Telstra Corporation Ltd v Optus Communications Pty Ltd

[1996] FCA 1025

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

B E T W E E N

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:8 NOVEMBER 1996

REASONS FOR JUDGMENT

HIS HONOUR:   In this matter an application has been made by Telstra for injunctive relief to restrain the broadcasting of a television commercial which, it alleges, compares Optus and Telstra rates in the context of a guarantee that Optus is giving, or proposing to give, to its customers.  The advertisement is substantially the same as that which was run by Optus earlier in the year. I think it is fair to say that Optus was then placed on notice, when that advertisement was not continued with by it, that a similar, or the same advertisement, was likely to attract litigation on the part of Telstra.  That has now occurred.

At the present time it is clear that, on the material before me, the applicant has established a prima facie case that the advertisement might be misleading insofar as it is construed as comparing long distance rates charged by Telstra and Optus.  Optus has not had the opportunity to file answering material.  In these circumstances, I have to deal with the advertisement on the material filed by the applicant. 

On the balance of convenience, a case is said to have been made out by Telstra, not just for protection of its goodwill, but also in respect of members of the public who will be exposed to the advertisement, and may change their business and custom from Telstra to Optus. In the absence of any material from Optus which justifies the alleged comparison it seems to me that that is an important factor in the balance of convenience at this stage.

It is put by Optus that it will suffer inconvenience and harm, but in essence, that basically relates to the cost of having to "pull" advertising with a cost which may be in the sum of $700,000. However, that loss is protected by the undertaking as to damages.  Moreover, it seems to me that the general concept of protection of the public and the protection of goodwill on the material currently before me justify the court intervening, even at this late stage, particularly as it has not been said by Optus that a prima facie case has not been made out by Telstra.

I should add, that it has been the submission of Optus that Telstra has delayed in bringing the proceeding.  Again that may or may not be the case.  However, given the background to the proceedings, it seems to me on the present material that I should not refuse relief on that discretionary ground.  For these reasons I propose to grant appropriate injunctive relief until 4.15 pm on Thursday, 14 November or further order restraining further publication of the television commercial.

However, it has been indicated by Optus that, in the light of my reasons, it may be prepared to offer an undertaking to the Court, which I would accept, that it take such steps as are within its power to take to prevent the further broadcast of the advertisement until 4.15 p.m. on 14 November or further order.  The applicant has offered a cross-undertaking as to damages in the usual form. I am prepared to stand the matter down for 5 minutes to see which of the two courses is preferred by Optus.

HIS HONOUR:  Upon the undertaking of counsel on behalf of the respondents which has just been given and the cross undertaking as to damages which has been given by counsel on behalf of the applicant, I will adjourn the application for interlocutory injunctions to 14 November 1996.  I will direct the application be not before noon on that date.  I will also direct that any affidavits upon which the respondents wish to rely be filed and served on or before 5 pm on Tuesday, 12 November.  I direct that any affidavits upon which the applicant wishes to rely in response to the respondents affidavits, be filed and served on or before 5 pm on 13 November.  I will reserve the costs of the application today.

I certify that this and the preceding pages are a true copy of the Reasons for Judgment of the Honourable Justice Merkel as corrected

Associate:

Date:

Heard:8 November 1996

Place:Melbourne

Judgment:8 November 1996

Appearances:              Mr. A. Archibald Q.C. instructed by Mallesons Stephen Jaques appeared for the applicant

Mr. D. Shavin Q.C. instructed by Minter Ellison appeared for the respondents