Port Coogee No 790 Pty Ltd v Coastal Development Management Pty Ltd

[2014] WASC 400

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

CITATION:   PORT COOGEE NO 790 PTY LTD -v- COASTAL DEVELOPMENT MANAGEMENT PTY LTD [2014] WASC 400

CORAM:   CHANEY J

HEARD:   16 OCTOBER 2014

DELIVERED          :   31 OCTOBER 2014

FILE NO/S:   CIV 2406 of 2014

BETWEEN:   PORT COOGEE NO 790 PTY LTD

Plaintiff

AND

COASTAL DEVELOPMENT MANAGEMENT PTY LTD
Defendant

Catchwords:

Injunction - Interlocutory - Advertisement - Whether artist's impression is misleading and deceptive - Turns on own facts

Legislation:

Competition and Consumer Act 2010 (Cth)

Result:

Plaintiff's application for interlocutory injunction dismissed

Category:    B

Representation:

Counsel:

Plaintiff:     Mr R J Price

Defendant:     Mr M D Howard SC

Solicitors:

Plaintiff:     Hotchkin Hanly

Defendant:     Chew & Matthews

Cases referred to in judgment:

Castlemaine Tooheys Ltd v State of South Australia [1986] HCA 58; (1986) 161 CLR 148

Twinside Pty Ltd v Venetian Nominees Pty Ltd [2008] WASC 110

1. CHANEY J:  This is an application for an interlocutory injunction to restrain the defendant from publishing an advertisement in the form which it published in the Western Suburbs Weekly on 2 September 2014, or from publishing or making any other statement, orally or in writing, to the effect that any purchaser of an apartment proposed to be developed by the defendant in a development known as Port Coogee Marina Apartments shall enjoy, from practical completion of the apartment, views of the Port Coogee marina and the ocean that are unimpeded by any other developments.

2. The plaintiff is the registered proprietor of land situated at 9 Coromandel Approach, North Coogee (Lot 790).  It has approval to develop a 109 multiple dwelling development on Lot 790.  The development is to be known as the Marina Edge development.  The Marina Edge development is to be a substantial building comprising eight levels.  The plaintiff's land has three road frontages.  Coromandel Approach is to the north.  Brunswick Street is to the east.  On the western side is Chieftain Esplanade.  To the west of Chieftain Esplanade is the Port Coogee marina.  The apartments on the western face of the Marina Edge development will, therefore, when constructed enjoy views of the marina which are unobstructed, except perhaps by occasional street trees.

3. Since March 2014, the plaintiff has been marketing the Marina Edge development through a development sales suite located on Lot 790.  It has been receiving offers from the public to purchase apartments in the Marina Edge development since 26 March 2014.  In order to fulfil a condition of finance approval, substantial pre‑sales of units are required.  To date, the plaintiff has accepted contracts for a total of approximately half (in dollar terms) of the required amount of pre‑sales.

4. The defendant is a wholly owned subsidiary of Match Corporate Services Pty Ltd, and owns land comprising of three contiguous lots fronting Coromandel Approach to the immediate east of Lot 790 on the other side of Brunswick Street.  It, too, proposes to develop its land with apartments, although the development would appear to be considerably smaller than the Marina Edge development.  The defendant's development is referred to as the Port Coogee Marina apartments.

5. On 2 September 2014, the defendant published an advertisement in the Western Suburbs Weekly for the Port Coogee Marina apartments.  The advertisement consisted of an artist's impression of the development, and an aerial photograph showing the location of the defendant's land in relation to the marina and the coastal strip north to Fremantle.  The advertisement stated that the apartments were 'now selling from $395,000'.  Below the artist's impression (which occupied approximately half of the page), the aerial photograph and the indication of price, the following words appeared:

•      Luxury boutique Apartments in Award‑winning Port Coogee Estate	•     Marina and ocean views
•      1, 2 and 3 bedrooms available	•     Minutes from the cafes and culture of South Beach and Fremantle
•      North‑facing apartments opposite lush green parklands	•     Secure your apartment today with only 10% deposit
•      Only 100 m from the beach	•     Completion early 2016

VISIT OUR NEW ONSITE DISPLAY SUITE

1. The plaintiff contends that the advertisement is misleading and deceptive contrary to s 18 of the Australian Consumer Law (in Sch 2 of the Competition and Consumer Act 2010 (Cth)). It is said to be misleading by reason of the artist's impression of the building. The complaint as to the artist's impression is that, immediately to the west of the building, there is a depiction of a narrow green strip of land and, beyond that, the marina showing boats apparently in pens. The perspective of the artist's impression is the view of the building from approximately a northeast vantage point looking to the southeast.

2. The plaintiff contends that the artist's impression is misleading because it does not show the Marina Edge development constructed immediately to the west of the Port Coogee Marina apartments, and thus suggests that there would be views from the Port Coogee Marina apartments which would not be impeded by the plaintiff's development.  The plaintiff asserts that the artist's impression would mislead parties as to the available views from the development, and the proximity of access to the marina, with the result that they would accept the invitation contained in the advertisement to visit the defendant's onsite display suite.  The plaintiff contends that the advertisement would thus divert potential investors away from the plaintiff's more expensive apartments and, thereby potentially cause the plaintiff to lose pre‑sales.  Specifically, the plaintiff's case is that the advertisement, by the artist's impression, conveys a representation that the Port Coogee Marina apartments would enjoy views of the Port Coogee marina and the ocean that are unimpeded by any other development.

3. The defendant asserts that the advertisement is not misleading and deceptive and that the injunction ought not to be granted.

The applicable principles

1. The principles in relation to the grant of interlocutory injunction are well‑settled.  These were summarised by Mason ACJ in Castlemaine Tooheys v State of South Australia[1] where he said:

   In order to secure such an injunction the plaintiff must show (1) that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief; (2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction.

   [1] Castlemaine Tooheys Ltd v State of South Australia [1986] HCA 58; (1986) 161 CLR 148 153.

2. Beech J in Twinside Pty Ltd v Venetian Nominees Pty Ltd[2] elaborated on the principles as follows:

   These principles were further explained by Gummow and Hayne JJ in Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57, [65] ‑ [71] (Gleeson CJ and Crennan J agreeing). Their Honours stated that the relevant principles are those stated in Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618, where the two main inquiries were said to be whether the plaintiff had made out a prima facie case and whether the balance of convenience favours the grant of the injunction. The phrase 'prima facie case' does not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed. It is sufficient that the plaintiff show a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending the trial. How strong the probability needs to be depends upon the nature of the rights the plaintiff asserts and the practical consequences likely to flow from the orders the plaintiff seeks: [65], [71].

   The apparent statement by Lord Diplock in American Cyanamid Co v Ethicon Ltd [1975] AC 396 at 407 that, provided the court is satisfied that the plaintiff's claim is not frivolous or vexatious, there will be a serious question to be tried, is not to be followed. The governing consideration is that the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory orders sought. These principles make it clear that the various considerations identified by Mason ACJ in Castlemaine Tooheys are to be considered together.

   As the apparent strength of the applicant's case diminishes, the balance of convenience moves against the making of an order: Glenwood Management Group Pty Ltd v Mayo [1991] 2 VR 49 at 54 ‑ 55; Todd v Novotny [2001] WASC 171. The grant of an injunction involves balancing the injustice which might be suffered by the defendant if the injunction is granted and the plaintiff later fails at trial, against the injustice which might be suffered by the plaintiff if the injunction is not granted and the plaintiff later succeeds at trial: Films Rover International Ltd v Cannon Film Sales Ltd [1987] 1 WLR 670; Madaffari v Labenai Nominees Pty Ltd [2002] WASC 67 [14].

   [2] Twinside Pty Ltd v Venetian Nominees Pty Ltd [2008] WASC 110 [9] ‑ [11].

3. I adopt the principles as explained by Beech J.

Prima facie case

1. In considering this question, it is necessary to focus upon the manner in which the advertisement is said to be misleading and deceptive.  As I have already mentioned, the essential contention by the plaintiff is that the artist's impression contains an implicit representation that an apartment in the Port Coogee Marina apartments development will enjoy views of the Port Coogee marina and the ocean that are unimpeded by any other development.  It is accepted that the printed statement in the advertisement, namely that one of the listed attributes of the development was 'marina and ocean views' is not misleading.  That is because it is accepted that, as the photographic evidence attached in the affidavit of Michael James Sims demonstrates, marina and ocean views will be available from the north‑facing apartments depicted in the artist's impression.

2. The artist's impression depicts north‑facing apartments and what appear to be some east‑facing apartments.  Quite obviously, the east‑facing apartments will have no views of the marina or ocean.  That is obvious from the advertisement.  Similarly, it is quite evident from the artist's impression that the north‑facing apartments would not, except perhaps those on the western end, have views of the small area of boats and marina depicted in the artist's impression.  That is because the perspective of the picture is to the southwest, and for many of the north‑facing units, the Port Coogee Marina apartments building itself would necessarily obscure any view of that area.  There is no evidence as to what development is to occur down the Brunswick Street side of the defendant's land immediately opposite Lot 790.

3. The advertisement specifically refers to 'north‑facing apartments opposite lush green parklands'.  It is those apartments which are depicted in the artist's impression.  The reference to 'lush green parklands' would appear to be a reference to the open space to the north on the opposite side of Coromandel Approach.

4. In my view, it is unlikely that the plaintiff will establish at trial that the artist's impression in the advertisement contains any representation in relation to views.  The only representation in the advertisement as to views is the statement 'marina and ocean views' which the plaintiff accepts, rightly in my view, is not misleading.  Marina and ocean views will be available from the apartments, or at least some of them.  The artist's impression does not suggest that the small area of water and marina to the west of the development could be seen from the majority of units depicted.  With the possible exception of the north‑facing units at the western end of the development, the building itself would obscure any view of the area of water depicted.

5. It may be that the artist's impression contains an implicit representation that the development is in close proximity to the marina.  That representation, clarified by the words 'only 100 metres from the beach', would appear to be true, and is not the subject of any complaint by the plaintiff.

6. The second criticism of the artist's impression is that it fails to show that there is a road between the Port Coogee Marina apartments and the land to the west.  There is, in fact, what appears to be a paved area to the west of the building in the artist's impression.  More importantly, however, is the fact that the aerial photograph, which forms a prominent part of the advertisement, clearly depicts the location of the Port Coogee Marina apartments, and what appear to be the roads surrounding it.  The plaintiff's land can be seen in that aerial photograph lying between the defendant's land and the water.  Taken as a whole, the advertisement clearly shows that there is undeveloped land between the Port Coogee Marina apartments and the marina, and the location of a road between the defendant's land and Lot 790.

Will the plaintiff suffer irreparable damage

1. I have described above the plaintiff's formulation of the manner in which it contends it will suffer damages as a result of the defendant's allegedly misleading advertisement.  Ms Fleur Hudson, a director of the company which is the project manager of the Marina Edge development, expressed her concern as being 'that the Match advertisement will lead prospective purchasers into acquiring a Match apartment instead of a Marina Edge development in the belief that they will have unimpeded marina and ocean views for a much cheaper price'.[3]

   [3] Affidavit of Fleur Louise Hudson, sworn 7 October 2014 [15].

2. Even if it could be said that the advertisement carried the implied representation that the Port Coogee Marina apartments would have unimpeded marina and ocean views, the consequential damage to the plaintiff is at best speculative.  It assumes that the purchasers would choose the defendant's development over the plaintiff's development simply on the basis of the advertisement.  The advertisement invites inspection of the site.  The evidence shows that there is a sales unit and signage advertising in the Marina Edge development on Lot 790 which would be readily apparent to any person who accepted the invitation in the advertisement to visit the defendant's onsite display unit.  Photographs attached to the affidavit of Michael James Sims show that there are large signboards on Lot 790 depicting the plaintiff's development.  One such large signboard faces the corner of Coromandel Approach and Brunswick Street and would be readily apparent to any person visiting the defendant's site.  It seems highly unlikely that prospective purchasers would make a decision to purchase units in the Port Coogee Marina apartments on the basis of an assessment of the available views from the artist's impression contained within the advertisement.

3. Not only is it unlikely that the plaintiff will establish that the artist's impression contains the representation alleged, the plaintiff's assertion that it is likely to suffer damage is also extremely weak.

The balance of convenience

1. In responding to the application, the defendant did not address the question of the extent to which an interlocutory injunction in the terms sought by the plaintiff would subject it to costs or inconvenience.  It can reasonably be assumed that some costs would be incurred in changing future advertisements, and that the benefit of past expenditure would to some extent be lost, if the injunction were to be granted.  The quantum of those costs is not apparent on the evidence before me for the purposes of the interlocutory hearing.  The plaintiff argues that relatively minor costs would be involved in changing the advertisement, and thus the balance of convenience favours the grant of the injunction.

2. As Beech J noted in Twinside, the balance of convenience moves against the making of an order where the apparent strength of an applicant's case diminishes.  Having regard to the conclusions I have reached as to the apparent weakness of the plaintiff's case, both as to the question of whether the advertisement is misleading and deceptive, and, if it is, whether it is likely to cause damage to the plaintiff, I do not consider it appropriate to exercise my discretion to grant an interlocutory injunction on the terms sought, regardless of the possibility that the resultant costs and damage to the defendant might be relatively small.

Conclusion

1. For those reasons, I do not consider that the interlocutory injunction should be granted in the terms sought, or at all, and I would dismiss the plaintiff's application for interlocutory relief.