Duracell Australia Pty Ltd v Union Carbide Australia Ltd

[1988] FCA 407

IN THE FEDERAL COURT OF AUSTRALIA	)
)
NEW SOUTH WALES DISTRICT REGISTRY	) MO. G161 o f 1988
)

DIVISION GENERAL 1

BETWEEN:  DURACELL AUSTRALIA PTY.

LIMITED -

Applicant

AND :  UNION CARBIDE AUSTRALIA

- LIMITED

Respondent

CORAM:	FOSTER, J.
DATE :	19 MAY, 1988.

PLACE: SYDNEY.

REASONS FOR JUDGMENT

(EXTEMPORE)

HIS HONOUR: These proceedlngs come before the Court by way of

a clalm made by the appllcant, Duracell Australla Pty. Llmlted, that the respondent, Union Carblde Australla Llmlted should be

held to be In contempt of court f o r the breach of a certaln

undertaking glven to the Court at the conclusion of prlor litlgation between the partles. That lltlgatlon concluded on 17 February, 1988 when the partles settled an actlon brought by

the applicant agalnst the respondent	f o r alleged breaches of S.
52 of the Trade Practlces Act,	1 9 7 4 .

The undertaking in question was clearly glven upon

consideration. The wording along with the wording of other

undertakings was reduced to wrltlng In a form handed up to the
Court so that the Court could formally note the undertaklng I

the precise terms in which It was given. The question before

me is whether	it	has been proved In these proceedlngs that
there has been a breach	of	the undertaking constltutlng a

contempt of the Court. The subject of breaches of undertaking

and their constituting a contempt was considered In Australian

Consolidated Press	Ltd. v. Morgan & Anor. ( 1 9 6 4 ) 1 2 2 C.L.R.
483.

In that case, Mr. Justice Owen, at p. 515, expressly

adopted wlth approval, the words of Mr. Justice Jenkins ~n the

case of Redwlng Ltd. v Redwing Forest Products Ltd. ( 1 9 4 7 ) 1 7 7

Law times Reports, 3 8 7 , where hls Honour in refusing an

appllcation that the respondent	be found guilty of contempt	of
court said:-

"I cannot say I think that the undertaklngs

contalned ln the order were clearly drawn and I

cannot say I regard the questions of construction

involved in them as entlrely easy questions, but	in my ludgment, a defendant cannot be committed
for contempt on the ground that upon one of two possible constructions of an undertaking belng given he has broken his undertaking. For the
purpose of rellef of this character I think the
undertaking must be clear and the breach must be
clear beyond all question."

Mr. Justice Wlndeyer, at page 508, expressed general

agreement to what Mr. Justice Owen said ln thls regard. I have

heard considerable argument a s to the standard of proof to be
applied in the case before me. It has been submitted that the

standard of proof should be as high as the criminal standard of

proof and as I understand the submission of the applicant, it I S

put that a mere civil onus of proof may well	be appropriate; that
15, proof on the balance of probablllties.

I do not understand any cases subsequent to Morgan's

- Case to cast doubt upon the general proposition that in

establishing a contempt of court on the basis that an undertaking

given to the Court has been broken that guilt can	be establlshed
on any basis other than that, "the breach must	be clear beyond
all question."	I do not think it necessary in this case for

myself to embark upon any close consideration of the authorities

on standard of proof that have been cited to me.

Before referring to the undertaking in question, it 1s

appropriate that I mention that the undertaklng was given after

the Court had embarked upon a consideration of certain television

advertislng material, normally referred to as commercials, whlch .

the respondent had caused to be telecast. These commercials have

been described in argument before me as belng	of a terse,
aggressive character and hard hitting. Those descrlptions,	in my
view, are certalnly reasonably appropriate to that	material, a
part of which I have seen today, again, as a result	of a rullng
on evidence made by me ~n the course	of che proceedings.

The alleged breach which I must consider ln this case

relates to the telecast of	a similar commercial on some recent
occasions. The fundamental question	for decision is whether that
commercial constitutes a breach	of the undertaklng previously

given. I turn then to the text of the undertaklng. For relevant

purposes, it reads as follows:-

" . .. the Respondent will not, prior to 1 June 1988,
whether by itself, its servants, agents or
otherwise howsoever, in any advertising or
marketing, make any claim of superiority of any

nature whatsoever, directly o r indirectly, in

relation to the performance of . . ' I .

and then certain batteries being products	of the respondent are
referred to.	And the advertising material, which had been the
subject of the previous litigation in respect	of which a
settlement occurred and	the undertaking was given, clearly

asserted the superiority of the respondent's Energizer batteries

over the applicant's batteries of a similar type.

The words which were, as I recollect it, repeated

several times in the earlier commercial were that Energizer lasts

20 per cent longer than Duracell and, in a subsequent commerclal

in the same serles, the claim was made in the same terms and in

the same aggressive manner that the	Energizer battery lasted 30
per cent longer than Duracell. And there can	be no doubt

whatever in relation to those earller advertlsements that a

distinct, definite and very direct claim of superiority vas m de.

The commercial which 1 s alleged to constitute a breach

of that undertaking, is undoubtedly	of a similar hard-hitting
kind, the personality purveying the	advertising message is the
same personality and had	obviously been selected for hls ability

to convey advertlslng messages wlth some agressive force. The

words used in the impugned advertisement are, and I quote:

"Tests prove it, no battery lasts longer."

This statement was made both by the person involved in

purveying the message and also as a result of subtitles. The

undertaking required that the respondent make no claim of

superiorlty dlrectly or Indirectly. In light of the words spoken and visually presented in the advertisement, I am quite satrsfled that no direct claim of superiorlty could be held to have been

made.

It is submitted, however, that an indirect claim has

been made on a number of bases which relate to some of the

essential qualities of simllarlty between the earlier
advertisements, where there vas a direct claim of superiority,

and the impugned advertisement. It 1s sald that adopting a broad

interpretation of the word "claim", which interpretation	1 s not
conceded In argument by the respondent, that persons receiving
this advertising materla1 as viewers	of the televised commercial

would understand it as being a claim made on behalf of the
respondent that its batteries were superior.

I note, of course, that the words "clalm of

superiority", apart from the use of the expression, "directly" or "indlrectly" are not quallfled In any way such as to reduce the term "claim" to the term "suggestlon" or some slmllar term.

Putting that matter asrde, however, and looklng at the prevlous

material and the impugned material and considering the case from

the way it is put	by the respondent, namely that viewers who had,
to some extent, been sensitized by the earller materla1 would	on

seeing the subsequent material regard lt as conveylng the same

message.

I ask myself whether in light of the statement of

princlple in Morgan's Case, to which I have referred, I should

come to the concluslon that there has been a breach beyond all

questlon of the undertaking prevlously glven. I f1nd myself

quite unable to come to any such decislon. I am simply not

satisfled that a clalm of superiorlty, even interpreted	ln the
very general way, pressed upon me by the respondent, has	in fact
been asserted In the impugned advertlslng material.

. I therefore flnd that the charge of contempt of court

In relatlon to the breach of that undertaklng 1s not establlshed.

I certify that thls and the f1ve precedlng pages
are a true copy of the reasons for ludgment

hereln of hls Honour, Mr. Justlce M. L. Foster.

Dated:  2 Au

Assoclate: