Country Road Clothing Pty Ltd v Najee Nominees Pty Ltd

[1991] FCA 119

Re: COUNTRY ROAD CLOTHING PTY LTD
And: NAJEE NOMINEES PTY LTD
No. V G67 of 1991
FED No. 119
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Heerey J.(1)

CATCHWORDS

Trade Practices - alleged misleading and deceptive conduct - printed comparative advertisement - meaning conveyed by advertisement - invitation to compare different products - factual accuracy of advertisement.

Trade Practices Act 1974, ss.52, 53(a), 53(aa), 53(e), 55, 79.

Morgan v Odhams Press Ltd (1971) 1 WLR 1239

Lewis v Daily Telegraph Ltd (1964) AC 234

HCF Australia Ltd v Switzerland Australia Health Fund Pty Ltd (1988) ATPR 49,108

Briginshaw v Briginshaw (1938) 60 CLR 336

Rejfek v McElroy (1984) 112 CLR 517

HEARING

MELBOURNE

#DATE 27:3:1991

Counsel for the Applicant: Mr R. Gillard QC with

Mr C.D. Golvan

Solicitors for the Applicant: Coltmans

Counsel for the Respondent: Mr R. Merkel QC with

Mr D. Collins

Solicitors for the Respondent: Howie and Maher

JUDGE1

In the "Good Weekend" colour supplement to The Age published on Saturday, 16 March 1991 the Respondent, Najee Nominees Pty Ltd ("Najee") published a double page advertisement. The total area of the advertisement is approximately 39cm x 27cm. About three-quarters of the advertisement is taken up with three photographs of the same man wearing a navy blue double breasted suit. In each photograph he is wearing the same shirt and tie. Across the bottom of each photograph there are the following respective words (reading from left to right):

Pure New Wool Gaberdine Suit by COUNTRY ROAD $995

Pure New Wool Gaberdine Suit by HUGO BOSS

$795

Pure New Wool Gaberdine Suit by NAJEE 9.2.5

$349

1. Along the top of the advertisement in white letters 2.5cm high are the words:
   

WHY PAY MORE?

1. Along the bottom of the advertisement, again in white against a coloured background, in letters 1cm high are the words:
   

COMPARE SUITS, THEN COMPARE PRICES

1. To the right of the photographs of the three suits there are the following words in letters 0.5cm high:
   

Price tags no longer dictate style and quality. From this point of view, the rationale behind the Najee 9.2.5 suit becomes more rational than ever. Perfectly tailored in pure new wool gaberdine, it's designed to work nine to five and beyond.

1. There then follows the pure new wool trademark with the words "Cool Wool" and underneath that some words containing more details about prices of Najee suits, shirts, trousers and shoes. This material is not relevant for present purposes.

2. Underneath the price details are the words:
   

Available exclusively at all of the following Najee Stores

followed by locations of a number of Najee outlets in Victoria and other States.

1. The applicant, Country Road Clothing Pty Ltd ("Country Road") is a well known retailer of clothing, including high quality men's suits. It claims that in publishing this advertisement Najee committed a breach of s.52(1) of the Trade Practices Act 1974 which provides:
   

52. (1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

1. Breaches of ss.53(a), (aa) and (e) and s.55 are also alleged. Country Road's case is that the advertisement misleads the consumer by creating the impression in his mind that each of the suits displayed by the model are of the same quality when in fact this is not the case. Country Road filed a number of affidavits sworn by experts to support its argument that the Najee suit in fact was of lesser quality than the other two. This evidence went in considerable detail to comparisons between the quality of the cloth, the lining and other materials used in the respective suits and details of methods of construction. In many respects this evidence was challenged in affidavits filed on behalf of Najee. For example, one of the Country Road expert witnesses was of the opinion that the cloth in the Country Road suit was softer than the cloth in the Najee suit whereas an expert on behalf of Najee expressed the opposite conclusion. In other respects Najee admitted to the difference in detail pointed out by the Country Road witnesses but asserted that it was simply a matter of design preference. For example, it was admitted that the Country Road suit has a button hole on the lapel which actually opens so as to accommodate a flower or badge whereas the Najee suit only has an imitation button hole. Najee says that this is merely a matter of design preference. It argues that a mock flower hole is tidier and results in a neater finish.

2. Country Road's application was filed on Wednesday 20 March 1991 together with an application seeking an interlocutory injunction returnable on Friday 22 March. On that day I directed that the matter be fixed for Tuesday 26 March as a final hearing. Directions were given for the filing of further affidavits. In the event, Najee filed two affidavits and Country Road a further two.

3. By lunchtime on Wednesday 27 March the case had proceeded to the stage of the close of Country Road's case, a number of its witnesses having been cross-examined by Counsel for Najee, and the opening address of Counsel for Najee.

4. It had by this time become clear in my view that the issue as to the meaning of the advertisement ought to be resolved as soon as possible. If Country Road's contention as to that meaning was correct, then it would be necessary to resolve the issue whether the representation conveyed by the advertisement, given that meaning, was false. However Najee's contention, expressed very briefly, is that the advertisement is making no such representation at all but is merely inviting comparison between its suits and those of its competitors. If that view prevailed, the Court would not be called on to make any finding whether the Najee suit was of the same quality as the other suits.

5. Being conscious of the commercial importance to the parties of a prompt and efficient resolution of this matter, I directed that Counsel should in the afternoon make their submissions as to the meaning of the advertisement. I indicated that I would endeavour to rule on those submissions on the following day. If that ruling were favourable to Country Road, then the matter would proceed at a later date with the cross-examination of the Najee witnesses and submissions by both sides on the issue of quality. However, if Najee's contention were accepted, the matter would be finally resolved.

6. On the Wednesday afternoon Counsel for both sides made detailed and thoughtful submissions which I have found of great assistance.

7. I agree with the argument of Counsel for Country Road that, in dealing with this issue, I should not go beyond the advertisement itself and that the question can, and should, be determined without reliance on extrinsic evidence. I do not think that such an approach is dictated by any principle of law but rather by the particular circumstances of this case. The advertisement is contained in a newspaper of general circulation and concerned with goods purchased by the lay public. I do not think I need be concerned with the way men's suits are advertised in other, perhaps more specialised, publications. Nor do I treat the advertisement as being directed toward any particular segment of the market for men's suits such as the young and "image conscious" market.

8. It was accepted by Counsel on both sides that the present exercise is not like construing a statute, will or contract. The advertisement was not meant to be read that way and would not be so read in fact. I think that in this context, just as in the law of defamation, the Court "must accept a certain amount of loose thinking": Morgan v Odhams Press Ltd (1971) 1 WLR 1239 at p 1245 per Lord Reid. The reader of this advertisement must be taken as someone who would "read between the lines in the light of his general knowledge and experience of worldly affairs": Lewis v Daily Telegraph Ltd (1964) AC 234 at p 258.

9. A relevant circumstance here is that the advertisement is concerned with a consumer item which represents a substantial expenditure for the average purchaser. The cost of both the Country Road and the Hugo Boss suits would be in excess of the wage which many, perhaps most, Australian workers receive in one week. A suit is likely to be purchased with a view to lasting for several years at least. It would be seen as serving not only as a business suit for those engaged in occupations requiring the wearing of a suit, but also for social occasions on which the appearance of a man's suit is important. In buying a suit a man is selecting something which for several years will form a highly visible part of the persona that he presents to the world. The advice of Polonius that "the apparel oft proclaims the man" is still practical wisdom today. This case is not concerned with a cheap item on a supermarket shelf likely to be purchased on the basis of fleeting impression or impulse.

10. Turning to the advertisement itself, it is immediately apparent that it contains a number of factual assertions. Not all of these are relevant to the present case. What is relevant, however, is the assertion that the man has been photographed wearing a Country Road suit of pure wool gaberdine which is sold by retail for $995. The same kind of assertion is made in relation to the other two suits. With one exception, it has not been suggested that any of these factual assertions are untrue. No complaint is made of the presentation of the photographs. There is no suggestion of any trick being used to make the Najee suit look more desirable or the Country Road and Hugo Boss suits less desirable.

11. The one exception concerns the statements in the advertisement in respect of all three suits that they are made of gaberdine. It is said that this statement is incorrect in relation to the Hugo Boss suit and that technically it is a fine weave twill which is said to be a very different fabric to gaberdine. This proposition was supported by Mr John Robert Vicars, a gentleman with considerable experience in textile manufacturing. He deposed that, although gaberdine is a class of twill, the word is used to describe a twill which has single diagonal lines running at an angle of 45 degrees. Najee's evidence asserted that the term "gaberdine" did not involve any such qualification as to angle. However, we are concerned here not with the use of a word in a technical publication but in a newspaper of general circulation. The Macquarie Dictionary gives as the primary definition of "gaberdine":
    

A closely woven twill fabric of worsted cotton or spun rayon.

1. Since the Hugo Boss suit fabric is gaberdine within that meaning, no breach of s.52 is in my opinion established.

2. I should add that the Statement of Claim did not plead the Hugo Boss gaberdine point and, although not formally abandoned, it was not mentioned in the submissions of Country Road's Counsel.

3. I have spent what might seem to be disproportionate time on the Hugo Boss gaberdine issue because it really seems to highlight, by contrast, the unassailed accuracy of the rest of the advertisement in respect of the factual information which it conveys. Statements such as those by Fox J. in HCF Australia Ltd v Switzerland Australia Health Fund Pty Ltd (1988) ATPR 49,108 at p 49,110 that comparative advertising will "be examined more critically" because the reader is "less likely then otherwise to regard what is said or written as a mere exaggeration, stated with an excess of enthusiasm" necessarily, to my mind, carry the corollary that the comparative advertiser who gets his facts right should have no fear of s.52.

4. I think that, fairly read, the advertisement is not conveying the message that the three suits are, to use the words of Country Road's counsel in his opening address, "the same apart from price and label". It is true that the striking thing about the advertisement is that it shows three navy blue suits which look very much the same but with very different prices. But the largest words appearing in the advertisement are in the question "Why Pay More?". I do not think it is fair to read this as a rhetorical question saying, in effect, that Najee suits are the same quality as the other two suits and that therefore there is no reason to pay more. Rather the advertisement itself invites the reader, in text which could hardly be described as fine print, to "Compare Suits, then compare prices". These suits are not sold by mail order. The advertisement does not reach the consumer at the point of sale. The message of the advertisement in my opinion is all about value for money and the consumer is invited to go and make his own decision. The consumer, having done this, may think the Najee suit is equal in quality to the other two suits or he may think it is lesser quality but that the difference in quality is not worth the difference in price and that the Najee suit is a better buy. All this is a matter for the purchaser to make his mind up about, as he is expressly invited to do by the advertisement. The possibility that some readers may in fact read the advertisement and go and buy a Najee suit without looking at the other two does not to my mind alter the meaning which the advertisement conveys.

5. The words "Price tags no longer dictate style and quality" mean no more than that there is no necessary connection in today's market between price and quality so that an expensive suit must always be better than a cheaper suit or, perhaps more importantly, that there may be a difference in quality, but it is not proportional to the difference in price. Indeed this is really a truism.

6. One way of testing the point is to imagine the advertisement without the photographs, but in all other respects the same, including the prices and other details of the three suits. It could hardly be suggested that such an advertisement was doing other then inviting a comparison. How then can the addition of the photographs alter the meaning, especially since it is not asserted that they in themselves are misleading? The photographs are illustrative. They greatly enhance the impact of the advertisement on the Age reader drinking his Saturday morning coffee, the symbolic figure mentioned by Counsel for Country Road. But advertising does not infringe the Trade Practices Act merely because it is effective. On the contrary, effective advertising is part of that vigorous competition in the market place which the Act is intended to protect and promote.

7. I bear in mind that contravention of Part V of the Trade Practices Act (other than s.52) is a criminal offence: s.79. Of course, it is the civil standard of proof which is applicable in the present case but nevertheless the degree of satisfaction for which the civil standard of proof calls may vary according to the gravity of the fact to be proved: Briginshaw v Briginshaw (1938) 60 CLR 336, Rejfek v McElroy (1984) 112 CLR 517, at p 521. A finding of a court that a reputable trader has engaged in misleading and deceptive conduct is no light matter and I think it is particularly inappropriate when, as I find, all that Najee can be said to have done is to provide factually correct information to the market place and invite purchasers to compare its product with those of its competitors.

8. The application is dismissed with costs, including reserved costs.