Monarch Investments Pty Ltd v Yeramba Estates Pty Limited

[1997] FCA 68

IN THE FEDERAL COURT OF AUSTRALIA    )
NEW SOUTH WALES DISTRICT REGISTRY    )    No. NG 917 of 1996
GENERAL DIVISION  )

Between:MONARCH INVESTMENTS PTY LIMITED

Applicant

And:YERAMBA ESTATES PTY LIMITED

Respondent

REASONS FOR JUDGMENT

EINFELD J                    SYDNEY              7 FEBRUARY 1997

The matter that falls for decision this afternoon in this case is whether there should be pronounced in favour of the applicant an interlocutory injunction against the respondents restraining them from advertising or promoting for sale their property development at Warnervale on the Central Coast under the name Monarch Hills.  It is proposed by the respondents that there will appear tomorrow in the Daily Telegraph newspaper some small advertising, that there will thereafter appear during the course of the next week advertising in the Central Coast Express, and that there will be other advertising on local radio.

Next weekend there is proposed to be some television advertisements for which it is said space has been booked and appropriate preparations are taking or have taken place to produce the appropriate advertisements.  From the evidence it was not clear whether this advertising was to appear on the network stations appearing under the name of channel 9 or channel 10, but
for present purposes it may be assumed that wherever the television advertising appears, it will be beamed to viewers both in Sydney and on the Central Coast.

The hearing of this matter was significantly expedited and a judgment on the whole litigation is imminent, but it is unlikely to be available for delivery before the television advertisement is due to be aired next weekend.  Therefore consideration must now be given to whether the interlocutory injunction sought should be granted.  It is clear from the evidence that the applicant's greatest fear in terms of confusion, misleading and deceptive conduct, or passing off will, if at all, be exemplified or committed when the television advertisements go to air. 

Between the time this matter came into the list originally to the present, the matter of advertising by the respondents has been dealt with by undertakings or, in the case of the last week or so, by a statement made from the bar table by senior counsel for the respondents which, as I pointed out at the previous hearing, was tantamount to an undertaking and hence there was no need for the court to intervene in any particular way.

However, no further undertakings are being offered and the applicant is pressing its case for the interlocutory relief.  I do not find this matter particularly simple and the decision to which I have come is now being only briefly expressed because I do not want it to be thought that I have yet formed a conclusive view of what should be the result in the proceedings as a whole. 
Therefore nothing that I say now should be taken to indicate that I have, as yet, formed a concluded view on what ought to be the ultimate outcome and result of the litigation.  I do expect, however, that the decision will be given within the next three weeks and probably less.

It is trite law now that the test to be applied to applications for interlocutory injunction consists of two considerations:- (1) whether an arguable case for relief has been made out by the applicant, and (2) whether the balance of convenience favours the making of the order sought or some similar order.  

Because the hearing of the case as a whole has now taken place and all the evidence has been heard, the question of the arguability of the case is a little less theoretical than it often is in applications of this kind.  But as I have indicated, I am not yet sure what the result of the application will be on the issue of liability.  Hence I proceed in the course of this decision on the interlocutory application by assuming that the applicant has made or will make out an arguable case for relief.

The question that arises then is where the balance of convenience lies.  The case in part being a case for passing off, the applicant is required to establish that it has suffered or will suffer damage from the respondents' tort.  In this particular case the applicant does not lead a case of having already suffered actual damage from the actions of the respondents.  The respondents have been marketing or at least presenting the property development under the name Monarch Hills for all of or the best part of a year, and there has already taken place, so far as the evidence establishes, quite a degree of advertising in all forms of public media.  Yet the applicant's basic case in relation to damages is that its damages are thus far "inchoate", to use the word used by its counsel, which in simpler terms might be described as potential damage yet to be quantified.

So far as concerns the making of an interlocutory injunction, for which it should be noted the applicant by its counsel offers the usual undertaking as to damages, the question of balance of convenience will often come to a consideration of what damage will respectively be suffered by the two parties to the litigation.  In other words, the greater damage, or the loss which is less easily able to be recovered by an order for damages, will dictate the outcome of the interlocutory proceedings.

Neither side presents a particularly persuasive case in relation to damage if their arguments as to the result of this interlocutory application fail.  On the one hand, if the applicant fails, the advertising will go ahead, but the applicant is in real terms not able as yet to quantify what its loss has been from past advertising, let alone what it might be from future advertising.  Obviously the applicant's overall case depends upon a loss of reputation or potential confusion in the public mind and all the various other aspects of passing off and misleading and deceptive conduct.  But it is unable to point to
any particular financial loss to which it will be subject if the advertising is allowed to go ahead for the next couple of weeks.

On the other hand, the respondents have given some fairly vague evidence suggesting that if they do not take up the television time already booked, and possibly the radio and time and print space that has been reserved, they may suffer some form of financial penalty from those media outlets.  So far as the television is concerned, they may lose the spot which has been booked, not just for the weeks when the advertisements do not take place, but for a considerable number of weeks ahead, so as to greatly impede their planned advertising program.  They also speak of losing the value of the filming work that obviously has to take place before a television advertisement can go to air.  This last claim seems to me to somewhat beg the question because if at the end of the day the respondents are successful in the litigation, that film material could undoubtedly be used thereafter.

Although assertions concerning the loss of the time or the spots on the television programs were given, they were exceptionally vague.  No evidence was presented, for example, from either of the television channels whose names were mentioned.  There was no substantive technical corroborative support for the assertion that the spots would be lost, and indeed there was very little if any evidence that the actual spots were even now known and had been confirmed, still less paid for.  In any event, any loss by the respondents in this regard would be covered no doubt by the applicant's undertaking as to damages.

Thus neither side appears to present a particularly powerful case in an interlocutory sense to weigh the balance of convenience in their favour.  It seems to me that the likely losses to either party are quite narrow and imprecise, not to mention rather small in quantifiable terms.  However, the applicant is the moving party for the order sought and it is for the applicant to prove a case that the balance of convenience operates in its favour for the order rather than in favour of the respondents' opposition to the order.

In my view that case has not been made out.  It seems to me that the applicant has failed to establish what it needs to establish, namely that the probabilities are that it will suffer significant unrecoverable damage if the order is refused.  In those circumstances I hold that the applicant should not be granted the injunction it seeks and that the Court should make no order at all in the application to interlocutory relief.