Universal Telecasters Queensland Ltd v Ainsworth Consolidated Industries Ltd

[1983] FCA 198

Re: UNIVERSAL TELECASTERS QUEENSLAND LIMITED
And: AINSWORTH CONSOLIDATED INDUSTRIES LIMITED and LEONARD HASTINGS AINSWORTH
(1983) 78 FLR 16
No. G229 of 1982
Trade Practices - Practice

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Bowen C.J.(1), Sweeney(1) and Lockhart(1) JJ.

CATCHWORDS

Trade Practices - Misleading or deceptive conduct - Television newscast - Part of trade or commerce - Whether viewers are consumers.

Practice - Application to strike out statement of claim - Whether claim so clearly untenable that it cannot possibly succeed.

Trade Practices Act 1974, s. 52

Federal Court Rules Order 20 Rule 2

Trade Practices - Misleading or deceptive conduct - Television news service - Failure to plead in amended statement of claim the allegation that television viewers were "consumers" - Trade Practices Act 1974 (Cth), s. 52 - Federal Court Rules, O. 20, r. 2.

Practice - Application to strike out amended statement of claim - Considerations relevant in court exercising its discretion - Whether claim so clearly untenable that it cannot possibly succeed - Trade Practices Act 1974 (Cth), s. 52 - Federal Court Rules, O. 20, r. 2.

HEADNOTE

The respondents, applicants in the proceedings, by amended statement of claim alleged that the appellant in trade and commerce and in the course of conducting its business as the licensee of a commercial television station, telecast in a news service certain matters concerning the respondents alleged to be misleading and deceptive under s. 52 of the Trade Practices Act 1974 (Cth) and defamatory. The appellant applied to the court to strike out the proceedings on the grounds that no reasonable causes of action were disclosed in the amended statement of claim. The appellant argued, inter alia, that the amended statement of claim did not contain an allegation that the viewers of the news service were "consumers" under s. 52 of the Trade Practices Act. The viewers could only be considered as consumers of the news service and the conduct complained of was incapable in law of misleading or deceiving them. This application was dismissed and the appellant then appealed.

Held: (1) The claim of the respondents is not so clearly untenable that it cannot succeed.

Dey v. Victorian Railway Commissioners (1949) 78 CLR 62; General Steel Industries Inc. v. Commissioner for Railways (N.S.W.) (1964) 112 CLR 125, applied.

(2) In considering the exercise of the primary judge's summary jurisdiction to stay or dismiss the proceedings, it has not been established that he erred in concluding "it is at least arguable that the applicants have in law a reasonable cause of action".

(3) The appeal be dismissed.

HEARING

Brisbane, 1983, August 18, 19. #DATE 19:8:1983

APPEAL.

The appellant appealed from a decision dismissing its application to strike out the respondents' amended statement of claim.

J. A. Dowsett Q.C., for the appellant.

D. A. Staff Q.C., D. K. Catterns and H. Morgan, for the respondents.

Cur. adv. vult.

Solicitors for the appellant: Henderson & Lahey.

Solicitors for the respondents: David Landa, Stewart & Co.

J.J.I.

ORDER

1. The appeal be dismissed.

2. Universal Telecasters Queensland Limited pay to Ainsworth Consolidated Industries Limited and Leonard Hastings Ainsworth their costs of the appeal.

Orders accordingly.

JUDGE1

This is an appeal from the judgment of a single Judge of this Court dismissing an application by Universal Telecasters Queensland Limited, the respondent in the proceeding and the appellant in this appeal ("the appellant"), to strike out the amended statement of claim filed by Ainsworth Consolidated Industries Limited and Leonard Hastings Ainsworth, the applicants in the proceeding and the respondents to this appeal ("the respondents").

The amended statement of claim alleges that the appellant in trade or commerce, in the course of conducting its business as the licensee of commercial television station Channel TVQ-0 Brisbane telecast in Queensland and New South Wales in a program "Eyewitness News" certain matter concerning the respondents that is alleged to be misleading or deceptive under s. 52 of the Trade Practices Act 1974 ("the Act") to the effect that the respondents were associated with the Mafia and gangsters and indulged in corrupt practices. The respondents seek injunctions restraining the appellant from telecasting this matter and damages pursuant to s. 82 of the Act and for defamation.

The statement of claim reproduces what is alleged to be a transcript of what was said in the television program. The statements made in that program are alleged to convey imputations defamatory of the respondents.

The appellant applied to this Court pursuant to Order 20 Rule 2 for an order that the proceeding be stayed or dismissed and supported the application on the ground that no reasonable causes of action were disclosed in the statement of claim. The learned primary Judge dismissed that application and reserved the costs of the application.

Before the primary Judge, senior counsel who then appeared for the respondents stated that its case as pleaded depended upon the proposition that the appellant was providing services, namely a news service or a commentary televised to consumers of those services, being television viewers, and that in the course of the provision of those services misleading or deceptive statements were made. His Honour dealt with the respondents' case as so put.

One only of the grounds relied upon below was put to us by the appellant in argument yesterday. Counsel for the appellant pointed out that the amended statement of claim did not contain an allegation that the viewers of the program were consumers or potential consumers of the product of the respondents, that is to say, poker machines. They were, he submitted, to be considered only as consumers of the news service and the conduct complained of was incapable in law of misleading or deceiving them in that capacity. The section, it was said, does not prohibit conduct which is misleading or deceptive as to matters relating to them in any other capacity than as such consumers.

Reliance was placed by the appellant upon statements found in certain of the authorities (in particular Hornsby Building Information Centre Pty. Limited v. Sydney Building Information Centre Limited (1978) 140 C.L.R. 216 and Parkdale Custom Built Furniture Pty. Limited v. Puxu Pty. Limited (1982) 42 A.L.R.1) to the effect that s. 52 is concerned with conduct which is deceptive of members of the public as consumers. Those statements must be read in the context in which they were made where the Judges were emphasising that s. 52 is concerned, not with the protection of the reputation or goodwill of competitors as such, but with conduct which is deceptive of members of the public in their capacity as consumers. Their Honours were differentiating between contravention of s. 52 of the Act and the tort of passing off. Further, the facts in those cases generally involved the existence of a market for the sale of goods or services. They did not involve commercial activity of the type which arises here, namely, the business of a television station which sells neither goods nor services to the viewing public but telecasts matter which is seen by the public on their television sets.

The respondents were content to accept, for the purpose of the argument on this appeal, that to establish a contravention of s. 52 it is necessary to show that the conduct relied upon is misleading or deceptive of persons in their capacity as consumers. But they submitted that members of the public who viewed news bulletins on commercial television stations were to be regarded as consumers, namely consumers of whatever is telecast. It was said that commercial television stations carry on varied and widespread activities with a view to commercial gain. Their revenue is derived from the sale of advertising material which in turn is dependent upon the performance of the stations in ratings that are published from time to time. The screening of matter on television stations, whether advertising, news bulletins or otherwise, is all part of the commercial activity of television stations. It was said that in these circumstances there is no warrant for circumscribing the operation of s. 52 in the manner contended for by the appellant. This briefly summarises the rival arguments advanced before us on behalf of the parties.

This is not an appeal from a final judgment following a trial involving determinations of questions of fact and of law. It is an appeal from the exercise of discretion by a single Judge of this Court declining to strike out a statement of claim.

The principles governing applications to terminate actions summarily appear from many cases. It is sufficient to refer to two of them. In Dev v. Victorian Railways Commissioners (1949) 78 C.L.R. 62 Dixon J. said (at p. 91):-

"A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process."

In General Steel Industries Inc. v. Commissioner for Railways (N.S.W.) (1964) 112 C.L.R. 125 Barwick C.J. said (at p. 129):-

"It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action - if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; 'so obviously untenable that it cannot possibly succeed'; 'manifestly groundless'; 'so manifestly faulty that it does not admit of argument'; 'discloses a case which the Court is satisfied cannot succeed'; 'under no possibility can there be a good cause of action'; 'be manifest that to allow them' (the pleadings) 'to stand would involve useless expense'. At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or 'so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument'; 'so to speak apparent at a glance'. As I have said, some of these expressions occur in cases in which the inherent jurisdiction was invoked and others in cases founded on statutory rules of court but although the material available to the court in either type of case may be different the need for exceptional caution in exercising the power whether it be inherent or under statutory rules is the same."

Later in his judgment (at p. 130) Barwick C.J. posed the relevant test as being whether the plaintiff's case

". . . is so clearly untenable that it cannot possibly succeed".

The appellant's submission goes so far as to assert that s. 52 did not prohibit the appellant from telecasting material in its news service notwithstanding that it might be misleading or deceptive of the viewing public unless the viewers were purchasers or potential purchasers of poker machines.

The determination of the correctness of the submissions of the parties involves a consideration of the general scope of s. 52, and it would be necessary to determine whether certain judgments of the High Court and of this Court, including Hornsby Building Information Centre Pty. Limited v. Sydney Building Information Centre Limited (supra) and Parkdale Custom Built Furniture Pty. Limited v. Puxu Pty. Limited (supra), apply to circumstances such as those involved in the present case. Certainly in the past proceedings in this Court have not been restricted to the type of case which is suggested by the submissions of the appellant (see Phelps v. Western Mining Corporation Limited (1978) 20 A.L.R. 183). The submissions of the appellant may also involve an analysis of the construction and operation of other sections of the Act. As was observed in Hanimex Pty. Limited v. Kodak (Australasia) Pty. Limited (1982) ATPR 43,593 (at p. 43,599) much of this territory is still unexplored.

This case calls for particular care in considering whether or not to strike out the amended statement of claim.

For the purposes of an application to strike out a pleading it is, of course, necessary to assume the truth of the facts pleaded. The amended statement of claim alleges that the "matter" which constitutes the misleading or deceptive conduct and is defamatory of the respondents comprises, not merely the words of the television script, but the associated images and sounds as well. It is perhaps difficult to determine whether the facts pleaded in the amended statement of claim may be struck out without regard to those associated images and sounds which are themselves inherently incapable of being pleaded.

If the case proceeds to a final hearing the trial Judge will probably have the advantage of seeing a video recording of the impugned news bulletin. He will not only be able to read the script himself but will hear it read by the news commentator and see the associated images. Questions may arise as to whether the script alone may constitute a contravention of s. 52. These advantages are not ones which can be enjoyed by the Court in an application of the kind which is before us. This illustrates the desirability of this Court not intervening at this stage to strike out the amended statement of claim.

In all the circumstance we are not satisfied that the claim of the respondents is so clearly untenable that it cannot possibly succeed. We are not, of course, determining in this appeal the ultimate strength or weakness of the respondents' case. All we are deciding is whether the exercise by a single Judge of this Court's summary jurisdiction to stay or dismiss the proceeding has miscarried. It has not been established that the primary Judge erred in concluding that "it is at least arguable that the applicants" (the respondents in the appeal) "have in law a reasonable cause of action."

We are of the opinion that the appeal should be dismissed with costs.