B & W Cabs Ltd v Brisbane Cabs Pty Ltd

Re: B. and W. CABS LIMITED (RECEIVER AND MANAGER APPOINTED)
And: BRISBANE CABS PTY. LTD. and TAXICARD (AUSTRALIA) PTY. LTD.
No. Q G90 of 1991
FED No. 392
Trade Practices
(1991) 13 ATPR 41-126
30 FCR 177/21 IPR 563

COURT

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Pincus J.(1)

CATCHWORDS

Trade Practices - interlocutory injunction - deceptive advertising - expressing views on merits - statements alleged to be literally accurate.

Trade Practices Act, s.52

HEARING

BRISBANE

#DATE 11:7:1991

Counsel for the applicant: Mr P.D. McMurdo

Solicitors for the respondents: Morris Fletcher and Cross

Counsel for the respondents: Mr R.J. Douglas

Solicitors for the respondents: Kenny and Loel

ORDER

On the usual undertaking being given by the applicant:

The respondents be restrained until the trial of this action or earlier order, and an injunction is hereby issued so restraining them, by themselves, their servants or agents from (i) publishing to the public or any members thereof documents in

or substantially in the terms of any of Exhibits WJW4, WJW5 or WJW6 to the affidavit of Wilson Joseph Wilde filed herein on 4 July 1991; and

(ii) making to the public or any member thereof any statement to

the effect that TaxiCard Australia can be accepted or may be used in any taxi or limousine without making clear that many drivers might not at present in fact accept it in payment.

The costs of and incidental to the interlocutory application be the applicant's costs in the proceedings.

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

JUDGE1

This is an application for an interlocutory injunction. The applicant's complaint is based on s.52 of the Trade Practices Act 1974 and is that the respondents have made misleading statements about the possibility of people using special means of paying for taxi rides. The applicant's case is, in essence, that the respondents have said that people who avail themselves of a payment system established by the second respondent may use it Australia-wide to pay for taxi rides, whereas the truth is that only a relatively few taxi drivers are in practice likely to accept payment by use of that system. The respondents' case is that what they have said is no more than that taxi drivers can accept payment by presentation of the requisite documents; they say that this is literally true, however probable or improbable it may be that, in fact, drivers will so accept payment. The respondents also point out that, on the evidence, drivers who accept payment in this way will in fact obtain their money, on application to the second respondent.

The documents filed on behalf of the plaintiff appeared to me to have been intended to found the contention that there was misleading conduct in that taxi drivers connected with the applicant - i.e. Black and White Cabs - could not accept payment by use of the second respondent's system. At the hearing, however, counsel for the applicant admitted that that was not so and that, in general, Black and White Cab drivers were at liberty to accept such a method of payment. Counsel pointed out, however, that there are, according to the evidence, thirty-three Brisbane taxis operated by the applicant itself, the drivers of which are not at liberty to accept payment by the second respondent's system. Counsel argued that at least to that extent the statements made by the respondents about the second respondent's system were misleading. In my opinion, it would not be a proper exercise of discretion to grant interlocutory relief on the basis just mentioned. The Court should not incline to interfere pending trial in such cases as these - i.e. disputes between competitors about allegedly misleading advertising - other than on substantial grounds; here, I would not do so merely because of the position of the thirty-three taxis mentioned.
All that it is necessary to determine, as to merits as opposed to convenience, is whether the case is of sufficient strength to warrant a grant of interlocutory relief, and that it plainly is. However, I propose to set out my views about the matter in some detail, for two reasons. The first is that the facts are, in essence, common ground and it is unlikely that anything significantly new would emerge at the trial. The second reason, following from the first, is that it appears to me convenient in a case of this sort to deal with the issues in some detail, in the hope that by doing so one may increase the prospect that the parties may treat the matter as having been sufficiently determined, without going on to trial. It is true that there is authority suggesting that one should not, on an application for an interlocutory injunction, attempt to determine which side is more likely to win at trial, but that is an impractical stance to adopt in a case of this sort: see Spry in 55 ALJ 784 at 787 and Zuckerman's note in 107 LQR at 196. The Court may in an appropriate case express fairly strong views about the merits, particularly where there is no significant factual issue; to do so may save the parties time and expense, by producing an early resolution of the dispute.
The application, filed on 4 July last, seeks orders restraining the respondents from representing that a credit card "TaxiCard" is or will be accepted in every Australian taxi or limousine, and certain other relief. As to the latter, it is important to note that the applicant asks that the respondents be required to publish corrective advertisements.
It is convenient to discuss the matter as counsel did in the terms in which the advertising is couched - i.e. on the basis that the method of payment is a credit card. However, it should be mentioned that, in fact, the system offers alternatives. Plastic credit cards are or may soon be available and they are used in a way set out in the affidavit of D.C. Minshall (para 31); this method appears to be much the same as that ordinarily used when payment is by plastic credit card. In addition, the second respondent offers the possibility of payment by use of a book of encoded dockets. The second respondent supplies the customer with a book of these dockets and if the taxi driver is willing the customer may pay for a ride by such a docket, filled in and signed; the driver then applies to the second respondent for payment of the sum set out in the docket.
The dispute began with the writing of a letter dated 21 June 1991 from the applicant's solicitors to the manager of the second respondent making complaint in appropriate terms and seeking undertakings. On 26 June 1991, the solicitors for the second respondent replied seeking further information, but that was apparently not given and proceedings followed. The solicitors for the respondents wrote to complain of the speed with which proceedings were begun "without reasonable notice" and of the lack of response to the letter of 26 June 1991. However, counsel for the respondents sought no adjournment before me nor does it appear that, given more time, the respondents would have been likely to improve their case.
The first respondent was recently formed to compete with established taxi companies in Brisbane, one of which is the applicant. Some hundreds of cabs pay monthly fees to the applicant for "radio services and other support"; these taxis are owned by, and I infer operated by, persons other than the applicant. As mentioned above, thirty-three Brisbane taxis are operated by the applicant itself. The first respondent, also, has numerous cabs, called "Brisbane Cabs", which are "affiliated" with it.
For reasons which seem to me not to matter, the directors of the first respondent caused the second respondent to be established to implement a taxi credit card system competing with existing systems. The latter are not comprehensive: no existing taxi payment credit system covers usage by all taxi operators. To put that more precisely, at the time when the second respondent's system came into operation - within the last few weeks - the existing systems would pay only drivers connected with a particular cab organisation; "Cabcharge" cards could be used only for Yellow Cabs and "Taxicredit" cards only for cabs connected with the applicant - i.e. Black and White Cabs.
The second respondent advertised its system in the Brisbane "Courier Mail" on 11 June 1991, representing that "TaxiCard the National Charge Card can be accepted by any taxi or limousine in Australia". In much larger print, the advertisement was headed "Why Wait, Worry or Be Late". It is convenient to defer discussion of these expressions. On 12 June 1991, the second respondent wrote a letter - it is not clear to whom - using rather similar expressions.
About the end of last month (June 1991) the second respondent sent a notice to many cab companies in various parts of Australia - for example, in Sydney, Melbourne, Toowoomba, Perth, Hobart and Darwin. The notice introduced TaxiCard Australia as a "new national charge card which can be accepted by every Australian taxi or limousine". It invited taxi and limousine companies to act as agents for the card and explained the procedure whereby reimbursement for charges made could be obtained. The second respondent also advertised the system in the journal of the Queensland Taxi Council, namely "Taxi News". That advertisement described the new card as one "which can be accepted by any taxi or limousine in Australia". Further, brochures were distributed to advertise the new system and, as I understand the evidence, both respondents took part in the distribution process.
The applicant makes particular complaint about the content of these brochures, saying that they would convey to the ordinary person that use of the TaxiCard will, or is likely to, enable a person holding one to pay for travel by taxi or limousine anywhere in Australia.
It is, I think, common ground that if the brochure conveys anything of the kind, it is misleading. The second respondent could reasonably inform people that they could rely upon TaxiCard as a means of paying for rides in some, but by no means all, Brisbane taxis. But the task of obtaining Australia-wide acceptance of the card has hardly begun.
The brochure has a text including (as in the advertisement mentioned above) in large letters "Why Wait, Worry or Be Late". On the same page there follows:

"APPLY FOR the National Charge Card which can be accepted in every Australian taxi or limousine".

So to describe the quality of the card is perhaps literally accurate. A taxi driver, and indeed any other provider of goods and services, can accept in payment whatever form he likes, even a mere promise; there is no statutory or other legal obstacle.
Advertising for credit cards commonly lays emphasis upon the number, geographical distribution and variety of establishments which will accept them; the subtle twist in the respondents' advertising is that it puts it about that taxi drivers throughout Australia can accept TaxiCard as payment, meaning merely that nothing prevents acceptance.
But the reference in the same part of the brochure to the lack of need for worry would be likely to encourage many readers to take it to be asserting more than the rather academic point just mentioned. From the point of view of a taxi user who has not worried about payment, in reliance on the second respondent's card, it would be little consolation to be told that the driver who has rejected TaxiCard as a means of payment was legally free to take the opposite course. Counsel argued, and I agree, that one must read the allegedly misleading statements in their context; to do so assists the applicant.
On the reverse side of the part of the brochure just discussed, there appears:

"You will never again have to worry about getting from A too (sic) B". TaxiCard is a National Charge Card which can be accepted in every Australian taxi or limousine to get yourself, your family, your workmates, your friends, your customers or your parcels from A to B".

Again, the same point arises. If nothing more is meant than that it is legally possible for a taxi driver to accept TaxiCard as payment, what ground would that be for ceasing to be concerned about the means of payment or failing to ensure that one has enough cash to pay? That would be prudent only if it was reasonably certain that the driver would not insist on payment in cash and would take the TaxiCard as payment.
In other parts of the brochure, the card is described as "simply one of the easiest ways to get from A to B". Again, the emphasis is upon the practical utility of the card rather than its theoretical possibilities. The brochure says that the cards -

"... operate in the same way as all other charge cards and allow you or any other nominated persons to use them in any taxi or limousine throughout Australia".

If the word "use" here is understood by a reader in the narrow sense of "proffer as a means of payment" then no harm is done, but few readers would take it that way, in this context; effective use is plainly what is meant. Any credit card, however unlikely to be accepted as payment, may be proffered in an attempt at payment and, in that sense, be "used".

Other expressions in the brochure emphasise the practical advantages of having the card in question and reduce the likelihood that an ordinary reader would take it to be making merely the narrow assertion contended for. Simplicity is emphasised by repetition, in heavy type, of the word and punctuation mark "Simple". The brochure also says that costs are only incurred when the card is being used and that:

"For this reason no one can afford not to have with them the opportunity to use a taxi when they need one"

Important meeting, too much to drink, need to get home, emergency, unexpected drama, parcel to deliver ...

Payment for TaxiCard is also simple".

The plain implication is that if one has the card, one may rely on it as a means of using and paying for a taxi - for example, in an emergency. This may be done, so the brochure seems to say, throughout Australia. The truth appears to be that in most parts of Australia attempts to use the card would be calculated merely to aggravate whatever emergency existed, particularly if the trip were a long one and the user had no other means of paying.

Counsel for the respondent urged upon me the view that I should take into account in favour of his side that the proposed service would be a useful one and that I should do nothing to stifle its progress. Many businesses would grow more quickly if the law permitted the making of misleading claims about them. One of the deponents on behalf of the respondents said that if the second respondent -

"... is made to cease advertising on the basis that it can be accepted by any cab, the card will be relegated to a position in which it can only be used in the one hundred and ten (110) cabs in the Brisbane Cabs fleet".

That does not appear to me to follow. The respondents are quite at liberty to distribute brochures about or otherwise publicise their business, so long as they do not give the impression that those who obtain the cards will, by doing so, obtain advantages which are not, in fact, available. It would be convenient (as counsel submitted) if taxi users had available to them a credit card which would be, at least generally if not universally, accepted by taxi drivers as a means of payment. But it does not seem to me orthodox to excuse, or fail to prevent, misleading conduct on the ground that by doing so one may encourage the growth of a useful business.
It should, I think, be noted that a statement that a particular card can be accepted by any taxi driver in Australia is likely to have a particular impact on the mind of a driver who reads the statement; to him, the important point is whether if he accepts the card he will be paid. That is not the concern, however, of the member of the taxi-riding public who gets a TaxiCard; what such a person wants to know is whether drivers will accept the card.
To say that an event can happen may merely mean that it is possible; lightning can cause the death of human beings although it very seldom does. In other contexts "can" naturally conveys the idea that the event is quite on the cards ("you can win the race") or even probable ("one can have a pleasant holiday on the Riviera"). I think many people reading a statement that a new type of credit card can be accepted in certain specified places would not pause to consider what degree of likelihood of acceptance there might be, but would be led into the assumption that the card would be, as a matter of course, accepted in those places. The gloss which has been placed on the statute, that one should ask whether there has been a misrepresentation rather than simply apply the statutory language, does not, in my opinion, justify holding that a statement which is, in fact, "likely to mislead" is lawful. That is so even where it can be seen that there is a sense in which the statement complained of is literally accurate. I respectfully agree with the remarks of Lockhart J., albeit made in a different factual context, in Bridge Stockbrokers Ltd. v Bridges (1984) 4 FCR 460 at 474, 475. An important purpose of s.52 is to protect consumers (see Concrete Constructions (N.S.W.) Pty. Ltd. v Nelson (1990) 64 ALJR 293 at 294R, 296, 298) and that will hardly be fulfilled if traders are encouraged to draft advertisements which may be argued to be factually correct but are, in truth, likely to create a false impression.
It would have been perfectly easy for the respondents to make clear that, whereas any taxi driver in Australia might accept TaxiCard, no prior arrangements are in place with most such drivers and that, therefore, reliance on the card might lead to embarrassment for the customer.
The applicant's case, then, appears to me very strong and unless there were some overwhelming consideration of convenience against doing so, interlocutory relief should be granted. The inconvenience for the respondents is, in essence, that growth of their business may be impeded, but that is plainly not enough to deny the applicant relief. However, and not without some hesitation, I have determined against requiring corrective advertisements to be inserted, by way of interlocutory order. It appears to me, on the evidence, that if the present mode of advertising is stopped by interlocutory injunction, that will be reasonably sufficient.
The form of order poses the usual problem: if the order purports generally to restrain breaches of that law on which the applicant relies, that may be thought too vague, but if it prohibits precisely defined conduct, the order may be evaded. As to the latter possibility, however, a sanction which is available is that, in those circumstances, corrective advertising might be ordered at that stage and that might be a disincentive. Subject to anything counsel might wish to say, it will be ordered that on the usual undertaking being given by the applicant:

The respondents be restrained until the trial of this action or earlier order, and an injunction is hereby issued so restraining them, by themselves, their servants or agents from

(i) publishing to the public or any members thereof documents in or substantially in the terms of any of Exhibits WJW4, WJW5 or WJW6 to the affidavit of Wilson Joseph Wilde filed herein on 4 July 1991; and

(ii) making to the public or any member thereof any statement to the effect that TaxiCard Australia can be accepted or may be used in any taxi or limousine without making clear that many drivers might not at present in fact accept it in payment.

I shall also hear counsel on costs.

[1991] FCA 392

11 JULY 1991