Q41- SS NOTE: - NOT APPROPRIATE FOR REPORTING OR FOR GENERAL CIRCULATION (AEW) IN THE FEDERAL COURT OF AUSTPALIA ) ) VICTORIA DISTRICT REGISTRY ) NO. VG 117 OF 1985 ) GENERAL DIVISION ) BETWEEN : BUDGET RENT A CAR SYSTEM PTY LIMITED Applicant and ALLEN DEWHIRST, KAY RENT-A-CAR PTY LIMITED and TRANS AUSTRALIA AIRLINES Respondents MINUTES OF ORDER COURT: Woodward J. DATE: 23 May 1985 PLACE: Melbourne THE COURT ORDERS THAT: 1. The first and second respondents be restrained from making representations or causing to be made representations to the public whether by way of advertising, the circulation and distribution of magazines pamphlets or any other document or by way of oral or any written statements, and the first respondent from causing to be made such representations, in the terms .or to the effect that the second respondent has established itself as the leader in the rental car market for luxury cars. The first and second respondents pay the applicant's costs of the action. (Settlement and entry of orders is dealt with by 0.36 of the Federal Court Rules). NOTE: - NOT APPROPRIATE FOR REPORTING OR FOR GENERAL CIRCULATION (AEW) IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) NO. VG 117 OF 1985 ) GENERAL DIVISION ) BETWEEN : BUDGET RENT A CAR SYSTEM PTY LIMITED Applicant and ALLEN DEWHIRST, KAY FENT-A-CAR PTY LIMITED and TRANS AUSTRALIA ATRLINES Respondents COURT: Woodward J. DATE: 23 May 1985 PLACE: Melbourne EX-TEMPORE JUDGMENT In this matter I have reached a firm view and I propose to deliver judgment now. The claim is one for an interlocutory injunction to restrain what is alleged to be a breach of s.52 of the Trade Practices Act 1974. The parties are agreed that this hearing should be treated as the trial of the action, since all relevant facts are before me. The matter arises in the field of car rentals, which has already seen a number of similar actions instituted and contested. In this particular case the Hertz company, wholly owned by Kay Rent-A-Car Pty Limited, has placed in a publication brought out by Trans Australia Airlines, which is a half share holder in Kay Rent-A-Car Pty Limited, a statement to the effect that "Hertz has established itself as the leader in the rental car market for luxury cars". It is, I think, significant that this statement 1s expressed as being a direct quotation from the managing director of Hertz Australia, and that it appears in a publication of the company which is a half owner of Hertz. So it is not as though 1t is something that has been stated casually - for example, in an interview by a journalist with the managing director. It 1s more in the nature of deliberate advertising copy, in view of the publication in which 1t finds itself. It has been conceded, upon examination by counsel for the respondents, that this statement, as a matter of fact, cannot be supported. However, Dr FPannam has sought to defend the application in a number of other ways; firstly, he has said that the statement is vague in its content and not such that the Court ought to be concerned about it. He suggests that to say Hertz has established itself as leader in the rental car market for luxury cars is to say no more than that it is the best in that field. I cannot agree with that. I think that to talk of a 'leader' in a notoriously competitive limited market, where there cotild only be one, two or three possible leaders in a given field, and to make a deliberate statement claiming the leadership in that field, is to make a direct statement that the company being described has the largest market share; and ain this case it is clear that that is far from the truth. There 1s, admittedly, some room for doubt about the precise definition of luxury cars; but it is clear that, however the word is to be interpreted, the claim cannot be substantiated; and it has not been attempted on behalf of Hertz to substantiate it. So I think that, taken on its face, it is a claim that this company has achieved the market leadership in one important aspect of the rental car market, and that statement is false. Whether it is also misleading ina material way is another matter which Dr Pannam challenges. He suggests, because of the limited audience to which this publication has gone, namely, the people wha are members of the TAA Flight Deck Club, or who otherwise have occasion to use the TAA Flight Deck lounges at airports, that that 1n some way makes a difference and renders less significant the falsity of the statement which was made. Again, I cannot accept that. I think that a statement is being made to a significant segment of the precise market which would be interested in claims about market leadership. Ido not believe that claims of market leadership are lightly made, or are thought to be of no significance in the business or advertising worlds. A claim to be a market leader suggests proved performance and acceptability. Indeed, I think the well-known adage that nothing succeeds like success exemplifies well enough the point that I am concerned to make - that it is a very useful ploy in a highly competitive field to be able to claim that experience has shown that yours is the service most in demand. To make that claim to the people who would be reading this particular publication is, I think, a significant publication of the claim. It was to some extent suggested that the Court ought not be concerned with this matter because it is a 'one-off' publication, there is nothing to indicate that it is going to be repeated to other people or in other publications, and that, the document having been distributed, there would he little point in an injunction at this stage. However, although I think there is something in that argument, I am inclined to believe, because of previous experience of this particular industry which has been drawn attention to by other judges of this Court, that if a claim like that is made in one publication and is not challenged, there 1s quite a distinct possibility that it might be repeated elsewhere. If a case is made out that the claim is false and has a likelihood to mislead, then it seems to me that the applicant is entitled to the injunction sought. In saying what I have, T am conscious of the undesirability of this Court becoming a censor of a series of competitive advertisements in this or any other industry. I think the courts will always be reluctant to be involved where 1t can fairly be contended that the claims made are in the nature of puffing, or are not likely to be taken as statements of precise fact by the persons reading them. I am interested to have drawn to my attention by Dr Pannam a statement which was made as long ago as 1895 in the House of Lords in the case of White v Mellin (1895) A.C. 154 at 165, where Lord Herschell L.C. indicates the undesirability of courts of law being, ",.. turned into a machinery for advertising rival productions by obtaining a judicial determination which of the two was the better." That 1s a slightly different point from the one that I am concerned to make. There, his Lordship was anxious that the Court's determination should not be quoted in advertising material; courts should try to avoid being used for that purpose. Similarly, I think that the courts do not want to be in the position of regularly being asked to look over the shoulder of those preparing competing advertising material in order to rule on the propriety of such material. I have given full weight to Dr Pannam''s submission along those lines, and I have also borne in mind what has been said by other judges of this Court in recent decisions, about the robust nature of advertising, in this field in particular, and the desirability of tolerating a reasonable degree of vigour ~- which was referred to by Northrop J in the case of Budget Rent A Car System Pty Ltd v W.T.H. Pty Limited (trading as Avis Australia), an unreported decision of 10 April this year. I refer also to the judgment of Lockhart J in the case of W.T.H. Pty Limited (trading as Avis Australia v Budget Rent A Car System Pty Ltd a decision of 4 July 1984 which, so far as I am aware, is still unreported, where his Honour referred to the highly competitive nature of the motor vehicle rental business, which may brang those engaged in it close to the edge of misleading or deceptive conduct. He went onto say that they should not cross the fine line that divides such conduct from fair competitive behaviour. I concede, as Dr Pannam says, that these things have to be very much a matter of impression, but my finding is that, in this case, Hertz has crossed the fine line that divides robust but fair competitive advertising from misleading and deceptive conduct, and that it is appropriate that the injunction sought should be granted, with costs. I hereby certify that this and the five (5) preeding pages are a true and accurate copy of the Reasons for Judgment herein of The Hon. Mr Justice Woodward CNS a Associate Dated: 23 May 1985 Counsel for Applicant: Solicitors for Applicant: Counsel for First and Second Respondents: Solicitors for First and Second Respondents: Counsel for Third Respondent: Solicitors for Third Respondent: Hearing Date: 23 May 1985 Mr R. Merkel Q.C. with Mr R.A. Finkelstein Messrs Corrs Pavey Whiting & Byrne Dr C.L. Pannam Q.C. with Mr A.d. Myers Messrs Moules Mr J.V. Kaufman Messrs Phillips, Fox and Masel