Telstra Corporation Ltd v Singtel Optus Pty Ltd
[2018] VSC 247
•16 May 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST
S ECI 2018 00097
| TELSTRA CORPORATION LTD | Plaintiff |
| v | |
| SINGTEL OPTUS PTY LTD | Defendant |
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JUDGE: | Robson J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 11 May 2018 |
DATE OF JUDGMENT: | 16 May 2018 |
CASE MAY BE CITED AS: | Telstra Corporation Ltd v Singtel Optus Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2018] VSC 247 |
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CONSUMER LAW – Misleading or deceptive conduct – False or misleading representations – Relevant legal principles – Billboard and internet advertisements – Alleged representations as to quality of parties’ respective mobile networks – Whether representations conveyed – Whether representations likely to mislead or deceive, or false or misleading to hypothetical ordinary or reasonable person within that class – Competition and Consumer Act 2010 (Cth), sch 2, Australian Consumer Law ss 18, 29(1)(b), (g).
INJUNCTION – Interlocutory – Principles to be applied – Serious question to be tried – Irreparable damage – Balance of convenience.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Dr M J Collins QC Ms M J Marcus | King & Wood Mallesons |
| For the Defendant | Mr N J Young QC Mr N P de Young | Clayton Utz |
TABLE OF CONTENTS
Introduction.......................................................................................................................... 1
The advertisement............................................................................................................... 3
The initial advertisement.................................................................................................... 4
The 2013 P3 Report.............................................................................................................. 5
The case put by Telstra....................................................................................................... 6
The response from Optus................................................................................................... 8
Relevant principles: interlocutory injunctions................................................................ 8
Is there a serious question to be tried?........................................................................... 10
Irreparable injury............................................................................................................... 14
The balance of convenience.............................................................................................. 15
Conclusion.......................................................................................................................... 16
Orders.................................................................................................................................. 17
HIS HONOUR:
Introduction
Since 4 May 2018, the defendant, Singtel Optus Pty Ltd (‘Optus’) has extensively displayed a pictorial advertisement promoting its mobile network. The advertisement has appeared on large-format digital billboards at several sites in Queensland, New South Wales, and Victoria.[1] The advertisement has also appeared as ‘online banner ads’ on various online news websites.[2] Telstra Corporation Ltd (‘Telstra’) alleges that the advertisement is misleading and deceptive and seeks an interlocutory injunction to restrain its public display.[3]
[1]Affidavit of Jeremy Anthony Nicholas, affirmed 9 May 2018, [12], [18] (‘Nicholas Affidavit’).
[2]Nicholas Affidavit, [18].
[3]By summons dated 9 May 2018, Telstra seeks interlocutory relief in the form of injunctions against Optus and its officers, employees and agents. Telstra seeks injunctions restraining Optus from making the alleged representation, and directing Optus to take all necessary steps to remove from circulation or public view any advertisements or promotional material containing the alleged representation.
Telstra alleges that the advertisement represents that:[4]
there has been a significant and permanent change in the relationship between the Telstra and Optus mobile networks with Optus now undisputedly operating a better mobile network overall than Telstra.
[4]Telstra, Statement of Claim, 9 May 2018, [7]; Telstra, ‘Plaintiff’s Outline of Submissions’, 10 May 2018, [13(b)].
Immediately below is a copy of the advertisement.
Optus opposes the interlocutory relief sought by Telstra. Optus submits that the Court should refuse Telstra’s application on the basis that there is no tenable argument that the advertisement conveyed the alleged representation to the reasonable consumer.
On 5 May 2018, the solicitors for Telstra, King & Wood Mallesons (‘KWM’), sent a letter to the solicitors for Optus, Clayton Utz, demanding that Optus immediately cease using the advertisement or any other similar form of advertising, and that Optus provide certain written undertakings.[5] On 7 May 2018, Clayton Utz responded to KWM refusing to give the requested undertakings.
[5]Affidavit of Lisa Huett, affirmed 9 May 2018, [25] (‘Huett Affidavit’).
For the reasons set out below, I have decided to grant Telstra the interlocutory injunctions it seeks. I am satisfied that there is a serious question to be tried, that Telstra may suffer irreparable injury for which damages will not be adequate compensation unless I grant the injunction, and that the balance of convenience favours the granting of the injunction.
The advertisement
The advertisement features an image of a sand-duned desert landscape. In the foreground of the image appears a phone box, half-sunk and lopsided, like the decayed remains of a past era, sticking up conspicuously from the lone and level sands. In the background of the image appear several pyramids.
With its distinctive shape, and blue-and-orange colour scheme, the phone box is easily recognisable as a Telstra phone box of the type that was once commonplace on Australian streets.
Overlaid on the image is the headline: ‘Empires end. That’s what they do.’ Below that, in smaller print, in bold, appear these words: ‘The Optus Mobile Network has been ranked the best overall in voice and data.’ Below that, in smaller, fainter print, appear these words: ‘By P3 Mobile Benchmark, Dec 2017.’
The initial advertisement
The advertisement at the centre of this dispute has been amended from an earlier version of the advertisement (the ‘initial advertisement’). I will give a brief description of how the initial advertisement came to be amended to the form now described as simply the advertisement.
By 30 April 2018 at the latest, Telstra became aware of advertisements which Optus was running on the basis of results of the 2017 P3 Report. The advertisements featured these words: ‘Empires end. That’s what they do. The Optus Mobile Network is now best overall nationally. Ranked by P3 Mobile Benchmark, Dec 2017.’[6] The initial advertisement was primarily published on large-format digital billboards.[7]
[6]Nicholas Affidavit, [5]. A copy of the initial advertisement is exhibited to the affidavit as JAN-1.
[7]Nicholas Affidavit, [7], [28].
Correspondence was exchanged between Telstra’s solicitors, KWM, and Optus’ solicitors, Clayton Utz. Optus made no admissions, but thereafter took down the initial advertisement by 5.00pm on Friday, 4 May 2018.[8]
[8]Huett Affidavit, [5]–[23].
In the evening of 4 May 2018, KWM became aware that Optus was continuing to run advertising that used the slogan ‘Empires end. That’s what they do.’[9] The new advertisement is an amended version of the initial advertisement.
[9]Huett Affidavit, [24].
The only discernible difference between the initial advertisement and the amended advertisement is that the former’s subtitle read ‘The Optus Mobile Network is now best overall nationally,’ while the latter’s reads ‘The Optus Mobile Network has been ranked the best overall in voice and data.’
The 2013 P3 Report
The affidavit of Channa Seneviratne, affirmed 8 May 2018 (‘Seneviratne Affidavit’), goes into some detail in relation to the 2013 P3 Report.[10]
P3 Communications GmbH (P3) is a company headquartered in Aachen, Germany. P3 conducts independent studies into mobile networks across the world, and publishes reports online in relation to those studies. Since 2014, P3 has conducted an annual benchmarking study in Australia.
From 11 October 2017 to 24 October 2017, P3 conducted a study testing the mobile network performance of telecommunications services in Australia. The results of that study were published in a report dated 4 December 2017 (2017 P3 Report). …
[T]he study was conducted using 4 drive-test cars which covered 12,400 km of driving in 9 cities and 19 towns along pre-defined connecting routes. The drive-test cars covered approximately 4700 km through big cities and 1300 km through the smaller towns, while 6400 km were covered on connecting roads. Each of the 4 drive-test cars in the P3 study was equipped with 9 Samsung Galaxy S7 category 9 smartphones (Test Phones) — 6 for conducting voice-tests, and 3 for conducting data tests. In addition, 2 teams conducted ‘walk tests’ in Sydney, Melbourne, Brisbane and Adelaide carrying 9 Test Phones — 6 for conducting voice-tests, and 3 for conducting data tests. P3 estimates that the areas chosen for the study account for approximately 13.7 million people, or 61% of the Australian population.
To measure voice performance, the Test Phones accessed the 10 most popular web pages in Australian [sic] according to the Alexa ranking. In addition, the Test Phones accessed the static ‘Kepler’ test webpage, a test page used by the European Telecommunications Standards Institute. To test the data service performance, 3MB files were downloaded, and 1MB files were uploaded, to or from a test server location. The peak data performance was tested by assessing the amount of data that was transferred within seven seconds time period [sic]. Finally, Youtube video playback was tested.
The results of the P3 study were assessed by assigning points according to performance of different tasks and in different areas.
[10]Seneviratne Affidavit, [31]–[36].
The 2017 P3 Report describes the results of the test as follows:[11]
It was a neck-and-neck race of the two biggest Australian operators. Ultimately, Optus won with an advance of three points over Telstra. Both receive the grade ‘very good’. Optus secures its overall win with a clear lead in the voice category, while Telstra scores best in the data discipline.
…
All three Australian operators have improved their scores over last year. Overall winner Optus overtakes an also ‘very good’ Telstra by just three points.
…
The two largest Australian operators Telstra and Optus fought a close race for the top rank in this year’s mobile benchmark in Australia. With a narrow margin of three points, the overall winner is Optus. This operator gains the victory due to strong results in the voice discipline. Like Optus, also the second ranking Telstra receives the grade ‘very good’. Telstra scores somewhat stronger in the data discipline but falls a little behind Optus in the voice category.
[11]2017 P3 Report, 2, 11.
The case put by Telstra
Telstra alleges that the advertisement conveys a single representation which contains two interwoven aspects, namely that:
(a) ‘there has been a significant and permanent change in the relationship between the Telstra and Optus mobile networks’; and
(b) ‘Optus [is] now undisputedly operating a better mobile network overall than Telstra.’
Telstra submits that this representation is conveyed by the use of the words ‘Empires end’ and by the depiction of the iconic Telstra phone box abandoned in the desert. Telstra submits that the image ‘unmistakably conveys a sense of permanence, to be compared with the fall of an empire.’[12]
[12]Telstra, ‘Plaintiff’s Outline of Submissions’, 10 May 2018, [13(b)].
Telstra submits that the subtitle, ‘The Optus Mobile Network has been ranked best overall in voice and data,’ together with the imagery, invites the reasonable observer to make a comparison between the two companies’ networks, and to conclude that Optus is ‘the clear leader, having defeated Telstra once-and-for-all.’[13] Telstra points to the reference to the 2017 P3 Report as lending legitimacy to the overall impression created by the advertisement.
[13]Telstra, ‘Plaintiff’s Outline of Submissions’, 10 May 2018, [13(c)].
Telstra submits that this representation is misleading and deceptive, or likely to mislead or deceive, since it misrepresents the true relative positions of the companies. According to Telstra, the 2017 P3 Report ‘made no conclusions about the overall operation of the Telstra and Optus Mobile Networks.’ Telstra also points to the fact that the 2017 P3 Report awarded Optus the ‘best in test’ award by only three points out of a possible 1,000 (ie by only 0.3 per cent).[14] In Telstra’s submissions, the 2017 P3 Report’s conclusions are at odds with the alleged representation that ‘there has been a significant and permanent change in the relationship between the Telstra and Optus mobile networks.’
[14]Seneviratne Affidavit, [36].
For the reasons just stated, Telstra submits that there is a serious question to be tried as to whether the Advertisement contravenes any of ss 18, 29(1)(b), (g) of the Australian Consumer Law (‘ACL’) in sch 2 to the Competition and Consumer Act 2010 (Cth) (‘CCA’).
Telstra submits that damages would be an inadequate remedy for any injury suffered as a result of a decision by the Court not to grant an interlocutory injunction against Optus. According to Telstra, recent consumer testing suggests that similar advertising has had a significant impact on customers,[15] and that the Advertisement will have a similar impact.[16] Telstra submits that it will be an ‘extremely difficult’ task for the Court to quantify the damage that will have been done to Telstra’s business and brand as a result of the advertisement.
[15]Nicholas Affidavit, [10]–[25], [27]–[31].
[16]Telstra, ‘Plaintiff’s Outline of Submissions’, 10 May 2018, [14].
As to the balance of convenience test, Telstra submits that Optus would suffer no great inconvenience at having to withdraw its Advertisement from circulation, since the content on digital billboards may be easily and quickly removed or altered.[17]
[17]Telstra, ‘Plaintiff’s Outline of Submissions’, 10 May 2018, [15].
The response from Optus
As stated above, Telstra alleges that the Advertisement conveys a single representation which contains two aspects: (a) that the relative market positions of Telstra and Optus have changed significantly and permanently; and (b) that Optus is now undisputedly the better network. Optus submits that neither aspect of the alleged representation is conveyed to the reasonable consumer, that there is ‘no tenable argument’ that it is so conveyed,[18] and that ‘no reasonable person viewing the advertisement would be led into adopting that meaning.’[19]
[18]Optus, ‘Defendant’s Outline of Submissions on Plaintiff’s Interlocutory Application’, 10 May 2018, [5].
[19]Optus, ‘Defendant’s Outline of Submissions on Plaintiff’s Interlocutory Application’, 10 May 2018, [12].
As to the first aspect of the alleged representation, Optus denies that the advertisement conveys that representation that Telstra’s ‘empire’ has come to an end: ‘At most, [the words and image] convey that Telstra is not destined always to occupy a position of pre-eminence.’[20]
[20]Optus, ‘Defendant’s Outline of Submissions on Plaintiff’s Interlocutory Application’, 10 May 2018, [9].
In its written submissions, Optus made no reference to either the irreparable damage test or the balance of convenience test, resting its submissions only on the question of whether there was a serious question to be tried.[21]
[21]Optus, ‘Defendant’s Outline of Submissions on Plaintiff’s Interlocutory Application’, 10 May 2018, [13].
Relevant principles: interlocutory injunctions
The application which Telstra makes is for interlocutory injunctions. The Court may grant an interlocutory injunction in order to protect a plaintiff against injury for which it could not be adequately compensated in damages if the defendant’s alleged infringement of its rights were to continue pending the resolution of the proceedings.
There are two lines of authority as to the tests to be applied in considering whether an interlocutory injunction should be granted. One line of authority states that a party seeking an interlocutory injunction must show that it has a prima facie case with a sufficient likelihood of success.[22] Once the plaintiff has made out its prima facie case, the Court then undertakes the ‘balance of convenience’ test: it weighs the injury that the plaintiff would be likely to suffer if the interlocutory application were refused against the injury likely to be suffered by the defendant if the injunction were granted.[23]
[22]Municipal Council of Rockdale v Municipal Council of Kogarah (1926) 26 SR (NSW) 552; Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618.
[23]Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; Mutual Life & Citizens’ Assurance Co Ltd v Balfours Pty Ltd (1979) 23 SASR 82. Cf Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148.
The other line of authority states that that a party seeking an interlocutory injunction is only required to show that there is a ‘serious issue to be tried.’[24] If the applicant is successful in establishing that there is a serious issue to be tried, then it falls to the Court to consider the balance of convenience between the parties, as described above.[25]
[24]Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148. See also American Cyanamid Co v Ethicon Ltd [1975] AC 396, 407 (Diplock LJ).
[25]See, eg, Srinivasan v Bank of Western Australia Ltd [2012] FCA 319 (19 March 2012) [8] (Rares J).
In Castlemaine Tooheys Ltd v South Australia (‘Castlemaine Tooheys’),[26] the High Court of Australia applied the ‘serious question to be tried’ test in preference to the ‘prima facie case’ test. Although the ‘prima facie case’ test may remain the appropriate standard in some situations,[27] it seems that the ‘serious question to be tried’ test has gained general acceptance in Australia.[28]
[26](1986) 161 CLR 148.
[27]See LexisNexis, Halsbury’s Laws of Australia (at 5 February 2018) 185 Equity, ‘7 Equitable Remedies’ [185-1440] n 6.
[28]See, eg, Australian Competition and Consumer Commission v Allphones Retail Pty Ltd (No 2) [2009] FCA 17 (19 January 2009) (Foster J); Northern Star Agriculture Pty Ltd v Morgan and Banks Developments Pty Ltd [2007] NSWSC 98 (15 February 2007) [20] (Young CJ).
In Castlemaine Tooheys, Mason ACJ said of interlocutory injunctions:[29]
In order to secure such an injunction the plaintiff must show (1) that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief; (2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction.
[29](1986) 161 CLR 148, 153.
I use the three-step method outlined by his Honour in considering whether the Court should grant Telstra its interlocutory relief.
Is there a serious question to be tried?
First, the Court must consider whether there is a serious question to be tried. The principles in relation to misleading and deceptive conduct are not in dispute between Telstra and Optus. The general approach to be taken in determining whether conduct is misleading or deceptive of the public at large was comprehensively summarised by Elliott J in a previous dispute between these same parties:[30]
[30]Telstra Corporation Ltd v Singtel Optus Pty Ltd [2014] VSC 35 (18 February 2014) [30] (citations omitted), citing .au Domain Administration Ltd v Domain Names Australia Pty Ltd (2004) 207 ALR 521, 527 [15]–[16] (Finkelstein J); Australian Competition and Consumer Commission v Telstra Corporation Ltd (2007) 244 ALR 470, 474 [14], [16], 475 [17] (Gordon J); Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 304 ALR 186, 194 [39], 196 [49] (French CJ, Crennan, Bell and Keane JJ); Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592, 604 [36] (Gleeson CJ, Hayne and Heydon JJ); Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304, 319 [25]–[26] (French CJ); Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45, 85 [102]–[103], 86–7 [105]–[106]; National Exchange Pty Ltd v Australian Securities and Investments Commission (2004) 49 ACSR 369, 373–4 [18] (Dowsett J, with whom Jacobson and Bennett JJ relevantly agreed); Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191, 199 (Gibbs CJ). The quotation in step (4) comes from .au Domain Administration Ltd v Domain Names Australia Pty Ltd (2004) 207 ALR 521, 527 [15] (Finkelstein J).
(1) Consider whether each of the pleaded representations is conveyed by the conduct referred to.
(2) If yes to (1), was the making of each such representation conduct that was misleading or deceptive or likely to mislead or deceive (s 18), or false or misleading: s 29?
In determining (1) and (2), the following must be included in the court’s deliberations:
(3) Identify the class or classes of consumers likely to be affected by the conduct. The class or classes may be confined by factors such as time and geographical circulation of the representations.
(4) After identifying the relevant class or classes, consider who comes within the class or classes. ‘This may include the astute and the gullible, the intelligent and the not so intelligent, the well educated and the poorly educated.’
(5) Having determined the question in (4), the hypothetical person identified within each class should be judged as ‘ordinary’ or ‘reasonable’, and postulated understandings or reactions that are ‘extreme’ or ‘fanciful’ should be excluded.
(6) The individual events comprising the conduct of the making of each representation are not to be considered in isolation, but in characterising the conduct those events are generally to be considered as a whole.
Before considering these questions, I should note that it is not the Court’s role to undertake a preliminary trial, or to give or withhold interlocutory relief upon a forecast as to the ultimate result of the case.[31] The Court’s role at this stage is to ask whether, if the evidence remains as it is, there is a probability that at trial the plaintiff will be held to be entitled to relief. How strong the probability needs to be will depend upon the nature of the rights which the plaintiff asserts, and upon the practical consequences likely to flow from the granting of the interlocutory relief sought.[32]
[31]Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618. See also Plaintiff M168/10 v Commonwealth (2011) 279 ALR 1, 5–6 [15]–[19] (Crennan J).
[32]Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, [65]–[72] (Gummow and Hayne JJ).
So, the first main inquiry is whether it would be open for the Court to find, on the evidence, that the representation which Telstra pleads is conveyed by Optus’ advertisement. To this question, I answer in the affirmative. It will be open to the Court to find that the headline, ‘Empires end. That’s what they do,’ in combination with the subtitle, the legitimising reference to the 2017 P3 Report, and the imagery, may be understood by the reasonable consumer to mean that ‘there has been a significant and permanent change in the relationship between the Telstra and Optus mobile networks,’ and that ‘Optus now undisputedly operates a better mobile network overall than Telstra.’
Telstra submits that the class or classes of consumers likely to be affected by the alleged representation in the advertisement is ‘a broad cross-section of the Australian public, including members of the Australian public who are considering, or may in future consider, acquiring a mobile telephone service or changing the carrier who supplies their existing mobile telephone service.’ Optus did not challenge this identification of the relevant class of consumers, and I am content to accept Telstra’s submission on this point.[33]
[33]Telstra, Statement of Claim, 9 May 2018, [6]; Transcript of Proceedings, Telstra Corporation Ltd v Singtel Optus Pty Ltd (Supreme Court of Victoria, S ECI 2018 00097, Robson J, 11 May 2018) 24 (M J Collins).
The imagery is especially evocative, alluding, via the pyramids, to the Egyptian Empire, which fell in the 11th century BC after almost five centuries of power. That the advertisement invites a connection to be drawn between the empire of Ancient Egypt and the ‘empire’ of Telstra is not fanciful or extreme; rather, it is an association that a reasonable viewer could make. The concept of an ‘empire’ is not one that is restricted to the awareness of intelligent and well-educated people. Knowledge of the existence and subsequent decline of the New Kingdom of Egypt is something that may be imputed to a range of ordinary Australians: references to Ancient Egypt appear in pop culture as well as in universities.[34]
[34]See, eg, The Mummy film franchise and the Tomb Raider video game series.
The second main inquiry is whether the making of the representation constitutes conduct that is: misleading or deceptive, or likely to mislead or deceive, under s 18 of the ACL; or false or misleading, under s 29 of the ACL.
Section 18 of the ACL provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or likely to mislead or deceive.
Section 29(1) of the ACL provides relevantly that:
A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:
(d)make a false or misleading representation that a particular person has agreed to acquire goods or services; or
…
(g)make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits …
The CCA does not define the expression ‘misleading or deceptive.’ A good working definition of ‘deceive’ is ‘to cause to believe what is false, to mislead as to a matter of fact, to lead into error, to impose upon, delude or take in.’ A good definition ‘mislead’ is ‘to lead astray in action or conduct, to lead into error or to cause to err.’[35] Conduct will be held to be ‘likely’ to mislead or deceive if there is a real possibility, regardless of whether that possibility is more or less than 50 per cent.[36]
[35]Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 104 FCR 564.
[36]See, eg, Readymix Holdings International Pte Ltd v Wieland Process Equipment Pty Ltd (No 2) [2008] FCA 1480 (3 October 2008) [84] (Flick J); Corporation of the City of Adelaide v Adelaide City Fines Pty Ltd (2009) 253 ALR 417, 434 [92] (Mansfield J); Unilever Australia Ltd v Goodman Fielder Consumer Foods Pty Ltd [2009] FCA 1305 (13 November 2009) [23] (Buchanan J).
In my view, it is arguable that the representation allegedly conveyed in the advertisement is misleading or deceptive, or likely to mislead or deceive, or constitutes the making of a false or misleading representation that goods or services have certain performance characteristics.
The 2017 P3 Report uses language that emphasises how closely Telstra and Optus are rated. According to the report, ‘[i]t was a neck-and-neck race,’ and both companies received the rating of ‘very good.’ The report states that Optus overtook Telstra ‘by just three points’ in a ‘narrow margin.’
However, the alleged representation of the advertisement, which relies for its persuasive effect in part on the reference to the 2017 P3 Report, is not so measured in depicting the relationship between Optus and Telstra. The advertisement, taken as a whole, may be understood as saying that the 2017 P3 Report has declared Optus to be the new dominant player in the telecommunications arena — that the Telstra era is over and a new Optus empire has begun. But the 2017 P3 Report said no such thing. The content of the 2017 P3 Report does not support the proposition that there has been a significant and permanent change in the relative market positions of Telstra and Optus, nor does it support the idea that Optus is now undisputedly operating a better mobile network overall than Telstra.
The question of whether the advertisement is in fact misleading may turn on the question of whether or not the ordinary reasonable viewer would take notice of the reference to the 2017 P3 Report. Without that reference, the advertisement might be taken to be a mere bluster, a humorous brag, as is common in the advertising world. If company A says in its advertisement that it is better than company B, a consumer is unlikely to believe that the comparison is a fact. Consumers know that it is common for companies to big-note themselves in their advertisements. The factor that makes the advertisement in this case potentially misleading or deceptive is its reference to the 2017 P3 Report, as though to suggest that the 2017 P3 Report itself is the credible source of the representation that ‘Optus is now undisputedly operating a better mobile network overall than Telstra.’
Irreparable injury
To secure an interlocutory injunction, the plaintiff must also establish that that it will suffer irreparable injury, for which damages will not be adequate compensation, unless an injunction is granted.
Telstra led evidence that recent consumer testing suggests that Optus’ initial advertisement was having a significant impact on customers.[37] In my view it is reasonable to infer that the amended advertisement, which is materially the same, will have a similar impact on customers.
[37]Nicholas Affidavit, [10]–[25], [27]–[31].
Telstra also led evidence that it will be difficult for it to quantify how many of its customers will have switched to Optus, or away from Telstra, as a result of the advertisement. The difficulty of assessing the damage caused to Telstra’s business and brand is significant in my finding that Telstra will have suffered irreparable injury for which compensation would be inadequate.
Optus made no particular submissions as to whether the harm suffered by Telstra would constitute ‘irreparable injury.’
The balance of convenience
To secure an interlocutory injunction the plaintiff must also show that the balance of convenience favours the granting of an injunction. I find that the balance of convenience weighs in favour of Telstra. If the injunction is granted, but then at trial the issue is resolved in favour of Optus, then Optus will have suffered the expense and inconvenience of taking down the advertisements from digital billboards and internet banners, and will have been deprived of the positive effects that its advertising campaign would have had between the granting of the interlocutory injunction and the final determination of the issue.
However, I note two things. First, the difficulty of removing or amending digital advertising is relatively low as compared to print advertising. Telstra led evidence that advertisements on digital billboards can be removed or amended within about one to three hours.[38]
[38]See Nicholas Affidavit, [28].
Secondly, the only truly irreparable damage which Optus will suffer is the loss of the effect of the advertising in the time between the interlocutory injunction and determination at trial. This is because Telstra will give an undertaking as to damages, so that Optus will be compensated by Telstra if Telstra loses the case. Mr Young, of her Majesty’s counsel, appearing for Optus, pointed out the difficulty of quantifying damages to compensate Optus for the loss of the opportunity to advertise in the time between interlocutory injunction and finalisation of the proceedings.
Mr Young submitted in oral argument that the difficulty of assessing damages for Optus in such a circumstance is equivalent to the difficulty of assessing damages for Telstra in the event that the injunction were not given: there is ‘nothing to choose between those positions.’[39]
[39]Transcript of Proceedings, Telstra Corporation Ltd v Singtel Optus Pty Ltd (Supreme Court of Victoria, S ECI 2018 00097, Robson J, 11 May 2018) 65 (N J Young).
I accept that there will be some difficulty in quantifying Optus’ loss for the time the company would otherwise have been circulating its advertisement and reaping its benefits. However, I do not accept that the problem would be as significant for Optus as it would for Telstra. If the injunction is not granted, but then at trial Optus is found to have engaged in misleading or deceptive conduct causing Telstra loss, then Telstra will have lost some customers and suffered some injury to its brand — both of which will be difficult to quantify and to compensate adequately.
Given that it is relatively simple to remove or amend digital forms of advertising, and that there will be difficulty in quantifying the damage done to Telstra’s brand and customer-base caused by the advertisement, I find that the balance of convenience swings in favour of Telstra.
Conclusion
Telstra has satisfied me that the Court should grant its application for interlocutory relief in the form of interlocutory injunctions restraining Optus from making the alleged representation, and directing Optus to take all necessary steps to withdraw any advertisements or promotional material containing the alleged representation.
I am satisfied that there is a serious question to be tried in relation to the allegations of misleading or deceptive conduct on the part of Optus. I am further satisfied that if I were to refuse the application, Telstra may suffer irreparable injury for which damages would not adequately compensate. Finally, I am satisfied that the balance of convenience test favours the granting of the injunctions sought by Telstra.
Orders
For the reasons given above, I would grant the application for interlocutory injunctions.
I will hear the parties as to the terms of the final orders and on the question of costs.
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