Trotman Australia Pty Ltd v Hobsons Press (Australia) Pty Ltd
[1991] FCA 565
•17 SEPTEMBER 1991
Re: TROTMAN AUSTRALIA PTY LIMITED
And: HOBSONS PRESS (AUSTRALIA) PTY LTD and PETER SELIGMAN
No. N G353 of 1991
FED No. 565
Trade Practices - Copyright - Interlocutory Proceedings - Injunctions
(1991) 22 IPR 397
COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Einfeld J.(1)
CATCHWORDS
Trade Practices- misleading and deceptive conduct and false representations - whether publications containing comparisons between prices charged by companies competing for advertising and claiming exclusivity constituted misrepresentations - prima facie or arguable case - power to order corrective publications and provision of list of recipients of offending publications - power only to be exercised sparingly or where needed to resolve interlocutory dispute - balance of convenience - consideration of wider public interest and doctrine of unclean hands
Copyright - threat of legal action for alleged infringement of copyright - entitlement to relief provided by section 202(1) of the Copyright Act 1968 - no action in fact taken - copyright no longer asserted - no persisting imminent threat of action - no order required on interlocutory basis
Interlocutory Proceedings - role of Court in cases of true commercial competition - relief to be limited to preventing continuation of identified wrongs - relevance of strength of applicant's case - whether appropriate to consider fact and strength of cross claim - relevance of argument that damages not appropriate remedy because of difficulty of proof - effect of cessation of threat or imminence of action in breach of statute
Injunctions - limitation in interlocutory proceedings to matters required to permit market place competition on a fair, factual and equitable basis - whether difficulty of proof of ultimate damages is relevant to grant of interlocutory injunction
Trade Practices Act 1974 Part V and sections 52(1), 53(e), 81 Fair
Trading Act (NSW) 1987 sections 42(1), 44(g)
Copyright Act 1968 section 202
Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618
Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1977) 140 CLR 216
Interstate Parcel Express Co. Pty Ltd (Ipec) v Time-Life International (Nederlands) B.V. (1977) 138 CLR 534
Bullock v The Federated Furnishing Trades Society of Australasia and Ors (No. 1) (1985) 5 FCR 464
World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181
Taco Company of Australia Inc. v Taco Bell Pty Ltd (1982) 42 ALR 177
FAI Insurances Ltd v Advance Bank Australia Ltd (1986) 68 ALR 133
Janssen Pharmaceutical Pty Ltd v Pfizer Pty Ltd (1986) ATPR 40-654
Collins Marrickville Pty Limited v Henjo Investments Pty Limited (1987) ATPR 40-782
HCF Australia Ltd v Switzerland Australia Health Fund Pty Ltd (1988) ATPR 40-834
HEARING
SYDNEY
#DATE 17:9:1991
Counsel and solicitor T. Blackburn instructed by
for the applicant Michael Frankel and Co
Counsel and solicitor R. Parsons instructed by
for the respondents Peters Crompton Worrall
JUDGE1
In early 1991 Trotman Australia Pty Limited (the applicant) won a tender to produce the official directory of the Graduate Careers Council of Australia Pty Limited (GCCA) designed to advertise employment information and opportunities for tertiary graduates. An agreement between the applicant and the GCCA was subsequently signed in March 1991 authorising the applicant to publish a directory (the Trotman directory) under the proposed name of "Graduate Opportunities - GO", for distribution through universities, other appropriate institutions and careers advisory services.
Pursuant to agreements with the GCCA and its predecessors, Hobsons Press (Australia) Pty Limited (the first respondent), of which Peter Seligman (the second respondent) is group general manager, has been publishing a directory of graduate opportunities for 16 years called, in recent years at least, "Graduate Outlook - GO", (the Hobsons directory). It proposes to continue to produce its directory and therefore continues to solicit advertisers.
The first respondent's campaign for its 1992 directory has included, first, a letter of 20 June 1991 from the first respondent to some or all previous, and perhaps some potentially new, customers containing certain representations; second, a circular to the same or similar persons with a further misrepresentation; and third, a letter dated 24 June 1991 from the first respondent's solicitors to the applicant, threatening legal action against the applicant for breach of alleged copyright in the acronym "GO". The first two publications are now the subject of this action by the applicant for misleading and deceptive conduct and false representations as proscribed by sections 52(1) and 53(e) of the Trade Practices Act 1974 and sections 42(1) and 44(g) of the Fair Trading Act (NSW) 1987 (the Acts). The third letter is claimed to entitle the applicant to the relief provided for in section 202 of the Copyright Act 1968. The applicant seeks declarations, injunctions and damages.
The action was commenced by ex parte application on 5 July 1991 and is in the process of being made ready for hearing. At present before the Court is a notice of motion by the applicant for two declarations and several mandatory and restraining injunctions pending the final hearing. The applicant seeks to restrain continuation of the misrepresentations alleged and asks for an order under section 81 of the Trade Practices Act requiring corrective publications in unspecified form. The applicant also seeks an order that the respondents identify the parties who received the misrepresentations so that they may be acquainted with the corrected material. A further injunction is sought to restrain the continuation of the threat of legal action arising from the alleged infringement of copyright. Declarations are sought that the stated sections of the Acts have been infringed.
The evidence for presently relevant purposes discloses that the Hobsons directory provides two broad types of employer presentations. One is a condensed digest of basic information headed "Employers in Brief", generally known as "mini entries". This service is provided without charge. The other facility offered is called display advertising, usually of one or more pages. There are a variety of applicable charges for this facility but the basic charge for black and white print is $2,500 for one page and $1,395 for a second page. Colour is extra. It is apparently permissible to take as much space in the free mini entry section as desired although the information given is not narrative and is generally in abbreviated form. It is also possible to have a free entry without placing an advertisement in the display section although in evidence the second respondent was not able to find one such instance in the 1991 directory.
The Trotman directory will also contain both a paid and a free section. What the applicant's general manager disclosed in evidence to be a "yellow pages" section in the Trotman directory will consist of "a brief outline of approximately 500 graduate recruiters", setting out "the company's name, a brief description of what it does, number of employees, the person to contact, telephone number, number of vacancies, together with disciplines from which students are recruited and careers in full, the last two coded, and appearing at the top of each entry next to the company name". The Trotman directory will also provide a section for each participating employer's "profile" to be known as a "standardised reference entry", which will contain mainly digested factual information of the employer's choice, together with the employer's logo if desired. Trotman charges $2,250 for the first page and $1,500 for each additional page of a standardised reference entry.
The recruiter may also take an adjoining full page of "display advertising". If this facility is used, the first page of the standardised reference entry is reduced to $1,000 and the display page will cost $2,850 for black and white and $3,650 for colour. An employer may also take out a display advertisement by itself, without a reference entry. The applicant's rates are officially set out in one of its publications as follows:
STANDARDISED REFERENCE ENTRY RATES
First Page *$2,250
Each Additional Page $1,500
*EMPLOYERS WHO SUPPORT THEIR STANDARDISED REFERENCE ENTRY WITH AN ADJACENT DISPLAY ADVERTISEMENT PAY ONLY $1,000 FOR THEIR FIRST PAGE OF STANDARDISED REFERENCE ENTRY.
DISPLAY ADVERTISING RATES MONO COLOUR One Page $2,850 $3,650 Each additional page $2,250 $2,650
The first issue before the Court is whether the letter dated 20 June 1991, signed by the second respondent, is misleading and deceptive. The letter produced in evidence is said to be typical of those sent to other customers. It reads as follows:
20 June 1991
Mr Graham Featherstonehaugh
Graduate Recruitment
ANZ Banking Corporation
Level 17
55 Collins Street
MELBOURNE VIC 3000
Dear Mr Featherstonehaugh
By now you will have spoken to a sales representative from Trotman Australia regarding their publication 'Graduates Opportunities'. As a result of misleading information, we at Hobsons Press believe there are a few misconceptions regarding our publication Graduate Outlook (GO). To clarify these, the following information will assist you. 1 Endorsement
As you would know Graduate Outlook (GO) is no longer endorsed by the GCCA. After 16 years this endorsement has gone to Trotman on purely financial grounds. Nevertheless, the copyright for Graduate Outlook (GO) is held by us and it will, of course, go to print. Now, let us look at the value of the endorsement to your advertising dollar. You as a graduate recruiter must ask yourself:
a Who am I trying to reach? b What is important to them? Obviously, you are trying to reach graduates, and what is important to them is finding a suitable employer. Now, do graduates know who the GCCA is? Do they care? You will find the answer to these two questions is 'no'. However, graduates do know Graduate Outlook
(GO) and they do know that it will assist them in finding a job. Generations of Australian graduates know and ask for Hobsons' publications by name. The GCCA is unknown to undergraduates. Hobsons have established distribution of their publications on every campus around Australia.
2 Hobson's mini-entry vs Trotman's standardised entry
If you turn to page 279 of the 91/92 edition of Graduate Outlook (GO) you will find a section titled 'Employers in Brief'. This section provides a free service to all graduate recruiters large or small. These 'mini-entries' contain all the relevant information a graduate needs to apply for employment. For a similar service, Trotman's standardised entries cost $2,250. Now you the advertiser can have a true price comparison:
HOBSONS PRESS TROTMAN AUSTRALIA a) Reference
Entry $ 0.00 $2 250.00 b) One page
Display
Advertising
+ entry $2 500.00 $3 850.00 c) Two page
Display
Advertising
+ entry $3 895.00 $6 100.00 Needless to say, prices for colour follow the same trend. 3 Size
There has been a promotion of the 'new, larger size' of the Trotman publication. Hobsons' Graduate Outlook
(GO) is the refinement of 16 years feedback from graduates, employers and career services. Feedback about what works and what does not work for these groups. Quality, not size, is the issue. I hope I have clarified the anomalies which have been circulating in the marketplace. The choice should now be clear. You can either choose the book which graduates know, use and trust or you can choose the untried and untested 'me too' product.
The applicant alleges that the misrepresentations conveyed by this letter are:
(i) that the type of entry provided free in the Hobsons directory
will be provided by the applicant at a cost of $2,250, when in fact the similar service to be provided by the applicant in the yellow pages of its directory will also be provided free of charge;
(ii) that the service provided by the first respondent for $2,500,
namely a free entry plus a paid page, is provided by the applicant for $3,850, when in fact that sum buys two full pages in the Trotman directory;
(iii) that the services provided in the Hobsons directory for $3,895,
namely a free entry and two paid pages, is provided by the applicant for $6,100, when in fact that sum buys three pages in the Trotman directory.
In other words, the applicant argues that the prices for a "Reference Entry" are wholly false, and that those given for "One page Display Advertising + entry" are misleading because they refer respectively to one full and one mini entry in the Hobsons directory, and to two full pages in the Trotman Directory. Again, the prices given for "Two page Display Advertising + entry" will buy two full pages and a mini entry in the Hobsons directory as against three full pages in the Trotman directory. The applicant submits that the letter thus conveys a misrepresentation as to the prices of the entries in the Trotman directory or sets out a comparison, substantially adverse to the applicant, of services that are not comparable.
The applicant says that a truer comparison of rates is as follows:
COMPARISON OF RATES TABLE TROTMAN AUSTRALIA AND HOBSONS PRESS PAGES BOOKED HOBSONS TROTMAN LESS 1 page mono $2,500 $2,250 $ 250 2 pages mono (SRE) $3,895 $3,750 $ 145 2 pages mono (SRE and ADV) $3,895 $3,850 $ 40 3 pages mono (SRE) $6,385 $5,250 $1,135 3 pages mono (SRE and ADV) $6,385 $5,350 $1,035 PAGES BOOKED HOBSONS TROTMAN MORE 1 page colour and 1 page mono $4,000 $4,650 $ 650 2 page colour and 1 page mono $4,500 $7,300 $2,800 NOTE
SRE represents Standard Reference Entry ADV represents Display Advertisement
The first respondent did not cross-examine to establish, nor did it submit, that this comparative table was fundamentally untrue or erroneous. Its basic submission was that the letter of 20 June 1991 does not or would not convey misrepresentations because its readership was not the public at large but a very restricted class of persons. It was submitted that "the overwhelming majority" of this class would know of the "competitive statements being made by Trotman and Hobsons in promotional material", and that "they would have the contextual material available" to them. Thus, it is said, they would not be deceived, and the Court should therefore not order the restraint of such representations pending the trial.
The real question here is whether there are misrepresentations in the letter at all. In Taco Company of Australia Inc. v Taco Bell Pty Ltd (1982) 42 ALR 177 at 202, Deane and Fitzgerald JJ stated that
... whether or not conduct amounts to a misrepresentation is a question of fact to be decided by considering what is said and done against the background of all surrounding circumstances.
The test is an objective one which the Court must determine for itself. Their Honours delineated four stages to the fact-finding exercise at 202-203:
First, it is necessary to identify the relevant section ... of the public ... by reference to whom the question of whether conduct is, or is likely to be, misleading or deceptive falls to be tested.
...
Second, once the relevant section of the public is established, the matter is to be considered by reference to all who come within it, "including the astute and gullible, the intelligent and the not so intelligent, the well educated as well as the poorly educated, men and women of various ages pursuing various vocations": Puxu Pty Ltd v Parkdale Custom Built Furniture Pty Ltd (1980) 31 ALR 73, per Lockhart J at 93: see also World Series Cricket v Parish ... per Brennan J (16 ALR at 203). Thirdly, evidence that some person has in fact formed an erroneous conclusion is admissible and may be persuasive but is not essential. Such evidence does not itself conclusively establish that conduct is misleading or deceptive or likely to mislead or deceive. ...
Finally, it is necessary to inquire why proven misconception has arisen: Hornsby Building Information Centre v Sydney Building Information Centre (18 ALR at 647; 140 CLR at 228). The fundamental importance of this principle is that it is only by this investigation that the evidence of those who are shown to have been led into error can be evaluated and it can be determined whether they are confused because of misleading or deceptive conduct on the part of the respondent.
I accept that the relevant section of the public are the employers specifically targeted by the first respondent, arguably of a restricted class, and not the public at large. However, the only recipient of the letter of 20 June 1991 whose evidence is before the Court was a Ms Parthimos, senior personnel officer of BHP, who stated that upon reading the letter she was confused because of its representations. This evidence does not conclusively establish that the statement is misleading, but as the only evidence before the Court one way or the other, it has some persuasive force. Simply because Ms Parthimos was misled does not mean that the letter contains misrepresentations but it does provide a basis for drawing such an inference.
Ms Parthimos was able to resolve her doubts by referring to the applicant's preceding literature. There is no actual evidence that other recipients of the letter of 20 June 1991 would similarly have had additional material of these two parties available to them, but even if this is assumed, there is nothing to establish that this would have either prevented them from being misled or enabled them to resolve any confusion arising out of the letter.
It is irrelevant to the issue of whether the letter was misleading that the truth could have been ascertained upon enquiry. In Collins Marrickville Pty Limited v Henjo Investments Pty Limited (1987) ATPR 40-782 at page 48,538, Justice Wilcox noted that in the context of a determination of priorities between innocent parties, "the doctrine of constructive notice provides a mechanism to allow the Court to reflect the fact that one party had the opportunity to ascertain the true facts". His Honour went on to state:
It is a very different matter to interpose the doctrine of constructive notice between a misrepresentor and his victim.
In my view the present evidence shows, quite clearly enough for interlocutory purposes, that the letter of 20 June crossed the line of acceptable conduct, in contravention of the Acts. The applicant's free service was ignored. The remaining price representations were not comparable facilities but were presented as if they were. I find prima facie that the letter did contain the misrepresentations as generally alleged by the applicant.
At about the same time as the distribution of the letter of 20 June 1991, the first respondent also distributed a circular as follows:
Required reading for every graduate
The new edition of Graduate Outlook is Australia's only comprehensive directory of graduate employment and training - and it also covers New Zealand and South-East Asia. The Directory supplies details of over 500 employers who recruit graduates - their work locations, number of employees, the disciplines from which they recruit, the training and vacation work they offer, and more. Experts in the area of graduate employment have supplied features on all aspects of the job search, from self evaluation to working overseas, to graduate job prospects in 1991.
The listings in Graduate Outlook include listings of employers by occupation and by qualification. There are also sections on further study and professional associations. Indices of careers services on campus, occupations and qualifications complete this invaluable resource. Publication date: March 1992. Print run: 70,000
The statement that the Hobsons directory "is Australia's only comprehensive directory of graduate employment and training", taken together with the publication date, is said to have been misleading because it represented that Hobsons will be the only directory to appear in 1992, and that employers should advertise in it as such, when in fact the applicant's directory is also going to appear in 1992. Despite the respondents' concession otherwise, I must confess that the wording of the circular appears to me more appropriate for graduates than for their recruiters but it is difficult to see what purpose would be served by such a circulation nine months before publication. Moreover, little harm could flow to the applicant if intended graduates were the circular's intended readership.
The respondents submit that the applicant mis-states the representation because the terms of the circular were in the present tense. Since the Hobsons directory has been in continuous publication for 16 years and is what the respondents call the only "comprehensive" directory available at this time, they submit that the statement in the circular was in fact true.
It is well established that words that are literally true can at the same time be misleading and deceptive. In Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1977) 140 CLR 216 at 227, Stephen J gives a good example of how words that are literally true can still convey a false representation:
To announce an opera as one in which a named and famous prima donna will appear and then to produce an unknown young lady bearing by chance that name will clearly be to mislead and deceive. The announcement would be literally true but none the less deceptive, and this because it conveyed to others something more than the literal meaning which the words spelled out.
In World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181 at 201, Brennan J stated:
Before a statement can be said to be misleading or deceptive or falsely to represent a fact, it must convey a meaning inconsistent with the truth. A statement which conveys no meaning but the truth cannot mislead or deceive or falsely represent; although a statement which is literally true may nevertheless convey another meaning which is untrue, and be proscribed accordingly.
It was possibly suggested in Taco Bell at page 201 that this principle may be limited to "similar name" cases although I cannot see why this should necessarily be so. Someone claiming to be the producer or marketer of a particular product said to be unique may mislead if another identical but differently labelled product is also available. However, this does not need to be decided here where the true question is whether the circular conveyed the meaning, inconsistent with the truth, that the Hobsons directory is to be the only one published in 1992.
The first respondent again argued that everyone reading the circular "would be acquainted with the controversy between Trotman and Hobsons" and with the information distributed by both companies. I can find no evidence to support this submission although it is quite likely to be true with at least some of the circular's recipients. However, as there is no evidence as to who the recipients of the circular were, or even as to the extent of its circulation, there can be no inference that no one would be deceived by the statement.
With the onus the other way, this is a borderline case. On the one hand, there was no obligation on the respondents to predict the future or express the possibility that the Trotman directory will in fact appear. On the other hand, the respondents knew that the applicant had won the tender and was in the field soliciting advertising. The circular was also seeking advertising in the first respondent's 1992 directory, when it was expected to have competition, not its 1991 edition when it did not. Many if not most employers reading both the circular and any of the applicant's advertising would, I think, have been confused by being informed by the first respondent, with whom a number of them had presumably done business before, that there was to continue in the future, as in the past, only one directory for which their advertising was being solicited, not two as the competing promotions were indicating.
The applicant further submitted that a letter dated 24 June 1991 from the first respondent's solicitor to the applicant asserting copyright in the acronym "GO" and threatening legal action, entitles the applicant to a declaration and injunction under section 202 of the Copyright Act 1968. The applicant says that there is no copyright in "GO".
Section 202(1) states:
Where a person, by means of circulars, advertisements or otherwise, threatens a person with an action or proceeding in respect of an infringement of copyright, then, whether the person making the threats is or is not the owner of the copyright or an exclusive licensee, a person aggrieved may bring an action against the first-mentioned person and may obtain a declaration to the effect that the threats are unjustifiable, and an injunction against the continuance of the threats, and may recover such damages (if any) as he has sustained, unless the first-mentioned person satisfies the court that the acts in respect of which the action or proceeding was threatened constituted, or, if done, would constitute, an infringement of copyright.
The relevant part of the letter stated:
We are instructed that your proposed use of our client's acronym "GO" infringes our client's copyright. We are further instructed that your marketing literature reproduces documents the property of our client, without our client's permission and provides a comparison of prices of our client's publication and your publication which is disparaging to our client.
The above actions past and proposed by you are liable to cause our client loss and damage.
We therefore request that you provide us with:
1. Your written undertaking that you will withdraw all references to use of the acronym "GO" in your publication "Graduate Opportunities" and in all other publications under your auspices and;
2. An open letter advising that your said publication is not connected with our client's publication "Graduate Outlook" ("GO");
3. Your written undertaking that you will immediately withdraw from circulation and not produce or publish further any correspondence, literature or publication which makes use of or reference to our client's documents, forms, literature or publications. In the event that we do not receive the above undertakings and letter within seven (7) days of the date hereof our client may commence proceedings for injunctive action and recovery of damages against your company without further notice.
The first respondent no longer asserts that it is the owner of copyright in the acronym "GO". It argues that section 202 is not attracted in any event because the so-called threats of legal action in the letter are in general terms, covering all the complaints made earlier in the letter, and are not specifically directed at proceedings for breach of copyright. In fact it has commenced no legal proceedings or taken any other action on its threat. The applicant's only response to the letter of 24 June 1991 was commencement of these proceedings for the statutory relief provided in section 202.
As the first respondent has ceased to assert any copyright in the acronym "GO" and the threat of legal proceedings is not now imminent, if it exists at all, it seems to me that nothing is now required to be done by the Court on an interlocutory basis. There is no impending wrong or threat which requires or calls for an order of the Court at this time, or apparently prior to the hearing of this action if at all.
The applicant claims entitlement to the other relief sought in the motion on the basis that damages are or will be inadequate because it will not be possible to determine what sales of space the applicant might have lost through the distribution of the letter and circular. There is some evidence that a few employers have indicated indecision as to the directory in which they will choose to place their advertisements but this evidence is vague and incapable of financial quantification. Thus the applicant says that its losses are not likely to be provable. The applicant also claims a lost opportunity to establish goodwill which is impossible to measure. Because of these problems, the applicant seeks to notify the persons to whom the misrepresentations were made, of the correct position, and to bring the misrepresentations to a halt. For its part, the first respondent argued that "difficulty of proof is not the determinant of inadequacy" and that the applicant has failed to show that damages are or will be no real remedy.
Whichever of these viewpoints are correct, I cannot see how damages can seriously be considered at this stage at all. It is questionable on the present evidence whether any, or any irrevocable, damage has yet been suffered. If it occurs, I see no reason why evidence of quantification would not be available in due course. But damages are not being sought in the motion and the concept of extensive discovery and subpoenas to prove a potential damages case at this stage is not attractive as an interlocutory exercise. In any case, the present task for the Court is to establish a regime which will permit this vigorous competition to proceed on a fair and legal basis, not to assume or find who is, or assist one party or the other to be, an ultimate winner or loser.
It is not now open to doubt that the Court has the power to order publication or distribution of corrective information. In Janssen Pharmaceutical Pty Ltd v Pfizer Pty Ltd (1986) ATPR 40-654 Justice Burchett reviewed, in the light of the Statute Law (Miscellaneous Provisions) Act (No. 1) 1983, the hesitations of Ellicott J prior to that Act in Mundine v Layton Taylor Promotions Pty Ltd (1981) ATPR 40-211 about whether there was power to make mandatory orders for corrective publications. Justice Burchett stated at page 47,295:
I conclude that the power (to order corrective advertisements), the existence of which having regard to the sections as they formerly stood Ellicott J doubted but did not finally deny, does now inhere in the Court under the Act in its present form.
In HCF Australia Ltd v Switzerland Australia Health Fund Pty Ltd (1988) ATPR 40-834, Justice Wilcox stated at page 49,005:
... the Court does have power, in an appropriate case, to make an order requiring a party who has engaged in misleading or deceptive conduct in relation to advertising to publish appropriate corrective advertisements.
His Honour added this qualification:
... the power is one to be used protectively and not by way of punishment, and ... the sole consideration for the Court, in determining whether to make such an order, must be the protection of the consumer.
Wilcox J went on:
... there will be other occasions in which misleading advertising has been of such a nature as to be likely to inculcate incorrect information into the minds of consumers, and where it is appropriate to take steps to correct the impression which the previous advertisements might have given.
In FAI Insurances Ltd v Advance Bank Australia Ltd (1986) 68 ALR 133, Justice Pincus said at 135:
Although the power of the Court to make such an order for corrective action in interlocutory proceedings is clear, it will not ordinarily be thought convenient to do so, in my view, unless it seems reasonably obvious that the conduct complained of would probably be held at the trial to fall within s 52 of the Trade Practices Act.
The applicant says, to me a little ingenuously, that the sole reason for making the order for correction is to provide protection to those individuals who have been misled by the alleged misrepresentations. The first respondent submitted that the power of the Court should only be exercised in special circumstances. It argues that since the evidence in this case reveals that the only person who claimed to be misled was able to satisfy her doubts, such an order is unnecessary.
The applicant suggested no form of the proposed correction but left it to the Court to offer up the required authorship. This course will always carry the risk of rejection of the application on the ground of vagueness or imprecision. This may be one such case. On the other hand, obviously if an order of this kind were made at this interlocutory point in the proceedings, the first respondent would now be compelled to notify its potential advertisers that it had been found to have done wrong. If it were held at the trial that no contravention had occurred, the first respondent would already have distributed a corrective notice and would have suffered damage to its established goodwill. This exposes the invitation, referred to in the cases, to engage in a qualitative analysis of the applicant's chances of success at trial as the means of resolving the stark choice as to whether such an order should or should not be made before the final determination of unlawfulness under the Acts.
I do not think that this exercise should or needs to be undertaken here. I agree with respect with the general approach of Justice Pincus in FAI Insurances. As it seems to me, it will also not be convenient to make an interlocutory order of the suggested kind unless it is the only or only satisfactory way to resolve the interlocutory dispute. This is not such a case.
Assuming that this power extends so far, it is likewise not appropriate that the Court so enter the market place as to require the respondents to hand over to the applicant their list of actual and potential customers by way of de facto penalty for what is as yet only found to be a seriously arguable or prima facie case of misleading and deceptive conduct. As it seems to me, this would give the applicant, by the hand of the Court, a significant competitive advantage which would not normally be available. The only recruiting employers who need to know the facts are those approached by the applicant who might or would contemplate advertising in its directory if the misrepresentations were removed from the scene. This can be done by the applicant itself. The Court cannot be used to secure additional potential customers for the applicant beyond those already facing the confusion caused by the misrepresentations.
In this case, it will be sufficient for the resolution of the motion, in the first instance, for the Court to pronounce, on an interlocutory basis, that the statements complained of are misleading and deceptive. The applicant will thereby be enabled, if it so chooses, to correct the record as may be necessary or desired.
It then falls to consider whether to enjoin the repetition of the misrepresentations identified. In Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622, the High Court expressed the view that when a court is contemplating granting or refusing interlocutory relief, it should direct itself to both the prima facie strength of the plaintiff's claim and the balance of convenience. As with the first of these criteria, where the balance of convenience lies in this case is also disputed.
In World Series Cricket at 186, Bowen C.J. stated:
It has recently been said by the House of Lords in American Cyanamid v Ethicon Ltd (1975) AC 396; (1975) 1 All ER 504 that if the court is satisfied that there is a serious question to be tried, it should not further test the strength of the plaintiff's case before deciding the balance of convenience. ... Whether it is necessary to establish a prima facie case in the Beecham sense, or a serious question to be tried in the American Cyanamid sense, what will be required will vary from case to case.
Bowen C.J. continued at 186-187:
Proceedings under the Trade Practices Act have a special character in that the Act deals with the protection of the public interest, ... In the course of protecting that public interest, the Act also enables a party to seek relief from injury to his own interest. An applicant for an injunction under s 80 need not show that a proprietary interest of his is affected, or that he has suffered special damage, or indeed, that he personally has suffered any damage at all. Even where the application is brought by a rival competitor seeking redress of damage to his business caused by the allegedly unfair and illegal practices of the respondent, the application, though it vindicates or protects the private interests of the competitor, at the same time secures the public interest of consumer protection. ... For competition between rival traders properly to be promoted, it is necessary that the relevant market is kept adequately informed about the goods or services available for purchase, and is not misled by deceptive trade practices.
These factors, however, although important in determining what considerations should be taken into account when assessing the strength of the applicant's case and when weighing the balance of convenience, do not require that the balance of convenience should be ignored or that a party's entitlement to interlocutory relief should depend on an assessment of facts made from unsatisfactory evidence.
In other words, the fact that the misrepresentations arose out of competition between the applicant and the first respondent does not absolve the first respondent from the consequences of contravening Part V of the Trade Practices Act. The public interest must also be given serious attention. In fact, the applicant called for regard to be given to an extended public interest, including the interests of the graduate students. Although the submission did not make it clear to me in the present context precisely what these interests are, I think that it is appropriate to view the matter rather more broadly than merely the interests of these litigants.
In relation to the balance of convenience, the first respondent submitted firstly that the applicant has a weak case. In Bullock v The Federated Furnishing Trades Society of Australasia and Ors (No. 1) (1985) 5 FCR 464, Woodward J said at 472:
... when it becomes necessary to consider the balance of convenience, it is, I believe, quite proper to continue to bear in mind the apparent strength of the applicants' case; the two legs of the test need not be considered in isolation from each other. Thus an apparently strong claim may lead a court more readily to grant an injunction when the balance of convenience is fairly even. A more doubtful claim (which nevertheless raises "a serious question to be tried") may still attract interlocutory relief if there is a marked balance of convenience in favour of it.
Whilst no serious exception can be taken to this approach in general, I have earlier said that it is not appropriate for me to express a view at this stage of these proceedings on the strengths or weaknesses of the applicant's case. It suffices that I have found certain prima facie or arguable misrepresentations by the respondents.
Secondly, the first respondent pointed to its cross claim to establish that the doctrine of "unclean hands" should deprive the applicant of any relief at all. The cross claim seeks no interlocutory relief and has not yet been litigated. In fact very little evidence was available on the motion in relation to it, but it is said to provide a context relevant to the exercise of the Court's discretion and "to expose the ambit of the first respondent's claim against the applicant".
The cross claim alleges that by three written and a series of verbal publications, the applicant made a number of misrepresentations concerning the comparative prices and services of the two directories, and falsely asserted the exclusiveness of the Trotman directory in 1992. One of the three written publications was a letter of 4 June 1991 signed by the applicant's general manager. The first respondent alleges that this letter was distributed to clients of the first respondent who have in the past advertised, and were likely in the future to advertise, in the Hobsons directory. The applicant's evidence is that it was only sent to one person. The copy of the letter in evidence is relevantly as follows:
Dear
Many thanks for your time yesterday. For your information, following are rate cards for Trotman Australia and Hobsons Press for comparison. You will see that last year and again this year, Hobsons Press charged $2,500 for a one page employer's advertisement in Graduate Outlook. Our charge for the same service is $2,250, which is a 10% saving of $250. For two mono pages, Hobsons Press charge $3,895 to employers. Trotman's price is $3,850 ($1,000 for a standard reference entry and $2,850 for the mono page). Again, we are lower on cost.
The only section in which Hobsons' rates are cheaper than ours is their colour section at the front of their publication, where they charge less for colour than black and white. We know of no other publication where mono costs more than colour and can only assume their price reflects the worth of positioning the colour advertisement outside the alphabetical reference section. As a matter of interest, in both publications 94% of advertisements are mono, not colour. We would be pleased to explain our rate card with any employers who enquire through your advisory service.
The second respondent said in evidence that the applicant was thereby disseminating in the market place comparisons, unfavourable to the first respondent, between the applicant's and the first respondent's advertising rates. As this allegedly amounted to misleading and deceptive conduct, the first respondent submitted that the applicant's conduct has been inequitable and the public interest ought therefore to work against the applicant.
In Interstate Parcel Express Co. Pty Ltd (Ipec) v Time-Life International (Nederlands) B.V (1977) 138 CLR 534, Murphy J stated at 560:
Once the facts of a case disclose the reasonable possibility of a serious breach of the Trade Practices Act or injury to the public interest by a party, the court can and should require the party to negate this before exercising discretion in its favour. This is because there are public equities as well as private equities. The concept of public equities has been associated with the old doctrine of clean hands.
And at 561-562:
In my opinion, the trial judge should have raised the issue and insisted, as a condition of relief, that the plaintiff demonstrate that the Trade Practices Act was not being breached, that the public interest was not being injured and that the enforcement of copyright of the relief sought would not be used to breach the Act or injure the public interest.
To apply this approach to an application for interim injunctions will not always be easy. In interlocutory proceedings, some relaxation of the rules of evidence is often appropriate. Here the evidence that the applicant was disseminating the letter of 4 June 1991 in the market place was almost entirely hearsay. On the other hand, the cross-examination of a witness called by the first respondent revealed that the only letter shown to have been actually sent was subsequently removed from its addressee in surreptitious circumstances by that witness who passed it on to the first respondent. The circumstances of this little episode of industrial espionage are clouded in some mystery and are not now particularly relevant. They do disclose that the edition of the letter in evidence appears as addressed in blank because the original addressee's name had been "whited out" by the witness before sending it on to the first respondent so as to hide the source of its availability to him. This provides no evidence of dissemination of the kind suggested.
It is again not appropriate that I expressly assess the strength of the cross claim with particularity. Although this letter was published before those of the first respondent in issue here, it seems to me, on the limited evidence presented so far, that the applicant's letter was more a defensive ploy than an "unclean" or inequitable action such as should require a refusal of interim injunctive relief. Perhaps more importantly, there is insufficient evidence to persuade me yet that the letter contains any stark inaccuracies at all, or at least any as apparently clear as those shown to have emanated from the first respondent thereafter. The fact that objection was not taken until after the applicant commenced the present action raises an inference that the respondents took the same view of its contents at least for some weeks or until stimulated to a counter attack.
There is a general public interest in, as well as a statutory entitlement to, a market place free of falsities or doubtful manipulations of the facts. Because advertisers are apparently entitled to and will presumably claim a tax deduction for, and therefore some public funding of, the cost of their advertising, both the public and the advertisers are entitled to an assurance that the choice of recruitment vehicle is based on the maximum degree of factual promotion. Graduates need the best possible assistance in finding jobs, especially in the current economic and employment climate. The GCCA has an interest in its successful tenderer at least being able to operate on a fair and even playing field.
All these factors lead me to the conclusion that limited injunctive relief is desirable but that declarations are unnecessary and inappropriate. However, the injunction(s) should be no more than necessary to clear the market place of inaccuracies and misrepresentations and permit competition on a fair, factual and equitable basis.
Upon the applicant giving the usual undertaking as to damages, and subject to hearing the parties again on the precise form of the injunction(s) to be pronounced, I shall in due course order until further order that the first respondent, its servants and agents refrain from disseminating, distributing or publishing in any form, price comparisons as or to the effect of those set out in the first respondent's letter to customers of 20 June 1991 signed by the second respondent. I shall similarly restrain claims by the first respondent as or to the effect of those made in its circular of or about June 1991 that it is to be the only publisher of a graduate careers directory in 1992.
I will hear the parties on costs.
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