Sabre Corporation Pty Ltd v Laboratories Pharm-A-Care Pty Ltd
[1995] FCA 121
•15 MARCH 1995
CATCHWORDS
INTERLOCUTORY INJUNCTION - application to restrain marketing, distribution, selling of hair care products - principles applicable to grant of interlocutory injunction - serious issue to be tried and balance of convenience - Court has general discretion in determining grant of interlocutory injunction - whether strength or weakness of case relevant to balance of convenience - court's opinion that applicant's case weak taken into account on balance of convenience.
Trade Practices Act, 1974 (Cth)
Australian Coarse Grain Pool Pty Limited v Barley Marketing Board of Queensland (1983) 46 ALR 398
World Series Cricket Pty Limited v Parish (1977) 16 ALR 181
Castlemaine Tooheys Limited v The State of South Australia (1986) 161 CLR 148
Brayson Motors Pty Ltd v Federal Commissioner of Taxation (1983) 46 ALR 279
TPC v Santos Limited & Anor (1992) 110 ALR 517
Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533
American Cyanamid Case v Ethicon Limited [1975] AC 396
Cayne v Global Natural Resources plc [1984] 1 All ER 225
Stuart Alexander & Co. (Interstate) Pty Limited v Blenders Pty Limited (1981) 53 FLR 307
SABRE CORPORATION PTY LTD v LABORATORIES PHARM-A-CARE PTY LTD
No. NG117 of 1995
Beazley J
15 March 1995
Sydney
IN THE FEDERAL COURT OF AUSTRALIA )
) No. NG117 of 1995
NEW SOUTH WALES DISTRICT REGISTRY )
)
GENERAL DIVISION )
BETWEEN:SABRE CORPORATION PTY LTD
Applicant
AND:LABORATORIES PHARM-A-CARE PTY LTD
Respondent
CORAM:BEAZLEY J
PLACE: SYDNEY
DATE: 15 MARCH 1995
MINUTE OF ORDERS
The Court orders that:
The application for the grant of an interlocutory injunction be dismissed.
The applicant pay the respondents' costs.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
) No. NG117 of 1995
NEW SOUTH WALES DISTRICT REGISTRY )
)
GENERAL DIVISION )
BETWEEN:SABRE CORPORATION PTY LTD
Applicant
AND:LABORATORIES PHARM-A-CARE PTY LTD
Respondent
CORAM:BEAZLEY J
PLACE: SYDNEY
DATE: 15 MARCH 1995
REASONS FOR JUDGMENT
BEAZLEY J: This is an application for an interlocutory injunction to restrain the respondent from marketing, distributing, offering for sale or selling the hair care products "Hairdresser's Formula Extra Body Shampoo", "Hairdresser's Formula Conditioner and Instant Detangler" and "Hairdresser's Formula Conditioning Shampoo" in packaging in the form in which it is currently sold or any other form of substantially similar packaging.
Background facts
The applicant has the sole and exclusive rights to import into Australia and promote and distribute haircare products manufactured in the United States by Joico Laboratories, Inc.
(Joico). The haircare products are sold under the brand name Joico. The products relevant to this application are Joico's "Lavei", an extra body shampoo, Joico's "Lite", a detangler and conditioner; and "Kerapro", a conditioning shampoo.
The Joico products are formulated with what was described in the evidence as "a unique ingredient" called Triamine Complex, a "multi-level formulation of hydrolyzed human hair Keratin protein" manufactured exclusively for Joico. Joico products are marketed as specialist or exclusive haircare products and are generally only sold through professional hair salons and haircare sales outlets and wholesalers which supply those outlets. The retail price of the Joico products is approximately $12.50 for the 250 ml sized product and approximately $20.00 for its 500 ml sized product.
In the 1993/1994 financial year the turnover of Joico products at a wholesale level in Australia was about $11 million. Joico products are regularly supplied to over 2500 outlets Australiawide. Joico products are marketed in television commercials broadcast throughout Australia and advertisements in a variety of magazines including "Mode", "Elle" and "Vogue Australia". Joico products have also been promoted through sponsorships of the Australian Mens Volleyball team, the 1992 Australian freestyle skiing championships and the 1991 and 1992 Australian Miss Universe Pageant. The applicant's cost of marketing and advertising in the financial year ended 1994 was about $700,000 and over a ten year period the applicant
has spent several million dollars on marketing and advertising.
The respondent manufactures and distributes health and beauty products including the Hairdresser's Formula products subject of these proceedings.
The respondent commenced selling Hairdresser's Formula products to Safeways in Victoria in late November 1994. Since then it has sold the products to Pick 'n Pay in Queensland and since February 1995, has sold the products to Coles supermarkets throughout Australia. The respondent's managing director gave evidence that up to the present time, the total volume of products sold is approximately 80,000 units. It is not clear, however, whether that figure relates to products sold to retailers or is in respect of the volume of retail sales. Hairdresser's Formula products are sold in a 375 ml plastic bottle and retail for $5.95 per bottle.
The applicant's product
The applicant's product is contained in a pale mauve bottle with a flip top lid in what might be described as a grey/mauve colour. The printing on the bottle is in the same shade as the lid. The only word which is highlighted and which is in larger (although not large) and heavier print than the other print on the bottle is the name of the product, that is Lavei, Kerapro or Lite. The extra body shampoo bears the following descriptions:
Lavei
Extra Body Shampoo
for Fine/Limp
Oily Hair
Kerapro
Conditioning Shampoo
for Normal to Dry &
Chemically-Treated Hair
Lite
Instant Detangler and
Conditioner
The name Joico does not appear prominently on the rounded surface of the bottle. It appears at the bottom of the bottle as follows:
Manufactured by
Joico Laboratories Inc.
Los Angeles, CA 90042-0308
Made in USA
and is also etched into an indented portion of the bottle in lettering which is larger than any of the printing on the bottle.
The following statement also appears on the Joico products:
"Guaranteed
when purchased
from a Professional
Stylist only. Do not
buy this product at
any supermarket,
drug store or other
unauthorized
retail outlet."
The respondent's product
The respondent's product is packaged in a differently coloured mauve bottle. It has a flip top lid in the same colour as the bottle. The extra body shampoo bears the following description:
If you like
Joico
Lavei
you'll love
HAIRDRESSER'S
FORMULA
EXTRA BODY
SHAMPOO
FOR FINE, THIN
& LIMP OILY HAIR
Below these words, set at an angle, are the words:
COMPARE & SAVE
Below that in fine print is the following statement:
"Joico and Lavei are trademarks of Joice Laboratories Inc. There is no connection between Joico and Hairdresser's Formula. We believe this product is as good as Joico Lavei even though its formulation and fragrance may have some differences. Try it and see!" (emphasis added).
On the reverse of the bottle appear the words, in the same size as the statement in respect of Joico Lavei on the front:
"We think our product is as good as Joico Lavei. Try it and see!"
The brand name and product description are again reproduced. The following statement then appears in black print:
"Hairdresser's Formula is not connected in anyway with Joico Laboratories Inc, and we don't represent that our products are identical in every respect. Hairdresser's Formula and Joico are competitors. We leave it up to you to make your choice."
There is a similar description on the bottles of the Hairdresser's Formula conditioning shampoo and the conditioner to that on the Joico "Kerapro" and "Lite" product respectively. However, whereas the Lavei product is described as "Extra Body Shampoo for Fine/Limp Oily Hair", the respondent's product adds the word "thin" after the word "fine". The description on the Lite product is "Instant Detangler and Conditioner". On the respondent's product it is "Conditioner and Instant Detangler". The description of the conditioning shampoo is the same on both products.
Both the Joico and Hairdresser's Formula bottles list the ingredients in the respective products. There are some common ingredients and some which differ. I have already referred to Joico's exclusive use of Triamine Complex, which according to the opinion of Mr Ray Townsend, a cosmetic manufacturing chemist engaged by the applicant for the purposes of these proceedings, "is alone likely to give the Joico products very different properties to the Respondent's products". Mr Townsend says that the Joico Lavei and Lite products have a more efficient preservative system than the respondent's extra body shampoo and conditioner and instant detangler and that Joico Kerapro and Hairdresser's Formula Conditioning Shampoo are not even similar. He described the latter as a "very basic and cheap formula" thrown together. In his opinion, the fact that the applicant's and respondent's products have different ingredients indicated a very high possibility that they would have different performance characteristics. He said that, in any event, it was possible for two products with the same ingredients to result in a different end product if one was a "watered-down, cheaper version", in which case it would be of inferior quality. Mr Townsend concluded that:
"Based on the relative prices of the Applicant's and the Respondent's products it is most likely that the Respondent's products have lower levels of surfactant concentration, higher water content and are less efficacious than the Applicant's products."
It should be noted that Mr Townsend has not tested the two products but reached his conclusion upon an examination of the list of ingredients of the parties' products and having been told the retail price of each.
Recently, the respondent has advertised the Hairdresser Formula products on national television. Relevantly, the advertisement is in these terms:
"This is Joico Kerapro Shampoo. [Visual: Bottle of Joico Kerapro.] It's a great product sold for around $12.00. This is Hairdresser's Formula [Visual: Respondent's product alongside Joico Kerapro.] also a great product at $5.95. It's not Joico but we think it's as good and it's half the price. [Visual: Range of Respondent's products.] Try it and see!"
Applicant's claims
The applicant contends that having regard to the promotion, sale and/or distribution of the Hairdresser's Formula products, the respondent has contravened ss 52, 53(a), 53(c) and 53(d) of the Trade Practices Act, 1974 (Cth). It is also alleged that such conduct constitutes the tort of passing off in that the respondent has passed off the Hairdresser's Formula products as having the same ingredients, formulations, quality, characteristics, level of satisfaction and distinctiveness as the Joico products and that the sales of the Hairdresser's Formula products by reference to the Joico products has debased and will debase the reputation of Joico's distinctive haircare products. In particular, the applicant alleges that the statements on the Hairdresser's Formula products convey the following representations:
the Hairdresser's Formula products have the same ingredients, formulations, quality, characteristics and level of satisfaction as Joico Lavei and Joico Lite;
Joico Lavei and Joico Lite are not distinguished by their ingredients, formulations, quality, characteristics or level of satisfaction;
the respondent genuinely believes that the Hairdresser's Formula products have the same quality characteristics and level of satisfaction as Joico Lavei and Joico Lite;
this belief of the respondent has a proper basis;
there is a connection between the respondent, the Hairdresser's Formula products or their manufacturer and Sabre and/or Joico Laboratories."
The applicant contends each representation is wholly or partly false, misleading and deceptive in the following respects:
Representation (i):
A review of the ingredients of the Hairdresser's Formula products reveals that their ingredients and formulations and, therefore, their quality, characteristics and level of satisfaction are different to Joico Lavei and Joico Lite. In particular, the Hairdresser's formula products do not contain Joico Laboratories' unique Triamine Complex formula.
Representation (ii):
Joico Lavei and Joico Lite are distinguished by, among other things, the use of Triamine Complex in their formulation.
Representations (iii) & (iv):
In light of the above the respondent's belief is genuinely held or has a proper basis.
Representation (v):
There is no connection between the Hairdresser's Formula products, Laboratories Pharm-A-Care or the manufacturer of the Hairdresser's Formula products and Sabre or Joico Laboratories.
Principles governing grant of interlocutory injunction
The principles which govern the grant of interlocutory relief are well established. There must be a serious issue to be tried and the balance of convenience must favour the making of the injunction.
The applicant's solicitor submitted that the correct application of these principles meant that once the court had determined that there was a serious question to be tried, it was not open to it to take into account the strength or weakness of the applicant's case on the balance of convenience. Reliance was placed on Australian Coarse Grain Pool Pty Limited v Barley Marketing Board of Queensland (1983) 46 ALR 398 and World Series Cricket Pty Limited v Parish (1977) 16 ALR 181 in support of this submission. In Australian Coarse Grain Pool Pty Limited v Barley Marketing Board of Queensland (1983) 46 ALR 398, Gibbs CJ stated the test in these terms:
"...the proper approach, in considering whether an interlocutory injunction should be granted, is first to inquire whether there is a serious question to be tried, and then to determine the matter on the balance of convenience."
In World Series Cricket Pty Limited v Parish (1977) 16 ALR 181 after referring to the wide judicial discretion conferred by s 80(2) of the Trade Practices Act, 1974 (Cth), Bowen CJ stated at 186:
"The strength of the case which the plaintiff must make out will depend upon the nature of the right which he is seeking to assert, and the consequences which will flow from the making of the interlocutory order. However, where the facts are seriously in dispute, the Court will not undertake a preliminary trial of the action in order to forecast a probable result, but rather, if the plaintiff has a fair chance of success (and what will be required will vary according to the nature of the case), the Court will proceed to look to the balance of convenience.
It has recently been said by the House of Lords in American Cyanamid v Ethicon Limited [1975] AC 396 that if the Court is satisfied that there is a serious question to be tried, it should not further test the strength of the plaintiff's case before deciding the balance of convenience."
Notwithstanding these high judicial statements the applicant's submission must be rejected. In the first place it does not accurately reflect what was said by the House of Lords in the American Cyanamid Case v Ethicon Limited [1975] AC 396 upon which Gibbs CJ relied in Australian Coarse Grain Pool and upon which Bowen CJ relied in World Series Cricket Pty Limited v Parish, although Lord Diplock considered the circumstances in which the merits could be taken into account on the balance of convenience to be limited. His Lordship stated at 409:
"...if the extent of the uncompensatable disadvantage to each party would not differ widely, it may not be improper to take into account in tipping the balance the relative strength of each party's case as revealed by the affidavit evidence adduced on the hearing of the application. This, however, should be done only where it is apparent upon the facts disclosed by evidence as to which there is no credible dispute that the strength of one party's case is disproportionate to that of the other party."
Secondly, the approach in American Cyanamid has been modified in later cases. For example in Cayne v Global Natural Resources plc [1984] 1 All ER 225 May LJ stated at 237:
"...one must be very careful to apply the relevant passages from Lord Diplock's familiar speech in the Cyanamid case not as rules but only as guidelines, which is what I am certain Lord Diplock intended them to be."
...
"...[t]he balance that one is seeking to make is more fundamental, more weighty, than mere 'convenience'. I think that it is quite clear...that although the phrase may well be substantially less elegant, the 'balance of the risk of doing an injustice' better describes the process involved."
More fundamentally however, the approach for which the applicant contends does not accord with the approach which has been adopted in Australia. In Castlemaine Tooheys Limited v The State of South Australia (1986) 161 CLR 148 at 155, in which the High Court was dealing with an interlocutory injunction to restrain the enforcement of a statute challenged on constitutional grounds, Mason ACJ stated at 155:
"...there are a variety of situations in which the Court, on a proper balance of convenience, will restrain enforcement of a statute in aid of a plaintiff's constitutional right. In arriving at a balance of convenience the Court will take into account the seriousness of the conduct enjoined by the statute and the damage to the public interest that may be caused by restraining its enforcement. And in some cases the balance of convenience may be affected by the Court's perception or evaluation of the strength of the plaintiff's case for invalidity."
His Honour's statements were confined to the interlocutory restraint of the enforcement of a statute and care has to be taken in extracting passages out of judgements on particular matters and giving them general application. In Brayson Motors Pty Ltd v Federal Commissioner of Taxation (1983) 46 ALR 279 at 285-6 Brennan J stated:
"The rights which the Commissioner seeks to assert are the rights to recover by s 38 procedure a proportion of the alleged tax liability of the plaintiff. To refuse injunctive relief, in practical terms, spells the end of the plaintiff's business. To grant injunctive relief, in practical terms, diminishes the prospect of recovery by the Commissioner.
In this situation, the strength of the case made by the plaintiff on this application is the chief factor for consideration, for that determines which claim to legal rights is more likely to be unjustly defeated - either by refusing or by granting the injunction, as the case may be."
Notwithstanding that his Honour also was dealing with an application to restrain enforcement of a statute, he stated the principle in general terms. And in TPC v Santos Limited & Anor (1992) 110 ALR 517 Hill J, with whose reasons Sweeney J agreed stated at 527:
"[t]he Court must determine whether it is satisfied that there is a serious question to be tried. The Court will also determine where the balance of convenience lies. These two matters are not independent of each other, although it will often be convenient to consider them successively."
In Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 McLelland J stated at 536 that there were some kinds of cases for interlocutory relief in which it was desirable to evaluate the strength of the plaintiff's case for final relief and cited Castlemaine Tooheys Limited and Brayson Motors. Although his Honour referred to "kinds" and "classes" of cases, I do not consider that his Honour meant to say more than was observed by M J Tilbury in Civil Remedies (1990) that although the court had a general discretion, the strength or weakness of the applicant's case was a factor which may be relevant to the balance of convenience,
"...the weight attaching to it depending on its impact when balanced against the other relevant considerations operating in the case."
and that:
"...the authorities direct special attention to the strength of the plaintiff's case in two contexts which tend to favour the refusal of interlocutory relief. These are (i) interlocutory injunctions which finally determine the dispute; and (ii) mandatory interlocutory injunctions."
In Kolback Securities, McLelland J also adopted the expression used by May LJ in Cayne v Global Natural Resources plc [1984] 1 All ER 225 namely that the court had to weigh "the balance of risk of doing injustice". Acceptance of that terminology as an accurate reflection of the court's task underscores the correctness of approaching the balance of convenience issue as a matter of general discretion.
Serious question to be tried
In determining whether there is a serious question to be tried in this case, it is useful to refer to a number of principles which govern applications brought under Part V of the Trade Practices Act 1974 (Cth) for misleading and deceptive conduct. First, the test of whether conduct is misleading or deceptive or is likely to mislead or deceive is an objective one: Parkdale Custom Built Furniture Pty Limited v Puxu Pty Limited (1982) 149 CLR 191 at 198-199; Sutton v A.J. Thompson (In Liq) & Ors (1987) 73 ALR 233 at 239-240. It is not necessary to prove that anyone has in fact been misled or deceived and the intent of the respondent in engaging in the conduct is irrelevant: Parkdale Custom Built Furniture Pty Limited v Puxu Pty Limited (1982) 149 CLR 191 at 197. In determining whether conduct contravenes s 52, regard is to be had to the section of the public exposed to the respondent's conduct. Once the relevant section of the public is established, the matter is to be considered by reference to all those who come within it, not only the educated, intelligent or discerning: Puxu Pty Limited v Parkdale Custom Built Furniture Pty Limited (1980) 31 ALR 73 per Lockhart J at 93; World Series Cricket Pty Limited v Parish per Brennan J at 203; Taco Company of Australia Inc. & Anor v Taco Bell Pty Limited and Ors (1982) 42 ALR 177 at 202 per Deane and Fitzgerald JJ. However, the test is probably one of the reasonable response of persons within the relevant sector of the public: see Parkdale Custom Built Furniture Pty Limited v Puxu Pty Limited at 199 per Gibbs CJ. It is not enough to establish that the conduct was confusing or caused people to wonder whether the two products came from the same source: Parkdale Custom Built Furniture Pty Limited v Puxu Pty Limited per Gibbs CJ at 198; per Mason J at 209.
Conduct will be likely to mislead or deceive if there is "a real or not remote chance or possibility" of persons being misled or deceived, regardless of whether it is less or more than 50%: Global Sportsman Pty Ltd v Mirror Newspapers Pty Limited (1984) 2 FCR 82 at 87. This too is an objective question for the Court: The Thai Silk Company Limited and Anor v Aser Nominees Pty Limited & Anor (1991) ATPR 41-145 at 53,089.
The Court also has regard to whether the alleged misrepresentations are properly characterised as expressions of opinion or statements of fact. In Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 at 88, the Full Court explored the significance of the distinction. It stated that:
"[a]n expression of opinion which is identifiable as such conveys no more than that the opinion expressed is held and perhaps that there is basis for the opinion. At least if those conditions are met, an expression of opinion, however erroneous, misrepresents nothing".
In Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1 at 46, Hill J stated that it is:
"...essentially...a question of fact whether a particular formulation of words expresses merely an opinion or a statement of fact. However, two observations may be made. First, the subjective purpose or motivation of the maker of the statement will not be of much significance. It is the reader's perception of the maker's intention which will ordinarily be the significant matter. The question will generally be resolved by looking at the persons to whom the statement was directed and asking whether any members of that class of persons
would reasonably understand the statement to be one of fact or of opinion".
Of their nature, statements which are puffing must be statements of opinion and not statements of fact. Statements which are puffs or which are exaggerated are not misleading or deceptive. However, there is often a fine line between what is puffing, what might merely cause uncertainty, and what is misleading or deceptive. These are matters of evaluation in respect of which responses may differ.
The question whether statements are mere puffs have been given particular attention in respect of television commercials. In Stuart Alexander & Co. (Interstate) Pty Limited v Blenders Pty Limited (1981) 53 FLR 307, Lockhart J stated at 311:
"...I think a robust approach is called for when determining whether television commercials of this kind are false, misleading or deceptive. The public is accustomed to the puffing of products in advertising."
Comparative advertising of products, whether on television or otherwise, has been the source of much litigation under Part V of the Trade Practices Act, 1974 (Cth). In Stuart Alexander, which was one such case, Lockhart J noted in respect of television commercials at 310 that:
"...first impressions...are important...".
His Honour further stated at 310:
"when a person produces a television commercial that not only boosts his own product but, as in this case, compares it critically with the product of another so that the latter is shown up in an unfavourable light by the comparison, in my view he ought to take particular care to ensure that the statements are correct."
I have set out above the statements made on the packaging of the Hairdresser's Formula product. I have also set out the representations which it is alleged these statements contain and their alleged misleading or deceptive nature.
In the present case, I doubt whether the printing on the respondent's bottles is misleading or deceptive or is likely to mislead or deceive. There is nothing in the express words used to indicate that the same ingredients and formulations are used. To the contrary, the ingredients are separately listed and there is the statement on the bottle which I have set out earlier, namely: "its formulation...may have some differences". There is also the manufacturer's statement that "we believe this product is as good as Joico...". However, I consider that to be a statement of opinion. There was evidence from the respondent's managing director that he had used both products and found the Hairdresser's Formula products as good as the Joico products. In addition he said that there had been consumer testing of the products which he said supported the statements on the respondent's products. Therefore this statement satisfies the criteria in Global Sportsman.
The applicant's evidence in relation to the quality of the product is sparse. Mr Townsend's conclusion that the Hairdresser's Formula products are most likely to be "less efficacious" than the Joico products is based, if not entirely at least in large measure, on the relative prices of the two products. For my part, I do not consider this to be a very sound basis for the conclusion drawn. Nor do I consider that I should place much weight on his statement that the manufacturer has "just thrown together a very basic and cheap formula" when it must be possible that a basic and cheap formula can still constitute an effective product. In any event this statement was made without any testing of the product and was a conclusion drawn solely from the list of ingredients.
In my opinion, the phraseology "If you like [the Joico product] you will love Hairdresser's Formula" not only lacks subtlety, but does not contain the representations alleged. It appears to me to be a classic example of puffing. In addition, the clear statements elsewhere on the bottles which state that there is no connection between the two products, that Hairdresser's Formula and Joico are competitors and that the formulations differ would dispel any uncertainty which might arise in a consumer's mind as to any association between the products.
Notwithstanding the apparent weakness of the applicant's case, I do not consider that I should find at this stage that there
is no serious case to be tried. I have come to this conclusion because the product name "Hairdresser's Formula" may not be sufficiently clear to indicate that it is a brand name, with the possibility that, given the references on the bottle to Joico, the packaging could be misleading or deceptive. In addition, despite the weaknesses in Mr Townsend's evidence there are differences in the formulations of the two products which may have some impact on the statements made on the "Hairdresser's Formula products. However, the weakness of the applicant's case is a factor which I consider should appropriately be taken into account in considering the balance of convenience.
I have not dealt separately with the applicant's claims that the respondent's conduct amounts to a contravention of s 53 and passing off. However, for the same reasons that I doubt that there has been conduct in contravention of s 52, I am of the opinion that it is unlikely that there has been conduct in contravention of s 53 or which amounts to passing off.
Balance of Convenience
The applicant relies upon the following factors as demonstrating that the balance of convenience lays in favour of the grant of an injunction. First, the applicant's trade is an old and established one. The applicant has, over a ten year period, developed a substantial market for the Joico products in Australia. On the other hand, the respondent is a newcomer to the market, having commenced sales in about November 1994. It was submitted that in such circumstances, the Court should more readily grant an injunction: Beecham Group Limited v Bristol Laboratories (1968) 118 CLR 618; Visa International Service Association v Beiser Corporation Pty Limited [1983] 5 ATPR 40-373.
Secondly, the respondent had taken the risk of commencing the new trade "with its eyes open" to the possibility, if not the likelihood, of the applicant taking action against it: Visa International Service Association. In support of this submission, the applicant relies upon a meeting between the representatives of the applicant and the respondent in February 1994, when the applicant's chairperson advised the respondent's managing director, that if the respondent proceeded with the comparative statements on the packaging of the Hairdresser's Formula products, the applicant would take legal action.
Thirdly, the respondent was the party attempting to disturb the status quo, by what is alleged to be its misleading and deceptive conduct: W.T.H. Pty Limited (trading as Avis Australia) v Budget Rent-A-Car System Pty Limited [1984] 6 ATPR 40-479 and at 45-507. Further, it was submitted that the respondent's deliberate conduct in choosing the name and packaging for its product, when the respondent was well aware of the existence of the applicant, the Joico trade marks and its products should weigh in the applicant's favour. Fourthly, it was submitted that the distinctiveness and reputation of the applicant would be eroded by the respondent's conduct.
I agree that these factors are relevant to take into account on the balance of convenience. However, the weight to be afforded to them is inextricably linked to the strength of the applicant's case. So, taking the third factor as an example, if the likelihood that the status quo has been or will be disturbed is low because the statements on the packaging are unlikely to mislead or deceive, the factor would carry little weight. As I have found that the statements on the packaging are unlikely to be misleading or deceptive, I do not consider that any of the factors upon which the applicant relies in respect of the balance of convenience are of much weight.
On the other hand, it is relevant that the two products are sold in two quite distinct outlets and possibly in two distinct markets. The applicant's products are sold essentially through hair salons and are at least twice as expensive as the respondent's product, which is sold in supermarkets. Further, there is no evidence that the applicant's business has in fact been damaged by the respondent's conduct, although that may be because there has not been sufficient time to assess whether there has been any impact in the marketplace by the sale of the respondent's product. However, in my opinion, I should not overlook that there has been no complaint by any member of the public of confusion and/or dissatisfaction with the respondent's product. The only evidence of concern has arisen out of the television commercial, which a seller of the applicant's product considered to be "demeaning" of the applicant's product. That, of course, is not sufficient for the conduct to contravene s 52 or s 53 of the Trade Practices Act.
The other factors to be considered in weighing the balance of convenience are matters which relate to the respondent's position. The applicant has expended about $450,000 in the establishment of its business. Mr Browne, the respondent's managing director said that if the interlocutory injunction was granted, the respondent's business will be destroyed. Hairdresser's Formula is the first product line that the respondent has sold to supermarkets. Mr Browne stated that an interlocutory injunction would seriously jeopardise and possibly ruin the valuable business relationships which have been built up with Coles and Safeways and that there is a very substantial risk that this will effectively destroy the possibility of future dealings with those organisations. Counsel for the applicant submitted that the risk to the respondent's business was overstated, as the applicant did not seek to restrain the sale of the product, but only the sale of the product in its present packaging. I consider that, too, to be a relevant consideration.
Conclusion
As I have said, the matters upon which the applicant relies to support its submission that the balance of convenience lies in favour of the grant of an interlocutory injunction are matters which seek to derive their force from the strength of the applicant's case. I have formed the view that the case lacks strength. On the other hand, I am satisfied that the respondent will suffer damage if an injunction is granted, although I am not satisfied that the damage will necessarily be as severe as the respondent predicted. Having regard to all of these matters, I am of the opinion that the applicant has not established that the balance of convenience, or the "balance of the risk of doing an injustice" lies in favour of a grant of interlocutory relief. Accordingly, I dismiss the application for the grant of an interlocutory injunction.
I certify that this and the preceding (23) pages
are a true copy of the Reasons for Judgment
of the Honourable Justice Beazley.
Associate:
Dated: 15 March 1995
APPEARANCES
Solicitor for the Applicant: Mr S. Klotz
Solicitors for the Applicant: Messrs Dunhill Madden Butler
Counsel for the Respondent: Mr Nicholas
Solicitors for the Respondent: Messrs Clayton Utz
Dates of hearing: 28 February 1995
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