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Telstra Corporation Ltd v Optus Communications Pty Ltd

Telstra Corporation Ltd v Optus Communications Pty Ltd

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Case Copied 22 November 1996 29 min read

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TRADE PRACTICES - Misleading or deceptive conduct, Comparative television advertising - Whether advertising comparing prices for long distance telephone calls is misleading - Application for interlocutory injunctions - Whether a television advertisement which may not contain an inaccurate statement or representation when its constituent parts are considered separately might be misleading or deceptive because of the first impressions conveyed - Whether omission to state the facts that make the comparison fair is misleading.

Trade Practices Act 1974 (Cth) s.52

Bullock and Others v. The Federated Furnishing Trades Society of Australasia and Others (No 1) (1985) 5 FCR 464
Stuart Alexander & Co. (Interstate) Pty. Ltd. v. Blenders Pty. Ltd. (1981) 37 ALR 161
Tobacco Institute of Australia Limited v. Australia Federation of Consumer Organisations Inc. (1992) 38 FCR 1
Kalwajtys v. Federal Trade Commission 237 F2d 654
Fraser v. NRMA Holdings Ltd. (1994) 52 FCR 1 and on appeal (1995) 55 FCR 432
Hoover (Australia) Pty. Ltd. v. Email Ltd. (1991) 104 ALR 369
Sterling Winthrop Pty. Ltd. v. The Boots Company (Australia) Pty. Ltd. (1995) ATPR 41-433

VG677\96 TELSTRA CORPORATION LIMITED V. OPTUS COMMUNICATIONS PTY. LIMITED AND OPTUS NETWORK PTY. LIMITED

MERKEL J.
MELBOURNE
22 NOVEMBER 1996

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION VG 677 of 1996

BETWEEN:

TELSTRA CORPORATION LIMITED
(ACN 015 775 556) Applicant

and

OPTUS COMMUNICATIONS PTY. LIMITED
(ACN 052 833 208) and
OPTUS NETWORK PTY. LIMITED
(ACN 008 570 330) Respondents

CORAM:MERKEL J
PLACE:MELBOURNE
DATE:22 NOVEMBER 1996

MINUTES OF ORDERS

Upon the usual undertakings being given to the Court by Counsel on behalf of the applicant the Court restrains the respondents, whether by themselves, their servants or agents or howsoever otherwise until the trial of the proceeding or further order, from causing to be broadcast, published or transmitted within Australia the television commercials referred to in paragraphs 6 and 11A of the Amended Statement of claim herein, being Exhibits CB5 and CB17 to the affidavits of Christopher Carmelo Bellomo sworn on 8 and 13 November 1996 respectively.

The costs of the applicant and the respondents be reserved.

NOTE:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION VG 677 of 1996

BETWEEN:

TELSTRA CORPORATION LIMITED
(ACN 015 775 556) Applicant

and

OPTUS COMMUNICATIONS PTY. LIMITED
(ACN 052 833 208) and
OPTUS NETWORK PTY. LIMITED
(ACN 008 570 330) Respondents

CORAM:MERKEL J
PLACE:MELBOURNE
DATE:22 NOVEMBER 1996

REASONS FOR JUDGMENT

Introduction
Over recent years the applicant ("Telstra") and the respondents ("Optus") have engaged in vigorous competition in providing a range of telephone services to customers throughout Australia.

The obvious similarity and overlap between the telephone services provided by each competitor has resulted in price competition becoming a major factor in attracting or retaining custom.

The present case involves two Optus television advertisements. The first, which has been referred to as the Guarantee commercial, has been shown nationally on television in its present form as…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1996] FCA 1035
Decision Date: 22 Nov 1996

CaseChat Overview and Summary

The case of Telstra Corporation Limited v Optus Communications Pty Limited involved an application by Telstra for interlocutory injunctions against Optus for allegedly misleading and deceptive conduct in relation to two television commercials. The first, referred to as the Guarantee commercial, was part of a campaign promoting Optus' Guarantee which promised that customers would pay less for long distance calls with Optus compared to Telstra. The second, referred to as the International commercial, was part of a campaign promoting Optus' cheaper prices for international calls compared to Telstra. Telstra alleged that the commercials falsely represented that Optus' prices for long distance and international calls were cheaper than Telstra's prices.

The court found that the commercials were misleading in that they created a false dominant impression that Optus' prices were generally cheaper than Telstra's prices. The court held that even if the detailed message derived from careful analysis of the commercials was accurate, the first impressions conveyed to the casual viewer were misleading. The court also found that Optus had omitted material necessary to make the comparisons fair, thereby rendering the commercials misleading. The court granted the interlocutory injunctions sought by Telstra, finding that the balance of convenience favoured Telstra and that there were no discretionary reasons for refusing relief.

Orders