Benckiser Australia Pty Limited v L and K Rexona Pty Limited

[1993] FCA 110

IN TAE FEDERAL COURT OF AUSTRATJA)

NEW SOUTH WAGES DISTRICT REGISTRY) NO G 0053 of 1993

a N E R A L DIVISION 1

BETCJEEN BENCKISBR AUSTRALIA PTY

LIMITED

Applicant

AND L6K:REXONA PTY LIMITED

FEOEPAL COURT OF

AUSTRALIA	Respondent
PRINCIPAL REOl8l'RV

REASONS FOR JUDGMENT

EINFELD J SYDNEY 19 FEBRUARY 1993

The applicant is an Australian subsidiary of a German company which produces amongst other goods, a well known detergent for dishwashing machines called FINISH. This product has been available in Australia for a number of years and is said to command about 70% of the Australian market for such products at present. The respondent, a subsidiary of the renowned multinational giant Lever & Kitchen which produces many household products, has recently commenced to market a detergent for dishwashers under the name SUN PROGRESS.

Act 1972. The respondent's solicitors replied to this letter on	mislead or deceive in breach of section 52 of the Trade Practices
22 December 1992. Although making clear that it did not admit
the applicant's allegations, the respondent agreed to bring forward its final use of the television commercial from 5 pm on 24 December 1992 to 5 pm on 22 December 1992 -.the earliest time
at which this could be arranged. It volunteered to-give seven'

The respondent first commenced advertising SUN PROGRESS on television on 14 December 1992. On 19 December 1992 the applicant's solicitors wrote to the respondent protesting that the advertisement for SUN PROGRESS contained representations and imputations which were misleading and deceptive or likely to

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days' notice of any resumption of advertiskg. -In return the' .

. , . .

respondent requested that it be informed of the basis upon wh$h
the commercial was alleged to be misleading or deceptive or
likely to mislead or deceive.

Contraryto the respondent's promise, the SUN PROGRESS commercial was apparently aired on Channel 9 Perth up to midnight on 23 December 1992, after the promised cut off date. The applicant drew this fact to the respondent's attention by letter to its solicitors dated 7 January 1993. Responsibility for this further scheduling of the relevant material has been taken by Channel 9 Perth, as evidenced in a letter from that Channel dated 12 January 1993.

On 31 December 1992 proceedings were commenced in this Court by

the applicant against the respondent by way of an application and

statement of claim seeking injunctions and damages. On 15 January 1993 the respondent's solicitors requested further particulars of the claims made. No particulars were supplied, but on 28 January 1993 the respondent's solicitors gave notice to the applicant's solicitors that the respondent intended to resume television advertising for SUN PROGRESS on 4 February

1993. A script of the proposed new commercial was enclosed. The

respondent continued to deny misleading or deceptive conduct but said that it was reluctant to involve itself in legal proceedings. It asserted a belief that the "new commercial" would eliminate most of the applicant's earlier complaints despite the fact that no particulars of those complaints had been given. On 3 February 1993 the applicant's solicitor replied to this letter alleging that the new commercial also breached section 52 of the Trade Practices Act 1974.

On 8 February 1993 the applicants filed a fresh application and statement of claim in relation to the new commercial, again seeking damages and injunctive relief. The application sought an interim injunction, pending the hearing of the case, to restrain further publication of the commercial which has apparently been in regular exposure since then. Justice Morling gave leave to serve short notice of the application for the interlocutory injunction and made it returnable on 11 February. His Honour directed the parties to file and serve their evidence on the application and fixed the hearing for 17 February before

At the hearing the applicant read four affidavits and the me.	respondent eleven. There were several documentary exhibits and
videotapes of the two commercials. I have viewed those videos which are approximately 30 seconds in length. Although the applicant offeredthe usual undertaking as to damages, it appears that the company is without funds. It therefore presented a letter from the parent company in Germany guaranteeing to meet

any order of the Court for damages arising from any injunction granted. The letter is not particularly satisfactory as securiey for such damages but I am prepared to proceed on the basis that an appropriate undertaking can be given within a reasonable time after the pronouncement of or as a condition to any injunction.

The application before the Court concerns only the so-called "new commercial" aired on 4 February and subsequently, although there are few differences between the two for present purposes. In its attack on the first commercial, the applicant alleged through its solicitor that it contained the following misrepresentations about SUN PROGRESS:

1.    It will not burn skin.

2.    It is not corrosive.

3.    It is a breakthrough.

1. It is as equally efficient as FINISH.

5 .    It will not damage patterned china.

6.  It failed to disclose that baked on particles must be removed before items can be cleaned.

In the first statement of claim, these allegation8 were expanded into the following list of suggested misleading or false

representations about SUN PROGRESS:

That the product is non corrosive and/or will not

(a)	burn or aggravate human tissue on contact.
(b)	That the use of the product will not damage even

the finest patterned china.

(C) That the cleaning capability of the product is as	effective as:
(i) Higher alkaline automatic dishwasher

powders

(ii) The automatic dishwasher powder manufactured by the applicant and marketed under the name

(d)	That the composition and performance of the product is a breakthrough when compared to higher alkaline automatic dishwasher powder.
(e)	and will clean heavily soiled dishes.

That Sun Progress removes baked on food residues

It is not disputed that FINISH has a higher alkaline content than

SUN PROGRESS but in response to the other allegations, the facts

were said to be that SUN PROGRESS:

1, is corrosive and will burn and aggravate human tissue on

contact

1. will damage certain patterned china

3 .    is not as effective as and will not achieve the same results as higher alkaline automatic dishwasher powders, especially FINISH

Except for this comment about "effectiveness", no complaint was made about any adverse comparison with the applicant's product.

~t is not necessary for me to set out the script of the new commercial here, either in audio or video format. It features two small furry animals resembling a squirrel or teddy bear and a rabbit demonstrating their reactions to the respondent's and its competitors' products. At a stage when the new commercial had only been read but not viewed, the applicant said in a letter from its solicitor of 3 February that the "gist" of its complaints had not beenmet. The applicant assertedthatviewers would glean from the commercial, contrary to the facts, that:

1. FINISH and similar products are dangerous to ordinary skin in what it called a "typical operational solution"

2. SUN PROGRESS is equally effective as opposition products in all facets of dishwasher cleaning

The second statement of claim details all the alleged misrepresentations in the new commercial:

( a ) H i g h e r a l k a l i n e d i s h w a s h e r powders , i n c l u d i n g

t h a t a u t o m a t i c d i s h w a s h e r powder m a n u f a c t u r e d and

m a r k e t e d by the A p p l i c a n t u n d e r the name o f

" f i n i s h " , a r e dangerous t o o r d i n a r y skin i n a

t y p i c a l	s o l u t i o n	e n c o u n t e r e d	i n	d i s h w a s h e r
o p e r a t i o n .

(b) H i g h e r a l k a l i n e d i s h w a s h e r powders , i n c l u d i n g

t h a t a u t o m a t i c d i s h w a s h e r powder m a n u f a c t u r e d and

m a r k e t e d by the A p p l i c a n t u n d e r the name o f

" f i n i s h " ,	w i l l	damage	and	f a d e	p a t t e r n e d	c h i n a
i r r e s p e c t i v e	of	w h e t h e r	the	p a t t e r n e d	c h i n a	i s

o v e r g l a z e or u n d e r g l a z e d .

( c ) T h a t Sun P r o g r e s s i s less corrosive t h a n h i g h e r

a l k a l i n e	d i s h w a s h e r	powders ,	i n c l u d i n g	t h a t
a u t o m a t i c	d i s h w a s h e r	powder	m a n u f a c t u r e d	and

m a r k e t e d by the A p p l i c a n t u n d e r the name o f

"finish" in a typical solution encountered in

dishwasher operation.

That the cleaning capability of the product is as

(d)	effective as higher alkaline automatic dishwasher powders including that automatic dishwasher powder manufactured and marketed by the Applicant
under the name of "finish " .

The composition and performance of the product is

(e)	a breakthrough when compared to higher alkaline automatic dishwasher pwders.
(f)	That the product will remove baked on food residues and will clean heavily soiled dishes.

The applicant denied the assertions or imputations of the

commercial referred to in its solicitor's letter of 3 February.

It denied that FINISH will damage and fade patterned china -

irrespective of whether the patterned china is over- or under- glazed, although it asserts that like a11 detergents it may or will harm prints or patterns which are not beneath the glaze.

It denied that SUN PROGRESS is less corrosive than FINISH in

typical use and stated that SUN PROGRESS will not remove baked on food residue as effectively as FINISH and that it tarnishes silverware more than FINISH.

deceptive advertising in contravention of Part V of the Trade	The applicant claims a manifestly arguable case of misleading or
Practices Act. The argument has in this regard turned on a mass reason of scientific detail to support or deny the respective contentions as to the meaning and effect of the words of the advertisement. Ordinarily, conflicting evidence, especially of an expert nature untested by cross examination, is unhelpful to counter an application for an interlocutory injunction because

it merely demonstrates the issues to be tried. However, the respondent said that its scientific evidence was so overwhelming and destructive of the applicant's case as to remove all such issues.

Actually, in the major technical aspects, the respondent seemed to concede that there was little to choose between the two products in terms of the potential harm they could actually cause to humans and crockery in ordinary circumstances. For example, there was no issue that in an 0.5% solution, which is said to be a typical concentration for ordinary dishwasher use, both products will burn skin but that in ordinary use, no one will be burnt in fact because they cannot get access to the solution which only exists while the machine is closed and operating. The respondent's principal argumentwas, therefore, that the asserted imputation simply does not arise from the commercial.

It is perfectly clear that the whole of the context and impression of the commercial must be considered, not merely the

words or the images portrayed. Taken as a whole, it is

undoubtedly true that the commercial strikes at the hard edge of

competitive advertising. I would not doubt for a moment that the average consumer owning a dishwasher would take from the commercial that the respondent was claiming special and superior qualities for SUN PROGRESS over other products including FINISH. Some viewers might even believe that an uneven comparison is especiallymade with the applicant's product, partly because they might on a third or fifth viewing in succession notice in the

fleeting opening scene something which resembles a typical distinctive packet of FINISH, but mainly because the applicant's product presently controls a large share of the market and is the natural competitor or target for SUN PROGRESS.

In view of the parties' request that I give the earliest possible judgment and my commitments to sit interstate for the next two weeks, this is not the time or place for a lengthy quotation of legal authority. But it is clear law that comparison advertising must comprise close adherence to truth to pass the spicy curry

of the Trade Practices Act. On the other hand, it is the Act's

intention that consumers be protected from being misled or deceived concerning matters of substance, not that they be cuckolded from the day to day features, some would say ugliness, of a robust, sophisticated, competitive, pluralist market economy.

The context in which this commercial must be viewed is not only its precise words and their analysis by scientists and lawyers,

commercials of all kinds, day in day out, week in week out. The	but its presence on television among a Large volume of product
public, including that section of it in the market for dishwasher detergents, is inundated with appeals and invitations for its custom for a wide variety of household goods. In the absence of any marketing evidence demonstrating the success of this type of advertising in attracting custom away from one product to a competitor product, I am left to draw inexpert personal or intuitive conclusions.

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As it seems to me, some commercial importuning on television is so unattractive and repulsive as to be likely to cause positive repugnance. Other attempts seem startlingly seductive but glaringly exaggerated. Others still might have some people running to their local 24 hour outlets in their night attire with a passion otherwise reserved for non-commercial pursuits. It is not overstating the position to describe the public's exposure to television advertising as a tolerance-testing overdose. To treat the respondent's particular 30 seconds of enticement as of such quality and invasive genius that people will be glued to every word, still less to every wag of a rabbit's, teddy bear's or squirrel's tail, is absurd. Uninstructed by any expert testimony on the subject, in my opinion that is not what happens at all.

The applicant submitted that the animated visual effects of this commercial are what it called "engaging and eye-catching". Certainly that is their manifest intention and for many people they will no doubt succeed to a greater or lesser extent. But

there is nothing in the evidence thus far adduced to suggest that	reasonable dishwasher-owning members of the public in numbers are
likely to emerge from these idyllic scenes with a fear of or aversion to FINISH and an addiction to or even preference for SUN PROGRESS. There is no evidence that even one person has thus reacted. Without such evidence, the contention is that of lawyers and unsworn marketing assumptions, with all their capacity for vivid Imagination and colourful advocacy.
The applicant's lawyers' description of the depicted animals* response to SUN PROGRESS was even in these words of a written submission:

. . . the animals appear to d i s p o r t themselves

1 uxur ian t l y under t h e apparen t l y b e n e f i c i a l and

c l eans ing i n f l u e n c e of the respondent's product.

I wonder if that is a translation from the German. It is

described as a subtle misrepresentation. I can now understand why I am not a person renowned for subtlety. There will need to be evidence that someone else can see it.

The applicant argues that a bulk of ordinary consumers will view this commercial as transmitting the message that because small furry animals, similar to the cuddly toys most consumers used to find restful and supportive as children, shiver and shake upon exposure to FINISH but respond with congenial even ecstatic pleasure to SUN PROGRESS, the former is much less desirable to adult users and much more effective in cleaning dishes than the

terms, without evidence to support this graphic and somewhat	latter. Whatever the truth in this connection in scientific
terrifying possibility, I think that this submission at best requires a conclusion that these consumers are still unsophisticated toddlers enwrapped in or sedated by their former nocturnal companions.
For myself I have never seen animals or any other creatures living or dead jump out of the middle of a plate, whether inside

or outside a dishwashing machine. The fantasy of such activity in the commercial is not expected to elevate Alice in Wonderland into a living emanation. Without explicit evidence I cannot myself imagine that anyone viewing this commercial would contemplate that a product which has been allowed to be on the market for years and which large numbers of the interested viewing public have apparently already used quite regularly, in fact has or is likely to have stark adverse effects on live users or dishwasher contents. At the other end of the spectrum, I cannot myself believe, without evidence, that purchasers of detergent for any purpose would envisage fromthe commercial that such products provide personal benefits of any kind to living beings or that they are intended or likely to do so. To the contrary, I should have thought that such products would, in personal respects, be treated quite gingerly by most members of the public.

The respondent says that its scientific evidence positively refutes the factual claims which it says the commercial contains.

subjected to cross examination. For present purposes, it should	I doubt that it goes quite that far and it has not yet been
be treated as creating serious doubts about but not completely destroying some of the claims made by the applicant in respect of the two products. There is no dispute that both these products will produce skin irritation in certain limited circumstances. None of these circumstances, as I see it at present, are likely to occur or arise from or be affected by anything in the commercial. In the absence of any relevant
evidence, and instructed only by the speculations of lawyers, I do not agree that the suggested conclusion on comparative harm to people reasonably arises from the commercial. There is as yet no basis for an injunction on this ground.
As to potential damage to patterned china, which the parties
agree will occur from both detergents in limited circumstances, the applicant says that all would be well if only the commercial drew a distinction between underglazed and overglazed china. The only glaze I can envisage if this occurred would be that which would descend over the eyes and ears of the average interested viewer. Despite what the elite often think, people are not fools. If they are, their impending electoral choice ought to produce more fear than either of these parties' detergents. The difference between the effects of detergent on underglazed and overglazed china in a dishwasher is not the type of distinction that could be communicated in a 30 second commercial where it was not the major message being communicated.
some detergents may harm some china. This commercial merely In fact I suspect that most detergent buyers are well aware that

claims that SUN PROGRESS causes less harm than other products on the china which could be harmed. That is the type of claim made for many advertised products. There is no marketing evidence that this generally causes an unseemly or unsophisticated rush to reject, other than on an experimental basis, an earlier preferred competitive product in favour of the new entrant in the market. There is no true evidence that the claim in this

instance is false. But even if there were, I do not believe that

an arguable case for an injunction has yet been made out to prevent the representation being persistedwith. The marketplace will judge the qualities of the competing products and the truthfulness of the commercial. Except in a clearly arguable case of actual or likely deception, it is not for the Court to do so.

These conclusions mean that it is not necessary for me to decide the balance of hardship or convenience. But for completeness and because of the interlocking in the parties' submissions of this matter with the arguability issue, I should record my clear conclusion that the balance of convenience does not favour an injunction at this stage. The public interest is in principle favoured by competition to a market dominator, provided the competitive product is of adequate quality and safety. There is evidence that SUN PROGRESS represents at least in some respects, an advance, perhaps generational, on FINISH. There is evidence that a comparable upgrade or relevant variation of FINISH is

being marketed overseas but not in Australia and no explanation has been proffered for this exclusion. There is no evidence that	SUN PROGRESS is less effective or more harmful than FINISH in the
relevant public sense of its utility as a detergent. The public is entitled to the right to be exposed to the comparable claims and to assess them in the light of their experiences with both products.
As for the parties, this case is likelyto be lengthy, technical and complex. An interim injunction will be likely to last for some time and while it would not prevent all and any advertising of SUN PROGRESS, it would require significant changes to the existing commercial to meet the case alleged by the applicant. Whatever the words and pictures used, and however indirect or subtle the message conveyed, the effect would be the same, viz. that SUN PROGRESS was a better and kinder product than FINISH. The present weakness of the applicant's case does not warrant the expense and delay that would thereby be caused.
The applicant claims damages as part of its final relief. For -
this claim to succeed, any penetration of the market by SUN PROGRESS will have to be shown to be caused or contributed to by any proved deceptions in the commercial. An interlocutory injunction would be designed to prevent or limit that loss. Not only is there no evidence of any such connection; the possible nexus is not even identified. Indeed, if there is any present inference available at all, it is that any loss in market share
will result from the entry of sturdy competition into a present lopsided marketplace, not from the commercial. If the
respondent's claims for the superiority of SUN PROGRESS are wrong, the competition will hardly affect the applicant's profitability or damages will be an acceptable remedy. An injunction would therefore not be necessary or appropriate.
The application for an interlocutory injunction is dismissed with costs.