Phillip Morris Inc & Phillip Morris Ltd v Adam P. Brown Male Fashions Pty Ltd

[1980] FCA 101

Re: PHILIP MORRIS INCORPORATED AND PHILIP MORRIS LIMITED
And: ADAM P. BROWN MALE FASHIONS PTY. LTD. (1980) 44 FLR 88
No. VG 14 of 1980
Practice and Procedure - Practice - Appeal

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIAN DISTRICT REGISTRY
GENERAL DIVISION
Sweeney(1), Northrop(2) and Fisher(3) JJ.

CATCHWORDS

Practice and Procedure - application for interlocutory injunction - undertaking to Court in lieu of injunction - application to vary undertaking - power to release where mistake or error - Appeal from discretionary order of trial judge.

Practice - Application for interlocutory relief - Undertaking to court - Application to vary undertaking - Application for release from undertaking - Situation not envisaged at time of undertaking arising - Power of court.

Appeal - Appeal from interlocutory order - Exercise of discretion by trial judge - Powers of Full Court - Federal Court of Australia Act 1976 (Cth), s. 24.

HEADNOTE

The plaintiffs (appellants) instituted an action against the defendant (respondent) alleging contraventions of ss. 52 and 53 of the Trade Practices Act 1974 (Cth) and the tort of passing off and seeking relief including damages and injunctions. The statement of claim alleged inter alia that the defendant in trade or commerce in connexion with the supply of goods had represented falsely: (a) that the goods had the sponsorship or approval of the plaintiffs, and (b) that the defendant had the sponsorship, approval of or was affiliated with the plaintiffs. The plaintiffs brought a summons seeking interlocutory relief and on the fifth day of hearing thereof, 17th September, 1979, the court adjourned the summons sine die after the defendant had given certain undertakings and the plaintiffs given an undertaking as to damages. The defendant's undertaking, which was given "pending the hearing and determination of this action or until further order" was virtually in the terms of the first order sought by the plaintiffs' summons and restricted the defendant in the manufacture, distribution, offering for sale, supply or sale of the relevant goods. By order of the court of 12th November, 1979, each party was given leave to place before the court affidavit evidence as to the state of mind of members of the public in relevant respects. Subsequently the action was fixed for hearing on 5th May, 1980. By notice of motion heard on 10th April, 1980, the defendant sought a variation of the undertaking by the addition of a proviso thereto enabling the defendant to offer for sale the relevant goods for the purposes of the conduct of a professional market and/or public opinion survey to be carried out in aid of the defence. During the hearing leave was given to the defendant to amend the motion to seek an order releasing the defendant from the undertaking upon terms that a fresh undertaking in the same terms be given but subject to the proviso. The trial judge made the order sought subject to certain limitations.

On appeal,

Held: Per C. A. Sweeney and Northrop JJ. - (1) Although the appeal was as of right it was an appeal from an interlocutory order made in the exercise of a discretion conferred upon the trial judge. Before the Full Court could substitute its own discretionary judgment it had to be established that the trial judge had failed properly to exercise the discretion committed to him and that the discretion had miscarried.

House v. The King (1936), 55 CLR 499; Mace v. Murray (1955), 92 CLR 370; Brambles Holdings Ltd. v. Trading Practices Commission (1979), 40 FLR 364, applied.
(2) The trial judge had failed properly to exercise the discretion committed to him because: Per C. A. Sweeney J. - (a) The question whether the defendant should have been released from its undertaking had been approached on the basis of the balance of convenience whereas it was for the defendant to show cause for being released from its undertaking; the defendant by its own action having precluded itself from taking the action it later desired. (b) There were no such circumstances shown.

Per Northrop J. - (c) The trial judge based his discretion solely on the balance of convenience and did not give sufficient weight to whether the defendant in giving the first undertaking acted in mistake or in error or for any other reason ought to be released from its undertaking. (d) To obtain a release from an undertaking freely given to the court a party must prove that the undertaking was given under a mistake or in error. The fact that the defendant for the purpose of preparing its defence now desired to engage in conduct that might contravene that undertaking did not constitute sufficient ground. Harvey v. Croydon Union Rural Sanitary Authority (1884), 26 Ch D 249, followed. (e) In truth, if not in form, the defendant had been seeking a variation of the undertaking previously given and in the absence of consent by the plaintiffs the court should not vary an undertaking which was freely given to the court in proceedings in which the plaintiffs were seeking an interlocutory injunction. Cutler v. Wandsworth Stadium Ltd., (1945) 1 All ER 103, applied.
(3) Judgment and order appealed from set aside.

Per Fisher J. dissenting - The appeal should be dismissed because: (1) The trial judge was exercising his discretion in a matter of practice and procedure and the Full Court should only intervene therewith if it were established that the trial judge had acted on some wrong principle or made an order working a substantial injustice to one of the parties. An appellant bore a heavy onus in seeking to disturb an order made in the exercise of a discretionary power.

De Mestre v. A. D. Hunter Pty. Ltd. (1960), 77 WN (NSW) 143; Minister of State for the Army v. Parbury Henty & Co. Pty. Ltd. (1945), 70 CLR 459, applied.
(2) No error had been established as having been made by the trial judge in exercising his discretion as: (a) The trial judge had jurisdiction to release the defendant from its undertaking and to accept another. Cutler v. Wandsworth Stadium Ltd., (1945) 1 All ER 103; Mullins v. Howell (1879), 11 Ch D 763, applied. (b) The original order remained under the control of the court. (c) There was evidence before the trial judge on the basis of which he could be justified in the exercise of his discretion and the interests of the plaintiffs had been considered. There was much to justify the order made.

HEARING

Melbourne, 1980, April 28; May 5, 12; July 15. #DATE 15:7:1980

APPEAL.

Appeal from a judgment of a single judge of the Federal Court of Australia (Smithers J.). The facts appear in the judgments of Northrop J. and Fisher J.

J. F. Lyons Q.C. and R. C. Gillard, for the appellants.

R. Merkel, for the respondent.

Cur. adv. vult.

Solicitors for the appellants: Whiting & Byrne.

Solicitors for the respondent: Kliger & Lew.

T. J. GINNANE

ORDER

1. The judgment and order appealed from be set aside and in lieu thereof it be ordered that the respondent's motion be dismissed.

2. The stay of proceedings granted on 28 April 1980 in respect of the order appealed from cease to operate upon the pronouncement of the judgment of the Court on this appeal.

3. The respondent pay the appellants' costs of the respondent's motion and of this appeal.

Appeal allowed with costs.

JUDGE1

The history of this matter is set out in detail in the reasons for judgment of Northrop, J. which I have had the advantage of reading. The plaintiffs instituted an action seeking damages, injunctions and other relief in respect of alleged breaches of s.52 of the Trade Practices Act and of allegations of passing off. They issued a summons for interlocutory injunctions restraining the defendant, until the hearing and determination of the action or further order, from engaging in any of the conduct complained of in their statement of claim. This summons came on for hearing before a single judge of this court on 11 September 1979. On the fifth day of the hearing, before the case for the plaintiffs had been completed, senior counsel for the defendant in open court offered to give an undertaking on behalf of his client in the terms of paragraph A(I) of the summons. Senior counsel for the plaintiffs replied that they would prefer an injunction but would accept such an undertaking and give a cross-undertaking as to damages. The undertaking was then given and the court made the following order :

"UPON the Defendant by its Counsel undertaking to the Court that pending the hearing and determination of this action or until further order the Defendant will not by itself its servants or agents or otherwise howsoever manufacture distribute offer for sale supply or sell or cause to be manufactured distributed offered for sale supplied or sold in Australia any items of apparel or other goods under or bearing or in relation to representations of the Marlboro red cigarette packet including the Marlboro label trade mark either or both of the red rooftop design and the trade mark 'Marlboro' and the trade name 'The Marlboro Company' variously referred to in the Statement of Claim herein or any one or more of them or any other name or mark deceptively similar to them or any of them AND UPON the secondnamed Plaintiff by its Counsel undertaking to abide by an order the Court may make as to damages in case the Court shall hereafter be of opinion that the Defendant shall have sustained any damage by reason of this Order that the Plaintiffs ought to pay THIS COURT DOTH ORDER: -

1. THAT the Plaintiffs' Summon for injunctions dated the 6th June 1979 be otherwise adjourned sine die.

1. THAT the costs of all parties of and incidental to this Application shall be costs in the cause.

1. THAT each party hereto shall have liberty to apply generally and further herein as it may be advised.

1. THAT the Defendants Summons for Directions dated the 10th September 1979 be adjourned sine die with liberty to any party to bring the same on upon 48 hours prior notice to the other party."

After the trial of the action had been fixed to commence on 5 May 1980, the defendant gave notice dated 2 April that it would move on 10 April for an order that the undertaking given by it be varied by the addition of the following proviso (hereinafter referred to as "the proviso"): -
"'PROVIDED ALWAYS that for the purposes of the conduct of a professional market and/or public opinion survey to be carried out in aid of the defence to the plaintiffs' claims herein the defendant may offer for sale and sell in Australia items of apparel or other goods under or bearing or in relation to representations of the Marlboro red cigarette packet including the Marlboro label trade mark either or both of the red rooftop design and the trade mark 'Marlboro' and the trade name 'The Marlboro Company' variously referred to in the Statement of Claim herein or any one or more of them or any other mark or mark deceptively similar to them or any of them.'"

The defendant's motion was based upon the receipt by it of an opinion from a market research company, with which its legal advisers agreed, that it was essential to its defence that a survey be carried out involving the display and sale at retail outlets of wearing apparel bearing the marks and name which the plaintiffs' action was designed to protect and which the defendant had undertaken not to use.

After counsel for the plaintiffs had submitted that the court had no jurisdiction to make an order varying the defendant's undertaking, the latter was given leave to amend its motion to seek a release from its undertaking and to offer a new undertaking, subject to the proviso. The court released the defendant from its earlier undertaking and in its place accepted an undertaking subject to the proviso, but limited to the offer for sale in Australia at any one time of not more than 240 units of the apparel or goods and to the sale in Australia in total of not more than 120 units. An application by the plaintiff for a stay of this order pending appeal was refused.

We are dealing here with the exercise of a judicial discretion. The principles governing the consideration by a court of appeal of such an exercise of discretion are well settled.

As was said in the judgment of the High Court in Mace v. Murray (1955) 92 C.L.R. 370 at p. 378 : -
"The principles to be applied in such a case are not in doubt. The order of the learned primary judge was made in the exercise of a discretionary judgment; and it has been repeatedly laid down by this Court, following decisions of the highest authority in England, that in such a case a court of appeal is not justified in interfering with the decision appealed from unless it reaches a clear conclusion that by reason of some error, whether of fact or of law, the primary judge not only has taken a view different from that which the judges of the court of appeal would have taken if they had been in his place, but has failed properly to exercise the discretion committed to him : House v. The King (1936) 55 C.L.R. 499, at pp. 504, 505; Lovell v. Lovell (1950) 81 C.L.R. 513, at pp. 518, 520, 526, 528, 532-534; Pearlow v. Pearlow (1953) 90 C.L.R. 70, at pp. 76, 77; Paterson v. Paterson (1953) 89 C.L.R. 212, at pp. 218-224."

In House v. The King (1936) 55 C.L.R. 499 at pp. 504-5 Dixon, Evatt and McTiernan JJ. said : -
"The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so."

The learned primary judge, in an extempore judgment, said that it seemed to him that "in the circumstances in which this undertaking was given and having regard to the terms of the order in which it was incorporated, the court remains in control of the continuance or otherwise of the undertaking that was given." His Honour then went on to consider the balance of convenience and expressed the opinion that -
". . . . the defendant should be enabled to take reasonable steps to obtain for itself such evidence as it thinks is necessary for its protection, provided that having regard again to the balance of convenience, by so doing it is not likely to do damage to the plaintiff out of all proportion to the benefits to be obtained by obtaining the best evidence and evidence obtained in circumstances which will best display the reaction of the members of the public whose reactions it is understood are important in the issues in this case.

I have to remember that although Mr. Gillard pressed on me that considerable damage might be done to the plaintiffs' goodwill, there is no evidence to that effect. There is no affidavit which indicates to me the class of injury to goodwill which is likely to follow from the class of conduct which is foreshadowed in the affidavit of Mr. Lew.

Looking at the matter for myself, again with such knowledge as I have from the previous proceedings and the notorious fact that the plaintiff is a very well established organization, unlikely to suffer severely in its goodwill by three or four weeks activity in selling the defendant's goods in the manner which is indicated in the affidavit, I think on the balance of convenience that I should vary the undertaking and, if necessary, do so by permitting an amendment of the motion to seek a release of the undertaking and take a new undertaking in the form of the old undertaking as varied.

The variation will be a very limited variation, inasmuch as it will not go past 5 May. If the trial does not come on, if it is desired to do more after that date, some other proceedings will have to be taken to seek sanction therefor."

In my respectful opinion, his Honour failed properly to exercise the discretion committed to him. It is true that the original undertaking was clothed in the customary language of an interlocutory undertaking or injunction, in that it was expressed to be "pending the hearing and determination of this action or until further order", but that did not reduce the weight proper to be given to the fact that on the fifth day of the hearing, before the case for the plaintiffs had been completed, the defendant proffered an undertaking in the terms of the plaintiff's motion. The defendant by its own undertaking thus precluded itself from taking what his Honour later held to be reasonable steps to obtain evidence. In my respectful opinion, his Honour acted on a wrong principle, in approaching the question whether a defendant in such a case should be released from its undertaking on the balance of convenience, starting with the proposition that the defendant should be enabled to take such steps to obtain evidence for itself as it thought necessary for its protection, provided that by so doing it is not likely to do damage to the plaintiffs out of all proportion to the benefits to be obtained by it. The proper starting point, in my opinion, was that the defendant, at a late stage of a long hearing, with counsel's advice, had chosen to give the undertaking, and that the parties had proceeded on the faith of that undertaking from September 1979 to April 1980, in respect of a matter fixed for trial on 5 May, 1980. In my opinion, it was for the defendant to show cause for being released from its undertaking. The mere receipt of advice from a market research company, however much it commended itself to the defendant's legal advisers, did not amount to such cause. There were no circumstances shown to justify the overturning of the basis upon which the defendant had conceded that it was fitting for the parties to proceed, and to permit it to do the acts which were relied upon as the basis of the plaintiff's claim. There had been no judicial pronouncement on the prima facie strength of the plaintiffs' claims in relation to those acts, but it was the action of the defendant in proffering the original undertaking which effectively cut short the proceedings launched by the plaintiffs to obtain such a pronouncement.

In my opinion, this is a case in which the appellate court may exercise its own discretion in substitution for that of the learned primary Judge. For the reasons earlier given, I am of opinion that the defendant's motion should have been dismissed. I would propose the following orders :
1. that the judgment and order appealed from be set aside and in lieu thereof it be ordered that the respondent's motion be dismissed;

2. that the stay of proceedings granted on 28 April 1980 in respect of the order appealed from cease to operate upon the pronouncement of the judgment of the Court on this appeal;

3. that the defendant pay the plaintiffs' costs of the defendant's motion and of this appeal.

JUDGE2

The action in which this appeal is taken was commenced by the plaintiffs by writ dated 6 June 1979 and under the Federal Court of Australia Rules then in operation was instituted in accordance with the High Court Rules. On 1 August 1979 the Federal Court Rules came into operation but no order or direction having been made under Order 64 of those Rules, the action is to be continued under the High Court Rules.

The plaintiffs' claims, as appearing from the statement of claim endorsed on the writ, are that the defendant -

1. Being a corporation under the Trade Practices Act 1974, as amended, hereinafter called "the Act", in trade or commerce has engaged and is continuing to engage in conduct that is misleading or deceptive or is likely to mislead or deceive in contravention of s.52 of the Act.

2. Being a corporation in trade or commerce in connection with the supply of goods has represented and is representing falsely - (a) that the goods have the sponsorship or approval of the plaintiffs;

(b) that the defendant has the sponsorship, approval or is affiliated with the plaintiffs in contravention of s.53(c) and (d) of the Act.

1. By engaging in the conduct referred to has committed the tort of passing off.

The goods concerned comprise various items of wearing apparel which have attached to them labels and badges being marks alleged to be identical with or deceptively similar to the name and trade mark "Marlboro" and the red roof-top design, being marks and labels of which the first-named plaintiff is the registered proprietor under the Trade Marks Act 1955 (Commonwealth) in respect of cigarettes and in respect of men's and boys' dressing gowns, pyjamas and other clothing. The second-named plaintiff, which carries on business under the trade name "The Marlboro Company" is a licensed user of the trade mark in respect of cigarettes. The action is for damages, injunctions and other relief and is brought in the Federal Court by virtue of sections 80, 82 and 86 of the Act, and sections 19, 22 and 32 of the Federal Court of Australia Act 1976, as amended. The injunctions as sought in the statement of claim are -
"A. Injunctions (including interim and interlocutory injunctions) restraining the Defendant by itself its servants or agents or otherwise howsoever -

(1) from manufacturing distributing offering for sale supplying or selling or causing to be manufactured distributed offered for sale supplied or sold in Australia any items of apparel or other goods under or bearing or in relation to the trade marks (as defined in paragraph 9 hereof) or any one or more of them or any other name or mark deceptively similar to the said trade marks or any of them;

(2) from engaging in the course of the business of the manufacture distribution supply or sale of any items of apparel in conduct that is misleading or deceptive or likely to mislead or deceive;

(3) from representing in the course of the aforesaid business and in connection with the supply or possible supply of any items of apparel that any such apparel has the sponsorship or approval of the Plaintiffs or either of them and from representing that the Defendant has the sponsorship or approval of or is affiliated with the Plaintiffs or either of them;

(4) from passing off or enabling to be passed off any items of apparel or other goods not of the manufacture or merchandise of or connected in the course of trade with the Plaintiffs or either of them as and for goods of or connected in the course of trade with the Plaintiffs or either of them;

(5) from passing off or enabling to be passed off the business or any business of the Defendant as and for a business connected or associated with or approved by the Plaintiffs or either of them."

By summons dated 6 June 1979 the plaintiffs sought interlocutory injunctions restraining the defendant until the hearing and determination of the action or further order from engaging in any of the conduct described in paragraphs A(1) to (5), as set out above. The application for the interlocutory injunctions came on for hearing before the Federal Court constituted by a single judge on 11 September 1979. At the hearing the plaintiffs and the defendant were each represented by senior counsel. The hearing extended over four days during which evidence was given both orally and by affidavit. The plaintiffs' case had not been completed when, on the fifth day of the hearing, senior counsel for the defendant, after explaining the commercial situation as the defendant saw it, said -
"These are the commercial considerations which have ultimately been decided to be very relevant on the question of the future conduct of this action and which are relevant in relation to "the matter of convenience. It is, with the matter to which I have referred, being considered that it seemed to us that the best way to resolve this matter now and to try and get the matter on as soon as possible so that a final hearing could be reached, so that we can have the matter resolved without necessarily having a forestalling of the commercial course of conduct which could well start now if we succeed at this stage, would be to say to the court that at this stage in the light of the issues which have been raised and for the reasons which I have given, and in an attempt to resolve the matter speedily, the defendant is prepared, if there be an appropriate cross undertaking as to damages, to give an undertaking to the court in the terms of paragraph 1 of the summons dated 6 June 1979."
Subsequently he said -
"We submit on that basis what should now happen is if my learned friends are disposed to give the undertakings as to damages, and my learned friends stated in the evidence they were prepared to do that, we would give that open undertaking to the court, and the managing director of the defendant is in court. It could be made a matter of court record and we would then submit the appropriate order to be made is that the costs of the application be reserved or, alternatively, made costs in the cause. We would seek within the next week or so, if my learned friends are not in a position to proceed today, to bring on our summons for directions on notice to expedite the final trial of the matter."
In response, senior counsel for the plaintiffs said -
"As far as the plaintiffs are concerned, they would prefer an injunction, but subject to the question of costs we would be prepared to accept an undertaking to the court embodied into the court order and to give a cross-undertaking as to damages by the company in this jurisdiction of the second plaintiff.

The plaintiffs are prepared to accept an undertaking in the precise terms of paragraph 1(i) of the summons, emobdied of course in the court order, an undertaking to the court, and that the summons for injunction be otherwise adjourned sine die with liberty to apply, but in the circumstances of this matter it is our submission that the proper order as to costs is that the plaintiffs costs be made costs in the cause."
The court then heard submissions limited to the issue of costs. Senior counsel for the defendant gave to the court an undertaking on behalf of his client in the form of paragraph A(1). An order as follows was made on 17 September 1979 -
"UPON the Defendant by its Counsel undertaking to the Court that pending the hearing and determination of this action or until further order the Defendant will not by itself its servants or agents or otherwise howsoever manufacture distribute offer for sale supply or sell or cause to be manufactured distributed offered for sale supplied or sold in Australia any items of apparel or other goods under or bearing or in relation to representations of the Marlboro red cigarette packet including the Marlboro label trade mark either or both of the red rooftop design and the trade mark 'Marlboro' and the trade name 'The Marlboro Company' variously referred to in the Statement of Claim herein or any one or more of them or any other name or mark deceptively similar to them or any of them AND UPON the second-named Plaintiff by its Counsel undertaking to abide by any Order the Court may make as to damages in case the Court shall hereafter be of opinion that the Defendant shall have sustained any damage by reason of this Order that the Plaintiffs ought to pay THIS COURT DOTH ORDER: -

1. THAT the Plaintiffs' Summons for Injunctions dated 6th June 1979 be otherwise adjourned sine die.

2. THAT the costs of all parties of and incidental to this Application shall be costs in the cause.

3. THAT each party hereto shall have liberty to apply generally and further herein as it may be advised.

4. THAT the Defendants Summons for Directions dated the 10th September 1979 be adjourned sine die with liberty to any party to bring the same on upon 48 hours prior notice to the other party."
By order made on 12 November 1979, the Federal Court constituted by another single judge, gave directions for the future conduct of the action. The trial of the action was fixed to commence on 31 March 1980 and directions were given that evidence of certain matters relating to the opinion, expression or state of mind of members of the public in Australia in relation to the use of the Marlboro trade mark upon or in relation to cigarettes or clothing could be given by way of affidavit. Subsequently, the trial of the action by consent was fixed to commence on 5 May 1980.

By notice dated 2 April 1980 the defendant gave notice that on 10 April 1980, being the Thursday after Easter, the defendant would move -
"1. That the undertaking given by the abovenamed defendant to the Honourable Mr. Justice Keely on the 17th September 1979 be varied by the addition to the defendant's undertaking of the following proviso

'PROVIDED ALWAYS that for the purposes of the conduct of a professional market and/or public opinion survey to be carried out in aid of the defence to the plaintiffs' claims herein the defendant may offer for sale and sell in Australia items of apparel or other goods under or bearing or in relation to representations of the Marlboro red cigarette packet including the Marlboro label trade mark either or both of the red rooftop design and the trade mark 'Marlboro' and the trade name 'The Marlboro Company' variously referred to in the Statement of Claim herein or any one or more of them or any other mark or mark (sic) deceptively similar to them or any of them.'

2. Such further or other orders as to the Court may seem fit."
The proviso set out is hereinafter referred to as "the proviso".

To support the motion the defendant relied upon affidavit material to the effect that a market research company engaged by the defendant to prepare evidence for the hearing had advised that it was essential to the defence of the defendant that the market survey work be carried out with respect to the actual display and sale of the wearing apparel at retail outlets. The legal advisers of the defendant accepted that advice and considered it was essential for the proper defence of the action that the undertaking already given be varied to allow the conduct described in the proviso. The motion came on for hearing before the Federal Court constituted by the judge who in November 1979 had given the directions in the action. The plaintiffs and the defendant were each represented by junior counsel. Counsel for the defendant made his submissions in support of the motion. Counsel for the plaintiffs then submitted that -

1. The court does not have jurisdiction to vary an undertaking.

2. The court does not have jurisdiction to vary an undertaking in the terms sought by the defendant.

3. Although the court may entertain an application by the defendant for a release from an undertaking, it should only get that relief in limited circumstances which do not include the circumstances relied upon by the defendant.

4. The court ought not to vary an undertaking in the terms sought by the defendant.

The second, third and fourth submissions were said to be predicated on the assumption that the court does have jurisdiction to vary an undertaking which jurisdiction was expressly denied.

In support of his first submission, counsel relied upon Cutler v. Wandsworth Stadium, Ltd. (1945) 1 All E.R. 103. In that case on an application for an interlocutory injunction, the defendant gave an undertaking to the court in the following terms -
"The defendants, Wandsworth Stadium Ltd., and their agents and servants undertaking to admit the plaintiff to the Wandsworth Stadium until trial of the action or until further order."
Subsequently in other proceedings a Court of Appeal held, that having regard to the Betting and Lotteries Act 1934, an interlocutory injunction in similar form to the undertaking was too wide and dissolved the injunction which had been granted. Wandsworth Stadium, Ltd. applied to the court to have the undertaking which it had given, varied. The judge at first instance refused the application and the Court of Appeal dismissed an appeal from that order. In dismissing the appeal Morton L.J. at p. 105 said -
"In my judgement, the order of Cassels J., was right. In the first place, the court does not vary an undertaking given by a litigant. If the litigant has given an undertaking and desires to be released from that undertaking, the application should be an application for release, and an application supported by evidence showing why the litigant should be released from the undertaking which he has given. The undertaking in this case was given until the trial of the action or further order and an order of the court was, of course, necessary before the giver of the undertaking could be released. Litigants are not ordered to give these undertakings; they choose to give them, and an application to have an undertaking already given varied is wholly wrong in form. For that reason alone, the decision of Cassels, J., was, in my judgment, perfectly right. But I may add this, that even if we were to treat the application as being in substance an application for a release from the undertaking coupled with the offer of a different undertaking, it seems to me that such an application ought to have been supported by evidence. It is not enough merely to rely on the fact of effluxion of time since the delivery of the statement of claim, nor is it enough to rely on the fact that the Court of Appeal in another action has taken the view that the injunction granted was granted in too wide terms. I do not see that these are matters which should be brought to the attention of the court, but, in my view, that would not be enough. No doubt the defendants are in an unfortunate position at the moment, and saying as I do that, in my view, this appeal should be dismissed, I do not desire in any way to prejudice any application which the defendants may think fit to make for a release from their undertaking on some future occasion."

In reply, counsel for the defendant stated that if it needed to be done, he would seek leave to amend the motion by seeking an order that the defendant be released from the undertaking already given upon terms that a fresh undertaking in the same terms be given, but subject to the proviso. Counsel for the plaintiffs did not seek an adjournment of the hearing to argue against the motion in the amended form. He was not offered, nor did he seek, leave to make submissions opposing the application to amend the motion or to make submissions opposing the motion in its amended form. At the conclusion of the reply by counsel for the defendant, the Court said -
"It seems to me that in the circumstances in which this undertaking was given and having regard to the terms of the order in which it was incorporated, that the court remain in control of the continuance or otherwise of the undertaking which was given.

The question then is whether there is evidence before me which would justify the court at this stage taking a different view of what is necessary for the proper protection of the plaintiff in the light of the litigation which is in train. The Plaintiff is entitled to such protection as is reasonable upon the balance of convenience; it being remembered that the issues between the parties upon which any order at all is justified have not been decided.

On the balance of convenience, as the matter is put to me, arising out of the affidavit of Mr. Lew, it does appear to me that the defendant in the position of the defendant should be enabled to take reasonable steps to obtain for itself such evidence as it thinks is necessary for its protection at the trial and to get the very best class of evidence for its own protection, provided that having regard again to the balance of convenience, by so doing it is not likely to do damage to the plaintiff out of all proportion to the benefits to be obtained by obtaining the best evidence and evidence obtained in circumstances which will best display the reaction of the members of the public whose reactions it is understood are important in the issues in this case.

I have to remember that although Mr. Gillard pressed on me that considerable damage might be done to the plaintiffs' goodwill, there is no evidence to that effect. There is no affidavit which indicates to me the class of injury to goodwill which is likely to follow from the class of conduct which is foreshadowed in the affidavit of Mr. Lew.

Looking at the matter for myself, again with such knowledge as I have from the previous proceedings and the notorious fact that the plaintiff is a very well established organization, unlikely to suffer severely in its goodwill by three or four weeks activity in selling the defendant's goods in the manner which is indicated in the affidavit, I think on the balance of convenience that I should vary the undertaking and, if necessary, do so by permitting an amendment of the motion to seek a release of the undertaking and take a new undertaking in the form of the old undertaking as varied.

The variation will be a very limited variation, inasmuch as it will not go past 5 May. If the trial does not come on, if it is desired to do more after that date, some other proceeding will have to be taken to seek sanction therefor. I think therefore "that the order I should make should permit the amendment of the motion as indicated; that I should release the defendant from the existing undertaking, on the defendant giving an undertaking in the same terms, subject, however, to the proviso which is set out in the motion; that the proviso will operate only until 5 May.

I do not think that it is desirable that I should impose conditions upon the defendant pursuant to which the plaintiff should be informed of the time and place of the surveys which are contemplated and invited to be present. The feeling I have is that each party should be free to gather its own information. This is not a survey ordered by the court. It is peculiarly a party effort to collect evidence. I do not think I have anything further to say. Do either of you want to add anything?"

Following further submissions, the court on 15 April 1980 made the order under appeal. The order recited that upon the defendant by its counsel giving the undertaking subject to the proviso, all of which was set out in full, the court ordered -
"1. The Defendant have leave to amend its Notice of Motion herein dated the 3rd April, 1980, by adding a claim in which it seeks an order that it be released from the undertaking given by it to the Honourable Mr. Justice Keely herein on the 17th September, 1979, upon terms that it give the undertaking to the Court hereinbefore set out in this Order.

2. The Defendant be released and discharged from the undertaking given on its behalf herein to the Honourable Mr. Justice Keely on the 17th September, 1979.

3. The costs of this application be costs in cause.

4. The parties herein have liberty to apply for any variation or release of the above undertakings upon such terms as to the Court may seem fit.

5. General liberty to apply.

6. The Plaintiffs' application for formal release of its undertaking contained in "the Order of the Honourable Mr. Justice Keely made the 17th day of September, 1979, be adjourned to a date to be fixed."
The court refused to grant a stay of the order pending the hearing and determination of an appeal from that order.

The plaintiffs appeal from the whole of the order made on 15 April 1980. Under s.24 Federal Court of Australia Act the appeal is as of right. The order appealed from is an interlocutory order made in the exercise of a discretion conferred upon a judge. The principles to be applied by the Full Court which hears an appeal from an order of that kind are stated in Brambles Holdings Ltd. v. The Trade Practices Commission (1980) 28 A.L.R. 191, and I refer to the cases cited and opinions expressed by Bowen C.J. at p.193 and Northrop J. at pp.195-6. In brief, before the Full Court can substitute its own discretionary judgment in place of the one already pronounced, it must be established that the discretion of the trial judge miscarried in one way or another. It is proposed to consider the matters raised on this appeal and apply the principles stated in those authorities.

Since the trial of the action had been fixed to commence on 5 May 1980, as a matter of urgency the hearing of the appeal commenced on 28 April. When the appeal came on for hearing, counsel for the defendant announced that since 15 April 1980, notice under s.78B Judiciary Act 1903, as amended, had been given to the Attorneys-General for the Commonwealth and for Victoria, since the action raised an issue of whether the Federal Court had jurisdiction to hear and determine the claim insofar as the plaintiffs relied upon the tort of passing off, but the Full Court proceeded to hear the appeal pursuant to the exercise of the discretion conferred by s.78B(5). During 28 April, it became obvious that the hearing of the appeal could not be concluded on that day. The defendant was engaging in conduct permitted by the proviso. On 28 April the Full Court ordered that all further proceedings on the judgment and order of the Federal Court made on 15 April 1980 be stayed until further order. At the same time the court was aware that if the appeal failed the defendant ought to be given adequate time before the hearing of the action in which to obtain material in the manner permitted by the proviso.

When the hearing of the appeal resumed on Monday, 5 May, the parties announced that the commencement of the hearing of the action had been adjourned to a date to be fixed, and that the Attorney-General for Victoria had given notice that pursuant to s.40 Judiciary Act he proposed to apply to the High Court for an order that the plaintiffs' claim based on the tort of passing off, be removed into the High Court. Until such an order is made, the Federal Court has jurisdiction to continue to hear and determine all aspects of the appeal.

Before the Full Court, the defendant conceded that the Court had no jurisdiction to vary the undertaking given by the defendant in September 1979, Cutler v. Wandsworth Stadium, Ltd., supra. The parties argued the appeal on the basis that the defendant had sought an order that upon giving to the Court an undertaking containing the proviso, it be released from the undertaking it had given on 17 September 1979. The basis of the application was that in the opinion of its legal advisers and an expert witness, the defendant would need evidence of the kind contemplated in the proviso in order to properly present its defence to the action. Counsel for the defendant contended that if they so desired, the plaintiffs could renew their application for an interlocutory injunction and in those proceedings the court would be free to determine whether to grant the injunction in full or subject to the proviso. It was contended further that the plaintiffs had not elected to adopt this course and so the only issue to be decided was whether, on the balance of convenience, justice demanded that the defendant be permitted to prepare its defence in accordance with the opinion of its legal advisers.

In my opinion the appeal should be allowed for the reasons about to be given. The plaintiffs have established that the discretion of the trial judge miscarried. The application before him was treated as one of extreme urgency, the date for the commencement of the hearing of the action having been fixed for 5 May 1980, and if the application succeeded the defendant needed adequate time in which to conduct the survey. Initially, the application was for a variation of the undertaking already given by the defendant. It was only after the plaintiffs had presented a complete answer to that application that leave was given to amend the application. As a result, and in the absence of submissions by counsel for the plaintiffs, the learned trial judge did not have the benefit of hearing submissions on the principles to be applied when considering whether a party should be released from an undertaking freely entered into. As a further result, the learned trial judge did not take into account the material relevant to the proper exercise of his discretion. He based his discretion solely on the balance of convenience, and did not give any, or any sufficient, weight to whether the defendant, in giving the first undertaking, acted in mistake or in error, or for any other reason ought to be released from its undertaking. It follows that the Full Court now should exercise its own discretion on the application of the defendant.

In form, the defendant is seeking a release from and the discharge of the undertaking previously given and the giving of a new undertaking, but in truth the defendant is seeking a variation of the undertaking previously given. This can be illustrated. An undertaking of the type given by the defendant is normally offered by a defendant in lieu of an interlocutory injunction being sought by a plaintiff. In the present case the defendant offered the undertaking in lieu of the injunction being sought. The condition precedent to an undertaking of this kind being offered is an application by a plaintiff for an interlocutory injunction and normally the undertaking is given to the court in the proceedings constituted by the application for the interlocutory injunction. Indeed, it would be most unusual for a defendant, in the absence of an application for an interlocutory injunction by the plaintiff, to make an application to the court to offer an undertaking not to engage in certain conduct pending the hearing of an action. Yet this is precisely what the defendant did here. It sought an order to be released from an undertaking previously given. On the basis of that release, it then sought to give an undertaking. There was then before the court no application by the plaintiffs in which they were seeking an interlocutory injunction. In fact, before the Full Court, counsel for the defendant contended that the Court should not look at or consider the material relied upon by the plaintiffs when they were seeking their interlocutory injunction in September 1979. Counsel for the defendant contended further that the plaintiffs were free to renew their application for an interlocutory injunction, but that in the meantime the defendant should be released from the undertaking previously given which undertaking had been discharged. The order under appeal must be treated as an order varying the undertaking previously given. In the absence of consent by the plaintiffs, the court should not by order vary an undertaking of this type, an undertaking which was freely given to the Court in proceedings in which the plaintiffs were seeking an interlocutory injunction. I agree with the opinions expressed in Cutler v. Wandsworth Stadium Ltd., supra, and would apply that decision to the facts of this case.

The Court has power to release a defendant from an undertaking freely given to the Court, but in order to obtain a release a defendant must prove that the undertaking was given under a mistake or in error. The position is clearly stated in Harvey v. Croydon Union Rural Sanitary Authority (1884) 26 Ch.D. 249. In that case -
"An action was brought against a local board to restrain them from pulling down certain houses of the Plaintifs, and for damages. On a motion for an injunction coming on, the Defendants' counsel, by the authority of his clients, consented to an order for a perpetual injunction, with costs, and an inquiry as to damages, and such order was taken by consent without opening the case to the Court. Before the order had been passed, the Defendants formally withdrew their consent, and the Registrar thereupon declined to pass the order without the direction of the Court. The Plaintiff moved that he might be directed to proceed to perfect the order. The Defendants alleged that their instructions to consent had been given under a misapprehension, but did not enter into any evidence in support of that allegation."
The Court of Appeal held that where counsel by the authority of his client consents to an order, the client cannot arbitrarily withdraw that consent. Cotton L.J. pp.255-6 said -
"There being, however, no authority which is binding on us to the contrary, we must decide according to what we think the right course, and it must be understood henceforth to be the rule that a consent given by the authority of the client cannot be arbitrarily withdrawn. Probably in the state of the authorities Mr. Justice Pearson could not do otherwise than he did, but the Court of Appeal is in a different position, and the authorities are not in such a state as to prevent our laying down what we consider to be the right rule, and which is in accordance with the practice established in the Queen's Bench Division."
Lord Coleridge, L.C.J. at p.256 said -
"I asked Lord Justice Cotton to give judgment first in this case, because it turns on the practice in the Chancery Division, with which I am not familiar. In the Queen's Bench Division this case would not have been arguable, it being quite settled there that a consent given by counsel with authority and with full knowledge of the facts is binding and cannot be withdrawn. I agree with the Lord Justice Cotton that this is the right rule, both in the interest of counsel and of those who employ them."
See also Mullins v. Howell (1879) 11 Ch.D. 763 and Cutler v. Wandsworth Stadium Ltd., supra.

In the present case, counsel for the defendant does not claim that the undertaking given to the Court in September 1979 was given under a mistake or in error. In my opinion the fact that the defendant, for the purpose of preparing its defence, now desires to engage in conduct that might contravene that undertaking does not constitute a sufficient ground to release it from that undertaking. The undertaking was given after there had been a substantial hearing of the plaintiffs' application for an interlocutory injunction. The plaintiffs had not completed their case when counsel for the defendant made the offer of the undertaking in the precise form of the interlocutory injunction being sought. The defendant is seeking a release from that undertaking to enable it to engage in conduct which, if the plaintiffs' claims are correct, would constitute a contravention of the Act and would constitute the tort of passing off. Such a course cannot be justified on the evidence relied upon by the defendant. It follows, therefore, that there are no grounds for releasing the defendant from that undertaking or for discharging that undertaking. The application for release from the undertaking must be refused. In these circumstances it is neither necessary nor desirable to express any opinion on the other matters raised before the Full Court.

I agree with the orders proposed by Sweeney J.

JUDGE3

This is an appeal against an order of Smithers J. ("the trial judge") made on 15 April 1980 whereby he discharged an undertaking given to the court by Adam P. Brown Male Fashions Pty. Ltd. ("the respondent") and accepted in lieu thereof the same undertaking with the addition of a proviso. This proviso in effect permitted the respondent to perform for a limited period, for the purpose of conducting a market survey, acts which otherwise would have been in breach of the terms of the original undertaking.

This latter undertaking was given to the court in the following terms, namely: -
". . . that pending the hearing and determination of this action or until further order the Defendant will not by itself its servants or agents or otherwise howsoever manufacture distribute offer for sale supply or sell or cause to be manufactured distributed offered for sale supplied or sold in Australia any items of apparel or other goods under or bearing or in relation to representations of the Marlboro Red cigarette packet including the Marlboro label trade mark either or both of the red roof-top design and the trade mark "Marlboro" and the trade name "The Marlboro Company" variously referred to in the Statement of Claim herein or any one or more of them or any other name or mark deceptively similar to them or any of them."

By the order of the trial judge this undertaking was discharged and replaced by a new undertaking which incorporated the original undertaking but with the following proviso added there-to:
"Provided Always that for the purposes of the conduct of a professional market and/or public opinion survey to be carried out in aid of the defence to the Plaintiffs' claims herein the defendant may offer for sale in Australia at any one time not more than 240 units of the apparel and goods hereinbefore described and sell in Australia in total not more than 120 units of the apparel or goods hereinbefore described under or bearing or in relation to the representations of the Marlboro red cigarette packet including the Marlboro label trademark either or both of the red rooftop design and the trade mark "Marlboro" and the trade name "The Marlboro Company" variously referred to in the Statement of Claim herein or any one or more of them or any other name or mark deceptively similar to them or any of them until the 5th May 1980, or if the trial of the action herein is adjourned until the adjourned date for the trial of the action herein (but not being a date later than the 31st May 1980)."

The circumstances in which the abovementioned application and order were made may be shortly stated. On 6 June 1979 Philip Morris Incorporated and Philip Morris Limited ("the appellants") initiated proceedings by writ of summons with statement of claim annexed out of the Victoria District Registry of this court. On the same day they also issued a summons seeking interim or interlocutory injunctions which summons was returnable on 9 July 1979. The allegations in the statement of claim were, inter alia, that the first named appellant was the registered proprietor of three Australian registered Trade Marks, two in respect of cigarettes being Marlboro and Marlboro label and the other in respect of men and boys clothing, being Marlborough and device. The second named appellant was the licensed user of the first two marks and carried on business under the trade name "The Marlboro Company".

The statement of claim went on to allege that the respondent had for some time in the course of its business and without approval of either appellant attached to certain items of clothing tapes, labels and badges bearing marks identical or deceptively similar to the said trade marks which apparel so marked was selling in Australia. The appellants' proceedings alleged contraventions of s.52 and s.53 of the Trade Practices Act 1974 and passing off associated with such contraventions. Relief in the nature of but not confined to damages and injunctions was sought.

The appellants' summons claiming interlocutory relief until determination of the action or further notice came on for hearing before Keely J. on 11 September 1979. Both the appellants and the respondent tendered affidavits and oral evidence was taken.

On the fifth day of the hearing (17 September 1979) the respondent offered certain undertakings to the court. There were conflicting contentions before us as to the circumstances in which and the reasons for which such undertakings were offered at that stage in the hearing. I do not see it as desirable or proper that I should go carefully through the transcript of the hearing before Keely J. to attempt to construe the recorded statements for the purpose of attempting to determine such circumstances or reasons. The crucial fact was that upon the abovementioned undertaking to the court being offered by the respondent and the appellants offering the usual undertaking as to damages, that judge made certain orders and the hearing terminated. The order incorporating the undertakings which was drawn up and entered by the appellants' solicitors is not in the form of a consent order.

This order recited the abovementioned undertaking by the respondent to the court pending determination of the action or further order, which undertaking was virtually in terms of sub-paragraph 1(i) of the interlocutory summons. No undertaking was offered in terms of sub-paragraphs (ii) to (v) of paragraph 1 of the summons or any other paragraph. The order recited the fact that the second appellant gave the usual undertaking as to damages. The precise terms of the order were as follows:
"1. That the Plaintiffs' Summons for Injunctions dated the 6th June 1979 be otherwise adjourned sine die.

2. That the costs of all parties of and incidental to this application shall be costs in the cause.

3. That each party hereto shall have liberty to apply generally and further herein as it may be advised.

4. That the defendant's Summons for Directions dated the 10th September 1979 be adjourned sine die with liberty to either party to bring the same on upon 48 hours prior notice to the other party."

It is common ground that the summons for directions referred to in paragraph 4 of the order was a summons seeking in effect an early hearing.

This summons for directions came on before the trial judge on 12 November 1979, the upshot of which was that his Honour made an order granting leave to each party to place before the court hearing the action affidavit evidence as to the state of mind of members of the public in relation to the use of the Marlboro trade marks but subject to and reserving all just exceptions to the admissibility of such evidence other than the form thereof. Neither party objected to the tentative approval that this order appeared to give to survey evidence and each appeared to contemplate making use of the same but reserving the right to object other than on the score that the evidence was in affidavit form.

On 10 April 1980 the application the order upon which is the subject of this appeal came before the trial judge. By notice of motion dated 2 April 1980 (being the Wednesday prior to Good Friday) the respondent sought an order that its undertaking to Keely J. be varied by adding thereto a proviso substantially in the form abovementioned. This application was supported by an affidavit of Harry Lew, a partner in the firm of solicitors advising the respondent. In it the following matters which I set out shortly and seriatim were deposed to:
(a) In November 1979 the respondent engaged a market research company with a view to gathering evidence on the opinion, impression or state of mind of the public in respect of the use of the Marlboro trade marks.

(b) This company recommended that the survey be conducted by displaying and offering for sale clothing in manner similar to other merchandise.

(c) In early March 1980 the deponent asked the appellants for consent to the arranging of a display and offering for sale of the clothing.

(d) The appellants in the first instance refused to give the consent requested notwithstanding the fact that the respondent offered to produce for the appellants' approval the relevant garments and placards and to keep an account of any sales. Ultimately they offered a narrow consent.

(e) The respondent's counsel had advised that it was of essential importance to its defence that the market survey recommended by the market research company be carried out properly and comprehensively, otherwise it was counsel's advice that the respondent would be greatly impeded in its defence.

Upon the hearing before the trial judge, counsel for the respondent acknowledged the giving of the undertaking to Keely J. but submitted that a situation had arisen which had not been envisaged. Attention was drawn to the fact that the undertaking was given until determination of the proceedings or further order.

By its notice of motion the respondent sought an order varying the terms of the undertaking. However it was generally accepted that in seeking to "vary" the undertaking the notice of motion was defective and it appears not to have been disputed that the proper application was for the discharge of the undertaking conditional upon the giving of a substituted undertaking containing the proviso. There is no evidence that counsel for the appellants opposed the making of the amendment and he did not make what might be seen as an understandable request for an adjournment. The intervening days between the service of the notice of motion and the commencement of the hearing had, it appears, been taken up with the Easter vacation.

It was conceded by counsel for the respondent that if the trial judge was inclined to accede to the respondent's request not-with-standing opposition from the appellants, their remedy was to proceed with the adjourned application for interim orders on the ground that the new undertaking did not adequately protect their position.

At the end of the day the trial judge granted the respondent's application but at the request of the appellants inserted certain limitations into the undertaking offered. He gave short oral reasons for the making of his order.

I would on two grounds dismiss this appeal against the decision of the trial judge. In the first instance I am of the opinion that as he was exercising his discretion in a matter of practice or procedure, this court should be reluctant to intervene. It should only interfere if it is satisfied that the trial judge was clearly wrong and that the appellant has suffered an injustice. In my view neither of these two criteria has been established. But I am furthermore of the opinion that the trial judge's exercise of his discretion has not miscarried and there is much to be said in favour of his ultimate decision.

The contentions of the appellants were in essence that the trial judge had no jurisdiction to discharge the undertaking previously given and accept a new undertaking (which procedure I shall hereafter call the "variation" of the undertaking). In any event it was said that he should not have "imposed" the new undertaking on the appellants, particularly in circumstances where the prior undertaking had, in the words of their counsel, resolved the matter once and for all by a method which in effect amounted to a compromise. These latter submissions fall for consideration on the question whether the exercise of discretion has miscarried.

The principle that an appellate court ought only for "grave or powerful reason" (Bank of Montreal v Robertson (1892) 31 N.B.R. (Can)653 at 659 cited by Hardie A.J. in De Mestre v A.D. Hunter Pty Limited infra @ 147) interfere with a judge's discretion exercised in a matter of practice or procedure has been reiterated on a number of occasions. Such interference requires, as Hardie A.J. said when delivering the reasons for judgment of the Full Court of the Supreme Court of New South Wales in De Mestre v A.D. Hunter Pty. Limited (1960) 77 N.S.W. W.N. 143 at p.146, that "a clear case has been made out that he has acted on some wrong principle or has made an order which works a substantial injustice to one of the parties". The Full Court was there dealing with an appeal against an interlocutory order granting an injunction, which order Hardie A.J. was satisfied was a matter of practice and procedure. He cited McHarg v Universal Stock Exchange Ltd (1895) 2 Q.B. 81 in which case Charles J. at page 82 said of the summons for an interlocutory injunction that it was "simply a step in the cause, a part of the machinery by which the action was to be worked out to its final determination. I am quite unable to see why such a summons should not be a matter of practice and procedure". Wright J., the other member of the court, was of the same opinion.

In Minister for Army v Parbury Henty & Co Pty. Ltd. (1945) 70 C.L.R. 459 at p.489 Latham C.J. identified matters of practice or procedure in the following terms:
"In Poyser v Minors Lush L.J. said that the term 'practice' denoted the mode of proceeding to enforce a right as distinguished from the law which gives or defines the right, and that he took 'practice' and 'procedure', as applied to that subject, to be convertible terms. Practice in the common or ordinary sense of the word denotes 'the rules that make or guide the cursus curiae, and regulate the proceedings in a cuase within the walls or limits of the Court itself - Attorney General v Sillem per Lord Westbury."


Procedure;

". . . comprehends all steps necessary to be taken in litigation for the establishment of a right in order that the right may be judicially recognised and declared in such manner as will enable the party asserting the right legally to enjoy it; it covers not only the acts of the judges of the court but also the acts of the officers of the court which are necessary to give effect to judicial pronouncements."
White v White (1947) V.L.R. 434 at p.440.

These comments on matters of practice and procedure and the nature of an interlocutory injunction are, in my opinion, at least equally applicable to the acceptance, variation or discharge by the court of undertakings offered to the court, and the adjournment of proceedings in consequence of such undertakings.

The reason for the reluctance of an appellate court to interfere with discretionary powers in matters of practice or procedure was discussed by the Full Court of the Supreme Court of New South Wales in re The Will of Gilbert (1941) 46 S.R. (N.S.W.) 318. Jordan C.J. at page 323 said:
". . . there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigous disposition could at will in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal. But an appeal from an exercise of a so-called discretion which is determinative of legal rights stands in a somewhat different position. In this class of case too, a Court of Appeal submits itself to self-imposed restraints, but restraints which, though strict are somewhat less stringent than those adopted in matters of practice or procedure."

This passage was referred to with approval in Brambles Holdings Limited v Trade Practices Commission (1980) 28 A.L.R. 191 at pp.193 and 198. I refer also to the cases cited in Williams, Victorian Supreme Court Practice 2nd ed. vol. 2 page 2376 under the heading "Practice and Procedure". The giving of undertakings to the court and subsequent variation of such undertakings are not matters determining substantive or legal rights.

In Dougherty v Chandler and Others (1946) 46 S.R. (N.S.W.) 370 at p.374 Jordan C.J., after referring to the fact that a Court of Appeal has jurisdiction to override an exercise of discretion reiterated that where the discretion "has been exercised with respect to a matter of practice and procedure, an Appellate Court will do so only when satisfied that the course taken by the trial judge is likely to have led to a miscarriage of justice."

I am satisfied that the trial judge's discretion was one with respect to a matter of practice and procedure, in which case we should be particularly loathe to interfere. The appellants' submissions do not satisfy me that a miscarriage of justice has occurred or, for the reasons which follow, that the trial judge has acted upon a wrong principle in law.

If, notwithstanding the nature of the discretion we are, contrary to my opinion, inclined to intervene, it is axiomatic that notwithstanding that an appeal lies to this court as of right (Federal Court of Australia Act 1976, s.24) we should follow established principles in reviewing the exercise of the trial judge's discretion. As an appellate court we should only interfere if an error has been made in the exercise of the discretion. It is nothing to the point that we would, if in the position of the trial judge, have adopted a different course or approach.

It is apparent therefore that an appellant bears a heavy onus in seeking to disturb an order made in the exercise of a discretionary power. Bearing in mind this obligation it is appropriate to consider whether the contentions of counsel for the appellants establish that the exercise of discretion has miscarried by reason of an identifiable error or because the result is unreasonable or so plainly wrong or unjust that there has been a failure to exercise it (Gronow v Gronow (1980) 29 A.L.R. 129 and Australian Broadcasting Commission v Parish and Others (1980) 3 A.T.P.R. 42193, per Bowen C.J. at p.42,195 and Deane J. at p.42,215). Unless such a miscarriage is established, this court should not interfere; Brambles Holdings Limited v Trade Practices Commission supra.

The appellants' first submission was that the trial judge erred because he had no jurisdiction to discharge the original undertaking and to accept another. It was said that the limited grounds upon which an injunction would be dissolved, such as mistake or error, (Halsburys Laws of England 4th ed. vol.24 para 1112) apply equally to the variation of an undertaking, in the sense in which I am using that expression. However, in my opinion, such is not the case, and I am not aware of any authority supporting such a submission. Paragraph 1112 does not refer to interlocutory injunctions which according to paragraph 1111 may be dissolved at any time and the former paragraph makes no reference to a variation of an interlocutory order to take account of changed circumstances. I refer to Attorney General v Birmingham Tame and Rea District Draining Board (1910) 1 Ch 48 (1912) A.C. 788 at p.806, and Encyclopaedia of Court Forms and Precedents, Lord Atkin Edition vol.9 p.645 as illustrating the control which a court has over its interlocutory orders. Moreover a contention that an undertaking can only be discharged in limited circumstances is contrary to Cutler v Wandsworth Stadium Ltd (1945) 1 All E.R. 103, where it was accepted that if a proper case has been made out, there is general power to discharge an existing undertaking in exchange for a new undertaking. The Court of Appeal in Mullins v Howell (1879) 11 Ch.D.763 referred to the control which a court has over its own orders and in particular interlocutory orders at p.766 where Jessel M.R. said:
"I do not think that the rules which have been laid down as the rules under which the court will enforce agreements apply to enforcing orders of the court, because the court has jurisdiction over its own orders, and there is a larger discretion as to orders made on interlocutory applications than as to those which are final judgments."

Smith v Baxter (1900) 2 Ch. 138 illustrates that a court will in appropriate circumstances accept the offer of an undertaking rather than make an order irrespective of the attitude of the other party, and Iraqi Ministry of Defence v Arcepey Shipping Co S.A. (Gillespie Brothers & Co. Ltd. intervening) (1980) 1 All E.R. 480 is an example of circumstances in which the terms of an interlocutory injunction will be varied.

In my opinion the trial judge had jurisdiction to release the respondent from its undertaking. Moreover there was no evidence that that undertaking was given to the court in the course of the carrying out of a compromise agreed between the parties. Certainly there was no submission to the trial judge that that the respondent's action in applying to vary the undertaking was in breach of an agreement, and no application to stay the respondent's action on this ground.

Likewise even if it be said that the original order was in substance though not in form made by consent, it has to me all the indications of an order remaining under the control of the court, which was entitled on proper application to vary, dissolve, discharge or adjust the order to meet changing circumstances. In form it was not made by consent, doubtless because the appellants had indicated that they would prefer an order restraining the respondent. However they did not oppose the adjournment of the application upon the court indicating that it was inclined to accept the undertaking. The fact that the respondent's undertaking was given "until trial or further order" (my underlining) and that the application was adjourned sine die with liberty to apply generally is indicative of the entitlement of a party to make subsequent applications on the matters before the court.

In the light of my opinion that the trial judge had jurisdiction to vary the undertaking and the fact that the original order expressly enabled an application to this end to be made, the question arises whether there was material before the court upon which the trial judge could rely in exercising his discretion in favour of the respondent. In my opinion there was such material.

The respondent sought the release for the purpose of enabling it to obtain evidence to present at trial the results of a public opinion survey. The admissibility or relevance of such evidence is not a matter for our consideration. It suffices to say that on the application of the appellants, directions had earlier been given as to the mode in which it would be permissable to present such evidence. However, shortly prior to the application to vary the undertaking, the respondent was advised by its experts and its counsel that an appropriate survey could not be conducted without breaching the terms of the undertaking. In these circumstances the respondent made application to vary the terms of its undertaking to the extent necessary to enable it to conduct an effective survey.

The appellants contended that this was not a proper or sufficient ground upon which the undertaking should be varied; particularly, it was said, because the variation would permit conduct which would amount to a contravention of the Act and to the tort of passing off. However there had been no finding, even on the evidence before the court on the application for an interlocutory injunction, that the Act had been infringed or that the respondent had committed the tort of passing off. Moreover it is my opinion that there is the risk of injustice to the respondent if it is not permitted to obtain this evidence. A further ground which justified the exercise by the trial judge of his discretion is the public interest, in that the Act is in this area primarily concerned to protect the interest of consumers. In such circumstances all relevant evidence should be available to assist the court, and such assistance should not be denied because a party, in consequence of having given a prior undertaking, was prevented from seeking it out. It follows that in my opinion there was evidence before the trial judge on the basis of which he could be justified in exercising his discretion to discharge the undertaking.

The final matter for consideration is whether the trial judge made his decision without regard to the interests of the appellants, which companies it was said have in consequence suffered such an injustice as would indicate a failure to exercise his discretion. The contention was that the order would occasion irreparable harm to the appellants, but after considering all the evidence tendered at any time to the court, whether or not it was technically before the trial judge, I am not satisfied that this is the case. The extent to which the appellant was entitled by its new undertaking to perform the allegedly improper acts was specifically restricted by the trial judge and there was no submission that the public would suffer irreparable harm. The contention that such harm would be occasioned to the appellants was based on the alleged impossibility of calculating the extent of the harm. The trial judge did take into account the interests of the appellants as his use of the expression "balance of convenience" indicates. If the appellants were insufficiently prepared to oppose the respondent's application an adjournment could have been sought. If it was, and the trial judge had refused it, other considerations would arise, as they would if the appellants, being dissatisfied with the varied undertaking offered, had sought and been refused an adjournment to enable the adjourned application for a restraining order to proceed. However neither of these applications was made, and it can not be correctly stated that an unacceptable undertaking was imposed on the appellants. No undertaking was imposed on them, nor were they obliged, as indeed they could not be, to give the usual cross-undertaking as to damages.

In giving his reasons the trial judge referred to what he called the balance of convenience. In my opinion, after satisfying himself that he had jurisdiction in the matter and that the applicant had made out a case for discharge of its earlier undertaking, it was proper for him to consider, in relation to the undertaking offered, the extent to which its new terms would inconvenience each of the parties. It cannot be said that by so doing he, as was alleged, reversed the onus of proof or paid no regard to the interests of the appellants.

In my opinion, no error has been established as having been made by the trial judge in exercising his discretion. No incorrect principle upon which he acted has been identified, nor has any material upon which he should or alternatively should not have relied. Furthermore the decision is neither unreasonable nor plainly unjust. If it be relevant, my opinion of the order is that there was much to justify it.

In my opinion the appeal should be dismissed with costs.