FEDERAL COURT OF AUSTRALIA
Seafolly Pty Ltd v Madden [2012] FCA 1346
Citation: Seafolly Pty Ltd v Madden [2012] FCA 1346 Parties: SEAFOLLY PTY LTD (ACN 001 537 748) v LEAH MADDEN File number: VID 764 of 2010 Judge: TRACEY J Date of judgment: 29 November 2012 Catchwords: TRADE PRACTICES – misleading or deceptive conduct claimed where allegations of copying swimwear designs – consideration of relevant legal principles – whether statements misleading, deceptive or false – whether statements expressions of opinion or statements of fact – whether representations were “false” and asserted that goods were of particular “style or model” – whether ss 52 and 53(a) of the Trade Practices Act 1974 (Cth) apply where contravention by natural person –whether impugned conduct occurred “in trade or commerce” – damage to reputation claimed – economic loss claimed – whether loss and damage actually suffered – no significant or ongoing damage – limited damages awarded under s 82 of the Trade Practices Act 1974 (Cth) – declaration sought – granting of declaration warranted – permanent injunction sought to restrain further allegations of copying – whether injunction would serve a purpose – whether possibility that contraventions will be repeated – injunction granted
TRADE PRACTICES – cross-claim of misleading or deceptive conduct – whether representations made apt to mislead – cross claim not made out
TORT – claim for injurious falsehood – consideration of relevant principles – whether pecuniary loss suffered
INTELLECTUAL PROPERTY - copyright infringement claimed where allegation that photographs of swimwear reproduced and communicated to the public without license – whether ownership of copyright at the relevant times established
DEFAMATION – cross-claim that defamatory allegations made – whether statements made defamatory – whether contextual truth defences made out – whether fair comment defence made out – whether defence of qualified privilege made out
Legislation: Competition and Consumer Act 2010 (Cth), Schedule 2, ss 18, 29
Copyright Act 1968 (Cth), ss 31, 36, 41, 115, 119
Fair Trading act 1987 (NSW), ss 42, 44(a)
Fair Trading Act 1989 (Qld), ss 38, 40
Federal Court of Australia Act 1976 (Cth), s 21(1)
Trade Practices Act 1974 (Cth), ss 52, 53(a), 80
Trade Practices Amendment (Australian Consumer Law) Act (No 2) 2010 (Cth), Schedule 7, Item 7Cases cited: Adam v Ward [1917] AC 309 – considered, applied
Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 – cited
Australian Competition and Competition Commission v Chen (2003) 132 FCR 309 – cited
Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (in liq) (2007) 161 FCR 513 – cited, considered
Australian Competition and Competition Commission v Hughes [2002] FCA 270 – considered, applied
Bateman v Slatyer (1987) 71 ALR 553 – cited
Berry v Federal Commissioner of Taxation (1953) 89 CLR 653 – cited
Brabazon v Western Mail Limited (1985) 8 FCR 122 at 129 – cited
Chakravarti v Advertiser Newspapers Limited (1998) 193 CLR 519 – cited
Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 – considered, applied
CPA Australia Ltd…
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- Case
- [2012] FCA 1346
- Decision Date
CaseChat Overview and Summary
The court held that Madden's statements were indeed misleading and deceptive, and that they were expressions of fact rather than opinion. The court found that Seafolly had suffered some economic loss, but not significant or ongoing damage. The court granted limited damages of $25,000 under section 82 of the Trade Practices Act 1974 (Cth). The court also granted Seafolly's application for a declaration that Madden had engaged in misleading and deceptive conduct and made an injunction to restrain Madden from reproducing Seafolly's photographs and making similar statements to third parties. The court dismissed Madden's cross-claims with costs and ordered Madden to pay Seafolly's costs of the application. Seafolly was substantially successful in vindicating its reputation, and it should have the costs of its application. Madden's cross-claims should be dismissed with costs.
Orders
Orders of the court
2. The Respondent pay the Applicant damages in the sum of $25,000 pursuant to s 82(1) of the Act for damage suffered by the Applicant caused by the conduct of the Respondent.
3. The Respondent, whether by herself, servants or howsoever otherwise, in trade or commerce, be restrained from:
4. reproducing or authorising the reproduction of the Seafolly Photographs without the consent of Seafolly; and
5. making the Representations or any other statements or claims similar to the Representations to third parties or aiding, abetting, counselling or procuring the making of the Representations or any other statements or claims similar to the Representations to third parties.
The Respondent pay the Applicant’s costs of the application.
The cross-claim be dismissed with costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011
Background
Background to the litigation
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
Such an injunction will also serve the public interest in ensuring that consumers of swimwear are not misled into thinking that Seafolly garments are copied from another designer’s range.Declarations Seafolly’s application sought a declaration that Ms Madden had engaged in misleading and deceptive conduct. The Court has power, pursuant to s 21(1) of the Federal Court of Australia Act 1976 (Cth), to grant binding declarations of right. This is a wide discretionary power which may be exercised when there is utility in doing so: see Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581-2. A declaration that a provision of the TP Act such as ss 52 and 53(a) has been contravened may be made because it protects the right of the public not to be misled or deceived by misrepresentations: see Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (No 2) (1993) 41 FCR 89 at 98, 110. A declaration of the kind sought by Seafolly would serve a number of useful purposes. It would identify conduct that constitutes a contravention of the consumer protection provisions of the TP Act which continue to apply under the Australian Consumer Law. This would have an educative effect. Such a declaration would also identify the bases on which the granting of injunctions and the award of damages are founded. It would serve the additional purpose of marking the Court’s disapproval of Ms Madden’s conduct. These considerations, in my view, warrant the making of a declaration that Ms Madden has contravened ss 52 and 53(a) of the TP Act by making her impugned statements.The FT Act and the NSW FT Act Sections 38 and 40 of the FT Act and ss 42 and 44(a) of the NSW FT Act appear in largely the same terms as ss 52 and 53(a) of the TP Act respectively. Seafolly relied on the same facts to support its claims under all three sets of provisions. In light of my findings set out above as to Ms Madden’s liability under ss 52 and 53(a) of the TP Act, it is not necessary for me to deal with Seafolly’s respective claims under the relevant provisions of the FT Act and NSW FT Act. INJURIOUS FALSEHOOD Seafolly also sought to establish a cause of action against Ms Madden for injurious falsehood. Although they are similar in some respects, the elements of this tort differ from those required to make good a claim of defamation. The differences were explained by Weinberg J in Orion Pet Products Pty Ltd v Royal Society for the Prevention of Cruelty to Animals(Vic) Inc (2002) 120 FCR 191 at 223:“In some respects, this tort bears a marked resemblance to defamation. Both involve a false and harmful imputation concerning the plaintiff which is made to a third party. They differ, however, in that the law of defamation protects interests in personal reputation while injurious falsehood protects interests in the disposability of a person’s property, products or business. Defamation is generally actionable without proof of damage. Falsehood is presumed and liability is strict. In an action for injurious falsehood, the plaintiff must prove that he sustained actual economic loss, that the offending statement was false, and that it was made with intent to cause injury without lawful justification. The requisite state of mind is often described as malice.”