Optus Mobile Pty Limited v Hutchison 3G Australia Pty Limited
[2003] FCA 635
•19 JUNE 2003
FEDERAL COURT OF AUSTRALIA
Optus Mobile Pty Limited v Hutchison 3G Australia Pty Limited [2003] FCA 635
OPTUS MOBILE PTY LIMITED v HUTCHISON 3G AUSTRALIA PTY LIMITED
N 724 of 2003ALLSOP J
19 JUNE 2003
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
N 724 of 2003
BETWEEN:
OPTUS MOBILE PTY LIMITED
APPLICANTAND:
HUTCHISON 3G AUSTRALIA PTY LIMITED
RESPONDENTJUDGE:
ALLSOP J
DATE OF ORDER:
19 JUNE 2003
WHERE MADE:
SYDNEY
UPON THE APPLICANT GIVING THE USUAL UNDERTAKING AS TO DAMAGES AND COMPENSATION IN TERMS OF PRACTICE NOTE 3, GIVEN THROUGH ITS COUNSEL, THE COURT ORDERS THAT:
1.The respondent be restrained, until further order, from distributing or causing to be distributed, to the public in any way, the brochure, which is behind tab 7 of the exhibit marked ‘SDT1’, being an exhibit to the affidavit of Stuart Donald Tucker sworn 16 June 2003.
2.The respondent take all steps reasonably capable of being taken, without interfering with the rights or interests of third parties, to prevent the distribution until further order, of the said brochure.
3.The reasonable steps required by order 2 do not include requiring the respondent to cause any copies of the brochure that were, as at 4.00 pm on Thursday 19 June 2003, already assembled or substantially commenced, to be assembled by any newspaper publisher together with its own or other advertisers’ material into a bundle or group of printed matter within or as part of a newspaper.
4. An officer of the respondent with personal knowledge of the facts file and serve an affidavit on or before 10 am, 26 June 2003, setting out the steps taken under order 2, any distribution of the said brochure which occurred after 6 pm, Thursday 19 June 2003, and if such distribution has occurred, the reasons for the inability to prevent such distribution.
5.The matter be stood over for final hearing to 26 June 2003 at 10.15 am.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
N 724 of 2003
BETWEEN:
OPTUS MOBILE PTY LIMITED
APPLICANTAND:
HUTCHISON 3G AUSTRALIA PTY LIMITED
RESPONDENT
JUDGE:
ALLSOP J
DATE:
19 JUNE 2003
PLACE:
SYDNEY
REASONS FOR JUDGMENT
For reasons that I am about to give, I propose to restrain the distribution of the brochure which is behind tab 7 to the exhibit of the affidavit of Mr Tucker, (SDT1), on the basis that usual undertakings as to damages set out in the practice note are given.
This application is brought to restrain certain advertising by the respondent which is a mobile phone company, if I may use that expression. The applicant is in a similar business. An aspect of the respondent's business is that it is able to provide not only mobile phone services, but also the sending of recorded pictures. Most relevantly, it can provide, from certain areas to certain areas, live video telephone calls where the person on the other end of the telephone call, being shown on a screen on the handset of the mobile phone, can see the other person to the call. The sound is transmitted digitally in the way it is in a current digital mobile phone.
These reasons are necessarily truncated because of the hour, but I think I can express the substance of my reasons succinctly. They should be read in the background of the evidence read before me, in particular the affidavits of Mr Tucker, Mr Czinner and Ms Hutton.
The debate has focused on one brochure being that behind tab 7 of exhibit SDT1. The brochure is large and glossy and has been used and is intended to be used as an insert in newspapers, in particular in Sydney and Melbourne. It emphasises the undoubted advantage that the respondent presently enjoys in the market, that is, the capacity to carry live video calls on a mobile telephone.
Complaint is made about the brochure as a whole and certain parts of it. The complaint cannot be explained succinctly at short notice by reproducing various isolated parts of the brochure. It is sufficient to say that there is a serious question to be tried and one that is not in any way fanciful: that the reader of the brochure will be given the impression that the coverage of the video calls is nationwide, or as is said in one part of the brochure, to 92 per cent of Australia's population.
I should say at the outset that in an interlocutory matter, as on a final hearing, these things are a matter of impression. I have attempted as far as possible not to come to any final view about the meaning and context of the brochure, but I think it fair to say that I have reached a state of satisfaction that there is a serious question about whether or not the brochure might, on a final view, be said to be misleading or deceptive or likely to mislead or deceive in the way I have identified, that is to have the reader think that the services obtained on the 3 network, as it is called, from ordinary mobile phone calling to video calling, are all equally available on an otherwise seamless and largely nationally comprehensive network.
Having come to the view that there is a serious question to be tried about the misleading character of the brochure, it is necessary to consider the balance of convenience. That consideration is, of course, inextricably tied to the serious question. If I do, as I have decided to do, restrain the use of this brochure or the distribution of this brochure, at least until the resolution of the final hearing, there will be certain real and direct costs to the respondent. The precise sum of those indirect costs is not clear. They are likely to be less than $200,000, but even if they were somewhat more or even if they were substantially more, there can be no doubt and no issue is put but that the applicant, in the vernacular, is good for that money.
More importantly to the respondent's submissions is the indefinable damage that may well be caused to an advertising campaign carefully undertaken by it. On the hypothesis that the interruption is not in the end justified, it will be difficult, I accept, to quantify the damage, if any, that the respondent has suffered from the interruption to its advertising campaign. Equally, however, if ultimately it is found that the use of the brochure should be restrained on a final basis and I were not to grant interlocutory relief, there would be an indefinable measure of damage able to be argued for by the applicant. Further, there would be an indefinable damage to the public in being misled.
Those two things can be seen as separate. The applicant is entitled to complain about, and seek damages for, the misleading of third parties: see Janssen-Cilag Pty Ltd v Pfizer Pty Ltd [1991] FCA 581. However, s 52 of the Trade Practices Act 1974 (Cth) is not a charter of private rights for competitors, it also involves the protection of the public. Thus, though there is force in Mr Cobden's submissions that if the interruption be not justified there will be indefinable damage to the respondent, there is equal, I think, force in the proposition that if I do not restrain the brochure and on a final hearing it is found to be misleading or deceptive, there will be an indefinable damage both to the applicant and to the public.
In that context, one important consideration is the strength of the prima facie case, using one body of expression. I would prefer not to use the notion of strength of the prima facie case. The question is whether it is a serious question to be tried. Some matters can be identified as a serious question, but at the same time recognised as weak or thin. I do not propose to characterise this as a strong case, however, I am prepared to say it is not a fanciful or weak case and I think the reality of the arguments are plain and warrant it to be considered as a real and substantial question to be tried.
In those circumstances I am prepared to look upon the respective indefinable damage as, to a significant degree, cancelling each other out. I am mindful of the interruption, however, of the respondent's advertising campaign, but it is not, as Mr Gleeson, senior counsel who appeared for the applicant, correctly pointed out, a complete sterilisation of that campaign. There are planned advertising measures to be undertaken in the next week and so the respondent will not be sterilised from putting its message to the public.
I say next week because I propose to hear this matter on a final basis next Thursday, a course as to the date, to which the parties have agreed.
Also relevant to the balance of convenience is the fact that the respondent was aware at all times of the keen interest and attention that the applicant was paying to its advertising. I think I can fairly assume or infer that each party probably keeps a careful eye on the advertising of the other and of others in this market, and that is not said disrespectfully or in any jaundiced fashion about either.
The correspondence indicates that there had been, prior to the first public use of these brochures, some exchange of correspondence about other advertisements. That previous exchange of correspondence had not led to any application. It was said by Mr Cobden on behalf of the respondent that I should view that correspondence as, to a degree, having either led the respondent to a position where it committed itself to these brochures or in some fashion entitled the respondent to think that it could move ahead with this brochure.
That may not be an accurate or precise summary of Mr Cobden's submissions, and if that be the case, I apologise, but looking at the matter from that light, that is, looking at the previous correspondence and seeing whether it lays a foundation for a conclusion that the applicant has prejudiced its position for interlocutory relief I do not think that is the case. The subject matter of the correspondence was different advertisements in a different context and I do not think, looking at the correspondence as a whole, that it should be taken as a basis for the conclusion that the applicant has in some way prejudiced its relief in relation to this brochure.
This brochure was first used two weekends ago, that is, the weekend of 8 June. Immediately thereafter, correspondence ensued between solicitors for the applicant and the in-house counsel for the respondent. Matters were put in the traditional way. There was no agreement as to a course of action. Thereafter, it would appear at least that some further arrangements were made.
Nothing in the course of events can be used, separately, to criticise the respondent. I do not think, however, equally that the course of events of the chronology indicates any laches or other matter which could be used to found a legitimate argument that the applicant had prejudiced its entitlement to move the Court as it did earlier this week when it obtained short service.
In all those circumstances and balancing the matters to which I have referred and which are contained in the affidavits, I think I should restrain the use of the said brochure and also I think it appropriate to make ancillary mandatory orders to ensure the efficacy of the negative injunction. That mandatory aspect comes about because of the need to communicate with publishers and newspapers to prevent the distribution of the brochure to the public.
I would not like the respondent to think that the negative injunction did not require them to take perfectly reasonable and appropriate commercial steps to restrain the distribution merely because the brochures were now in the hands of independent third parties if those third parties would, for commercial or other reasons, obey the direction or request of the respondent.
Equally, to the extent that third parties may have interests which would be or could be detrimentally affected by the re-call, if I may use that expression, of the brochures from wherever they are lying, then I would not wish to see those third party interests and rights affected. It may be that the order I have proposed in general terms requires an exercise of judgment at any particular point.
If that be the case, I do not wish to put any officer of the respondent or the legal advisers of the respondent in an invidious position. I will grant the parties liberty to apply tomorrow from 8.30 am on half an hour's notice for the variation or clarification of the effect of the orders in any precise circumstances. That will give the respondent an opportunity to understand by tomorrow morning where these brochures are, what steps need to be taken, and if there is any confusion or uncertainty as to what is a reasonable step to be taken the matter can be brought back to me, the position explained and I will clarify the position by a refinement of the order.
Upon the usual undertaking as to damages and compensation set out in the Practice Note which is given by the applicant through its counsel the court makes the following orders:
1.The respondent be restrained, until further order, from distributing or causing to be distributed, to the public in any way, the brochure, which is behind tab 7 of the exhibit marked ‘SDT1’, being an exhibit to the affidavit of Stuart Donald Tucker sworn 16 June 2003.
2.The respondent take all steps reasonably capable of being taken, without interfering with the rights or interests of third parties, to prevent the distribution until further order, of the said brochure.
3.The reasonable steps required by order 2 do not include requiring the respondent to cause any copies of the brochure that were, as at 4.00 pm on Thursday 19 June 2003, already assembled or substantially commenced, to be assembled by any newspaper publisher together with its own or other advertisers’ material into a bundle or group of printed matter within or as part of a newspaper.
4. An officer of the respondent with personal knowledge of the facts file and serve an affidavit on or before 10 am, 26 June 2003, setting out the steps taken under order 2, any distribution of the said brochure which occurred after 6 pm, Thursday 19 June 2003, and if such distribution has occurred, the reasons for the inability to prevent such distribution.
5.The matter be stood over for final hearing to 26 June 2003 at 10.15 am.
I note the undertaking of the respondent to keep an account of new customers from 8 June 2003.
I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop. Associate:
Dated: 3 July 2003
Counsel for the Applicant: Mr J T Gleeson SC
Mr M DarkeSolicitor for the Applicant: Minter Ellison Counsel for the Respondent: Mr R Cobden Solicitor for the Respondent: Allens Arthur Robinson Date of Hearing: 19 June 2003 Date of Judgment: 19 June 2003
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