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 UNIVERSAL TELECASTERS QUEENSLAND LIMITED v. AINSWORTH CONSOLIDATED INDUSTRIES LIMITED and LEONARD HASTINGS AINSWORTH N.S.W. G229 of 1982 CORAM: Bowen C.J., Sweeney and Lockhart Ju. 19 August 1983 Sydney. AARP tn WA AA ONAN ELIE EELS ELISA NET? SOE IARI SEIN QUOC OER RA AL RN A TRL RIC LL CC f, IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY ) No. G229 of 1982 ) ) GENERAL DIVISTON ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: UNIVERSAL TELECASTERS QUEENSLAND LIMITED Appellant AND: AINSWORTH CONSOLIDATED INDUSTRIES LIMITED and LEONARD HASTINGS AINSWORTH Respondents "ORDER - JUDGES MAKING ORDER: Bowen C.J., Sweeney and Lockhart JJ ° WHERE' MADE: Sydney DATE: 19 August 1983 - THE COURT ORDERS THAT:-— 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. t ete te Ee LAREN A Ot ET REA RS IN THE FEDERAL COURT OF AUSTRAL? NE SOUTE WALES DISTDICT REGISTRY GENE? AL DEVISTON BETWEEN : AND: COPAM; Sowen C.J. Sweeney and Lac ; c Q ra a ct N 1s '0 co ret) -~wv eH No. G229 of 1982 \ UNIVERSAL TELECASTESS QUEENSLAND LIMITED Appellant AINSWORTE INDUSTRIES LIMITED and LEQNASD F STINGS AINSWOCREE Resvonéents REASONS FO? JUDGMENT THE COURT: This i~ a fv@ 'S 'S w ty I- Mh 1s Q a this Court I Single Judge c Universal Telecasters by procescing and the appellant strike out the amended statement Industries Limited and 'S tya w fh) p.i] g and the tw The amended statement of claim alleges that the anpellant in trade or commerce, in the course of canducting 1ts Dusiness as the licensee of commercial television statron Channel TVO-0 Brisbane telecast in Queensland and New South Wales in a4 srogram "Evewltness 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 corrust vractices. The responadenrs seok anjunctions restraining the aovellant fron The statement of claim reproduces what is aileged co be 2 transcript of what was said in the television sorcgram. The statenents we nh @ Sy | a pe a tet 0) mu e eo) a oO TS < @ hs + i"'S om cf w cr I! G i3 Ui ray wD Bay HB ur 0) y MS iv) My 2 for an order that the proceeding be stayed or dismissed and supported the application eon the ground that no ceasonable causes of action were disclosed in the statenenr of claim. The-learned orimacy Judge dismissed that avsnlicaticn ard sresersvec the cests of the 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, 1t 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 Buiit Furniture Pty. Limited v. Puxu_ Pty. Limited (1982) 42 A.L.R.1) to the effect that s. 52 is concerned with conduct which 1s 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 1s concerned, not with the protection of the reputation or goodwill of competitors as such, but with conduct whicn is deceotive of nembers oF the oublic in the1y 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, che business of a television station which sells nezther yocods nor services to the viewing public but telecasts matter which 15 seen by fos the public on their television se ft) S. The respondents were content to accept, for the vsurvose of the argument on this appeal, that to establish contravention or s. bth) 52 1t is necessary to show that the conduct célicd uvon is misleading os pQ. ip] fe) ecevtive of persons in their cavaczty as consumers. But they submitted that members of tne vsublic 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 witha view to commercial gain. Their revenue 1s derived from the sale of advertising material which in turn is desend@nt upon the performance of the stations in ratings that are sublished from cimé to time. The sersening of matter on television stations, vnether advertisinc, news bulletins cr othnervis2?, 285 221 cart cl the rormescial activicr cof television stations. It was Sala tTAaT in UASs= lirtumstances there 15 no warrant for cistumscrihine ihe sveratior of 3. 52 in the manner 5. contended for by the appellant. This brrefly summarises the arguments advanced before us on behaif of the parties. This 1s 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 aspiications to terminate actions summarily appear from many cases. It is sufficient to refer to two af them. In Dey v. Victorian Rairlwavs Commiss:zoners (1949) 78 C.L.2. $2 Dixon ¢&. said (at p. 91):- "RK case must be very clear indeea to justify the summary intervention of the court to ovrevent a slaintitf submitting his case for determination 2 h ted manner by the court with or without a 7 iat that a transaction is intricate may not s 2 court to examine a cause of action alls c of it for the vurvos2 oF seeing whethec ing amounts to an abuse of vrocess or 15 vexatious. But once it appears that there 1s a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it 1s 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 Railwavs (N.S.W.) (1964) 112 C.L.R. 125 Barwick C.J. said (at p. 129):- "Tb us sufficre unizormly adhere ia not te ce denned ton as deals with acci a brings, tack of a cause hat be ot Waich che court 2 Ss in tat exercise i275 vsowers smi demonstrated. The 2 6. vaclously expressed; 'so obviousiy untenable that it cannot possibly succeed'; 'manifestly groundless'; 'so manifestly faulty that it does not admit of argument'; 'discloses a case which the Court 1s satisrisd cannot succeed'; 'under no possibility can there be 2&2 sooa 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 syveak apparent at a glance'. . As I have said, some of these azpressions occur in cases in which the inherent jurisdicticn was invoked and others in cases founded on statutory rules of court but although the material available cto the court in either type of case may be different the need for excevtional caution in exercising the power whether it be inherent or under statutory rules is the samé." Lat Q rod i » his judgment (at p. 130) Barwick C.J. posed the relevant test as being whether the plaantiff's case ",..is so clearly untenable that it carnot ovsossibiy succeed" The appellant's submission goes so far as to assert that s. 52 did not prohibit the apyellant from telecasting material in its news service notwithstanding that it might be misleading or deceptiv o I of the viewing public unless the viewers were purchasers or sotentia purchasers of voker machines. The determination of the correctness of the sucmissions sf "a w 1D i) J ion she 7. Information Centre Ptv. Limited v. Sydnev Buiidina Information Centre Limited (supra) and Darkdale Custom Burit Fruynmiture Pty. Lomited v. ft) Puxu Pty. Limited (supra), anoly to circumstances such as those involved in the present case. Certa:nly in the past vsroceedings in this Court have not been restcicted to the tyoe 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 secticns of the Act. As was orserved in daninex Pty. Limited v. Kodak (Australasia) Privy. Limited (19832) ATPR 43,593 (at p. 43,599) much or this territory 1s still unexplored. not to strike out the amended statement of claim. For the purvoses of an apslication 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" vvhi2ch 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 15 perhaps difficult to determine whethec the 'facts vyleaded in the amended statement of claim may be struck cut without vegarcd to those associated images and sounds which ace therseives inherently incavable i of being sieacecd. If the case proceeds to a final hearing the trial Judge will probably have Che advantage of seeing a video recording of che tmpugned news bulletin. He will not only be able to read the script himself but will hear it cead by the news commentator and see the associated images. Questions may arise as to whether the sccipt alone May constitute a contravention of's. S2. These advantages are not ones Which can be enjoyed by the Court in an apolication of the kind which is before us. This illustrates the dsesirabriity oF this Court not intervening at this stage to strike out the amended sta clain, of the responéents 1s so clearly untenable that 1t cannot vossibly succeed. We are not, of course, determining in this appeal the ultimate strength of weakness of the resvoncaents' case. All we are deciding is whether the exercise by a single Judge oF thas Court's P summary jurisdiction to stay or dismiss the orocesding has miscarr p It has not been established that the primary Judge erred in concluding that "1t is at least arguable that the apslicants" (the respondents in the appeal) "have in law a reasonable cause of action." o miss2a We are of the opinion that che appeal snould be a2 (07 wich costs. I certify that this and the 7 preceding Pages are a true copy of the reasons for Judgment herein of tha Cours rd EES Associate