientific knowledge.

The question of origin labelling has been the subject of many decisions of this Court, most recently in Australian Competition & Consumer Commission v Lovelock Luke Pty Ltd (Lockhart J, 24 October 1997, unreported).  Lockhart J referred to those decisions, and I respectively adopt that list (at 9):  Korczynski v Wes Lofts (Aust) Pty Limited (1985) 10 FCR 348; Netcomm (Australia) Pty Limited v Dataplex Pty Limited (1988) 81 ALR 101; Thorp v C A Imports Pty Limited (1990) ATPR 40-996; Siddons Pty Limited v The Stanley Works Pty Limited (1991) 29 FCR 14; Just Juice Corporation Pty Limited (Receiver and Manager Appointed) v Hook (1992) 27 NSWLR 123; Trade Practices Commission v QDSV Holdings Pty Limited t/as Bush Friends Australia (1994) 128 ALR 551 (per Davies J); QDSV Holdings Pty Limited v Trade Practices Commission (1995) 59 FCR 301 (on appeal).

His Honour also noted that, in Federal Commissioner of Taxation v Jack Zinader Pty Ltd (1949) 78 CLR 336, considering whether certain goods were goods manufactured and sold for the purposes of the Sales Tax Assessment Act (No 1) 1930-1942, the Court adopted a test as to whether the goods in question were different ‘goods’ from the original character of the goods before any processing:  per Dixon J at 343, and per Williams J at 350.  I was also referred to that decision by counsel.  As the Court there said, that question is essentially a question of fact.

Unilever urged such an approach upon the Court in this matter.

In Lovelock Luke (above), Lockhart J after referring to the authorities, said (at 9-10):

“In this area of the discourse it is desirable that rigid rules are not set down; the words of the statute speak clearly enough.  Whether an article of commerce is “Made in Australia” must be determined by reference to the circumstances of each case.  Some articles may consist of parts manufactured either wholly abroad or partly abroad yet fully assembled here.  It may be apposite in some cases to refer to such articles as being Australian made because the purchasers or potential purchasers know that the parts are manufactured either wholly or partly abroad.  In the case of some goods the meaning conveyed by the expression “Australian Made” may be that all the components are manufactured in Australia and assembled here.  In some cases where the goods are designed may be irrelevant; this was the view adopted by Sheppard J in Thorp.  In the case of other articles the fact that they are designed in Australia may be important in considering the question whether they are “Made in Australia”.  I cannot emphasize enough the need to look at each particular set of facts to determine the answer to this question.

In examining the facts in this case I acknowledge the importance of having regard to the nature of the product itself and the expectations and likely understanding of purchasers:  Sackville J in QDSV Holdings at 309.”

That case concerned air conditioners designed in Australia, and assembled in Australia.  All essential components of the air conditioners were made in Australia, except for the compressor.  In those circumstances, his Honour concluded that the air conditioners were substantially manufactured in Australia, so that the use of the words ‘Made in Australia’ together with the Australian Made logo did not amount to conduct or representations contrary to ss 52 and 53(eb) of the Act.

It seems clearly to be settled that to state that a particular product is “made” in a certain place is to make an assertion about its state of origin.  In Netcomm (above) Gummow J said at 106-107:

“With minerals or crops, it may be quite easy to state what is their place of origin and so to characterise representations concerning that place of origin as being or not being false or misleading.  The concept of “place of origin” will present difficulties where sophisticated articles derive their value and character as articles of commerce by various circumstances involving design and manufacture.  There is then more likely to be a complex of integers constituting the origin of those articles.”

The cases tend to show that where any significant step in the manufacturing process from raw materials to the final product occurs overseas, it will not be appropriate to label the product as made in Australia:  Korczynski (above), Netcomm (above), Thorp (above), and QDSV (above), although as Sheppard J said in Thorp (at 50,966):

“. . . a question of fact and degree is involved and one must come to a conclusion on the basis of a consideration of the entirety of the steps necessary to manufacture . . .”

the product.  Such consideration led to Lockhart J’s decision in Lovelock Luke (above).  In the Full Court decision in QDSV (above), where the issue concerned a label ‘Made in Australia’ on a range of toy koalas, albeit with some qualification on the label, Sackville J at 312 treated that labelling as conveying that the koalas had been produced by a manufacturing process substantially taking place in Australia, and that most of the components used in the manufacturing process themselves had been manufactured in Australia.  R D Nicholson J (with whom Einfeld J agreed), in reaching the same conclusion that that labelling was misleading, said at 323:

“It is the effect of the label on the consumer which is in issue.  It is the words of the label which the consumer reads.  Accordingly, it is the meaning of those words in ordinary parlance which is in issue as well as the manner in which those words are presented to the eye of the consumer.  While it is true that the application of the ordinary meaning of the words leaves the judge deciding the effect of those words without evidence of the impact of those words on consumers, it is the fact that it is the impression of the words which is critical to a determination of whether they are, in the circumstances as found, misleading and deceptive either generally or in relation to the origin of goods.”

My findings in the present case show that the source of the tuna in John West tuna is to a significant degree from regions beyond Australia.  That raw ingredient is, together with limited other raw ingredients, processed or “manufactured” entirely within Australia.  There is no element of the “manufacturing” process which occurs outside Australia.  I use quotation marks because the ACCC was anxious that I should not assume that the canning process is a manufacturing process.  I have endeavoured to use the word “canned” in my reasons to this point for that reason.

I have described the canning process.  It is long and complex.  The product which results is, in my view, a product distinctly different from the raw ingredients.  Obviously, where there is a product which is very largely comprised of one raw ingredient, it will be a matter of fact and degree whether the product is in fact different in any relevant respect from the primary ingredient.  It will also be a matter to assess in each case where origin labelling issues arise the significance of any such difference.  If the meaning of the style of presentation of John West tuna to the consumer does not convey that the source of the tuna used in John West tuna is itself caught in or “sourced” from Australian waters, the ACCC will not have made out its case.  In considering that question, I do not think it is helpful to apply epithets such as the substantial transformation test or the essential character test to seek a solution (see the discussion of those matters in the reasons of Davies J in QDSV at first instance at 557-559 and of R D Nicholson J on appeal at 322-324).  I pose the question as expressed by R D Nicholson as cited above.

I have reached the conclusion that the style of presentation of John West tuna described does not convey the label representation.  I have taken into account that the canning process results in a product which is quite different in taste, texture, appearance and odour from the tuna as a raw ingredient or from fresh tuna as consumed.  There is nothing to suggest that the place of origin of the tuna as a raw ingredient is, or is capable of being, of significance to the consumer in terms of its ultimate characteristics as canned.  There may well be different considerations if that were not the case.  The use of the word “made” does not inherently convey that the raw ingredients of a product, even a dominant raw ingredient, are of a specific provenance.  I note that there is no evidence of any consumers that they have in fact been misled, either directly or through survey evidence (cp. the observations of Gummow J in Netcomm above at 105); that matter does not of course add to or fortify my conclusion, but is noted simply because it has been necessary for me to reach my decision without the benefit of any such evidence. I have not found the evidence led by the ACCC of a ‘contextual’ nature, that is as to how in a more general way Unilever promotes John West products in the marketplace, to have been material in reaching a conclusion on the critical issue; indeed, that general promotional material has an emphasis on quality, and in some respects points to John West raw materials being sourced wherever the best quality and freshest raw materials can be found, and not necessarily exclusively in Australia, including tuna.

It is necessary to separately consider the significance of the use of a relatively small quantity of imported processed tuna loins on certain occasions in the canning of John West tuna.  That gives rise to issues more closely akin to the sort of issues confronting the Court in the other origin labelling cases to which I have referred.  For reasons similar to those which led to Lockhart J in Lovelock Luke (above) finding in that case that the description ‘Made in Australia’ with the Australian Made logo did not contravene ss 52 and 53(eb) of the Act, I have reached the same conclusion. My primary conclusion is that that style of presentation of John West tuna does not convey the label representation alleged despite the principal ingredient being, to a significant degree, imported. The canning, or manufacturing, process is carried out entirely within Australia. In my view the few occasions when that part of the process constituted by the converting of whole tuna into tuna loins was carried out overseas so that, whilst the canning process was taking place, some part of the tuna used had already been partly processed and came into the canning process at a point along the canning process rather than at its commencement, does not as a matter of fact and degree mean that the style of presentation of John West tuna thereby contravened those provisions. I do not need to address the issue whether the answer to that question would be the same if all, or any more than a relatively insignificant proportion of, the tuna used was imported tuna loins.

The ACCC’s allegations include that the label representation is made in part, in the case of all John West tuna except Tuna Tempters, by the words ‘Product of Port Lincoln Tuna Processors Pty. Ltd., Sth. Aust.’ or a variation of that expression.  I do not find that such words convey to the relevant group of consumers that John West tuna is made up of tuna entirely, or largely, caught off or from South Australia.  John West tuna as canned is obviously a result of some processing of the primary raw ingredient, with other ingredients.  That presentation clearly asserts that all the process whereby tuna is processed or canned to the form of the canned John West tuna is carried out at Port Lincoln.  I have found that that representation is not misleading.  Within that conclusion, for the reasons expressed in the immediately preceding part of my reasons, I encompass my consideration of the fact that on a few occasions the entire process was not carried out at Port Lincoln because imported processed tuna loins were used.  The findings I have made do not accord with that part of the allegations of the ACCC that at least 25% of the tuna imported by Port Lincoln Tuna Processors is partly processed outside Australia.  The expression “product of” or “produced” necessarily conveys some process.  As I have found, the process is quite a complex and extensive one.  There is no matter, by context or otherwise, which to my mind conveys by those words more than their ordinary meaning:  a thing produced by any action or operation, or by labour; an effect or result (Macquarie Concise Dictionary, 1993).  The reference to Port Lincoln Tuna Processors of itself puts a focus on the canning process rather than the origin of the raw ingredients.

In reaching the conclusions referred to, I have considered whether the combination of expressions said to give rise to the label representation may convey that label representation.  My conclusions on that question reflect my consideration of the particular words and presentation used, namely the Australian Made logo and words like “Product of Port Lincoln Tuna Processors Pty. Ltd., Sth. Aust.” or “Product of Australia”, whether taken separately or in the combinations in which they appear in the various John West tuna products.

RELIEF

It was agreed between the parties, through counsel, that I should make my primary findings in relation to the label representation alleged, and on other matters which submissions identified as relevant or potentially relevant to any relief which may be appropriate and which arose in the course of evidence with respect to the alleged label representation.  It was then contemplated that the parties should have an opportunity to make submissions as to the appropriate form of relief which should be ordered.  In the light of my findings, it is not necessary to do that.

I turn to consider the appropriate relief in respect of the contraventions I have found established, and in the light of the findings with respect to those contraventions. Those contraventions of ss 52 and 53(eb) of the Act are firstly with respect to the Christmas 1995 newsletter and the March 1996 newsletter in so far as they represent the source of the tuna used in John West tuna generally, secondly with respect to the Christmas 1995 newsletter and the Port Lincoln wharf television commercial in so far as they represent the source of the tuna used in John West tuna slices. The ACCC seeks injunctive and remedial orders in the nature of corrective advertising in relation to those contraventions.

In determining upon the appropriate relief, I have had regard to the decision of the Full Court in ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248, especially per Lockhart J at 256-257, Gummow J at 265-267, and French J at 268. I have also had regard to the submissions of counsel for the parties.

It is important in the public interest that conduct which infringes the Act should be reflected by orders of the Court which indicate the Court’s disapproval of that conduct. In my view the first step is to formally declare those contraventions.

Accordingly, I declare that Unilever, by publishing the Christmas 1995 Best Selections newsletter within South Australia with its accompanying letter and by publishing the Port Lincoln wharf television commercial,

1. has engaged in misleading or deceptive conduct or conduct that is likely to mislead or deceive in trade or commerce contrary to s 52 of the Act

1. has made a false and misleading representation concerning the place of origin of goods contrary to s 53(eb) of the Act

in that it has represented thereby that the tuna in John West tuna slices is caught from Port Lincoln in South Australia when it is caught outside Australian waters and processed in Thailand.

I do not think other relief in respect of those contraventions is appropriate.  I have found the representations were made by Unilever by mistake.  The relevant newsletter was circulated to about 3,900 households in South Australia, and that representation was corrected to the same households by the March 1996 newsletter.  The Port Lincoln wharf television commercial has been withdrawn.  I am satisfied that Unilever will not replay it.  Steps have been taken to ensure that.  Unilever in October 1995 created a substitute commercial.  The Port Lincoln wharf television commercial was aired after that date only to promote the January 1996 Tunarama festival at Port Lincoln and not for Unilever’s purposes.  It was only by reason of the ‘tuna slices’ tag of three seconds at the end of that commercial that the contravention arose.  The packaging of John West tuna slices clearly identifies that it is produced in Thailand.  There is no evidence of any consumer being misled in fact by those representations.  I accordingly decline the other relief sought by the ACCC in respect of that representation.

I declare that Unilever, by publishing the Christmas 1995 Best Selections newsletters within South Australia with its accompanying letter and by publishing the March 1996 newsletter within South Australia with its accompanying letter,

1. has engaged in misleading or deceptive conduct or conduct that is likely to mislead or deceive in trade or commerce contrary to s 52 of the Act

1. has made a false or misleading representation concerning the place of origin of goods contrary to s 53(eb) of the Act

in that it has represented thereby that the tuna in John West tuna is caught from South Australia or is sourced from South Australia when a significant proportion of it is not caught from South Australia and is not sourced from South Australia nor is it caught in Australian fishing waters.

In my view it is also appropriate that there be an injunction issued against Unilever in respect of those contraventions restraining it from publishing or causing to be published any statement that the tuna in John West tuna is caught in or from South Australia or Australia unless that statement also specifies that the tuna in John West tuna is also caught in waters outside Australian fishing waters and is imported.  I think that injunction should be limited to a period of time of two years from the date of this order.  It is also necessary that Unilever have liberty to apply to discharge or vary that injunction if circumstances change as to the source of the tuna used in John West tuna in the future.  I so order.

The considerations leading to those conclusions as to the appropriate form of relief are similar to those which I have already addressed. The conduct was not deliberately in contravention of the Act, but the representations were intended to carry the message which I have found to constitute contraventions. It was, however, probably only during preparation of this matter for trial that the true source of much of the tuna in John West tuna was identified to Unilever, although prior to that time it was aware that up to 20% of that tuna may have come from overseas. It had not implemented any procedure to verify its belief as to the source of the tuna. Those considerations outweigh, in my view, factors which militate against an injunction being granted. I note those other considerations include Unilever’s state of knowledge, the limited extent of the publication, the time of that publication, and the absence of any proven complaint from any consumer or that any consumer has in fact been misled by the representation lead me to the view that corrective advertising is not now warranted. In the light of those considerations, in my view it is not appropriate to now order corrective advertising with respect to those contraventions.

There will be declarations and an injunction in accordance with these reasons.

I certify that this and the preceding fifty-five (55) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

Associate:

Dated:            22 December 1997

Counsel for the Applicant:	Mr J Wells QC with him Mr C Kourakis
Solicitors for the Applicant:	Finlaysons
Counsel for the Respondent:	Mr T Bathurst QC with him Mr R Webb
Solicitors for the Respondent:	Fisher Jeffries
Dates of Hearing:	16-18 September 1996; 23-27 September 1996
Date of Judgment:	22 December 1997