Specsavers Pty Ltd v Canstar Blue Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Specsavers Pty Ltd v Canstar Blue Pty Ltd [2010] FCA 1153

Citation: Specsavers Pty Ltd v Canstar Blue Pty Ltd [2010] FCA 1153
Parties: SPECSAVERS PTY LTD v CANSTAR BLUE PTY LTD
File number: NSD 1303 of 2010
Judge: EDMONDS J
Date of judgment: 28 October 2010
Catchwords:

PRACTICE & PROCEDURE – application under O 15A r 6 of Federal Court Rules for preliminary discovery – conditions to be satisfied for relief and applicable principles – application of principles to facts.

Held: applicant has no reasonable cause to believe it has or may have the right to relief for contravention of s 52 of Trade Practices Act 1974 (Cth); one or more of other conditions in paras (b) and (c) not satisfied.

Legislation: Trade Practices Act1974 (Cth) s 52
Federal Court Rules O 15A r 6
Cases cited: Apache Northwest Pty Ltd v Newcrest Mining Ltd (2009) 182 FCR 124 applied
Benchmark Certification Pty Ltd v Standards Australia International Ltd (2004) 212 ALR 464 cited
Echo Tasmania Pty Ltd v Imperial Chemical Industries Plc [2008] FCAFC 58 cited
Optiver Australia Pty Ltd v Tibra Trading Pty Ltd (2008) 169 FCR 435 cited
St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147 applied
Stratford Sun Ltd v OM Holdings Ltd (2009) 74 ACSR 698 cited
Date of hearing: 11 October 2010
Place: Sydney
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 56
Counsel for the Applicant: Mr R Cobden SC
Solicitor for the Applicant: Minter Ellison
Counsel for the Respondent: Mr C Moore with Mr D Hughes
Solicitor for the Respondent: Mallesons Stephen Jaques

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 1303 of 2010
BETWEEN:

SPECSAVERS PTY LTD
Applicant
AND:

CANSTAR BLUE PTY LTD
Respondent

JUDGE:

EDMONDS J

DATE OF ORDER:

28 OCTOBER 2010

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The application be dismissed.

2.The applicant pay the respondent’s costs of the application, as taxed or agreed.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 1303 of 2010
BETWEEN:

SPECSAVERS PTY LTD
Applicant
AND:

CANSTAR BLUE PTY LTD
Respondent

JUDGE:

EDMONDS J

DATE:

28 OCTOBER 2010

PLACE:

SYDNEY

REASONS FOR JUDGMENT

INTRODUCTION

  1. This is an application under O 15A r 6 of the Federal Court Rules (‘the Rules’) for preliminary discovery of various documents.  The documents are listed by category in the Schedule to the application.

    BACKGROUND

  2. The applicant (‘Specsavers’) is a recent entrant in the Australian optical services market.  It operates stores through a company-owned and franchise structure. Specsavers commenced its Australian retail operations in 2008.  It now has 239 Specsavers-branded stores nationally.

  3. The respondent (‘Canstar’) rates products or services based on consumer questionnaires.  A very broad outline of the methodology appears on its website and…

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Details
Case
[2010] FCA 1153
Decision Date

CaseChat Overview and Summary

Specsavers Pty Ltd applied for an order for preliminary discovery under O 15A r 6 of the Federal Court Rules against Canstar Blue Pty Ltd. Specsavers, a relatively new entrant to the Australian optical services market, sought to obtain documents from Canstar, a company that rates products and services based on consumer questionnaires. Specsavers was concerned that Canstar's survey of optometrists, conducted between 19 August and 2 September 2010, might be flawed or misleading. Specsavers sought documents from Canstar and its research agency, Colmar Brunton, to determine whether to proceed with a claim against Canstar for potential breaches of s 52 of the Trade Practices Act 1974 (Cth). Canstar refused to provide the documents, and Specsavers filed an application for an order of preliminary discovery. The court needed to determine whether Specsavers had a reasonable cause to believe it had or may have the right to relief, whether it had insufficient information to decide whether to commence proceedings, and whether Canstar was likely to have documents that contained the relevant information. The court found that Specsavers had not demonstrated that it had a reasonable cause to believe it may have the right to relief, as there was no evidence of flaws in Canstar's methodology or survey. The court also found that Specsavers had not established that it had insufficient information to decide whether to commence proceedings, nor had it identified with any precision the information it required to make that decision. The court further found that Specsavers had not established that Canstar was likely to have documents that contained the relevant information, as Specsavers had all the information it said was relevant. The court dismissed the application with costs.

The court found that Specsavers had not satisfied the conditions required for an order for preliminary discovery under O 15A r 6 of the Federal Court Rules. The court held that Specsavers had no reasonable cause to believe it had or may have the right to relief for contravention of s 52 of the Trade Practices Act 1974 (Cth), and that one or more of the other conditions in paras (b) and (c) were not satisfied. The court dismissed the application with costs.

Orders

Orders of the court

1. The application be dismissed.

2. The applicant pay the respondent’s costs of the application, as taxed or agreed.

Note:

Background

Background to the litigation

This is an application under O 15A r 6 of the Federal Court Rules (‘the Rules’) for preliminary discovery of various documents. The documents are listed by category in the Schedule to the application.BACKGROUND The applicant (‘Specsavers’) is a recent entrant in the Australian optical services market. It operates stores through a company-owned and franchise structure. Specsavers commenced its Australian retail operations in 2008. It now has 239 Specsavers-branded stores nationally. The respondent (‘Canstar’) rates products or services based on consumer questionnaires. A very broad outline of the methodology appears on its website and is in evidence. It has recently (apparently between 19 August and 2 September 2010) conducted a survey of some kind relating to optometrists. It engaged Colmar Brunton, a ‘professional market research company’, to conduct the survey. In the present case it is said that 2,500 people were surveyed. Canstar has placed the results of that survey on its website and, it can be inferred, promoted the results to print media, including Inside Retailing, and broadcast media, including Today Tonight. The results are given a star rating (up to five stars) in six categories, Overall (which is not, as might be expected, a score based on the other categories, but is a stand-alone category), Price, Service, After sale service, Range and Accessibility of store. Canstar seeks to trade in the results and in its endorsement. According to Canstar:‘Winners of the categories are able to licence [sic] the awards for use in their marketing.’ Specsavers’ Marketing Director, Stewart Roussel, saw the Canstar website and the Inside Retailing article on 23 September 2010, and the Today Tonight segment on 28 September 2010. Correspondence from Specsavers’ solicitors, and between them and Canstar’s solicitors, ensued. In it Specsavers set out its concerns about possible breaches by Canstar of s 52 of the Trade Practices Act1974 (Cth) (‘the TPA’). Specifically, Specsavers says it has concerns that there may be significant defects and inaccuracies in the methodology, approach and ratings by Canstar that may mean that the results reported were inaccurate or misleading. Specsavers asked to be supplied with documents that would enable it to make a decision whether or not to proceed with an action. Provision of the documents was refused pending clarification of the basis for Specsavers’ possible claim. Clarification was allegedly given. Production was refused again. Documents were also sought from Colmar Brunton and refused. The application was filed on 5 October 2010. It seeks orders under O 15A r 6 of the Rules for preliminary discovery of various documents. Specsavers says it does not presently have sufficient information to determine whether to commence a proceeding to obtain relief against Canstar and it seeks orders under O 15A r 6 in the terms proposed in the application. It further says that the information it requires is peculiarly within the possession of Canstar itself, being the documents and materials set out in the application. ORDER 15A RULE 6: APPLICABLE PRINCIPLES

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Likewise, here there is no evidence to suggest that the methodology is flawed or that there is anything wrong with the survey. There is no reasonable cause to believe that Specsavers has a right to obtain relief.CONCLUSION Specsavers has not established that it has a reasonable cause to believe that it may have the right to obtain any relief: O 15A r 6(a). As a result, and as a further consequence of the generality and incoherence of the allegations, Specsavers has not established that it has insufficient information to enable it to decide whether to commence a proceeding in the Court to obtain that relief; nor has it identified with any precision the information which it requires in order to make that decision: O 15A r 6(b). Further, in relation to the currency of results issue, Specsavers has not established that Canstar is likely to have documents that reveal that information; in any event, it has all the information that it says is relevant: O15A r 6(c). In the face of these conclusions, it is unnecessary to consider the discretion which the Court nevertheless has to decline granting preliminary discovery. As Emmett J said in Benchmark Certification at [128]:‘Even if there were some basis for conjecturing as to the possibility of a right to relief, I do not consider, in the exercise of discretion, that it is appropriate to make an order for discovery having regard to the uncertainty as to all of the relevant elements on the material presently before the court.’I would be similarly disposed in the present case. The application must be dismissed with costs.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.