Nitro Circus Touring Aust Pty Ltd v Fleshwound Films LLC

[2009] NSWSC 1214

CITATION:	Nitro Circus Touring Aust Pty Ltd v Fleshwound Films LLC & Anor [2009] NSWSC 1214
HEARING DATE(S):	9 November 2009
JUDGMENT DATE :	9 November 2009
JURISDICTION:	Equity Division
JUDGMENT OF:	Palmer J
EX TEMPORE JUDGMENT DATE:	9 November 2009
DECISION:	Orders continued until 19 November 2009.
CATCHWORDS:	MISLEADING OR DECEPTIVE CONDUCT – INJUNCTION – whether ex parte mandatory and negative injunctions should be continued.
LEGISLATION CITED:	Trade Practices Act 1974 (Cth) – s 52
CATEGORY:	Procedural and other rulings
PARTIES:	Nitro Circus Touring Australia Pty Ltd (Plaintiff) Fleshwound Films LLC (First Defendant) Dainty Consolidated Entertainment Pty Ltd (Second Defendant)
FILE NUMBER(S):	SC 5242/09
COUNSEL:	R.J. Weber SC (Plaintiff) S.G. Burley SC, Ms P. Arcus (First Defendant) F.M. Douglas QC, W. Edwards (Second Defendant)
SOLICITORS:	Allens Arthur Robinson (Plaintiff) Dibbs Barker (Sydney Agent for Davies Collison Cave) (First Defendant) Herbert Geer (Second Defendant)

5242/09 Nitro Circus Touring Aust P/L v Fleshwound Films LLC & Anor

JUDGMENT – Ex tempore

9 November, 2009

1 The Plaintiff (“NCTA”) is the promoter of a motocross bike show known as “Nitro Circus Live Tour” which will be performed in all mainland capital cities of Australia in May and June 2010.

2 The First Defendant (“FF”) apparently owns the intellectual property in a brand name called “Crusty Demons” or “Crusty”. The Second Defendant (“DCE”) is an entertainment promoter. The Defendants have arranged and have begun to promote a motocross bike show known as “Crusty Demons Thirst 4 Destruction” which will be performed in the same venues as the Plaintiff's show, also in May and June 2010.

3 On 6 November 2009, the Plaintiff obtained an ex parte mandatory injunction and orders against the Defendants directing them to withdraw what it says are misleading and deceptive advertisements for the Crusty Demons Tour. The alleged breaches of s 52 of the Trade Practices Act 1974 (Cth) are that a media release distributed by the Defendants to ticketing agencies, advertising agencies and media outlets states that named motocross riders, said to be the best in the world, will be performing in the Crusty Demons Tour when, in fact, none of the named riders is contracted to FF or DCE to perform and, indeed, all or most of them have indicated to NCTA that they do not intend to perform in the Crusty Demons Tour.

4 The mandatory injunction required FF to remove immediately from its website the media release which specified the names of the riders in question. FF has complied with this order.

5 The orders also required both Defendants to direct ticketing agencies, advertising agencies and media outlets to which the media release had been forwarded not to publish that release. The Defendants were also required to direct ticketing agencies not to sell or offer for sale tickets for the Crusty Demons Tour up to 9 November. The proceedings have now come back into the Duty List.

6 NCTA seeks a continuation of the orders up to final hearing. FF and DCE oppose continuation of the order preventing ticket sales, although they would consent on an interlocutory basis to a continuation of the first two orders made on 6 November.

7 The evidence in support of the application comprises an affidavit of the director of the NCTA, Mr Porra. The evidence put forward by FF and DCE in opposition is:

– first, a company search of NCTA showing that it was incorporated in August 2009 with a paid up share capital of $400 and is a wholly owned subsidiary of Nitro Circus Event LLC of Utah in the United States of America;

– second, a copy of an e-mail sent to “[email protected]" addressed "Dear Crusty Club Member" and advising that this Court had, on the previous day, ordered FF and DCE "to take off sale until further order of the Court its ‘Crusty Demons Thirst 4 Destruction Tour’ ... after the Court heard that (FF) had been conducting false and misleading advertising in relation to its rider line up" . The e-mail gives particulars of the riders concerned and makes other comments criticising FF and DCE for dishonest conduct

– a document said to be a media release issued by NCTA which is in almost the same terms as the e-mail. NCTA says that this document has been sent to "people in the industry" .

8 No other evidence has been tendered and Mr Porra has not been called for cross examination.

9 The exhibits to Mr Porra's affidavit show, at least prima facie, that the riders named in the Defendants' advertising material have not agreed to participate in the Crusty Demons Tour. Indeed, some of them, by their management, have threatened legal action against the Defendants if their names are not removed from the Crusty Demons Tour promotional material.

10 As the evidence presently stands, I am satisfied that there is a serious question to be tried as to whether FF or DCE has committed breaches of s 52 of the Trade Practices Act by disseminating promotional material for the Crusty Demons Tour which is capable of leading members of the public to believe that certain named riders will be performing in that Tour when, in fact, FF and DCE have no reasonable basis to believe that those riders will be performing.

11 The question then arises whether the balance of convenience requires that the orders made on 6 November 2009 continue until final determination of the proceedings. No date for a final hearing has been fixed. Indeed, the Defendants have not so far served any evidence at all. As matters presently stand there is no way of knowing whether the proceedings will come on for hearing before the performance dates for the Crusty Demons Tour in May and June next year.

12 After some discussion between Counsel, Mr Douglas QC who appears for DCE, applied for an adjournment to allow a contested interlocutory hearing to take place on 19 November 2009. As a condition of the grant of such an adjournment, Mr Douglas proffered consent to the continuation of orders in terms of paragraphs 1.1 and 1.2 of the orders made on 6 November. Those orders, as I have noted, require removal from FF's website of a media release specifying the names of the riders in question and also require that both Defendants direct ticketing agencies, advertising agencies or media outlets to whom that release has been forwarded not to publicise the content of that release.

13 Mr Douglas says, however, that the restraint on ticket sales contained in paragraph 1.3 of the orders should lapse. He says that to abate or ameliorate any prejudice that the Plaintiff claims to have suffered by reason of the allegedly false advertising carried out to date, DCE would send to Ticketek and other ticketing agencies a statement in the form of MFI 1. That statement provides as follows:

“ Proposed Ticketek and other ticketing outlets Statement

In our previous promotional material we named a proposed rider line-up which included Robbie Maddison, Cam Sinclair, Nate Adams, Adam Jones, Mike Mason and Blake Williams. We now understand that Cam Sinclair may not be available to tour. We wish to make it clear that whilst Fleshwound Films LLC and Dainty Consolidated Entertainment Pty Limited expect these other riders to participate in the Crusty Demons Thirst 4 Destruction 2010 Tour, this will be subject to their availability.”

14 I should say that publication of a statement in terms of MFI 1 does not, as the evidence presently stands, have any ameliorating effect on what is said to be the publication of the earlier misleading media release by the Defendants. Indeed, if anything, it suggests that the named riders, or some of them, will very probably appear in the Crusty Demons Tour.

15 As I have said, the Defendants have filed no evidence which raises even a prima facie case to suggest that they have any reasonable belief that the named riders will eventually appear in their event. As matters presently stand, MFI 1 does no more than compound what may well be misleading statements already published by the Defendants as to the appearance of those riders. Accordingly, the publication of a statement in terms of MFI 1 does not improve the Defendants' position in the slightest.

16 Mr Douglas also proffers that the DCE will send out to those persons to whom the Plaintiff sent its e-mail on 7 November another e-mail or statement explaining the position more clearly. The proposed e-mail is MFI 2. That e-mail, if anything, would tend to confuse the position even further rather than clarify it. It is argumentative and, in effect, puts forward the case of the Defendants rather than correcting the statements of which the Plaintiff complains. That proffered statement is of no assistance to the Defendants.

17 Further, the Defendants proffer to keep in a separate account, or to account separately for, any ticket sales made between now and the proposed hearing date of the contested interlocutory application, that is, 19 November.

18 The Plaintiff opposes any adjournment application and seeks the continuation of all orders, particularly orders as to restraint of ticket sales, until such time as the proceedings are finally heard, whenever that is to be.

19 There is no evidence which in my view could support, on the balance of convenience, the continuation of the injunction in those terms.

20 It appears that the offending material, if I can use that neutral term, i.e. material containing the names of particular riders, has been withdrawn from publication by the Defendants. Tickets will go on sale in the near future but would doubtless continue until very close to the event, that is, May and June next year. If there is no repetition of publication of material which is misleading or deceptive – I am not making a finding at this stage that the material is, in fact, misleading and deceptive, but at least it appears to be prima facie so – then it is difficult to see what legitimate interest the Plaintiff can have in seeking to restrain ticket sales, for example, in the early part of next year or in February or March next year by reason of alleged misleading and deceptive conduct which has occurred only for a relatively short space of time this month. I would not, at this stage, be prepared to grant an injunction in respect of ticket sales simply until further order of the Court.

21 It seems to me the parties on both sides have not had a sufficient opportunity to put forward their interlocutory cases as they might wish. This may be a somewhat ingenuous observation on my part. It may be that the object of this exercise is simply an endeavour by each side to gain commercial advantage in a media release war regardless of what transpires in court. Nevertheless, I would not be prepared to grant an injunction restraining ticket sales beyond a time when both parties have had a reasonable opportunity to put forward their respective cases, either for continuing the ticket sale injunction up to final determination of the proceedings or else for a total dissolution of that injunction.

22 Accordingly, I will continue the orders relating to publication contained in paragraphs 1.1 and 1.2 of the orders made on 6 November 2009 until further order of the Court.

23 I will continue the order as to ticket sales in paragraph 1.3 of the order made on 6 November 2009 up to 5.00 pm on 19 November 2009. The parties on that day will be able to contest whether or not the order in paragraph 1.3 should be continued any further. In this regard it is as well to note that the adequacy of the Plaintiff's undertakings as to damages is in question. Mr Douglas raised that issue for the first time in Court this morning when he tendered the search of the Plaintiff which showed that it had been recently incorporated and had an issue capital of $400.

24 It seems to me that the Plaintiff has not had sufficient time to consider its position as to whether it wishes to adduce evidence as to its substance or wishes to procure others of demonstrable substance to give an undertaking as to damages in addition to its own in order to support the undertaking as to damages. If the Plaintiff wishes to have the injunction as to ticket sales continued beyond 19 November, then it will have to address the issue of adequacy of the undertaking as to damages.

25 For the short time between now and 19 November I am prepared to accept the undertaking as to damages proffered by the Plaintiff, but the Court on 19 November will require better assurance than I presently have if the Plaintiff wishes to continue the orders which it now seeks.

26 If the parties wish I will make a directions as to the filing of evidence to ensure that the matter is ready to proceed on 19 November. That is a matter for them.

27 It seems to me that the costs of today's application ought to be reserved until 19 November as the matter may emerge in a wholly different light if, as Mr Douglas suggests, the Defendants are able to adduce evidence supporting the assertion which they make in MFI 1.

28 Accordingly, upon the Plaintiff through its Senior Counsel giving to the Court the usual undertaking as to damages, I extend paragraphs 1.1 and 1.2 of the orders made on 6 November 2009 until further order. I extend paragraph 1.3 of the orders made on 6 November 2009 up to 5.00 pm on 19 November 2009.

29 The matter will stand over to the Duty Judge's list for hearing of any further application in these proceedings at 10.00 am on 19 November 2009.

30 Costs of today reserved.

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