Designer Pools Pty Ltd v Precision Pools Pty Ltd

[1988] FCA 255

IN THE Fn)	ERAL COURT OF AUSTR
9UEENSLAND DISTRICT REGISTRY	QLD G58 of 1988
GENERAL DIVISION

BETWEEN:  DESIGNER POOLS PTY LTD

Applicant

AND:  PRECISION POOLS PTY LTD

First Respondent

AND:  J O H N ALLAN BOWEN

Second Respondent

AND: BRIM KERRY WARD

Thlrd Respondent

MINUTES OF O R D E R

JUDGE MAKING ORDER:	PINCUS J.
DATE OF ORDER:	2 3 MARCH
WHERE MADE:	BRISBANE
THE COURT ORDERS THAT:
m:	Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules.

1.    the application for an lnterlocutory in~unction be dismissed;

2 . the costs of and incidental to the application be

the respondents' costs in the proceedlngs.

IN THE FEDERAL COURT OF AUSTRALIA	1
) QLD G58 of 1988
QUEENSLAND DIS’IRIm REGISTRY
GENERAL DIVISION	)

BEXWEEN: DESIGNER POOLS PTY LTD

Applicant

AND:  PRECISION POOLS PTY LTD

First Respondent

AND: JOHN ALLAN BOWEN

Second Respondent

AND: BRIAN KERRY MARD

Third Respondent

PINCUS J. 23 MARCH 1988

EX TEMPORE REASONS FOR JUM;MEDT

This is an application for an interlocutory Injunction.

The principal appllcatlon was filed on 8 March 1988 and sought an

injunction to restrain the respondents from engaging in deceptlve
and misleading conduct and damages pursuant to	5-82 of the Trade
Practices Act 1974.
The applicant and the first respondent are competitors in the market for home swimming pools, and the applicant’s case	is
that disparaging statements have been made	by or on behalf of the

respondents in respect of its pools, which entitle it to relief

based upon breaches of s.52 of the Trade Practices Act.

.

L.

The material which is filed on behalf of the applicants

is unsatisfactory in some respects, which have been analysed by

senior counsel for the respondents.	It nevertheless seems to
raise, considered in isolation,	a prima facie case that the

respondents, or some of them, have made statements of a

disparaging kind about the applicant's standing in commerce and

about its pools.

There is no suggestion on behalf of the respondents that

statements of the kind complained of by the applicant would, if

made, have been true. However, the respondents' material

absolutely denies making any such statements as those which are

complained of. It is unnecessary, perhaps, to set out the details

of the allegations and the denials, but desirable to mention what

seems to be the clearest evidence on behalf of the appllcant.

Mr James Vansleve has made an affldavlt in which e says

that on 14 February this year, he telephoned the flrst respondent

and did so pretending to be a potentlal customer of the first

respondent, named Franklin. Later that day, he was telephoned by

one Kacer on behalf of the respondent; Kacer told	him, m	the
course of discussing the	pool	which the flctltlous Franklln

allegedly intended to build, that the appllcant could be compared

with another firm called Leisure Mutual, and that if Franklin

purchased a pool from the applicant he would end up with a blocked

pool, no guarantee, bad workmanship.	To	that it was added that
one of the directors	was a bankrupt.	The conversation, according

to Mr Vansleve, went on	to assert that Ken Stevens is the
marketing manager, a director of	Leisure Mutual and responsible

for their "going down the tube" for over $2,000,000. Other

statements to like effect were said to have been made.

Now, Mr Kacer has made an affidavit in whlch he admits

that a	conversation took place with a person purporting to be
Franklin, and MK	Kacer says in effect that the conversation was

quite innocent and did not contain any of the statements sworn to

by MK Vansleve.

There is no present way of resolving this confllct in the material, even on a preliminary basis. In particular, there is no writing; perhaps more to the point, there is no customer, who might be expected to be independent in the matter, who has

given evidence.	All	the wltnesses are persons Interested In the
outcome.

The argument advanced by Mr McHugh, on behalf of the

applicant, is that in those circumstances the proper course 1s to

grant interlocutory relief. Conceding that It would hardly be

practicable to resolve the conflict of fact at this stage, and

indeed, would be unorthodox to do so, Mr McHugh says that the

injunction should go because otherwlse hls client may suffer

damage which it cannot, realistically, be compensated for if it is

ultimately successful. He adds that the grant of an injunction

would only restrain the respondents from doing somethlng which the
law in any event prohibits. Putting his argument simply, he says
that it cannot be inconvenient for the respondents to be ordered
not to tell lies about the applicant.

The argument which Mr McHugh advances does not seem to

me correct in principle. If the respondents have been telling

lies about the applicant, they, no doubt, should suffer for it;

but I cannot decide the case, at present, on the basis that that

is established against hem. The respondents' position is

significantly different if an injunction is granted, in that if,

absent an injunction, they breach s.52, they may be the ob~ect of

successful civil proceedings against them but they will not go to

prison for the breach. On the other hand, if, an injunction

having been granted, they do not comply with	it, the individuals
may be committed as for contempt of court.	It appears that the
grant of	an injunction in these circumstances may be a useful

weapon for the applicant in its commercial contest wlth the first

respondent; an in~unction would be calculated to make any

competitor careful in statements comparing the two products.	Of
course, the respondents are quite entitled to compare the two

products as long as they do so without breach of 5 . 5 2 or other

positive obligations.

In thls case of mere word against word, and mere

interested word against mere interested word at that,	i seems to
me that it should not be enough for the applicant simply to	say,
here is a prima facie case; grant	an injunction, it wlll not hurt

the respondent.	As a matter of principle,	I should not have
thought it would be	a proper exercise of discretion to do	so,
absent any solid evidence	which	would tend to make the Court

inclined to the view that the applicant's affirmations rather than

the respondents' denials are likely to hold sway at the trial.

' . I .

5 .

Flr Gore Q.C., senior counsel for the respondents,

asserted that the Court should take notice of the practice with respect to applications for interlocutory injunctions in cases of defamation, a subject which is discussed, among other places, in Halsbury's Laws of England vo1.28 of the 4th ed., paras.168 and 274. Mr Gore has also referred me to the decision of the

Queensland Supreme Court in Shiel v. Transmedia Productions Ptv

-	Ltd C19871 1 Qd.R. 199 to the effect that one should be cautious
in granting interlocutory injunctions in such cases.
It appears to me likely to be correct that reasons of the kind which influenced courts in defamation cases should operate, where it is asserted that one competitor is unlawfully decrying another competitor or its products. I have said that the case seems to me to involve a question of principle, namely, where there is only one competitor's word against another's, as to what is happening in the market-place, whether it is correct to grant an injunction on the basis that there is a serious question to be tried, I have expressed the view, that generally speaklng, that should not be done. However, the applicant's case is not quite as strong as that; that is, there is a particular reason for exercising the discretion against the applicant here, namely that
its material is rather vague and diffuse, except in the important
respect I have mentioned, namely the conversatlon sworn to by Mr
Vansleve. My principal reason, however, for holding as I do that an interlocutory injunction should not go is that as a matter of
principle it appears to me wrong to grant an injunction.
I should add one or two points, in deference to the argument. It was suggested that there is no difficulty, in a case of this sort, in proof of the applicant's damages. That does not appear to be correct. Experience suggests that it is, indeed,
difficult for an applicant to prove its loss if it has been
damaged by action of the sort complained of, and I have taken into
account in favour of the applicant that practical difficulty.
It should be added that the material, at the worst for the applicant, gives ground for suspicion of breaches of the Act on behalf of the respondents, and it would be hoped that the respondents would not take their success today as a licence to
continue any breaches which may up to date have occurred. No
doubt that matter will be discussed wlth them by their legal
advisers.

I will dismiss the application for interlocutory rellef,

although I do hold there is a serious questlon to be tried, for

the reasons which I have mentioned, as a matter of discretion.	As
to the question of costs, I propose to adopt the course of	maklng
the costs of today's application the respondents' costs in the

proceedings. The practice as to costs in an applicatlon of thls sort seems to vary somewhat, and it has been suggested that because one does not know what is going to happen at the trial it is wrong to make a final order for costs on the interlocutory application. On the other hand, unless there is some penalty as to costs, these applications may be too readily made and on inadequate material. It will therefore be ordered that the application for an interlocutory injunction be dismissed; that the

Costa of and incidental to that application be the respondents'

costs in the proceedings. i certify that this and the 6 preceding

pages are a true copy of the reasons for

judgment herein of His Honour

Mr Justice Pincus

ke

D a t e d 2 3 Marroh f988