Trade Practices Commission v Telstra Corporation Ltd

TRADE PRACTICES COMMISSION v. TELSTRA CORPORATION LIMITED
No. NG614 of 1993
FED No. 567
Number of pages - 16
Trade Practices - Remedies
(1993) ATPR 41-256

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Hill J(1)

CATCHWORDS

Trade Practices - consumer protection - whether advertising material of respondent misleading or deceptive - whether to be read together with other advertising material distributed to consumers prior to poll - whether persons to whom addressed likely to be led into error.

Remedies - corrective advertising - whether in the circumstances corrective advertising would serve any useful purpose.

Trade Practices Act 1974: ss.52, 80A(1)(b).

Tobacco Institute of Australia v Australian Federation of Consumer Organisations (1992) 38 FCR 1; applied.

Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191; applied.

Hospitals Contribution Fund of Australia Ltd v Switzerland Australia Health Fund Pty Ltd (1987) 9 ATPR 40-830 (Wilcox J), (1988) 78 ALR 483 (Full Court); applied.

HEARING

SYDNEY, 18 and 19 August 1993

#DATE 20:8:1993

Counsel and Solicitors R Webb instructed by the
for Applicant: Australian Government Solicitor

Counsel and Solicitors TF Bathurst QC and Dr GA Flick
for Respondent: instructed by Freehill, Hollingdale and Page

ORDER

THE COURT ORDERS THAT:

That the applicant bring in short minutes of order on a date to

be fixed.

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

JUDGE1

HILL J Telstra Corporation Limited ("Telecom") supplies telephonic services to customers in Australia under the name "Telecom Australia".

Until recently, Telstra Corporation Limited, or a predecessor, had a monopoly in Australia of all telephonic services. As part of a policy of creating competition in the market for telephonic services, Optus Networks Pty Limited ("Optus") was licensed under the Telecommunications Act 1991 to carry on business as a provider of long distance and international telephone calls within and from Australia. To create a competitive environment, the government determined to have a ballot to enable consumers to decide whether they wished to transfer their long distance and international business to Optus or remain with Telecom. As will later be seen that choice is not irrevocable.
The ballot is not compulsory and failure to choose results in the subscriber remaining with Telecom. The ballot is being conducted by Austel, the Australian Telecommunications Authority, and is the subject of an agreement to which Telecom and Optus are parties, concerning the procedure to be adopted for the implementation of what are referred to in that agreement as "pre-selection arrangements". The administration of the ballot procedure is in the hands of a consortium. Initially the ballot was to be conducted in Canberra, Sydney and Melbourne. The ballot process is now complete in Canberra, continues until 3 September in Sydney and is to continue later in the case of Melbourne.
Essential to the success of the ballot is the need for a public education programme and such a programme has been implemented and coordinated by Austel in cooperation with Telecom and Optus who have funded it to the extent of a contribution by each of $2,500,000. In addition a telephone hot line is operated to deal with enquiries from the public concerning pre-selection.
As part of the public education campaign, there has been extensive advertising in radio, in television, through the distribution of brochures and in the press. One of the purposes of this advertising has been to ensure that customers understand the extent of the services provided by Optus as compared with the extent of the services provided by Telecom. A customer electing to choose Optus does so only in respect of the services provided by that company, being the long distance and international services to which reference has been made. Local domestic services and other services conducted by Telecom continue to be available through Telecom, so that a customer electing Optus would ultimately receive two accounts, one for the services carried out by Optus and one for the services carried out by Telecom. A customer staying with Telecom would receive all of the services from that company and receive only one account.
In addition to the public information material published, each of the competitors, Telecom and Optus, has campaigned extensively in support of its own services.
The present case concerns two brochures (one accompanied by a letter) which the applicant, the Trade Practices Commission ("the Commission"), alleges constitute a breach by Telecom of s.52 of the Trade Practices Act 1974 ("the Act") as being either misleading or deceptive or likely to mislead or deceive persons to whom they are addressed.
The first brochure (hereafter referred to as "Brochure A") was distributed in Sydney and in Melbourne. Approximately 65% of the total 790,000 copies of Brochure A distributed were distributed in Sydney, either by mail or by letter drop. Telecom appears unable to identify the persons to whom that brochure was sent but does not contemplate distributing further copies of it and is prepared to give, if required, an undertaking to this effect.
The second brochure (hereafter referred to as "Brochure C") was distributed between 9 July 1993 and 26 July 1993 to certain small and medium sized business customers of Telecom in the Sydney and Canberra areas. 135,000 copies were distributed in Sydney and 12,000 copies in Canberra. Telecom retains a database from which, if necessary for the purposes of corrective advertising, it could retrieve the identity of the customers to whom Brochure C was sent.

Brochure A
10. Brochure A is in the form of a single sheet of A4 size folded into three sections by two folds. As the brochure in its folded form presents, it says on the outside: "Before you choose, consider the facts." Inside, when the brochure is fully opened, appears first the following text:

"When you choose your preferred telephone company, make sure you choose the one that provides you with full service. Telecom offers you all the advantages listed below. Plus, competitive and flexible pricing on long distance calls. Most importantly, every dollar Telecom earns works to the benefit of all Australians.

See who provides these commonly used services."

Underneath the text under the heading "Who provides what" is information giving a comparison between the services offered by Telecom and those offered by Optus. It is not suggested that the table, read on its own, is misleading.

"

WHO PROVIDES WHAT? SERVICE TELECOM OPTUS Long distance telephone services YES YES Telephone installation,

maintenance and service YES NO Universally provides local

call services YES NO Special phones for those with

disabilities, free from

additional purchase and

installation costs YES NO Enables you to receive just

one bill including local and

long distance calls, rentals

and equipment costs YES NO Special discounts for

pensioners YES NO Full range of telephone

equipment YES NO 100% owned by all Australians YES 49% foreign owned "

The final part of the brochure sets out rates charged by Telecom to call certain international locations, calculated on the basis of a 5 minute call. Amongst other information contained on this part of the brochure is a panel which directs the reader to a long distance calling hot line operated by Telecom for further information. There is material printed as well on the back of the brochure but nothing turns upon that material.
The gravamen of the complaint made in respect of Brochure A, in the Commission's statement of claim, is that the text and table, to which I have made reference, are, when read together, misleading and deceptive or likely to mislead or deceive, because:

"...they convey the impression or representation that because a consumer chooses Optus the services described in the table, apart from `Long Distance telephone services', will not be available to the consumer."

An alternative way this complaint is expressed in the statement of claim, is:

"The statement and table... are misleading or deceptive or likely to mislead or deceive because they convey the impression or representation that the ballot is concerned with the choice of a telephone company to provide services other than long distance and international calls."

Brochure C and accompanying letter
15. Brochure C was sent together with a letter. Because the letter forms part of the context in which the brochure must be understood, I set out in full the text of it.

"July, 1993

Dear Customer

Soon you will be asked to select by ballot a single telephone company to handle all of your long distance calls. The best choice for your business? Telecom Australia. Compare Telecom to the other long distance provider. Both Telecom and the competition can help you to save on your calls. But only Telecom gives you more flexibility with a broad range of products and money-saving Flex-Plans ... and only Telecom gives you a complete range of telecommunications products and services specially geared to the needs of small and medium-sized businesses. It all adds up to more value for your money. To help you make a more informed selection of telephone company, we have prepared the enclosed brochure. By spending a few minutes reading it, you will see exactly what Telecom offers. And you will know what to look for from the competition.

Remember: your phone line is your business lifeline. You'll receive your ballot form in the mail soon. It is not compulsory to vote. But if you do, be sure to read the enclosed brochure. And when it comes time to choose a long distance provider, we hope you will choose the right company for all the right reasons: Telecom Australia.

If you have any additional questions regarding Preselection or your Telecom service in general, please call our Preselection Information Centre on Freecall 008 626 121.

The brochure itself is a glossy publication containing 13 pages as well as the outside covers. The first page, purporting to be a letter from the Managing Director of Telecom, refers to the impending ballot and urges the reader to compare Telecom to "the competition", making the choice that is best for the reader. The next two pages appear under the heading "Who gives me the most for my money?". The text reads as follows:

"Compare Telecom's extensive range of business products, competitive prices, customer services and technological innovations to any other telephone supplier.

We offer local as well as STD and IDD international service... a full range of telephone equipment for your business plus installation, repairs and maintenance... 24 hour access to expert advice and assistance... business-building services like Freecall 008 ... the added convenience of itemised billing... call management facilities like Easycall Call Waiting and Call Diversion... money-saving Flexi-plans ... and more Compare for yourself...

TELECOM THE COMPETITION FULL RANGE OF EQUIPMENT

plus installation, repairs and maintenance YES FLEXIBLE PRICING PLANS YES ITEMISED BILLING listing calls, discounts and service charges YES A COMPLETE PHONE SERVICE including local, STD and IDD international YES< "

The next table comes with the heading "What about price?". Reference is made to a range of "Flexi-Plans based on calling patterns" to help a business save money. There is set out a chart purporting to be: "...examples of what Telecom charges for typical calls from your area if you join Business Circle."
There follows then the following table:

"TYPE OF BUSINESS CALL TELECOM 5 minute calls BUSINESS CIRCLE RATE* 9am-6pm Monday-Friday

Sydney to Melbourne $1.55 Melbourne to Perth $2.29 Canberra to Melbourne $1.55 Australia to UK $6.45 Australia to New Zealand $5.19 *Business Circle FlexiPlan available for $1 per month." The next two pages appear under the heading "Who serves Australia's small and medium sized businesses best?" The text reads as follows:

"TELECOM is dedicated to enhancing service to small and medium-sized businesses. We now offer 24-hour access to customer service on 13 2000 exclusively for our business customers. Plus 24-hour fault- reporting on 13

2999. Itemised billing in many areas. And guaranteed scheduling of service appointments in many areas...".

There appears then the following table:

"Compare for yourself... TELECOM THE COMPETITION 24-HOUR CUSTOMER SERVICE LINE dedicated to answering the questions of small and medium-sized business YES 24-HOUR FAULT REPORTING YES ITEMISED BILLING listing calls, discounts and service charges YES ONE BILL FOR LOCAL, STD AND IDD CALLS YES "

The next two pages are under the heading "Who provides all the telephone services a business needs?". The printed material is as follows:

"Only Telecom offers everything your business needs for your phone system. Unlike the competition, we provide local as well as STD and IDD international service. And with Telecom, you can be sure of getting any help you require.

We also provide a full range of telephone products and services, from advanced telephone systems to Freecall 008 lines. And we'll install, service and maintain any equipment we provide.

If you choose another telephone company for your long distance service, you'll have to deal with two separate companies as well as pay an extra bill - one for long distance and Telecom for everything else."

At the end of this text appears the following table: "Compare for yourself... TELECOM THE COMPETITION FULL RANGE of telephone equipment YES ALL TYPES OF TELEPHONE SERVICE including local, STD, IDD international, Freecall 008, data and fax YES INSTALLATION, REPAIRS AND SERVICE YES FLEXIBLE PRICING PLANS YES CALL DIVERSION re-routes calls to other phones YES CALL WAITING for taking more than one call at a time YES FREECALL 008 YES FREEFAX 008 YES "

The next two pages are concerned with emphasising that Telecom is Australian owned and employs Australian workers. I pass it by as no complaint is made about it. The final two pages appear under the heading "Compare Telecom and decide for yourself". There is a summary followed again by a chart. The text relevantly says:

"We urge you to compare us to the competition. We're certain that you'll find Telecom is the best choice for you."

There appears then the final table under the heading "Who's the best choice? Compare for yourself...".

" TELECOM THE COMPETITION 24-HOUR CUSTOMER SERVICE line

dedicated to answering the questions of small and medium-sized business YES 24-HOUR FAULT REPORTING YES FULL RANGE OF EQUIPMENT plus installation, repairs and maintenance YES FULL RANGE OF PRODUCTS including Call Waiting, Call Diversion and Freecall 008 YES FLEXIBLE PRICING PLANS YES ITEMISED BILLING listing calls, discounts and service charges YES ONE BILL FOR LOCAL, STD AND IDD CALLS YES 100% AUSTRALIAN OWNED YES "

The Commission claims that both the letter and Brochure C offend s.52 of the Act.
The part of the letter that is said to be misleading or deceptive or likely to mislead or deceive those to whom it is addressed is the statement:

"Soon you will be asked to select by ballot a single telephone company to handle all of your long distance calls."

It is said that this statement conveys the impression or representation that the choice to be made in the ballot is irreversible and that consumers will be locked in by their choice in the ballot unable to change from the preferred telephone company or unable to override their choice by dialling an appropriate code in front of the number chosen.
The brochure is said to be misleading or deceptive or likely to mislead or deceive in the tables contained in it because those tables convey, so it is alleged, in the context in which they appear:

"...the impression or representation that `The Competitor', which is Optus, does not provide any of the described services, whereas Optus provides the following:

(a) itemised billing, listing calls, discounts and services charges;

(b) 24-hour fault reporting for international and national services;

(c) Flexible Pricing Plan; and

(d) call waiting, call diversion and 008 free numbers."

The brochure is also said to be misleading and deceptive so far as it deals with typical telephone call charges for members of the Business Circle plan. This is said to be so because the brochure conveys:

"...the impression or representation that all calls made according to the chart by a person who joined `Business Circle' would be charged at the rate indicated, whereas the `Business Circle' rate applies only to calls to 5 specified numbers."

Relief sought
28. The Commission seeks injunctions restraining Telecom from publishing or otherwise disseminating any letters, advertising or promotional material containing representations which are misleading or deceptive or likely to mislead or deceive in the manner alleged in the statement of claim or any similar manner and in particular from disseminating Brochures A and C and the letter which accompanied Brochure C.

In addition the Commission seeks orders that Telecom be required to publish corrective advertisements in newspapers in Sydney, Melbourne and Canberra. As the ballot has been concluded in Canberra the Commission no longer presses for corrective advertising to be published in that city.

The applicable principles
30. Section 52 proscribes the engaging in conduct which is misleading or deceptive or is likely to mislead or deceive. Conduct will be misleading or deceptive in the relevant sense if there is a real and not remote chance that it would be likely to lead a person or class of persons into error: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 198 per Gibbs CJ and Global Sportsman Pty Ltd v Mirror Newspapers Pty Limited (1984) 2 FCR 82 at 87.

Conduct which might lead the addressee to be confused will not of itself constitute misleading or deceptive conduct: Parkdale Custom Built Furniture Pty Ltd v Puxu (supra); McWilliams Wines Pty Ltd v McDonald's System of Australia Pty Ltd (1980) 49 FLR 455. It is unnecessary for the Commission to show that a particular person was misled for the Court must decide objectively whether the conduct is misleading or deceptive or likely to mislead or deceive: Parkdale (at 198-199).
Given the urgency of the present proceeding it is not surprising that the Commission has not sought to adduce evidence on this matter in any event.
In most cases at least, where s.52 operates, it will be because there has been a misrepresentation conveyed: cf Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177. The view that a misrepresentation must be present before a breach of s.52 is made out, has been challenged by French J, inter alia, in State Government Insurance Corporation v Government Insurance Office of New South Wales (1991) 28 FCR 511 at 561-2. In that discussion his Honour illustrates the point he seeks to make by reference to what are often referred to as the "silence" cases. Whether these are a true exception to the requirement that there be a misrepresentation is debatable. Clearly, where there is a misrepresentation there will be conduct which is misleading or deceptive. It may well be possible to imagine a case where conduct is misleading and deceptive without there being the need for a misrepresentation. However, the present is not such a case. The Commission rests its case upon the fact that there have been, both in the brochures and in the letter, misrepresentations because of the implications which are said to arise from what is written, or what is left unwritten, as the case may be.
Where the conduct sought to be impugned is said to involve a misrepresentation it will be necessary to consider the persons to whom that misrepresentation is made to determine whether in the context in which the representation is made it is truly conduct which can be categorised as misleading or deceptive or likely to mislead or deceive.
In Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1 at 48-50, I discussed the varying views as to the assumptions that should be made as to the skill and knowledge of the addressee of a representation. Where a representation is made to the public at large it has been suggested, for example, that the question whether the conduct is misleading is to be tested by its effect on:

"...a person not particularly intelligent or well informed, but perhaps of somewhat less than average intelligence and background knowledge..."

per Franki J in Annand and Thompson Pty Ltd v Trade Practices Commission (1979) 40 FLR 165 at 176. Deane and Fitzgerald JJ, in Taco (supra) at 202, expressed the matter by considering the conduct by reference, inter alia, to:

"...the astute and the gullible, the intelligent and the not so intelligent, the well educated as well as the poorly educated, men and women of various ages pursuing a variety of vocations."

Other views of the matter were expressed by Gibbs CJ and Murphy J in Parkdale (supra) at 199 and 214-5 respectively. In the Tobacco case, I said (at 49-50):

"Perhaps too much emphasis can be placed on this apparent divergence of opinion. In the end, the question is not whether account is to be taken of the effect of the conduct upon the gullible, but whether the conduct in question is misleading or deceptive. The statutory question is best tested in a case such as the present, by reference to the effect of the conduct upon the class of persons who are likely to read and consider the advertisement, that class having the qualities discussed by Franki J. The extremely stupid, and perhaps the gullible, may well be excluded from the class of persons who read such advertisements in newspapers. Some members of the class may, in reading the advertisement, be misled by a misconception of their own, howsoever arising. Those persons will not have been led into error by the representation made in the advertisement... Where, as in the present case, the advertisement is capable of more than one meaning, the question of whether the conduct of placing the advertisement in a newspaper is misleading or deceptive conduct must be tested against each meaning which is reasonably open. This is perhaps but another way of saying that the advertisement will be misleading or likely to mislead or deceive if any reasonable interpretation of it would lead a member of the class, who can be expected to read it, into error."

This passage was approved in the same case by Foster J (at 27) who added:

"...in approaching this aspect of the case, I have in mind, as the appropriate yard-stick, readers who may vary in age from the youthful to the elderly, who are not dullards or dotards but who, nevertheless, may have little or no formal grounding in scientific or philosophical thought and who may have only a humble to mediocre grasp of language."

Brochure A was clearly directed to the public at large and the comments made above apply to it. Brochure C, with its attendant letter, was addressed to business customers. Those business customers included, one must assume, proprietors of both small and large businesses. It may perhaps be that business customers are marginally more perceptive and sophisticated than may be the case of the general populace. There is no evidence before me that would enable me to reach a conclusion on that question. This is particularly so as the composition of the class of business customers was not gone into in evidence. Accordingly it seems to me that the question of the meaning of the respective brochures and letter must be approached both in the same way, but of course by reference to the context in which the statements complained of were made.
It was submitted for the Commission that where advertising involves comparatives there is a higher burden upon the advertiser to show the accuracy of the comparison. That proposition was said to follow from what was said by Lockhart J in Stuart Alexander and Co (Interstate) Pty Ltd v Blenders Pty Ltd (1981) 53 FLR 307 at 310; by Fisher J in State Government Insurance Commission v JM Insurance Pty Ltd (1984) 6 ATPR 40-465 at 45362; and by Wilcox J in Hospitals Contribution Fund of Australia Ltd v Switzerland Australia Health Fund Pty Ltd (1987) 9 ATPR 40-830 at 48951. The point being made is that errors in comparative advertising may have a greater potential to mislead consumers than statements made in ordinary advertising which may be perceived as mere "puffs".
It is unnecessary to elevate what is said in those cases into a principle of law. Whether conduct is misleading or deceptive must depend upon all the facts and those facts include, in the case of advertising, the entire context in which the advertising appears. Perhaps no better example of that can be given than the advertisement discussed by the full court in the Tobacco case to which reference has already been made.
An appeal in the HCF case was allowed in part against the judgment of Wilcox J. Counsel for Telecom submitted that what was said on the appeal (reported at (1988) 78 ALR 483) by Fox J, with whom Davies J agreed, made it clear that comparative advertising involved no different standard than is involved in any other form of advertising. With respect I do not read Fox J as in any way detracting from what was said by Wilcox J on the point of comparative advertising. Indeed his Honour was of the view, it seems to me, that where comparative advertising was involved the ordinary members of the public were more likely to be misled if the statements were inaccurate than they might be in other situations. That is, it seems to me, just precisely the point that Wilcox J was making.
At the end of the day the present case does not involve any particularly novel matter of principle. It involves a consideration of each of the documents sought to be impugned to determine whether there has been conduct which is, as the Commission claims, misleading or deceptive or likely to mislead or deceive.
I turn then to consider each of the brochures and the letter.

Brochure A considered
44. Counsel for the Commission submitted that the reference to "preferred telephone company" had to be seen in the context of the array of other material which would have been supplied to members of the public in connection with the ballot. In evidence were samples of brochures and media advertising, some of which used the word "preferred", generally in the context of preferred carrier.

There is a question as to whether the brochures should be read on their own without reference to the voluminous other advertising which would have reached the ordinary reader, or whether they should be read against that other advertising. There is much to be said for the view that a person who would read this advertisement would be likely to have read the other advertisements and vice versa that a person who had not read the other advertisements would be unlikely to have read this one.
Whatever the validity of that view, the question is whether the meanings suggested by the Commission in its statement of claim are meanings which are reasonably open, bearing in mind the persons for whom the brochures were intended.
The question is, as counsel for the Commission conceded, ultimately a matter of impression. I must say that it would not have occurred to me on reading the advertisement that a choice for Optus meant that I would no longer be able to obtain ordinary domestic telephone services. Indeed, because one must view each brochure as an attempt to capture the vote of a consumer in the ballot, it seems to me that each must be read in the context of the advertisements addressed to the same consumers by Austel. These make it clear, beyond doubt, that when a customer votes for a preferred carrier it does not follow that that preferred carrier will provide a full service because only Telecom is responsible for local call services. Given this context, it seems to me that Brochure A is not misleading or deceptive or likely to mislead or deceive any consumer and in this respect the application must fail.

Brochure C considered.
48. As indicated earlier, two complaints are made in respect of Brochure C. The first concerns the tariff for Business Circle customers.

It is submitted for the Commission that the failure on the part of Telecom to mention that the cheaper calls on the Business Circle plan are available only in respect of five nominated phone numbers makes the table in the brochure a misleading half-truth. This is said to be made even clearer by the asterisk which refers to the need for a payment of an additional $1 per month fee but otherwise suggests no other qualification.
On the other hand, one must read the table by reference to the text which appears immediately above it and its reference to "calling patterns". However, a person unfamiliar with the manner in which Telecom's Business Circle rate is structured would ultimately, in my opinion, have no idea what was meant by the words "based on calling patterns". Those words might merely mean that if the customer's calling pattern was such that the customer had a significantly large number of overseas calls or STD calls, a real saving could be made.
In my view the failure on the part of Telecom to indicate that the reduction in tariff by using Business Circle was restricted to the five most frequently called numbers does constitute conduct which is misleading or deceptive or likely to mislead or deceive. In my view this conclusion is in no way diminished by the fact that a person seeking to obtain the Business Circle rate would either have to call Telecom when the appropriate conditions would be explained to that person, or complete an application form where the relevant conditions would also be explained. This evidence, while relevant to the question of corrective advertising, does not absolve Telecom from the misleading conduct in which it has engaged. In the present case it is not relevant whether ultimately a consumer might suffer loss by being misled when joining the Business Circle. What is here at issue ultimately is the integrity of the ballot to which Telecom is a party and in respect of which the brochure is directed.
The final matter of complaint concerns the tables with the blank boxes in respect of the four services outlined in the statement of claim.
Although at times this submission appears to have been put on the basis that the fact that the boxes were left blank conveyed a representation that the answer in the tables was "No", that is in my view somewhat of an over-simplification of the problem. I accept the submission of counsel for Telecom that the whole context of both the letter and the brochure involve an invitation to the addressee of the brochure to make a comparison between Telecom and Optus. No doubt if an actual comparison were made by an addressee that comparison would lead the addressee to the correct responses to be put in the boxes. There could be nothing misleading or deceptive about that. However, what the brochure is capable of suggesting, and indeed I think does suggest, is that if an addressee were to make that comparison the result would be that each of the relevant boxes where the answer is "Yes" for Telecom would show a "No" for Optus. This does not suggest, as counsel for Telecom put it, that invitation to compare features of competing products must always be seen as breaching s.52. The question must always depend upon reading the particular advertisement, having regard to the context in which it appears.
In my view a not insignificant section of business persons to whom Brochure C was addressed would conclude that if they made the relevant comparison by making enquiries of Optus the answers in the respective boxes would show a negative for Optus.
That then raises the question whether the four matters referred to in the brochure are wrong.
The first of these matters relates to itemised billing listing calls, discounts and service charges. Evidence was given from Optus that in so far as the tables represented to customers or prospective customers that itemised billing listing calls, discounts and service charges were not available from Optus, the table was incorrect. The evidence shows that Optus itemises bills, lists every call, lists all discounts applicable and all service charges. Accordingly if the representation suggests otherwise, it is misleading.
The second matter concerns the 24-hour fault reporting for international and national services. The evidence is that Optus does provide a 24-hour fault reporting service for international and national calls for all customers. However, it is suggested that the brochure should be read having regard to its context as saying that only Telecom offers a 24-hour fault reporting service especially for small and medium-sized business customers. According to Optus, that company provides a special 24-hour fault reporting service for large business customers which would intersect the class of business customers to whom the brochure was sent. There is, however, no special Optus service dedicated to small and medium-sized businesses as such.
Despite the emphasis in the context of the brochure to small and medium-sized businesses, I am inclined to the view it is reasonably open to read the brochure as suggesting that Optus does not provide a 24-hour fault reporting service at all, rather than as limiting its claim to a special service for small and medium sized businesses. So construed, there is a misrepresentation which constitutes misleading and deceptive conduct.
The third matter of which complaint is made is the reference to "Flexible Pricing Plans". According to the evidence, Optus provides discounted rates, for example, for calls at particular times or for customers whose bills exceed a particular amount. Optus does not presently, apparently, have plans which customers join, such as the Business Circle plan where special rates apply. It does not fall to me, fortunately in this judgment, to determine which of Telecom or Optus provides the better rates for discounted calls. That appears to be a matter of some complexity worthy of considerable study by those interested in ensuring they pay the least price. Suffice it to say here that the evidence suggests that, at least at certain times and in certain circumstances, calls from Optus may cost less than those of Telecom, even where one of the special Telecom Flexi-Plans has been adopted.
The question still remains as to what a person reading the brochure would understand by the reference to "Flexible Pricing Plans". With some hesitation I am inclined to the view that a reader of the brochure would most likely read it as relating to some special plan such as the Business Circle plan to which the consumer subscribes or to which the consumer becomes a member in some way or other. Since there are no such plans presently run by Optus, it would follow that, as so construed, the brochure was not in this respect misleading or deceptive.
The final matter concerns "calls waiting", "call diversion" and free calls.
As I understand the evidence, the ability to use Optus 008 numbers, that is to say calls that are free to the caller but charged to the recipient, will only be available to persons choosing Optus after 20 September 1993. Such a facility is not yet available for technical reasons. A customer choosing Optus could not use a call diversion to divert a call from one suburb to another because that would involve merely local calls. However, as and from 1 September, customers to Optus will be able to use a call diversion facility where what is involved is a timed call, that is to say an STD or IDD call. Finally, "call waiting" is virtually a local product and, as I understand the evidence of Ms Fairman, the Marketing and Sales Operations Manager of Telecom Commercial, was thus not provided by Optus and only available through Telecom.
It was submitted for counsel for Telecom in respect of call diversion and 008 numbers, that there was no element of misleading or deceptive conduct because, as at the time the brochure was distributed these services were not available, notwithstanding that it was contemplated that they would be available in September. With respect, I do not agree. The brochure is directed at the future. It is directed particularly at the situation where a ballot is to be held not concluding in either Sydney or Melbourne until after 1 September, so that the representations as to the availability of services relate not to the situation at the time of the brochure but to the situation that will prevail once the ballot has been concluded.

It follows in these circumstances that I am of the view that in respect of all matters other than "call waiting" and "Flexi-Plans", Brochure C in these respects was misleading or deceptive.

The letter considered
65. The complaint by the Commission here is that the letter signified that the choice in the ballot was irrevocable. The evidence is that, at least in the first six months after the ballot, a customer may, without charge, change his or her preference for a long distance carrier. Further, that the choice, even when made, may at any time be overridden by the use of a code appropriate to Telecom or Optus, as the case may be, in front of the number dialled.

It seems to me that the submission ultimately amounts to saying that the letter is misleading not because of anything said in the letter, because clearly the letter is right when it refers to a pending ballot of consumers for a telephone company to handle long distance calls. What is really put is that there was an obligation on Telecom to say that the choice was reversible or could be overridden and that failure so to do made the letter misleading.
The matter is one of impression but I do not think that the failure to expand upon the material in the paragraph in the context of the letter makes what is there said misleading. The letter hardly purports to set out in full all of the terms and conditions applicable to the ballot and the choice of carrier. It indeed invites questions to be directed to the pre-selection information centre where further detailed information could be received. The letter must also be seen in the context of the campaign engaged in by Austel, not to mention the advertising campaign of Optus, where the ability to reverse or override is the subject of comment.
I am of the view that the letter is not misleading or deceptive.

Relief - Injunction
69. Since I have found that the distribution of Brochure A was not misleading or deceptive conduct within s.52 of the Act the question of relief in respect of it becomes irrelevant. The same is true of the letter. However, Brochure C, in its present form, is misleading and deceptive and I would accordingly grant an injunction restraining Telecom from, in trade or commerce, publishing or otherwise disseminating the brochure marked "C" in the application. I do not think it appropriate to enjoin Telecom from disseminating material containing representations that are misleading or deceptive or likely to mislead or deceive in the manner alleged in the statement of claim or any similar manner. Such an injunction lacks, in my view, specific content and in the event that there were an allegation that it had been breached, this would in essence involve a trial to determine whether that which had been disseminated was in fact misleading or deceptive in the context in which it then appeared. It think it preferable that the relief be limited in the present circumstances to an injunction relating to the particular brochure: cf the Tobacco case (supra).

Corrective advertising
70. Counsel for Telecom conceded the power of the Court to order, in an appropriate case, Telecom to undertake corrective advertising by way of mandatory injunctive relief under s.80A(1)(b) of the Act. Such power must be used protectively rather than by way of punishment: Hospital Contributions Fund of Australia Ltd v Switzerland Australia Health Fund Pty Ltd (supra). However, as that case indicates there may be circumstances where it will not be appropriate to order corrective advertising but rather where it will be better to allow the situation to rest where it is. The HCF case ultimately was held to be such a case. Morling J, on appeal, with whose judgment in this respect both Fox and Davies JJ agreed, found it inappropriate in that case to require a correction to be published having regard to the passage of time. There was no real purpose to be served by the publication of a correcting advertisement.

Evidence has been adduced by Telecom of the very considerable media campaign in radio, television and newspapers giving the real facts relating to the exercise of the choice. That material certainly makes it clear the choice is not irreversible and may be overridden. It makes it clear that the choice of Optus as a long distance carrier does not leave the customer without domestic service. It makes it clear that Optus provides a service where there are discounts and competitive pricing. I see no real point in ordering corrective advertising in respect of the Business Circle plan because a consumer interested in that plan will require in any event to contact Telecom and will certainly then discover that the discounted tariff is available only in respect of five numbers. It is scarcely imaginable that a person reading Brochure C would opt for Telecom because of that plan but not ascertain within the next six months the conditions applicable to it. Such a person is able at any time, at least in the first six months, to change without difficulty.
Brochure C was last published on 26 July 1993. It is clear that since that date there has been a large volume of advertising material directed at ensuring that consumers make an informed choice. To quote the somewhat colourful turn of phrase of counsel for Telecom, Brochure C is but "one piece of ephemera among an avalanche of material". In my view no useful purpose would be served now by requiring Telecom to engage in corrective advertising.
I will hear counsel on the question of costs.

[1993] FCA 567

20 AUGUST 1993