Patrick John Walker as Commissioner for Fair Trading v Rugs a Million Pty Ltd
[2006] WASC 127
PATRICK JOHN WALKER AS COMMISSIONER FOR FAIR TRADING -v- RUGS A MILLION PTY LTD & ORS [2006] WASC 127
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2006] WASC 127 | |
| Case No: | CIV:2318/2005 | 17 FEBRUARY 2006 | |
| Coram: | SIMMONDS J | 30/06/06 | |
| 41 | Judgment Part: | 1 of 1 | |
| Result: | Injunction granted unless there is provision of undertakings by defendants | ||
| B | |||
| PDF Version |
| Parties: | PATRICK JOHN WALKER AS COMMISSIONER FOR FAIR TRADING RUGS A MILLION PTY LTD (ACN 060 596 769) RUGS A MILLION (WA) PTY LTD (ACN 078 871 664) RUGS WA PTY LTD (ACN 109 824 053) FREDERICK CREAGH WICKS PAUL MIFSUD GREG STANTON |
Catchwords: | Interim injunction Interlocutory injunction Whether serious question to be tried Whether misleading or deceptive conduct Whether false representations as to price of goods Whether false representations as to composition of goods Whether conduct liable to mislead public as to nature or characteristics of goods Whether bait advertising Balance of convenience Undertakings and the exercise of discretion to make orders |
Legislation: | Fair Trading Act 1987 (WA), s 9, s 10(1), s 12(1), s 17, s 19, s 68, s 74(1), s 74(2), s 76(3), s 76(5) Trade Practices Act 1974 (Cth), s 52, s 53, s 55, s 56, s 75, s 80(2) |
Case References: | Australian Competition and Consumer Commission v Dermalogica Pty Ltd (2005) 215 ALR 482 Australian Competition and Consumer Commission v Gary Peer & Associates Pty Ltd (2005) 65 IPR 1 Australian Consumer and Competition Commission v CG Berbatis Holdings Pty Ltd [2000] FCA 1893 Australian Securities and Investments Commission v Rich [2004] NSWSC 970 Barker v The Queen (1983) 153 CLR 338 Barker v The Queen (1994) 54 FCR 451 Bullock v Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464 Bunning v Cross (1978) 141 CLR 54 Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 Byrne v Kinematograph Renters Society Ltd [1958] 1 WLR 762 Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45 Foster v Australian Competition and Consumer Commission [2006] FCAFC 21 Glev Pty Ltd v Kentucky Fried Chicken Pty Ltd (1994) ATPR 41-299 ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 Lincoln Hunt (Aust) Pty Ltd v Willesee (1986) 4 NSWLR 457 Patrick Stevedores Operations No 2 Pty Ltd & Ors v Maritime Union of Australia & Ors (1998) 153 ALR 643 Rugs-A-Million (WA) Pty Ltd v Walker [2005] WASC 288 Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1 Trade Practices Commission v Cue Design Pty Ltd (1996) ATPR 41-475 Trade Practices Commission v Gold Coast Property Sales Pty Ltd & Ors (1994) 126 ALR 139 Trade Practices Commission v Von Berg & Curtis; The Vales Wine Company (1996) 6 FCR 336 Yorke v Lucas (1985) 158 CLR 661 Australian Competition and Consumer Commission v Cadbury Schweppes Pty Ltd (2004) 61 IPR 270 Australian Competition and Consumer Commission v Oceana Commercial Pty Ltd (2004) ATPR (Digest) 46-255 Bercove v Hermes (No 3) (1983) 51 ACR 109 Brambles Holdings Ltd v Trade Practices Commission (No 2) (198) 44 FLR 182 Epitoma Pty Ltd v Australasian Meat Employees' Union (No 2) (1984) 54 ALR 730 Fisher v Ellerton [2001] WASCA 315 Flanagan v Commissioner of the Australian Federal Police (1996) 60 FCR 149 George v Rockett (1990) 170 CLR 104 Given v C V Holland (Holdings) Pty Ltd (1977) 29 FLR 212 Global Sportsman Pty Ltd v Mirror Newspaper Pty Ltd (1984) 2 FCR 82 Halliday v Nevill (1984) 155 CLR 1 Jabuna Pty Ltd v Hartley, unreported; FCt of Aust (Beazley J); Library No 177; 18 April 1984 Kuruma v The Queen [1955] AC 197 Miller v Miller (1978) 141 CLR 269 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 Pearce v Button (1985) 8 FCR 388 Southern Equities Corp Ltd (in liq) v Bond (No 2) (2001) 78 SASR 553 Strang v Russell (1905) 24 NZLR 916 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
RUGS A MILLION PTY LTD (ACN 060 596 769)
First Defendant
RUGS A MILLION (WA) PTY LTD (ACN 078 871 664)
Second Defendant
RUGS WA PTY LTD (ACN 109 824 053)
Third Defendant
FREDERICK CREAGH WICKS
Fourth Defendant
PAUL MIFSUD
Fifth Defendant
GREG STANTON
Sixth Defendant
(Page 2)
Catchwords:
Interim injunction - Interlocutory injunction - Whether serious question to be tried - Whether misleading or deceptive conduct - Whether false representations as to price of goods - Whether false representations as to composition of goods - Whether conduct liable to mislead public as to nature or characteristics of goods - Whether bait advertising - Balance of convenience - Undertakings and the exercise of discretion to make orders
Legislation:
Fair Trading Act 1987 (WA), s 9, s 10(1), s 12(1), s 17, s 19, s 68, s 74(1), s 74(2), s 76(3), s 76(5)
Trade Practices Act 1974 (Cth), s 52, s 53, s 55, s 56, s 75, s 80(2)
Result:
Injunction granted unless there is provision of undertakings by defendants
Category: B
Representation:
Counsel:
Plaintiff : Mr N W McKerracher QC & Mr R J Price
First Defendant : Mr D H Solomon
Second Defendant : Mr D H Solomon
Third Defendant : Mr D H Solomon
Fourth Defendant : Mr D H Solomon
Fifth Defendant : Mr D H Solomon
Sixth Defendant : Mr D H Solomon
Solicitors:
Plaintiff : Department of Consumer & Employment Protection
First Defendant : Solomon Brothers
Second Defendant : Solomon Brothers
Third Defendant : Solomon Brothers
Fourth Defendant : Solomon Brothers
Fifth Defendant : Solomon Brothers
Sixth Defendant : Solomon Brothers
Case(s) referred to in judgment(s):
Australian Competition and Consumer Commission v Dermalogica Pty Ltd (2005) 215 ALR 482
Australian Competition and Consumer Commission v Gary Peer & Associates Pty Ltd (2005) 65 IPR 1
Australian Consumer and Competition Commission v CG Berbatis Holdings Pty Ltd [2000] FCA 1893
Australian Securities and Investments Commission v Rich [2004] NSWSC 970
Barker v The Queen (1983) 153 CLR 338
Barker v The Queen (1994) 54 FCR 451
Bullock v Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464
Bunning v Cross (1978) 141 CLR 54
Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592
Byrne v Kinematograph Renters Society Ltd [1958] 1 WLR 762
Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45
Foster v Australian Competition and Consumer Commission [2006] FCAFC 21
Glev Pty Ltd v Kentucky Fried Chicken Pty Ltd (1994) ATPR 41-299
ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248
Lincoln Hunt (Aust) Pty Ltd v Willesee (1986) 4 NSWLR 457
Patrick Stevedores Operations No 2 Pty Ltd & Ors v Maritime Union of Australia & Ors (1998) 153 ALR 643
Rugs-A-Million (WA) Pty Ltd v Walker [2005] WASC 288
Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1
Trade Practices Commission v Cue Design Pty Ltd (1996) ATPR 41-475
Trade Practices Commission v Gold Coast Property Sales Pty Ltd & Ors (1994) 126 ALR 139
Trade Practices Commission v Von Berg & Curtis; The Vales Wine Company (1996) 6 FCR 336
Yorke v Lucas (1985) 158 CLR 661
Case(s) also cited:
Australian Competition and Consumer Commission v Cadbury Schweppes Pty Ltd (2004) 61 IPR 270
Australian Competition and Consumer Commission v Oceana Commercial Pty Ltd (2004) ATPR (Digest) 46-255
(Page 4)
Bercove v Hermes (No 3) (1983) 51 ACR 109
Brambles Holdings Ltd v Trade Practices Commission (No 2) (198) 44 FLR 182
Epitoma Pty Ltd v Australasian Meat Employees' Union (No 2) (1984) 54 ALR 730
Fisher v Ellerton [2001] WASCA 315
Flanagan v Commissioner of the Australian Federal Police (1996) 60 FCR 149
George v Rockett (1990) 170 CLR 104
Given v C V Holland (Holdings) Pty Ltd (1977) 29 FLR 212
Global Sportsman Pty Ltd v Mirror Newspaper Pty Ltd (1984) 2 FCR 82
Halliday v Nevill (1984) 155 CLR 1
Jabuna Pty Ltd v Hartley, unreported; FCt of Aust (Beazley J); Library No 177; 18 April 1984
Kuruma v The Queen [1955] AC 197
Miller v Miller (1978) 141 CLR 269
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
Pearce v Button (1985) 8 FCR 388
Southern Equities Corp Ltd (in liq) v Bond (No 2) (2001) 78 SASR 553
Strang v Russell (1905) 24 NZLR 916
(Page 5)
- SIMMONDS J:
Introduction
1 This is an application for "interim" (or interlocutory) injunctive relief under s 76(5) of the Fair Trading Act 1987 (WA) ("FTA"), and the matching s 80(2) of the Trade Practices Act 1974 (Cth) ("TPA"), which has been adjourned from an application in Masters chambers.
2 The application arises out of what are alleged to be contraventions of the State and Federal Acts. Those contraventions were of their general misleading or deceptive conduct prohibitions (s 10(1) of the FTA, s 52 of the TPA); their prohibitions of false representations as to goods' particular composition (s 12(1)(a) of the FTA, s 53(a) of the TPA); their prohibitions of false or misleading representations as to goods' price (s 12(1)(g) of the FTA, s 53(e) of the TPA); their prohibitions of conduct liable to mislead the public as to the nature or characteristics of goods (s 17 of the FTA, s 55 of the TPA); and their prohibitions on advertising goods for supply if there are reasonable grounds for believing the person advertising will not be able to supply the goods in quantities that are or for a period that is reasonable having regard to the market and the advertising (s 19 of the FTA, s 56 of the TPA). For convenience, because of the identity of the law under both the Federal and the State Acts in all of the respects relevant to me, I will for the most part use the FTA references only from this point forward.
3 By writ filed 8 November 2005 as amended by writ filed 23 January 2006, the plaintiff sought declaratory and injunctive relief and related orders against each of the corporate defendants in respect of conduct contravening the provisions referred to, engaged in either alone or in conjunction with the other corporate defendants. The plaintiff sought the same sorts of relief against each of the individual defendants for certain of this conduct, both as contraveners, and as persons involved in a contravention for the purposes of the legislation (s 68 of the FTA, s 75B of the TPA). These proceedings I will refer to as the underlying proceedings.
4 The plaintiff in the underlying proceedings and the applicant for the orders in the application before me is the Commissioner for Fair Trading of this State. For convenience, I will refer to him from now on as the plaintiff.
5 The underlying proceedings were initiated following the striking out of similar proceedings by the plaintiff against the same defendants
(Page 6)
- (CIV 1969 of 2005). CIV 1969 of 2005 had been commenced on 15 August 2005.
6 The corporate defendants are companies that are or were concerned in the business well known in this State, "Rugs-A-Million", that sells a range of products, including rugs, mats and runners, but not limited to those. The first defendant is registered in this state as carrying on business under the business name "Rugs-A-Million". There is evidence that the first defendant licensed the intellectual property rights in relation to the Rugs-A-Million name, logo and business to the third defendant. There is also evidence that the second defendant carried on business under that name in Western Australia until 30 June 2004, and that the third defendant carried on that business thereafter.
7 The individual defendants, the fourth to the sixth defendants, are, respectively, a director of each of the corporate defendants, a senior employee with a national position with at least one of the corporate defendants, and a senior employee with a Western Australian position with at least one of the corporate defendants.
8 In the application before me, the interim injunctions are sought against the corporate defendants and each of them, "whether by their directors, servants, agents or otherwise". There is no interim injunctive relief sought against the individual defendants. For convenience from now on I will refer to the defendants as defendants and not as respondents.
9 In the hearing before me the issues were these:
• Whether the manner of obtaining at least some of the evidence of contraventions, by officers of the plaintiff's department entering retail premises of the Rugs-A-Million business in this State to gather information for the purposes of the proceedings under which these applications are brought, should be excluded in the exercise of the Court's discretion with respect to unlawfully obtained evidence;
• Whether there was a serious question to be tried with respect to any of the alleged contraventions;
• Whether the balance of convenience told against the granting of the orders sought, particularly in view of the history of the conduct of the Rugs-A-Million business in this state since the commencement of the underlying
- proceedings, and in view of the offer of undertakings by the third defendant; and
- • The form of the orders sought.
The evidence obtained during entries to retail premises
10 The evidence objected to was of what two compliance officers saw on visits to retail premises of Rugs-A-Million on various dates both before and after the original writ in these proceedings was filed. This evidence is also of what a solicitor for the department saw on a visit to retail premises of Rugs-A-Million after the original writ was filed. See affidavit of Bruce Hawkins sworn 3 November 2005, at pars 4 – 25; affidavit of Karen Hall sworn 5 December 2005, at pars 7 – 20; affidavit of Sean Dworcan affirmed 7 December 2005, at par 37; and affidavit of Sean Dworcan affirmed 10 February 2006, at par 10.
11 There is other evidence on which the plaintiff relies in this application, including the results of entries to premises of the second defendant and of interviews with employees working at these retail premises. The manner in which those results were obtained is not in issue before me, although I understand the matter is the subject of an appeal in other proceedings, CIV 1281 of 2005, against the decision of Newnes M in Rugs-A-Million (WA) Pty Ltd v Walker [2005] WASC 288. The defendants do make a submission in relation to the matter in connection with the exercise of my discretion to grant any relief here, and I will return to it in that connection. I also return to the decision in Rugs-A-Million in the present context, below.
12 Counsel for the defendants submitted that the evidence obtained on the visits to the retail premises that is objected to should be excluded in the exercise of my discretion to exclude unlawfully obtained evidence. I assume (without deciding) that the discretion relied upon, as recognised in Bunning v Cross (1978) 141 CLR 54, is the same in proceedings for an interlocutory injunction as it is in other proceedings. Senior counsel for the plaintiff did not put any other position to me.
13 Counsel for the defendants submitted my discretion was enlivened because the deponents were trespassers on the retail premises. They were trespassers because it could be inferred they had gone to those premises solely to gather the evidence. They had no statutory authority to overcome what would otherwise be a trespass. This made their entry unlawful. My discretion should be exercised to exclude the evidence as their conduct was wilful and deceptive, or alternatively high-handed and
(Page 8)
- contumelious or surreptitious, in view of the statutory authority to gather evidence which they could have used but did not choose to use.
14 All parties accepted that Barker v The Queen (1983) 153 CLR 338 (herein, "Barker, 1983, High Court") is authority for the proposition that (per Mason J, at 341 – 342):
"The essence of trespass by wrongful entry consists in an entry without right or authority by one person onto the land of another who is in possession, using that word in its strict sense so as to include a person entitled to immediate and exclusive possession (Thompson v Ward [1953] 2 QB 153 at 158–9). If the right or authority to enter is limited in scope then an entry which is unrelated to the right or authority will amount to a trespass. Thus a person who has an invitation or permission to enter the land of another for a specific purpose commits a trespass if he enters for any other purpose, especially if that other purpose be an unlawful purpose. For good reason he stands in no better position than the person who enters without any permission at all. So much is established by the cases."
- See also per Brennan and Deane JJ, at 357, and per Dawson J at 373.
15 However, it is important to determine whether and how the purposes for any permission to enter have been limited.
16 Thus, it has been held that an entry to a cinema with the purchase of tickets by inspectors to count patrons in order to collect evidence against the plaintiff was not trespass: Byrne v Kinematograph Renters Society Ltd [1958] 1 WLR 762, approved in Barker, 1983, High Court (supra) per Mason J at 344 - 345, and per Brennan and Deane JJ at 359. It has also been held that a client of an accountant who visited him to discuss her affairs wearing a listening device at the request of the authorities was not a trespasser: Barker v The Queen (1994) 54 FCR 451 (herein "Barker, 1994, Federal Court), especially per Jenkinson and O'Loughlin JJ, at 472 - 473, where the following appears:
"The authority Mrs Chaplin [the client] had to enter was limited to entry for the purpose of carrying on the professional relationship between herself and her adviser. And that is in our opinion what she did while she was on the premises. She discussed with each adviser aspects of transactions in relation to which advice and information by the adviser had previously been sought, and was sought again during the conversation
(Page 9)
- which she was causing to be recorded. With Mr Campbell she discussed also the commercial transaction which is the subject of the fifth count and to which Mr Campbell was a party. Her permission to enter the premises where he worked no doubt extended to entry for the purpose of discussing the performance of that transaction. The circumstances that she was merely pretending an interest in the adviser's advice and that she had the intention when she entered of recording a conversation which she would so guide that her interlocutor would, as she hoped, make admissions of his criminal conduct, do not in our opinion make her entry trespassory."
17 Counsel for the defendants put to me that it is clear that a retailer impliedly licenses or authorises members of the public to enter into the public areas of the retail premises only for the purpose of purchasing goods or services or considering whether to purchase goods or services. Presumably, although he did not address the point, this would extend to entries for consequential purposes, as where a spouse enters the premises to collect family members who are there for the purposes indicated.
18 Lincoln Hunt (Aust) Pty Ltd v Willesee (1986) 4 NSWLR 457 at 460 per Young J, a case involving an entry by a television crew and interviewer, was cited to me for the proposition advanced. That authority is not so limited, however. I note the following, from the page referred to:
"The evidence before me suggests that the implied invitation by the plaintiff for the public to visit its premises was limited to members of the public bona fide seeking information or business with it or to clients of the firm, but not to people, for instance, who wished to enter to hold up the premises and rob them or even to people whose motives were to go onto the premises with video cameras and associated equipment or a reporter to harass the inhabitants by asking questions which would be televised throughout the State."
19 There was no suggestion in this case that what the plaintiff's officers did at the retail premises in this case involved harassment of clients or was otherwise disruptive. Nor was there any suggestion that the conduct of those officers was other than that consistent with them being possible customers inspecting products on display. Indeed, it was conceded by counsel for the defendants that, had the plaintiff's officers bought something, even of very little value, the case for exclusion of their evidence would have been significantly more difficult.
(Page 10)
20 In those circumstances, it seems to me that it is difficult to argue, consistently with Byrne (supra) and Barker, 1994, Federal Court, that the officers were trespassers at any material time. See also Barker, 1983, High Court, per Mason J, at 348, and Brennan and Deane JJ, at 362, on the scope of the licence to enter given by a retailer.
21 Even if there were a trespass, it seems to me it is one which would not in the circumstances warrant me exercising my discretion to exclude the evidence gathered as indicated in the officers' and the solicitor's affidavits. While I would be warranted in exercising my discretion in that way had they entered, as it was put to me, in a wilful and deceptive, or high-handed and contumelious, or surreptitious way, it is not evident to me the officers so entered. To establish such an entry in a case like this one, it seems to me it would at least have to be shown the officers well knew (as from past dealings with that person) that the retailer had the right to prevent their entry in this case, on the basis that they were not acting in exercise of the powers conferred by the Consumer Affairs Act 1971 (WA). While there had been a case for such a right put for the second defendant in the hearing on 4 November 2005 in CIV 1281 of 2005 which resulted in the decision of Newnes M in Rugs-A-Million (supra), before the most recent entry on to Rugs-A-Million premises, that case was of course a contested one. However, even in the absence of a showing of such an entry as I have described, it might still be appropriate to exclude evidence, in a civil case such as this one: Australian Securities and Investments Commission v Rich [2004] NSWSC 970, Austin J, at appendix [20]. However, I consider any trespass here was of the "non-blameworthy" sort "because there would be nothing in such conduct to compromise or demean the court if it were to decide to admit the evidence [as a result]": per Austin J at appendix [20].
The application
22 The application under FTA s 76(5) requires that the court be satisfied that there is a serious question to be tried; if it is so satisfied, then it must consider the balance of convenience, which goes to whether or not to exercise its discretion to make an order: Miller, R V Miller's Annotated Trade Practices Act 27th ed, Sydney, Thomson Lawbook Co, 2006, at [1.80.20] and [1.80.25], and authority cited in both sections.
23 The serious question to be tried is as to the conduct referred to in FTA s 74(1), which is as follows:
(Page 11)
- "The Supreme Court or the District Court, on the application of the Minister, the Commissioner or any other person, where the Court is satisfied that a person –
(a) has engaged, or is proposing to engage, in conduct that constitutes or would constitute; or
(b) is involved in,
a contravention of a provision of this Act, may grant an injunction in such terms as the Court determines to be appropriate."
24 As will become apparent, the plaintiff's case rests on s 74(1)(a) and the provisions with respect to the forms of conduct I earlier referred to.
25 The strength of the plaintiff's case that there is a serious question to be tried is relevant to the question of the balance of convenience, as indicated in Bullock v Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464, per Woodward J, Smithers and Sweeney JJ agreeing, at 472:
"Thus an apparently strong claim may lead a court more readily to grant an injunction when the balance of convenience is fairly even. A more doubtful claim (which nevertheless raises 'a serious question to be tried') may still attract interlocutory relief if there is a marked balance of convenience in favour of it."
26 There is authority, Glev Pty Ltd v Kentucky Fried Chicken Pty Ltd (1994) ATPR 41-299, Fed Ct, von Doussa J, at 41,981, that, at least where an injunction is opposed on the basis that the plaintiff has "unclean hands", by which his Honour meant to include matters of delay in bringing the proceedings:
"… it must be remembered that these proceedings are brought under the umbrella of the Trade Practices Act which is an Act for the protection of consumers. There is an element of public interest involved. That being so, the Court will be slower to withhold relief than would be an equity court in a suit involving individual interests alone. The 'unclean hands' argument is a matter to be taken into account, but it may not be a matter that would lead to the withholding of a remedy if the public interest appeared to require a remedy to protect consumers."
(Page 12)
27 The power of the Court to grant an injunction restraining conduct (the case here) under FTA s 76(5) may be exercised (s 74(2)):
"(a) whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of that kind;
(b) whether or not the person has previously engaged in conduct of that kind; and
(c) whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person engages in conduct of that kind."
28 A recent and helpful account of the relationship between the provisions corresponding to FTA s 74(1) and (2) in the TPA (s 80(1) and (4)) is in Australian Competition and Consumer Commission v Dermalogica Pty Ltd (2005) 215 ALR 482, Goldberg J, at [107] - [110]:
"Section 80 confers a broad power upon the court to grant an injunction 'in such terms as the Court determines to be appropriate'. By reason of subss (4) and (5), the court is empowered to grant an injunction even in the absence of factors that would, in the case of equitable injunctions, be considered necessary for the exercise of power. However, the power is limited in that the injunction must be in terms that the court considers to be appropriate, which has been interpreted as requiring a connection between the contravening conduct and the future conduct that is prohibited by the injunction. The rationale for this is that where an injunction is made in terms that are too broad, the party enjoined by the injunction should not carry the burden of making an application to limit its scope: ICI Australia Operations Pty Ltd v Trade Practices Commission(1992) 38 FCR 248; 110 ALR 47. In that case Gummow J considered the circumstances in which granting an injunction will be appropriate (at FCR 267; ALR 67):
'Thus, the terms of the injunction will not be "appropriate" if, on its face, it operates upon a range of conduct some of which does, but some of which does not, have the relationship required by s 80 with contravention of the Act. The injunction should not prohibit conduct falling outside the boundaries drawn by s 80: see Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981)
- 148 CLR 150 at 161. The same limitation applies to mandatory injunctive relief. It is, in my view, no support for the grant of an injunction which, from the outset, has an operation outside the boundaries of s 80, to say that it is open for the party enjoined to apply under s 80(3) to vary the injunction so as to bring its operation wholly within proper limits. The party in question should not be placed under any such obligation in the first place.'
- More recently, in Australian Competition and Consumer Commission v Francis [2004] FCA 487, Gray J considered the necessity of clear and specific terms of injunctive orders, particularly because one consequence of granting an injunction under s 80 is the creation of a liability for contempt of court where the injunction is breached. His Honour said (at [122]):
'The effect of granting an injunction, if there is a repetition of the conduct enjoined, is to render the person enjoined liable to punishment for contempt of court. By this means, what would otherwise be a contravention of the Trade Practices Act can be converted to conduct rendering the person liable to a financial penalty, or, in extreme cases, to imprisonment. The Court must therefore be satisfied that the possibility of such consequences ought to be visited upon a person, if there should be a repetition of the conduct complained of, before granting such an injunction. The terms of the injunction must be specific, so that the person subject to it can understand clearly what conduct will amount to a breach of the injunction, and what conduct he or she can engage in legitimately.'
This was considered again in BMW Australia Ltd v Australian Competition and Consumer Commission (2004) 207 ALR 452; [2004] FCAFC 167at [39], in which Gray, Goldberg and Weinberg JJ said:
'A relevant factor to consider in determining whether to grant an injunction pursuant to s 80 of the Trade Practices Act is whether the existing sanctions for the conduct to be the subject of the injunction, found in the Trade Practices Act itself, require to be supplemented by the availability of the range of sanctions applicable to contempt of court. The purpose of granting an injunction to restrain conduct already
- prohibited by legislation can only be to add to whatever consequences the legislation attaches to that conduct the additional consequences of a possible finding of contempt of court by failure to comply with an injunction. In each case, it is a question whether the conduct concerned warrants the application of those more stringent consequences.' [Emphasis added]
- The fact that there is no continuing or threatened contravention is relevant to the discretion whether to grant relief under s 80: see Australian Competition and Consumer Commission v Oceana Commercial Pty Ltd [2004] FCAFC 174 at [187] per Heerey, Sundberg and Dowsett JJ.
In determining whether to grant an injunction proscribing future conduct, the court should consider whether all the circumstances of the case – including the scale of the prior contravening conduct, any evidence as to the contravener's future intentions and the likelihood of damage to other persons as a result of further proscribed conduct – call for the contravener being subject to the more onerous burdens, such as contempt of court, in relation to their future conduct. This consideration is required even though the power of the court to grant an injunction under s 80 is not limited by the requirement of a threat of future contravening conduct."
29 However, I also note, with respect to the quotation from the judgment of Gummow J in ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248, the following, from Foster v Australian Competition and Consumer Commission [2006] FCAFC 21, Ryan, Finn and Allsop JJ, at [30]:
"His Honour's reference to terms having 'an operation outside the boundaries of s 80' is no more than a paraphrase of the actual words of the subsection 'such terms as the Court determines to be appropriate.' That paraphrase, we consider with respect, does not illuminate the amplitude which should be given, as a matter of construction, to the grant of power. In our view, a more helpful guide to resolving the question of construction is afforded by this observation, also from [ICI Australia], of Lockhart J (with whom French J agreed) at 256;
- 'In my opinion subss (4) and (5) are designed to ensure that once the condition precedent to the exercise of injunctive relief has been satisfied (ie contraventions or proposed contraventions of Pt IV or V of the Act), the court should be given the widest possible injunctive powers, devoid of traditional constraints, though the power must be exercised judicially and sensibly.'"
30 Thus, it is relevant whether or not there is any evidence that the defendant was aware or was warned that it was contravening the legislation and yet went ahead in any event: see Australian Competition and Consumer Commission v Gary Peer & Associates Pty Ltd (2005) 65 IPR 1, Sundberg J, at [109]. It is also relevant whether or not the defendant had offered an undertaking not to engage in the relevant conduct: Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1, per Sheppard J, Foster J agreeing, at 18.
31 It is also relevant whether or not there was evidence any one was induced to act in reliance on the conduct or suffered loss as a result, and whether or not there have been complaints from purchasers about the conduct: Gary Peer & Associates (supra), Sundberg J, at [109]. However, account should be taken of "detriment that might be caused to third persons or to the public generally if an injunction were refused" (Spry, Equitable Remedies, 5th ed, Sydney, Law Book Company, 1997, at 403, quoted with approval in Patrick Stevedores Operations No 2 Pty Ltd & Ors v Maritime Union of Australia & Ors (1998) 153 ALR 643, Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ, at [65]).
32 Finally, it should be noted that the plaintiff is not required to give an undertaking as to damages or costs as a condition of the Court granting an interim injunction under the legislation: FTA s 76(3).
Serious question to be tried: misleading or deceptive conduct
33 There is a range of conduct in respect of which injunctive relief is sought. All or at least most of the conduct in the range, it appears to have been submitted, is made up of conduct that is misleading or deceptive within FTA s 10 and TPA s 52. Some forms of that conduct, it was also submitted, involve other provisions of the FTA as well, and I will return to consider those other provisions, below.
34 I begin, however, by rehearsing the relevant legal principles with reference to misleading or deceptive conduct under s 10 of the FTA.
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- There appears to be little difference between the parties on these principles.
35 In determining whether or not conduct is misleading or deceptive, the test for the class of prospective purchasers of a mass-marketed product, as established in Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45, per Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ, at [102] and [105], is as follows (footnotes omitted):
"It is in these cases of representations to the public, of which the first appeal is one, that there enter the 'ordinary' or 'reasonable' members of the class of prospective purchasers. Although a class of consumers may be expected to include a wide range of persons, in isolating the 'ordinary' or 'reasonable' members of that class, there is an objective attribution of certain characteristics. Thus, in [Parkdale Custom Build Furniture Proprietary Limited v Puxu Proprietary Limited (1982) 149 CLR 191, at 199], Gibbs CJ determined that the legislation did not impose burdens which operated for the benefit of persons 'who fail[ed] to take reasonable care of their own interests'. In the same case, Mason J concluded that, whilst it was unlikely that an ordinary purchaser would notice the very slight differences in the appearance of the two items of furniture in question, nevertheless such a prospective purchaser reasonably could be expected to attempt to ascertain the brand name of the particular type of furniture on offer.
…
Nevertheless, in an assessment of the reactions or likely reactions of the 'ordinary' or 'reasonable' members of the class of prospective purchasers of a mass-marketed product for general use, such as athletic sportswear or perfumery products, the court may well decline to regard as controlling the application of s52 those assumptions by persons whose reactions are extreme or fanciful."
36 In applying these principles in the context of an application for interlocutory relief, it is not the task of the Court to decide the issues finally, but rather to consider whether the plaintiff has made out a serious question to be tried: Glev (supra), Von Doussa J, at 41,981 - 41,982 (on what was meant in the defendant's advertising by "regular menu price").
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Serious question to be tried: dual price ticketing
37 The form of conduct under this heading was alleged to be in contravention of FTA s 10 as well as of s 12(1)(g). That paragraph prohibits a person making a "false or misleading representation concerning the price of goods". While there are differences in formulation between the latter provision and s 10, nothing was made of those differences before me.
38 The form of conduct by the defendants (without for the moment differentiating between them, a matter I return to below) referred to under this heading was the practice involving the display of products, being rugs products, at Rugs-A-Million stores in Western Australia, bearing tickets showing details as to the rugs including what appears to be a printed price, and another, significantly lower, price, apparently hand written. These products were so displayed at various times in 2002, 2003, 2004 and 2005, in the last case as late as 3 December 2005: affidavits of Sean Dworcan sworn 7 December 2005, pars 13 - 15 and 37, and sworn 10 February 2006, par 9; affidavit of Karen Marshall, sworn 5 December 2005, pars 5, 9, 11, 14, 16, 18, and 19; and affidavit of Bruce Hawkins, sworn 3 November 2005, pars 7, 12, 17 and 23. At a number of those times, being late June 2004, mid-July 2005 and mid-October 2005, the majority of the rugs displayed had dual price tickets so displayed. Some products bore a further hand written price, on a separate ticket, at a still lower price. There is evidence that on most of the dual price tickets the lower of the two prices on the ticket was handwritten below a printed heading, "sale price" (Dworcan affidavit of 10 February 2006, par 9 and annexure SLD29).
39 There is also matter in the affidavits that shows that products arriving in Western Australia for the first time in 2002 and 2003 were immediately displayed in Rugs-A-Million stores in this State bearing dual price tickets, without ever having been offered for sale in this state at the highest price displayed: see Dworcan affidavit of 7 December 2005, pars 13 – 15. There is also matter in the affidavits showing that some products so displayed had the same highest price shown on their dual price tickets on 3 December 2005: see Dworcan affidavit of 7 December 2005, pars 14 and 15, read with Marshall affidavit of 5 December 2005, pars 18 and 19.
40 However, there is also evidence, from the fourth defendant (affidavit of Frederick Wicks, sworn 1 February 2006), that indicates that dual price ticketing was used in respect of "new lines of rugs that are substantially similar to popular lines" to refer to the prices of the latter lines when,
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- between the date of ordering the new lines and their arrival, demand for the popular lines "significantly diminished or disappeared altogether" (par 9.4). There is also evidence that dual price ticketing was used when products, originally sold at the highest price, and then, owing to a fall in demand, offered at a lower price, after which they were put into storage, were later removed from storage to make room for new lines and resold at a discounted price (par 9.5).
41 The evidence I have just reviewed is at least partially in conflict. In proceedings such as these it is not for me to resolve that conflict, at least unless one body of evidence or another can be readily ignored. I am unable to do that.
42 In the circumstances, it seems to me there is, on the face of it, a serious question to be tried as to the false, misleading or deceptive character of dual price tickets in the circumstances. I consider the case to be a relatively strong one, after allowing for the conflicting evidence I have referred to.
43 I have noted that it is common ground between the parties that dual price ticketing is not itself unlawful. However, a prospective purchaser would, it seems to me, take it from the tickets that the products had been on sale at the higher price for a "substantial period of time": see Trade Practices Commission v Cue Design Pty Ltd (1996) ATPR 41-475, Fed Ct, O'Loughlin J, at [48134], a case in which the terms of the ticket appear simply to have been, relevantly, two prices, with the higher price crossed out. There is evidence in this case, to which I have referred, of dual practice ticketing in circumstances that falsify the expectation I have described, given the evidence as to the inapplicability in this state of the higher price at any time. While it was only necessary in Cue to determine that a prospective purchaser would understand the higher price had been applicable at some previous time, I consider the quoted language to express his Honour's view of the prospective purchaser’s understanding of the ticket in that case. That is an understanding that would apply all the more, it seems to me, in this case, as to the tickets bearing the heading, for the lower price, of "sale price".
44 It was put to me for the defendants, however, that I could not conclude from the matter in the affidavits that the products were not previously displayed for sale at the higher price elsewhere in Australia. Rugs-A-Million is a national business. All of the matter in the affidavits to which I have referred was related to stores in Western Australia. I note that there is also a reference, in some of the television advertising to
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- which I return in the next section of these reasons, to discount prices which might be taken to refer to discounts off interstate prices of products obtained from other states: see affidavit of Karin Bembridge sworn 7 December 2005, annexures KBH1 and KBH6.
45 It seems to me that there is a serious case to be tried that a member of the public would not in fact understand a dual price ticket as a representation that the product had been or was being displayed for sale anywhere in Australia, at the higher price, at least unless there were a reference to prices in other states (as there were, at least impliedly, in some of the Rugs-A-Million advertising, of sales of products obtained from other states). I do not consider there is anything in Cue (supra)which tends against this conclusion. The matter is one I would expect to be dealt with at trial.
46 In proceedings like these, it seems to me that the plaintiff has made out a serious case to be tried in respect of the dual ticketing practices in the Rugs-A-Million business in this state in the circumstances referred to.
47 It was put to me for the plaintiff that the representations of the dual price ticketing sort in this case carried also the meanings that the higher price on the ticket was the usual price, and the lower price on the ticket was a limited time price. Particular emphasis was laid on the dual price tickets (for which I have evidence they were the majority, as I have indicated) that headed the lower price "sale price".
48 However, I am unable on the material before me to extract from the dual price ticketing in this case, either generally or in the form more particularly described, a serious question to be tried as to anything more than the meaning I have quoted from Cue (supra). I consider that there is a strong case that the ordinary or reasonable consumer would read the dual price tickets in both cases in that way; but I do not consider that, on the material I have referred to, there is a serious question to be tried as to whether such a consumer would invest the tickets with those more elaborate meanings.
49 It was put to me for the defendants that dual price ticketing is common among the competitors of Rugs-A-Million, and there is evidence of that (Wicks affidavit of 1 February 2006, par 10). However, I do not consider that I should determine from that evidence that the plaintiff has not made out that there is a serious question to be tried as to whether the meaning of the dual price tickets in this case should be seen to be as I
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- have described it. I return to this evidence as to the practice of competitors below, under the balance of convenience.
50 It was also put to me by the defendants that the plaintiff has failed to identify which of the corporate defendants has engaged in dual price ticketing. I understood the defendants to have raised the same matter as to each of the other alleged forms of conduct relied upon as contraventions under each of the other headings below. It is convenient I deal with the matter here, both for dual price ticketing and those other forms of conduct, although I will have something more to say as to some of those other forms, below.
51 I have previously referred to evidence as to the roles in relation to the Rugs-A-Million business in this state played by each of the corporate defendants.
52 There is also evidence that, at least at various times in 2002 and 2003, the first defendant set the dual pricing for products received by stores in this State: see Dworcan affidavit of 7 December 2005, annexures SLD9, SLD10 and SLD11. There is also evidence, in the form of an extract from the Business Names register as at 28 November 2005, 3.40 pm, that the first defendant was the person carrying on the Rugs-A-Million business, at the stores at which the displays of rugs products with dual price ticketing to which I have referred had been observed: annexure SLD2. This is explained (in the Wicks affidavit of 1 February 2006, par 4) as being the result, not of the first defendant carrying on a retail business in this State (which it is deposed the first defendant does not), but of licensing to the third defendant all of the intellectual property rights in relation to the Rugs-A-Million name, logo and business. However, I note there is also evidence (Wicks affidavit of 16 February 2006, par 8) the first defendant had, as recently as in or about December 2005, been causing advertising for the Rugs-A-Million business to be broadcast in this State.
53 In addition, there is evidence that instructions to stores in respect of changes in practice in relation to dual price ticketing were sent on behalf of the second defendant (Wicks affidavit of 1 February 2006, annexure FCW8) or to "managers of all of the first and third defendants' retail outlets" (that affidavit, par 15).
54 It seems to me that the evidence as to the involvement in product pricing of the three corporate defendants, when taken in the larger context of the roles played by the corporate defendants in relation to the
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- Rugs-A-Million business in this State including advertising for it, is sufficient, in proceedings of this nature, to establish a serious question to be tried as to each of them as a contravener under the present heading, as well as the other headings below, at least if there is a serious question to be tried as to a past contravention or contraventions in relation to that business. (I note that each of the forms of conduct is alleged to have occurred at some point or points in the past, and there is no form of conduct which is relied upon as proposed future conduct only (see FTA s 74(1), above).) I so conclude because each of those forms of conduct represented an aspect of carrying on the Rugs-A-Million business in this State in what appears to have been an important respect.
55 However, as will be seen, some of the forms of alleged conduct occurred before the commencement, on 1 July 2004, of the involvement of the third defendant in the Rugs-A-Million business in this State. In those cases, it seems to me that any relief against the third defendant would depend ultimately upon the possibility of repetition of the conduct in question, which I consider below under the heading of the balance of convenience. Such a possibility would indicate, as to the third defendant, that such a form of conduct is one in which it is "proposing to engage" (FTA s 74(1)(a)). When there is no past conduct alleged against a person sought to be enjoined under s 74, and no present conduct in which that person is alleged to be involved, it is only proposed conduct that will enliven the jurisdiction to grant such relief: Foster (supra), Ryan, Finn and Allsop JJ, at [28].
56 In those circumstances, and in view of the conduct's dates, there is, it seems to me, a serious question under the present heading to be tried as to all of the corporate defendants.
Serious question to be tried: additional cash discounts
57 This form of conduct was alleged to be in contravention of both s 10 and s 12(1)(g) of the FTA. It is that conduct represented by two television advertisements of time limited offerings of rugs products by Rugs-A-Million at prices, expressed as percentages (of between 60 per cent and "80% or better" and "85%", in one commercial or the other), representing in each case a "discount off original ticket". This advertising appeared in June and July 2004 and in September 2005: see Dworcan affidavit of 7 December 2005, par 27 and Karen Bembridge sworn 7 December 2005, pars 9 and 11 – 12, and annexures KHB1, KHB6, KHB8 and KHB9. The transcripts of those advertisements in the latter affidavit's annexures KBH6 and KBH9 indicate, both in the vision and the
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- sound, that there is an "extra [percent figure, 5 per cent in one commercial, 10 per cent in the other] off for cash". There is also evidence that the percentage off for cash was calculated by reference to the discounted price, not the "original ticket": Dworcan affidavit of 7 December 2005, par 35.
58 For the plaintiff, it is put to me that viewers of the advertisements would understand the cash reference was to a percentage of the original ticket price, not the discounted price. The former would be a significantly larger amount.
59 For the defendants, it was put to me that no ordinary or reasonable member of the public would understand the cash reference as other than to the discounted price. It was pointed out, and I accepted, that it was possible for the total of the discounts to equal, or perhaps even exceed, the purchase price of the goods, although there was no evidence of any such advertisements illustrating this before me.
60 In any event, the combined discounts, if both were on the original ticket price, in the case of one rug in one advertisement shown as "$20" "85% off", with the further discount of "Plus 10% off for cash", would produce a total discount of 95 per cent, on the plaintiff's position.
61 However, I do not consider that the total combined discount, in light of the size of the larger percentage discounts in the advertising, would be so large as to make the plaintiff's reading one that could be considered "extreme" or "fanciful" (Campomar (supra), per Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ at [105]). The case of discounts equal to or exceeding the purchase price would, it seems to me, give rise to different considerations, which on the evidence I do not need to consider here. I consider the plaintiff's reading one that an ordinary or reasonable viewer might make of the advertisements that are in evidence, assessing the matter, as I must, at this stage of the proceedings for the purpose of determining if there is a serious question to be tried.
62 Thus, I consider there is a serious question to be tried in relation to the additional discount advertising. I consider that, as I have previously explained in relation to dual price ticketing, and in this context especially in view of the connection of this conduct with product pricing practices, and the conduct's dates, that the case is made as against all three corporate defendants.
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Serious question to be tried: sales only for a limited time; "never before" sales
63 This form of conduct is represented by television advertising of the two sorts indicated in the heading to this section.
64 The first sort of television advertising was of two kinds.
65 One kind, which was broadcast in July 2003, was of substantial price discounts which were said to be available for "1 day only" (on or about 3 July 2003, accompanied by "You'll never see rug bargains like this again"), or "ends Sunday" (on or about 18 July 2003 and on or about 19 July 2003, respectively, a Friday and a Saturday, accompanied by "Just get in by Sunday"), when, in the first case, the same advertisement was broadcast again on 11 and 12 July 2003, and when, in the second case, the same advertisements were broadcast again on 25 July and 26 July 2003. See Dworcan affidavit of 7 December 2005, pars 21 - 25; and Bembridge affidavit of 7 December 2005, annexures KBH2, KBH3 and KBH4.
66 This form of conduct was alleged to be in contravention of s 10 as well as of s 12(1)(g) of the FTA.
67 Reference was also made to FTA s 9, which is as follows:
"(1) For the purposes of this Part, where a person makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the person does not have reasonable grounds for making the representation, the representation shall be taken to be misleading.
(2) The onus of establishing that a person had reasonable grounds for making a representation referred to in subsection (1) is on the person.
(3) Subsection (1) shall not be taken to limit by implication the meaning of a reference in this Part to a misleading representation, a representation that is misleading in a material particular or conduct that is misleading or is likely or liable to mislead."
68 Counsel for the defendants put it to me that there was no evidence the sales in this first kind of advertising of sales for a limited time did not conclude as the advertisements indicated. In his submission, the ordinary or reasonable member of the viewing public would not understand any of
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- the advertisements to mean that once the advertised sale had concluded no similar sale would be undertaken within any particular period of time.
69 While I agree that there is no evidence the sale did not conclude as the advertising indicated, I consider there is a serious case to be tried as to whether or not the ordinary or reasonable member of the viewing public would not simply understand the advertising to be that the sale would end as indicated unless extended or repeated at any time. The advertising, it seems to me, is capable of being understood as strongly urging the viewer to respond by visiting a Rugs-A-Million store quickly, within the limited time, so as not to miss out, and thereby represents that there is no present reasonable belief of those advertising that there will not be the same sale in the near future. Whether that is the way the advertising should be understood on all of the evidence is a matter for the trial.
70 On that basis, there is a serious question to be tried as to the misleading character of the advertising by reference to FTA s 9.
71 The other kind of advertising of a sale for a limited time was broadcast on 10 September 2004. The advertisement's vision referred to "Every Single Rug", and the sound was "The one time of the year every single rug is on sale", with further vision indicating "Minimum 60% off – 85% off any rug": Dworcan affidavit of 7 December 2005, pars 28 – 29, read with Bembridge affidavit of 7 December 2005, annexure KBH7. However, there is also evidence of television advertising in early January 2004 in which the fourth defendant states "every rug half price to 85% off": Dworcan affidavit of 7 December 2005, par 29.
72 Counsel for the defendants pointed out, correctly, in my view, that the plaintiff does not seek any interim injunctive relief in respect of this kind of advertising of sales for a limited time. Senior counsel for the plaintiff agreed; however he also indicated this advertising was relevant to the extent it was of the same kind as the other limited time sale advertising. I agree that it is relevant to these proceedings to that extent, and points to the possibility of repetition. However, I consider that, in view of the difference in its terms, it is not very weighty evidence in that respect.
73 The second sort of television advertising complained of under the heading to this section is that on 1 August 2003, in which the vision was "Never Done Before", "All Stores", "Minimum 60% Off", "As High as 90% Off", and the sound was "the biggest over stock problem that Rugs-A-Million has ever faced", "So never done before", "All stores
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- minimum 60% off", "Right up to 90%". There was, however, evidence that on 4 October 2001 there was a television advertisement in which, as scripted, the vision included "60 to 90% off every rug" and the sound included "Last week … 60 to 90% off our clearance rugs", "Now … not just the clearance rugs, every single rug in store", "Minimum 60 to 90% off!". There is also evidence of a similar advertisement broadcast on 19 July 2003. See Dworcan affidavit of 7 December 2005, par 26 and annexure SLD20; Bembridge affidavit of 7 December 2005, annexure KBH5.
74 This form of conduct was alleged to be in contravention of s 10 as well as of s 12(1)(g) of the FTA.
75 For the defendants, it was put to me that there was a difference between the first advertisement of this sort, on the one hand, and the second and third advertisements of this sort, on the other. The ordinary or reasonable member of the viewing public would understand the first advertisement as referring to all products in Rugs-A-Million stores, and those products included, not only rugs, but, as I have previously indicated, mats and runners. As I have also indicated, the advertisements of the second kind referred only to rugs.
76 However, I note that the vision of the first advertisement features rugs, with the legend "Rugs for illustration purposes" appearing towards the end of the advertisement. It seems to me that there is a serious case to be tried that the first advertisement, when considered against the other two, was misleading or deceptive. Whether that is the final analysis of the advertisement is a matter for the trial.
77 Again, I consider that, in view of the evidence of the roles played by the respective corporate defendants in relation to product pricing to which I have previously referred, that case is made as against all three of them, in respect of the advertising of both sorts in the heading to this section in respect of which interim relief is sought, subject in the case of advertising of the second sort to the matter of the likelihood of its repetition, to which I return below.
No serious question to be tried: bait advertising
78 This form of conduct is represented by the television advertising of 1 August 2003 just referred to. There is evidence that each of the Rugs-A-Million stores in Western Australia carried at least several hundred rug products on display: Marshall affidavit of 5 December 2005, par 5 (Morley store, 24 June 2004, "counted 1160 rug products"); Brand
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- affidavit of 5 December 2005, par 5 (Harbour Town store, 24 June 2004, "counted 1568 rug products"); Hawkins affidavit of 3 November 2005, par 6 (Cannington store, 18 July 2005, "many hundreds, possibly thousands, of rugs and mats"); and affidavit of Simon Landers, sworn 3 November 2005, par 4 (Westfield Carousel store, 24 June 2004, "800 rugs and mats"). However, by a memorandum on Rugs-A-Million letterhead addressed to "All Stores – WA", there are references to being "still in 'Overstocked Crisis' mode", and statements that "Advertising resumes on Friday the 1st of August", and "each store is only to have 4 to 5 rugs at 90% off at all times". There is also in the memorandum the following:
"You will need 90% OFF rugs for the next two weeks so please let Greg know ASAP if you are running short."
80 Initially, senior counsel for the plaintiff relied not only on FTA, s 10, on misleading or deceptive conduct, but also on s 19, on bait advertising. However, that reliance was discontinued at the hearing, on the basis that it was not clear that the provision's requirement for advertising of inter alia goods at a "specified price" would be met by the advertising with respect to discounts up "to 90% off". In view of that position, I will say nothing further with respect to s 19.
81 Counsel for the defendants put it to me there was no sufficient evidence as to the scale of those operations, in view of the dates of the inspections, in 2004 and 2005, in the affidavits I previously referred to. However, I note that there is evidence the Rugs-A-Million business began in this State no later than August 1997. I would infer from that evidence, in conjunction with the other evidence I have referred to, that it is possible to find a scale of operations of a minimum of several hundred rugs displayed per store.
82 However, even on that inference, in view of the reference in the memorandum to maintaining levels of four to five rugs per store, and the advertising's reference to 90 per cent as the top of the discount range, I do not consider I have sufficient evidence that there is a serious case to be tried that the advertising under this heading was misleading or deceptive.
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Serious question to be tried: composition of rugs
83 This form of conduct is represented by the labelling on two rugs taken from Rugs-A-Million stores on 24 June 2004 and analysed by a Rinske Car-Driesens. See Marshall affidavit of 5 December 2005, par 6; Landers affidavit of 3 November 2005, par 5; and Dworcan affidavit of 10 February 2006, par 5. There is an affidavit sworn 4 November 2005 of Rinske Car-Driesens, who deposes to being a textiles co-ordinator at the School of Creative Arts, Faculty of Communication and Creative Industries, Edith Cowan University, and annexes a report of an examination of the two rugs inspected.
84 The conduct is alleged to be in contravention of FTA s 10, as well as of s 12(1)(a) and s 17. The prohibition in s 12(1)(a) is that a person shall not "falsely represent" that (in this case) the goods are of a "particular … composition", while the prohibition in s 17 is that a person shall not "engage in conduct that is liable to mislead the public" as to "the nature, …[or] the characteristics" of the goods. While there are differences in formulation between the latter two provisions, and between them and s 10, nothing was made of those differences before me.
85 The report states one rug had material stitched to the back of it that included the words "Rugs a Million" and "Fibre content: 100% pure wool pile", and the other rug had a "blue computer printed ticket affixed to the rug" bearing certain details, including "Material: 100% wool".
86 The report states that each rug was subjected to a "burn test", involving taking some threads from the rug and putting them in contact with a naked flame, to observe how they reacted, what odour and smoke they produced, and what the residue looked and felt like when it was crushed between the tester's fingers.
87 In respect of the first rug, the report states that the pile was not 100 per cent wool, going on to say:
"It was partly wool and partly cotton. I estimate that it is approximately 90% wool and 10% cotton."
88 In respect of the second rug, the report states that:
"This rug is not 100% wool. I estimate that it is approximately 30% wool and 70% cotton."
89 Counsel for the defendants put it to me that the testing evidence was of a non-scientific kind. While there is some apparent merit in that
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- position, at this stage of the case I am not in a position to treat this evidence as of no weight on that account.
90 However, I was also referred to a report annexed to the affidavit sworn 13 February 2006 of Christopher Williams, a solicitor in the firm of solicitors for the defendants. This was a report by a textile testing firm, of its analysis of a rug which Williams deposes, based on information from an employee of the first defendant, was from "a line of rugs similar to the line of rugs which contains the rug described as 'Rug 1' in Ms Car-Driesens' affidavit [of 4 November 2005]", and was from "the same line of rug that included the rug described as 'Rug 2' in Ms Car-Driesens' affidavit [of 4 November 2005]". The report provides analyses for "pile", "primary backing" and "secondary backing". The method of deriving these analyses is not described. However, the results are shown, for the pile, as 98.3 per cent wool and 1.7 per cent "other fibre"; for the primary backing, 84.8 per cent "cellulose" and 15.2 per cent "polyester"; and for the secondary backing 78.9 per cent cellulose and 21.1 per cent polyester. The report also shows that the "overall product" was 53 per cent pile, 37 per cent "primary backing and latex" and 10 per cent secondary backing. Those percentages are obviously of a rather more precise kind than those in the Car-Driesens report, from which I was invited to infer a more scientific method of analysis was involved than she had employed.
91 It was also put to me that an ordinary and reasonable consumer would understand a reference to the composition of a rug as referring to the pile and not to the backing of the rug. Counsel for the defendants pressed on me the analogies of a suit represented as "pure wool" being understood to refer to the suit’s material, excluding cotton stitching, plastic buttons and a metal zipper; and a bottle of vintage wine (see Trade Practices Commission v Von Berg & Curtis; The Vales Wine Company (1996) 6 FCR 336) being understood as the contents, excluding the glass container.
92 Accepting the analogies, I consider there is at best for the defendants' position a conflict in the evidence which is not suitably resolved in proceedings of this kind. There is evidence from Car-Driesens that would indicate the pile is no more than 90 per cent wool, while the more precise percentage from the defendant's reporting agency shows a much higher value, which for my purposes I would accept as being so high as to meet the ordinary or reasonable consumer's expectations if the result were ultimately to be accepted as founding the correct analysis. However, I
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- also note that there is also evidence from Car-Driesens that suggests there may be a significant degree of variation in wool content between samples.
93 For the purposes of these submissions, I have also noted the material annexed to the Wicks affidavit of 1 February 2006 (annexures FCW1 and FCW2, respectively) consisting of an invoice and Australian Customs Entry form, which Wicks deposes relate to a quantity of rugs including Rug 2, and which refer to the rugs as "woollen". However, I do not consider that this material is sufficient to establish an understanding by consumers of the labelling I have described such that it was not falsified or rendered misleading, in the light of the Car-Driesen results.
94 Counsel for the defendants put to me, however, that there was no evidence that the labels were affixed to Rug 1 and Rug 2 by the defendants. However, it seems to me that it is not necessary there be such evidence, where there is evidence as in this case that the rugs bore such labels, and had been displayed in Rugs-A-Million retails outlets bearing them.
95 Counsel for the defendants put to me, however, that the labels would be understood by the ordinary or reasonable consumer, not as representations made by the defendants or any of them, but as representations made by the defendants' supplier or by the rugs' manufacturer and simply passed on by the defendants. I was referred to Yorke v Lucas (1985) 158 CLR 661, per Mason ACJ, Wilson, Deane and Dawson JJ at 666, and to Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592, per Gleeson CJ, Hayne and Heydon JJ, at [38] - [40], per McHugh J, at [115] - [124] and per Kirby J at [183].
96 However, it seems to me that those authorities do not show that the ordinary or reasonable consumer would understand the labelling as contended for. For this purpose, I note from Butcher the following, per McHugh J, at [116] and [117] (footnotes deleted; references supplied):
"In Gardam v George Wills & Co Ltd [(1988) 82 ALR 415] - which concerned the prosecution of a clothing wholesaler for a breach of s 53(a) of the Act in relation to the supply by the wholesaler of children's sleepwear which bore labels that did not accord with the relevant consumer product safety standard - French J said [at 427]:
'The innocent carriage of a false representation from one person to another in circumstances where the carrier is and is seen to be a mere conduit, does not involve him in
- making that representation. … When, however, a representation is conveyed in circumstances in which the carrier would be regarded by the relevant section of the public as adopting it, then he makes that representation. It will be a question of fact in each case.'
- His Honour held that a wholesaler who supplies goods bearing a label without attribution of authorship 'can be taken in ordinary circumstances to adopt the text of those labels.' [at 427] In addition, he found that 'the sale of such anonymously labelled goods by a wholesaler without any disclaimer as to their content, amounts to a statement by the wholesaler to the retailer and to the ultimate consumer that the text of the labels is correct'. [at 428]"
97 I also note from Butcher per McHugh J, at [123] the following (footnotes deleted):
"However, the courts have held that in three situations a corporation does not contravene s 52 when it passes on erroneous information. They are: (1) where the circumstances make it apparent that the corporation is not the source of the information and that it expressly or impliedly disclaims any belief in its truth or falsity and is merely passing on the information for what it is worth; (2) where the corporation, while believing the information, expressly or impliedly disclaims personal responsibility for what it conveys, for example, by disclaiming personal knowledge; and (3) where the corporation, while believing the information, ensures that its name is not used in association with the information."
98 There was here anonymous labelling, and no disclaimers, while the Rugs-A-Million business was, unlike the real estate agency in Butcher (supra), a major carpet retailer in this state, and, apparently, nationally (for the relevance of the latter factor, see Butcher, per Gleeson CJ, Hayne and Heydon JJ, at [42]).
99 I consider there is on all of this material a serious case to be tried with respect to the composition labelling. However, I consider the case here, on the evidence before me, at this stage of the matter, to be of a rather less weighty kind than that in respect of the other forms of conduct relied upon by the plaintiff.
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100 Again, I consider that, in view of the evidence of the roles played by the respective corporate defendants in relation to product pricing to which I have previously referred, as well as their roles in the Rugs-A-Million business in this State, the case is made as against all three of them as to the representations as to composition of rugs, subject to the matter of the likelihood of its repetition, to which I return below.
Balance of convenience
101 Having concluded there are serious questions to be tried as to all of the alleged forms of conduct for which interim injunctive relief is sought, except as to bait advertising, I need now to turn to the considerations that arise under this heading.
102 On the authorities in relation to this aspect of the matter, to which I previously referred, I must at least consider whether there is any allegation and evidence of any intended or threatened repetition by the defendants, including any undertaking offered by them; whether or not the defendants were warned about the conduct and yet went ahead in any event; the scale of the conduct; whether or not there is evidence that any one was induced to act on it or complained about it; any detriment that might be caused to the public if orders were not made; any delay in the bringing of the proceedings for injunctive relief; whether or not the conduct concerned warrants the application of the more stringent consequences that would flow from contempt of an order of the court; and the clarity of the orders sought.
103 There is evidence of repetition of all of the forms of conduct in respect of which I have found a serious question to be tried. That evidence is rather more substantial for the other forms of conduct than for the representations as to the composition of rugs. The scale of the conduct is on the evidence greatest for dual price ticketing, and least for composition of rugs (in view of the limited samples involved, and the evidence as to the expected variations in composition, to which I have referred). There is, however, no evidence of repetition of contravening conduct, for sales only for a limited time, after 26 July 2003, except that which may be derived from the evidence as to once a year sales, as I have indicated; for sales never done before, after 1 August 2003; composition of rugs, after 24 June 2004; for additional cash discounts, after 16 September 2005; and dual price ticketing, after 3 December 2005.
104 Evidence that conduct had only been engaged in some time ago may go to show little likelihood of repetition in the future: Australian Consumer and Competition Commission v CG Berbatis Holdings Pty
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- Ltd [2000] FCA 1893, French J, at [8] (four year old events), reversed on other grounds [2001] FCA 757. However, I do not consider that the set of circumstances surrounding the events in these cases, unlike those in Berbatis, of themselves point strongly against any likelihood of repetition.
105 Evidence of conduct that has been engaged in after warnings as to that conduct may point to a likelihood of repetition. However, there is clear evidence of such conduct only in relation to additional cash discounts, since 10 March 2005 (Dworcan affidavit of 7 December 2005, annexure SLD8, letter from the plaintiff dated and faxed on that date) and dual price ticketing, since 14 December 2004 (Dworcan affidavit of 7 December 2005, annexure SLD3, letter from the plaintiff dated and faxed on that date). The latter warning refers to conduct "which concerns members of the WA public and this Department", under the heading "Specific details of complaints". This is some (if limited) evidence, and as to dual price ticketing only, of consumer complaints. There is no other evidence to which I was referred that might be seen to point to consumers having been induced to act by, or moved to complain about, the conduct the plaintiff relies upon.
106 Rather more significant to my consideration of the balance of convenience than either of the foregoing sets of indicators is, in my view, the evidence that the third defendant, by fax from its solicitors to the plaintiff of 20 October 2005 (Wicks affidavit of 1 February 2006, par 22):
" … without admissions, voluntarily undertook to the plaintiff that it would not represent to any person or any class of persons or the public whether orally in writing or by conduct that:
22.1 any design of rug, mat or runner is available for purchase by consumers from any 'Rugs a Million' outlet in Western Australia at a reduced or discounted price in circumstances where it has:
22.1.1 never; or
22.1.2 alternatively, not for at least 21 days,
been displayed for sale in Western Australia by the third defendant or the second defendant at a price higher than such reduced or discounted price;
22.2 any design of rug, mat or runner was at some earlier time displayed for sale in a 'Rugs a Million' outlet in Western
- Australia at a particular ticket price by the third defendant or the second defendant in circumstances where it was never displayed for sale at that price;
- 22.3 all stock of rugs, mats or runners is on sale at any 'Rugs a Million' outlet in Western Australia at a particular percentage discount for a designated period of time in circumstances where all stock is to be continued to be offered for sale at that percentage discount for a period of time that is longer than the aforementioned limited period;
22.4 any particular discount on the price of any design of rug, mat or runner had never before been offered in a 'Rugs a Million' outlet in Western Australia in circumstances where that particular discount on the price of any design of rug, mat or runner (as the case may) had been so offered by the third defendant or the second defendant; and
22.5 a consumer could get an extra, additional or further percentage discount on the price of any design of rug, mat or runner available for purchase from a 'Rugs a Million outlet in Western Australia without first disclosing to that person that that discount was calculated on the reduced, discounted or sale price of the design of the rug, mat, or runner (as the case may be) and not on the original ticket price."
107 This undertaking, it will be noted, came after all of the forms of conduct relied upon by the plaintiff except the most recent dual price ticketing (on 3 December 2005), with respect to which, as I will indicate below, there is evidence there was a change which was not made until subsequently, on 14 December 2005. It will also be noted that the terms of "22.1.2" for a "higher price" are not carried forward into "22.2" for a "particular ticket price". It will further be noted there is no undertaking as to the composition of rugs.
108 There is also evidence that the "third defendant's current policy is to ensure that its business is carried on so as to comply with the terms of those undertakings" (Wicks affidavit of 1 February 2006, par 23; and see also affidavit of Frederick Wicks sworn 16 February 2006, pars 6 - 10). Although the plaintiff put to me that the defendants had a poor
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- compliance record, and that it was not clear that the practices the subject of these undertakings had in fact ceased, there is no clear evidence of conduct inconsistent with these undertakings since they were put forward, except for the last-mentioned evidence as to dual price ticketing. That evidence related to dual price ticketing in respect of items that had been new to Western Australia in 2002 and 2003 (see Dworcan affidavit of 7 December 2005, pars 13 - 15 and 37; Marshall affidavit of 5 December 2005, pars 18 and 19). However, I also note the evidence as to compliance with the most recent change in policy, after 3 December 2005, in relation to dual price ticketing, which is returned to below (Wicks affidavit of 16 February 2006, par 10). I also note that the undertakings were not accepted by the defendants, for reasons that will appear shortly.
109 I further note that there is some evidence that earlier, if lesser, changes in the third defendant's policy and practices might not have been properly implemented with respect to dual price ticketing (see Wicks affidavit of 1 February 2006, pars 14 - 19; and see Dworcan affidavit of 7 December 2005, par 37 and Marshall affidavit of 5 December 2005, pars 8 and 9). However, that evidence is not clear in that respect, as the initial change in policy with respect to dual price ticketing appears to have been made, for all rugs within 10 lines, on 14 December 2005 (Wicks affidavit, par 17 and annexure FCW7), and the change made apparently to cover all "core" stock, which extended significantly more broadly than the 10 lines referred to, was on 5 January 2006 (Wicks affidavit of 1 February 2006, par 18 and annexure FCW8; and Wicks affidavit of 16 February 2006, annexure FCW2, "Core Product Price List"). The last change at least covered some, but by no means all, of the lines for which dual price ticketing practice was found on 3 December 2005 (Dworcan affidavit, par 37; and Marshall affidavit, pars 8 and 9). There is evidence that the last change in policy was implemented (Wicks affidavit of 1 February 2006, par 18), and indeed that since then "all products currently displayed for sale by the third defendant feature a single ticket price only" (Wicks affidavit of 16 February 2006, par 10).
110 In those circumstances, I have concluded that the undertakings, considered against the evidence as to changes of policy and practice I have referred to, go some distance to addressing the detriment to the public from the conduct of concern to the plaintiff.
111 However, the plaintiff put to me that the third defendant's undertakings were not sufficient as they had not also been made by the first and second defendants, and as they fell short of being appropriate
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- restraints of the relevant conduct. These were, it appears, the reasons the undertakings had not been accepted.
112 As to the party that had given the undertakings, I was directed to the evidence previously referred to (Wicks affidavit of 16 February 2006, par 8) that the first defendant had, as recently as in or about December 2005, been causing advertising to be broadcast in this state for the Rugs-A-Million business. As to the second defendant, I refer again to its role issuing instructions to stores in this state concerning changes in practices in relation to dual price ticketing. However, I also note that there had been an offer by the solicitors for the defendants to seek instructions for the first defendant to provide "identical undertakings" (Dworcan affidavit of 7 December 2005, annexure SLD26).
113 On balance, I have concluded that, if orders are appropriate, they should be in the same terms, against all three defendants. I understood this to be the position of counsel for the defendants also, without of course his conceding that any such orders were appropriate. However, the fact that undertakings have been put forward by the third defendant, with an offer to seek identical ones from the first defendant, indicates to me that, subject to suitable undertakings being given by all three defendants, the making of orders simply to address the lack of any initial undertakings by the first and second defendants would not be appropriate. This is particularly in view of the efforts made to address the plaintiff's concerns. I do not consider those efforts to be such as should be dismissed as being too late and of insufficient substance.
114 As to the scope of the undertakings, I do not consider the plaintiff's position to be as to the undertakings (the matter of the party giving them aside) concerning never before sales ("22.4" above) and additional cash discounts ("22.5"). I so conclude as the undertakings do not in my view differ materially from the orders the plaintiff seeks (respectively, pars 1.6 and 1.7), which senior counsel for the plaintiff appeared to concede.
115 This leaves the undertakings as to dual price ticketing and representations of a discounted price ("22.1" and "22.2"), and limited period sales ("22.3").
116 As to dual price ticketing and representations of a discounted price, I understood the plaintiff's position (the matter of the party giving the undertaking aside) to be that, while it was indeed appropriate for there to be a prohibition where the product line had never been offered for sale in this state at the higher price (undertakings "22.1.1" and "22.2" in this
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- respect are not materially different from, respectively, the orders 1.1 and 1.4 the plaintiff seeks), the period of time over which the product must have been offered at the higher price was too short (21 days, in "22.1.2", or not stipulated at all, in "22.2"), did not include any requirement that such period have fallen within a reasonably proximate previous period of time, and did not restrict the time over which the discounted price had been applicable. I note in this regard the orders the plaintiff seeks in these three respects (1.2, calling for the higher price to have been applicable at least 90 days, in the previous 360; and 1.3, prohibiting representations of discounted prices where they had been applicable for more than 60 days in the previous 360). The plaintiff's position was encapsulated in the submission that the undertakings allowed (as it appears to me they do) the third defendant to advertise a discount or sale price for an indefinite time if at any time in the past the product line had been displayed for sale at a higher price for at least a total of 21 days.
117 At this stage of the proceedings, I consider that the undertakings offered by the third defendant in respect of dual price ticketing and discounted prices are sufficient (the party giving them aside) to meet the concerns arising out of the serious question to be tried, except as to the period of time over which the higher price had been applicable that should be provided for. It does not seem to me that a period of any 21 days in the past is sufficient to qualify as "any substantial period of time" (Cue (supra), O'Loughlin J, at [48134]), let alone no period at all. At the same time, I consider that, on the material before me, 90 days is too long, in view of the reference as to shifts in demand in the evidence for the defendants to which I previously referred (Wicks affidavit of 1 February 2006, par 9.4). While I did not consider that evidence sufficient to displace the evidence of contravening conduct in relation to dual price ticketing, I consider it sufficient to point to the possibility of an understanding in the consumer market for the products sold by the third defendant as to the length of time for which a higher price should have been applicable. I will return to the matter of the length of time below, when I consider the form of the orders in this case.
118 I should note that further evidence as to the understanding of the consumer market of discounted prices of the sort that may emerge at trial may make plain that those concerns should rather be addressed as the plaintiff's proposed orders address them, in the respects other than the length of time to which I have referred as well as that length. At this point, however, I do not consider on the evidence before me that the undertaking is insufficient in any other respect than those noted.
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119 This takes me to the undertaking as to limited period sales ("22.3"). Here, I understood the plaintiff's position (the matter of the party giving the undertaking aside) to be that, while it is appropriate the undertaking have the sale end at the expiry of the designated period ("22.3" in that respect is indeed stronger in form than proposed order 1.5.1, which rests on the representor's reasonable belief), the undertaking is insufficient in not also being that there would be no representation of such a sale unless the third defendant reasonably believed at the time the representation was made that the sale would not within a short period of time after its expiry be run again (30 days, in the plaintiff's proposed order 1.5.2).
120 In my view the undertaking is insufficient in the respect just identified. I have previously explained why I consider that there is a serious question to be tried whether the advertising would be understood to carry a meaning that there was no present reasonable belief of those advertising that there would not be the same sale in the near future. For that reason I will return to the matter below when I consider the form of the orders in this case.
121 As to the delay in the bringing of proceedings for injunctive relief, I have noted that the dates of the conduct complained of by the plaintiff, which goes back in some cases to 2002. However, all of the forms of conduct relied upon have occurred at least as recently as July 2003 or on the evidence of once yearly sales September 2004 (limited time sales), August 2003 (never before sales), June 2004 (composition of rugs), September 2005 (additional cash discounts) and December 2005 (dual price ticketing). I do not consider any of those matters to count in a substantial way against the exercise of discretion to make orders in respect of the conduct in question.
122 However, the defendants rely upon the plaintiff's delay of five months in the bringing of initial proceedings in respect of the conduct relied upon, being CIV 1969 of 2005. The defendants also rely upon the plaintiff's delay of 18 days in bringing the underlying proceedings after the proceedings in CIV 1969 of 2005 were struck out, and upon the plaintiff's delay of a further month in applying for an interim injunction. Those exchanges were put in the context of the appeal pending against the decision of Newnes M in Rugs-A-Million (supra), delivered on 21 December 2005, as indicating that there was no urgent need to protect consumers from the defendants.
123 However, I do not consider those delays to tell strongly against the exercise of discretion to grant the orders sought. I note in particular the
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- exchanges between the plaintiff and the defendants with a view to finding a solution to the plaintiff's concerns, exchanges that appear to have continued over the delays or part of them that the defendants rely upon (see Dworcan affidavit of 7 December 2005, annexures SLD8, SLD24 and SLD25). Although I do not have any evidence of such exchanges after the decision in Rugs-A-Million, (supra), I do not consider the delay, which I also consider in part to be the result of the end of year period, in getting the matter to a hearing before me demonstrates the point the defendants were seeking to make. Finally, I also note the way in which I should weigh considerations of delay in a case like this one, involving the public interest: Glev (supra), per von Doussa J, at 41, 981.
124 The defendant also reminded me of the evidence of dual price ticketing by the competitors of the Rugs-A-Million business in this State to which I referred above. I was invited to infer from this that orders made in this case would cause the business significant competitive disadvantage. I consider that competitive detriment to a defendant to an application like the one before me is relevant to the balance of convenience. However, I note again that dual price ticketing itself is not unlawful. It is the circumstances in which such ticketing is employed that must ground the serious case to be tried in a case like this one, as the circumstances in this case do. On the strength of that serious case to be tried in relation to dual price ticketing, I have concluded that, if an order is otherwise appropriate, the competitive disadvantage the Rugs-A-Million business would suffer as a result of making such an order would not suffice to cause me not to make the order.
125 As to whether or not the conduct concerned warrants the application of the more stringent consequences that would flow from contempt of an order of the Court, it seems to me that the matters I have previously discussed would support such orders only in respect of dual price ticketing, in the respect I have identified, and limited time sales, again in the respect I have identified, putting aside the matter of the party giving the relevant undertaking. I return to that matter below.
126 However, in view of the lack of any undertaking as to the composition of rugs, I need to go further into that matter. As I have indicated, the scale of the conduct of concern is, on the evidence, of a significantly lower order than that of the other conduct complained of by the plaintiff. There is no evidence of complaints by consumers in respect of this conduct. Also I consider the claim as to composition of rugs a "more doubtful claim (which nevertheless raises 'a serious question to be tried')" (Bullock (supra), per Woodward J, Smithers and Sweeney JJ
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- agreeing, at 472) to weigh with the balance of convenience accordingly. Acknowledging that the defendants have given no undertaking in respect of composition, and the need to weigh the public interest, I do not consider on balance that it is appropriate for an order to be made in respect of that matter.
127 This takes me to the form of the orders sought, in the respects I have identified.
The form of the orders sought
128 The plaintiff's proposed orders in the respects I have identified are the following, retaining their original numbering: that the corporate defendants and each of them, whether by their directors, servants, agents or otherwise, not represent to any person or class of person or to the public, whether orally, or in writing, or by conduct:
"1.2 That a Product Line, or a part thereof, is available for purchase from a Store at a discounted price (whether or not the particular discounted price or the price against which the discounted price is or has been discounted is specified), in circumstances where the Product Line was not, for at least 90 days of the 360 day period immediately preceding the making of the representation, been displayed in a Store for sale, at a price higher than the discounted price;
…
1.5 That a Product Line, or a part thereof, is or will be on sale at a Store at a particular price or at a particular discount for a designated period of time, in circumstances where the representor , at the time of making the representation:
1.5.1 …
1.5.2 believes that the particular price or particular discount will not remain ceased for a period of at least 30 days thereafter; and
- has reasonable grounds for believing so."
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130 I also note in respect of order 1.2 that the order relates to a prior 360 day period. Earlier I indicated that in my view such a relation is not required for any such prohibition.
131 The defendants put to me, as to the plaintiff's proposed orders just quoted, that they imposed "arbitrary" time periods. Consumers would not think in terms of those specific periods, and they were not necessary to ensure that the defendants did not engage in conduct that contravened the FTA.
132 I do not consider the first objection, as to how consumers would think, to be telling. I have noted the width of the discretion conferred on the Court by the terms of FTA s 74(1). Those terms, as I have indicated, grant the Court power to grant an injunction "in such terms as the Court determines to be appropriate". I have also noted, with respect to the quoted words, the passage from Foster (supra) at [30], quoting from ICI (supra), per Lockhart J, at 256, and confirming the breadth of that discretion, as well as the necessity for it to be exercised "judicially" and "sensibly". The proposed orders are, it seems to me, a form of specification which provides clear and specific terms of the sort called for by Francis (supra), Gray J, at [122]. The form of specification, with its reference to a particular number of days, appears to me, for reasons which I have previously indicated, to be within the range of conduct prohibited by the relevant provisions of the FTA. It is true it may be impossible to demonstrate that any specification of a particular period is better than another. However, in such a case, provided at least that the Court can conclude that the particular specification is within the range of conduct prohibited by the relevant provision of the FTA, the choice of the specification in question is not arrived at in an unjudicial fashion or in a manner that is not sensible.
133 I now apply that approach to the orders sought in this case.
134 As to the proposed orders concerning dual price ticketing and discounted prices, I have already indicated that a period longer than 21 days should be stipulated. However, I have also indicated that one as great as 90 days is not appropriate. In my view it is appropriate for an order to be made in the terms of the proposed order applicable to all of the corporate defendants, without specification of a prior proximate period within which the higher price was applicable, and without limitation as to the period over which the discounted price was applicable, but with a period for the applicability of the higher price greater than 21 days but less than 90 days. I consider that a period of 42 days would be more
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- appropriate. I consider, however, that the order should allow for the possibility of a shorter period if the ticket or other representations clearly so indicates.
135 As to the proposed orders concerning limited period sales, I consider the proposed order to be appropriate both as to its form and as to the length of time it refers to. I have already set out my conclusion that there is a serious case to be tried that the advertising would be capable of being understood as meaning that there is no present reasonable belief in those advertising that there will not be the same sale in the near future, at least. A specification of the near future in terms of the next 30 days seems to me to be appropriate.
136 In both of these cases, I consider that, in view of the efforts of the defendants to address the plaintiff's concerns as I have indicated, undertakings in the terms I have described would, if given by all three defendants, be sufficient in my view to resolve the balance of convenience such that it would not be appropriate to make interim injunctive orders in the terms described. It does not seem to me that, in light of those efforts, and in view of the interim character of any orders that would be made, that I should weigh, in favour of making those orders, any possible role for them as deterrence to the person subject to the order, or as marking any disapproval of their conduct which the evidence might otherwise justify, as I might have done if they had been final orders: see on those roles for final injunctive relief, Miller, (supra), at [1.80.35].
137 As to the remaining proposed orders, I consider that they should be made only if the first and second defendants do not provide identical undertakings to those in the terms of "22.4" and "22.5" (from the Wicks affidavit of 2 February 2006).
138 I will hear from the parties as to the final form of the orders. I note, however, that no relief was sought, and none on these conclusions would be awarded, against the individual defendants. At the hearing before me, it was noted on all sides that in those circumstances that it would not be appropriate to award costs against the individual defendants. With that saving, I consider the appropriate order as to costs, in view of my conclusions, is to reserve the costs of this application to the Judge hearing the application for final relief: see Trade Practices Commission v Gold Coast Property Sales Pty Ltd & Ors (1994) 126 ALR 139, Fed Ct, Cooper J, at 149.
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