Warrina Cinema Pty Ltd v Rep Film Distributors Pty Ltd
[1996] FCA 159
•12 MARCH 1996
CATCHWORDS
INJUNCTIONS - Interlocutory - mandatory injunction sought to compel supply of film by distributor - balance of convenience - preservation of status quo - damages an adequate remedy
Trade Practices Act 1974 s45(4)(b), 47(4)
Federal Court Rules O33 r2(2)
Racecourse Totalizators Pty Ltd v The Totalisator Administration Board of Queensland (1995) ATPR ¶41-427 Refd
Warrina Cinema Pty Ltd v Rep Film Distributors Pty Ltd
No QG 34 of 1996
Kiefel J Brisbane 12 March 1996
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION No. QG 34 of 1996
BETWEEN:
WARRINA CINEMA PTY LTD
Applicant
AND:
REP FILM DISTRIBUTORS PTY LTD
Respondent
JUDGE MAKING ORDER: Kiefel J.
DATE OF ORDER: 12 March 1996
WHERE MADE: Brisbane
MINUTES OF ORDERS
THE COURT ORDERS THAT:
The Notice of Motion dated 7 March 1996 be dismissed.
The applicant pay the respondent's costs of the Motion to be taxed if there is no agreement.
THE COURT DIRECTS THAT:
The matter be listed for further directions at 9.30 am on 27 March 1996.
NOTE:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION No. QG 34 of 1996
BETWEEN:
WARRINA CINEMA PTY LTD
Applicant
AND:
REP FILM DISTRIBUTORS PTY LTD
Respondent
CORAM:Kiefel J.
DATE:12 March 1996
PLACE:Brisbane
REASONS FOR JUDGMENT
The applicant is a cinema operator in Townsville and seeks an injunction requiring the respondent, a film distributor, to make available to it for public screening the print of the film "Mr Holland's Opus" which has now been released in Australia. I do not propose to grant the injunction principally because the preservation of the pre-existing terms of supply between the parties does not require it and this is not a case where damages, if later awarded, would be an inadequate remedy. I shall however deal with some of the other matters raised by the parties.
The applicant has conducted its cinema complex, apparently successfully, for many years and it is of a high technical standard. The respondent is ranked about fourth or fifth amongst the five "large" film distributors in Australia and there are three other smaller distributors. The respondent says it has five percent of the Australian film
distribution market and its market share in Queensland is not significantly different. The applicant has, until a promise was recently made by the respondent to change the terms of supply to it, always taken the respondent's films as a "follow on", some four weeks after they are first released to other cinemas. In Townsville, this would usually be the applicant's competitor, Birch Carroll & Coyle Ltd.
The promise which is alleged to have been made substantially founds the applicant's case that there has been a contravention of s45(4)(b) or s47(4) Trade Practices Act 1974. It is alleged by Mr Hendy of the applicant company that in early February 1996 Mr Chamberlain of the respondent company said that he hoped the applicant might get the film in question on the date of first release. This was said to be brought about because he was impressed with his inspection of the applicant's cinema complex and was later reinforced by the applicant's successful trade screening of the film. On 15 February 1996 it is then alleged that Mr Chamberlain informed Mr Hendy that the respondent would advise Birch Carroll & Coyle Ltd of the respondent's intention to do so, but that a decision was deferred until a person from Birch Carroll & Coyle Ltd returned to Townsville, conveying that there needed to be some sort of discussion with that company. It is then alleged that on 19 February 1996 Mr Chamberlain advised that an employee of the respondent had spoken to Birch Carroll & Coyle Ltd and it had been resolved not to permit the applicant earlier release. No further terms of that conversation are known to the applicant. As confirmation of Birch Carroll & Coyle Ltd's position, Mr Hendy also says that he has been informed "by the employees of the other film distributors", when he asked why they too did not allow early release to the applicant, that it was because of
Birch Carroll & Coyle Ltd's dominant position in Queensland and that Birch Carroll & Coyle Ltd have threatened not to screen the respondent's films if the respondent releases to the applicant at the same time. Even if the sources so generally identified satisfied the requirements of O33 r2(2) Federal Court Rules, which the respondent contends they do not, I would not by reference to its terms afford the evidence much weight. It speaks in conclusions not of conversations and is said to be "off the record" which itself makes one doubt how much reliance could be placed upon it. Further it is not explained why, if these comments had been made, the applicant has not taken action with respect to those distributors although that may have been made clearer were I able to discern when these conversations took place. However the reference to the conversation with Mr Chamberlain on 19 February 1996 does implicate Birch Carroll & Coyle Ltd. These conversations are denied by the respondent. Unless they were also inherently unreliable, and I do not think they could be said to be, it seems to me I must approach the issue as to whether there is a serious question to be tried on the basis that the applicant might make out those conversations. The position is, then, that there has been a discussion with Birch Carroll & Coyle Ltd following which a proposal to release to the applicant early was not pursued. It is then quite possible that an arrangement or understanding has been reached with a competitor within the meaning of s45, but I think it would be taking the matter too far to say that it also shows that Birch Carroll & Coyle Ltd's offer to acquire the film was on condition that the applicant not be supplied (s47(4)). If an arrangement or understanding had been reached, would that have the likely effect of substantially lessening competition? I think there is a difficulty with such a conclusion because this injunction is presently limited to one film with a finite screening period. The material
does not permit the applicant to point to other conduct and it seems to me that its submissions in this respect relied to a large extent upon the other evidence of what other film distributors also do, which I have said I consider in its present form to be unreliable.
The narrowness of the injunction sought also impacts upon the question of balance of convenience. I was reminded of the views expressed by me in Racecourse Totalizators Pty Ltd v The Totalisator Administration Board of Queensland(1995) ATPR ¶41-427 concerning the requirements of a mandatory injunction and it was submitted that I ought to follow a like course here concerning the continuation of supply. In that case however, the prejudice likely to be suffered by the applicant, whilst not then presently able to be quantified, was obvious and of significance in particular because of the potential loss of future custom. What was sought was to continue arrangements for supply which had existed prior to the respondent's contravention. With respect to just what is the "status quo" which ought be preserved until trial there is a similarity between the two cases. This is a case, I consider, where it is proper to maintain the position as between the parties that existed before the alleged wrongful act, the arrangement with Birch Carroll & Coyle Ltd occurred: see the discussion in Spry "Equitable Remedies" 4th ed. pp 446-7 and 545. Here the supply to the applicant in the past has been on the basis of distribution to it some four weeks after first release. There is no reason to suppose that that state of affairs will not continue save that the respondent has offered to shorten it with respect to the film in question to two weeks. It may suffer some loss of profits, but it is not suggested they will have any significant or long term effect upon the applicant's
financial position and trade. Birch Carroll & Coyle Ltd will no doubt have records of ticket sales in the first two weeks of the film's screening and I would have thought an application of the applicant's market share in Townsville to it would enable an assessment of loss of profits which, whilst not exact, would be reasonably accurate.
Much has been said about the absence of Birch Carroll & Coyle Ltd in these interlocutory proceedings. At least for the future conduct of the matter it seems to me that they are a necessary party.
The applicant has not made out a case for the relief sought is paragraph 1 of the Motion. There is not presently material to suggest that the wider relief also sought by the Motion will be pursued. In those circumstances the better course is to dismiss the Motion. The applicant can file a motion for other relief at some later time if and when it has the evidence to warrant that course.
I certify that this and the preceding four pages are a true copy of the reasons for judgment herein of the Honourable Justice Kiefel.
Associate
Date:12 March 1996
Counsel for the applicant: Mr S Couper QC and Mr K Wilson
Solicitors for the applicant: Messrs Biggs & Biggs
Counsel for the respondents: Mr R Chesterman QC and Mr R Derrington
Solicitors for the respondents: Messrs Feez Ruthning
Date of Hearing: 11 March 1996
Place of Hearing: Brisbane
Date of Judgment: 12 March 1996
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