CATCHWORDS Practice and Procedure - application under Order 52 rule (17) for stay of mandatory injunction pending appeal - applicant found at first instance to have engaged in misleading and deceptive conduct - need to correct misconceptions in the mind of consumers as early as possible ~- consideration of conflicting interests of the parties. Federal Court Rules Order 52 rule (17). JANSSEN PHARMACEUTICA PTY. LIMITED v PFIZER PTY. LIMITED G220 of 1985 CORAM: Bowen C.J. Sydney 11 December 1985 aren ees ye st 74 % ores In THE FERED COURT OF AUSTPALITA NEW SOUTH WALES DISTRICT PEGISTPY No. G220 of 13 wee vevne GENERAL DIV =) i ke io % BETWESN: JANSSEN PHARMACEUTICA PTY. Applicant 32ND; BRIZER PRY. LIMITED Respondent Bowen C.J. ao ° vu ed 11 December 1985 o Rad t ig has) m Re fe) tr IW Sydney =fe '3oOiO fe THE COURT ORDERS THAT: l. The avplication b2 dismissed. 2. The applicant, Pfizer Pty. Limited, pay the respondent Janssen Pharmaceutica Pty. Limited ts costs oF tne application. 3. The applicant Prizer Pry. Limited ae perzittec to addi =o the announcement which 1t 1s required to publish by OGrcer or IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. G220 of 1985 wwewevw GENERAL DIVISION BETWEEN : JANSSEN PHARMACEUTICA PTY. LIMITED Applicant AND: PFIZER PTY. LIMITED Respondent CORAM: Bowen C.d. DATED: 11 December 1985 REASONS FOR JUDGMENT BOWEN C.J: This is a motion under Order 52 rule 17 of the Federal Court Rules for a stay in respect of two orders of Burchett J. pronounced on 19 November 1985. Janssen Pharmaceutica Pty. Limited ("Janssen") brought proceedings against Pfizer Pty. Limited ("Pfizer") claiming certain declarations injunctive relief and damages. The claim was brought upon the Trade Practices Act. 1974. It related to alleged misleading or deceptive conduct in trade or commerce engaged in by Pfizer in advertising its drug "Combantrin". The advertising consisted of: (a) the dissemination to pharmacists for viewing by pharmacists, members of the public and for loan for ee (bd) (c) -2- viewing by members of the public of copies of a video recording ("the video") alleged to contain misleading or deceptive representations; the dissemination to pharmacists for their use of copies of a brochure ("the brochure") alleged to contain misleading or deceptive representations; television and radio advertising alleged to contain . misleading or deceptive representations. . The facts which he found are set forth in the reasons for judgment of Burchett J. Broadly, his Honour's conclusion was as follows: "I conclude that by the video, the radio advertisenents referring to "three common types of worms", the television advertisement, and the brochure, and each of them, the Respondent has, in trade or commerce, engaged in misleading and deceptive conduct within the meaning of s.52 of the Trade Practices Act. It has also, within the meaning of s.53, in trade or commerce, in connexion with the supply and possible supply of goods, and in connexion with the promotion by each of the means mentioned of the supply and use of goods, made false and misleading statements concerning the need for goods, the goods being its medication Combantrin." Later his Honour said: "There is plainly a strong case for appropriate relief. The Respondent's product has been promoted through advertising which ae mae woe tage -~3- made a meretricious appeal to medical science to justify exciting the fears and emotions of parents by seriously misleading statements. While parental feelings thus aroused were exploited for gain, a competitor's product was in the process misleadingly denigrated. In my view, relief should be granted, which should include, if the Court's power extends so far, a mandatory order to correct the misinformation purveyed. He discussed the question whether he had power under 3.80 of the Trade Practices Act in addition to restraining the continuance of the conduct complained of, to make a mandatory order requiring the publication of corrective advertisements. He came to the conclusion he did have this power. In the result his Honour made orders as follows: "(1) The Respondent by itself its servants and agents be restrained from publishing or disseminating the video recording entitled "Worms - Knowledge & Treatment" ("the video") and the manual entitled "Pfizer Pharmacy Reference Manual" ("the manual") and from causing or permitting to be broadcast the television advertisement made on behalf of the Respondent in relation to its product "Combantrin"" ("the television advertisement") and such of the radio advertisements broadcast on behalf of the Respondent as suggest expressly or by implication that there are three common human-infesting gastro-intestinal nematode worms in Australia ("the radio advertisements"). (2) The Respondent forthwith cause such steps to be taken as may be necessary to recall and procure to be redelivered to the Respondent all copies of the video and so far as may be in its power the manual which have been published and disseminated by the Respondent within Australia and to prevent the future Sten ella tet] "1h eee (3) (4) (5) (6) -4- broadcast of the television advertisement and the radio advertisements. The Respondent forthwith cause to he destroyed all copies of the video and the manual in its possession save for two (2) copies of the video and five (5) copies of the manual which it may keep for its own record purposes only, and forthwith upon recall of any video or manual previously disseminated cause such video or manual to be destroyed, destruction in respect of the video for the purposes of this order to anclude the wiping by magnetic means of the material recorded on the cassette tape forming part of the video. The Respondent by itself its servants and agents be restrained from without the prior leave of the Court publishing or making by any medium any of the representations or any representations which are substantially the same as the representations set out in the Schedule to the Amended Application. Where a representation in the Schedule is expressed in the alternative this order refers to each of the alernative versions of the representation. The Respondent forthwith inform the applicant by affidavit of all persons to whom the Respondent is aware after all reasonable enquiry that it has delivered or caused to be delivered a copy of the video or the manual or either of then. The Respondent forthwith cause to he published prominently in "Pharmacy Trade" and "Australian Journal of Pharmacy" an announcement in the following terms: "IMPORTANT ANNOUNCEMENT BY PFIZER LIMITED The Federal Court of Australia has ruled that Pfizer Pty. Limited in its recent advertising and promotion of Combantrin has engaged in conduct that is misleading or deceptive in that it has made statements or representations including the following: wenn wore ene eee seen, mone mee gs ny cer Te OR ase -5- (i) That there are only three types of human-infesting gastro-intestinal nematode worms in Australia - i.e. threadworm, ruondworm and hookworm - whereas infact, there are at least five such types of worms - i.e. threadworm, roundworm, hookworm, whipworm and Strongyloides stercoralis. (ii) That threadworm, roundworm and hookworm are common in Australia whereas only threadworm is common and roundworm and hookworm are extremely rare. Pfizer Pty. Limited will forthwith he ceasing and withdrawing any and all such advertising and promotional material, including a manual entitied "Pfizer Pharmacy Reference Manual", a television advertisement, a number of radio advertisements and a recently released pharmacy/consumer video. Pfizer Pty. Limited requests pharmacists to cease further distribution and use of such promotional material pending its collection by a Pfizer Pty. Limited representative." as well as cause to be published prominently in a national daily newspaper an announcement in the following form: "IMPORTANT ANNOUNCEMENT BY PFIZER PLY. LIMITED The Federal Court has ruled that Pfizer Pty. Limited in its recent advertising and promotion of Combantrin has engaged in. conduct that is misleading or deceptive in that it has made statements or representations including the following: \ (i) That there are only three types of human~infesting gastro-intestinal nematode worms in Australia - i.e. threadworm, roundworm and hookworm, - whereas in fact, there are at least five such types of worms - i.e. threadworm, roundworm, hookworm, whipworm and Strongyloides stercoralis. . as Vee eye cre ne ee vere ee wt eR STE re ee oe -_— rend eee en ee ee ne amen ae ne ee ee -6- (ii) That threadworm, roundworm and hookworm are common in Australia whereas only threadworm is common and yroundworm and hookworm are extremely rare." (7) The Respondent pay the Applicant's costs of these proceedings. (8) Liberty to apply on 21 days notice in the event of a change of circumstances. (9) The orders made in paragraphs 5 and 6 hereof be stayed for 14 days from 19th November 1985. (10) The operation of the order made in paragraph 4 hereof be suspended until 19th December, 1985, insofar as any representations set out on the sachet dispensers exhibited to the affidavit of Kenneth James Moran sworn on 16 November, 1985, and filed in these proceedings, and marked with the letters "KJM-1" and "KIM-2" respectively are concerned." The order in paragraph 9 staying the orders in paragraph 5 and 6 was made in order to give Pfizer time to consider its position concerning an appeal and an application under Order 52 r.17 fora continuing stay of orders 5 and 6 pending the hearing and determination of any appeal. At the end of the hearing of the Motion before me I reserved my decision and made an order continuing the stay until delivery of judgment on the motion. At the trial the claim for damages was abandoned. On the hearing of the motion before me on 3 December 1985 evidence was tendered to show the steps being carried out to comply with orders 1 to 4 inclusive and to support the application for a stay of orders 5 and 6. An affidavit by Soe oe ™ mae oma' co we ea po te ee oe -7- Kenneth James Moran, Marketing Director Pharmaceutical Products of Pfizer, sworn 3 December 1985 was by leave filed and tendered. In this he stated: , "5, «eeel crave leave to refer to the - affidavit of Neil Mitchell Jones sworn on 17 November, 1985 and in particular paragraphs 5, 6, 7 and 8 thereof wherein ! Mr. Jones describes the training seminars conducted by the respondent. r 6. The names of the pharmacy assistants and pharmacists who have attended the training seminars conducted by the respondent are of commercial value to the respondent as such pharmacy assistants and pharmacists come from pharmacies which are viewed by the respondent as "key outlets" for the sale of its "over the counter" products. I apprehend that the applicant is likely to make use of such names in its own LY marketing so as to diminish their value i- to the respondent and obtain an advantage over the respondent in the marketplace. r aan 7. I am fearful that if the stay of order 5 iL is not continued by this Honourable oe -Court pending the respondent's appeal, * it will not be possible to reverse the effects referred to in paragraph 6 _ hereof and the respondent's proposed ' appeal will thereby be rendered ee nugatory." io i He further stated: f "9. I apprehend that publication of the r notices as required by order 6 is likely r to cause significant commercial damage . to the respondent in terms of its i goodwill.and its image in the market io place, both at the retail and trade "4 levels. ' 10. I am fearful that if the stay of order 6 . is not continued by this Honourable ct Court pending the respondent's proposed Be appeal it will not be possible to ; -8- reverse the adverse commercial effects referred to in paragraph 9 of this my Affidavit on the respondent's goodwill and image by the publication of the Notices and that, as,.a result, the proposed appeal by the respondent will be rendered nugatory." The respondent, Janssen, had no opportunity of meeting this evidence but declined any adjournment to enable it to do so. At the time when the hearing before me took place on 3 December 1985 no notice of appeal had been filed. A draft notice of appeal was handed up and it was stated from the Bar table that the intention was it would be filed when re-engrossed. I have since been supplied with the notice of appeal which was filed later on 3 December 1985. The grounds stated in the notice of appeal are as follows: "1. That His Honour erred in concluding that the Appellant, by its video recording its radio advertisements, its television advertisement and its brochure had breached the provisions of s.52 of the Trade Practices Act 1974. 2. That His Honour erred in concluding that the Appellant had also breached the provisions of s.53(f) of the said Act. 3. That His Honour erred in concluding that s.80 of the said Act empowered the Court to grant a mandatory injunction of the type contained in paragraph 6 of the orders made on 19 November, 1985. 4. Alternatively to Ground 3 above, His Honour erred in exercising his discretion or ieae an Ral tes Sede yas Pe wt goo reac a ter etn, -9- in favour of the Respondent to make an order in terms of paragraph 6 of the orders made on 19 November, 1985. 5. That His Honour erred in making an order in terms of paragraph 5 of the orders made on 19 November, 1985." In argument on behalf of Pfizer it was said that an appeal court would see, read and hear the video, brochure and television and radio material and would be in as good a position as the trial judge to form a view whether the alleged misleading or deceptive representations had been made by this material. The trial Judge's findings are very strong. I propose to treat them as prima facie correct. No particular error has been suggested and it has not been suggested that I should view the material in order to make some assessment of the prospects of success on the appeal. It was submitted that the point that tha Judge lackad the power to make mandatory orders such as orders 5 and 6, was important. This question was argued in the Court below and his Honour held that he did have power. I feel I should say no more on this point than to say it might be considered to be arguable. On the final ground of wrong exercise of discretion the appellant will, of course, have to meet the rule that appellate courts do not interfere with the exercise of a discretion conferred upon a judge unless an error falling within the well-known types is shown. ver pny ad Rak TS Sees mrt [TTS wet NE ae ee tee . — ~10- Pfizer has an appeal as of right from the decision of the trial Judge. However, Order 52, r.17 provides as follows: "17.(1) An appeal to the Court shall not - (a) operate as a stay of execution or of proceedings under the judgment appealed from; or (b) invalidate any intermediate act or proceeding, except so far as the Court of a Judge or the court below may direct. (2) The Court may vary or vacate any direction of the Court or the court below referred to in sub-rule (1). (3) An application for a direction of the Court or a Judge under sub-rule (1) shall be made to the Court ora Judge by motion upon notice, and may be made whether or nota similar application has been made to the court below. An application for a direction under sub-rule (2) shall be made to the Court by motion upon notice, and may be made whether or not a similar application has been made to the court below." In order to obtain a stay under this rule an appellant has to make out a case for a stay. Notwithstanding there is a right of appeal, the decision of the trial Judge is prima facie correct. There may be a balance of conflicting interests to be considered in determining whether a stay should be granted. Where the subject matter of the dispute would be lost or destroyed and any decision of the appeal Court rendered nugatory if a stay were not granted, a stay will generally be given. -1ll- I deal first with order 5. The complaint here is that it might not be possible to reverse the effects referred to in paragraph 6 of Mr. Moran's affidavit of 3 December 1985 unless the stay is granted. The effects referred to are comprised in the last sentence in paragrah 6, namely: ",..l apprehend that the applicant is likely to make use of such names in its own marketing so as to diminish their value to the respondent and obtain an advantage over the respondent in the marketplace." This is evidence of Mr. Moran's apprehension. It is not evidence of the fact. I am informed by Counsel for Janssen from the Bar table that aithough cross-examination could have been directed to that point during the trial, none took place which even suggested Janssen might act in such a manner. Iam not persuaded that a case has been made out for a stay of order 5. A factor which influenced the making of order 5 appears to have. been the advisability of enabling Janssen to monitor the performance of orders 2 and 3. I turn to order 6. Certainly compliance with this order involving a public circulation of the statement that the Federal Court had found that Pfizer in its recent advertising and promotion of Combantrin had engaged in conduct that was misleading or deceptive would be likely to cause damage to Pfizer. It is said this would be irreversible. I do not consider it would be entirely irreversible. The statement which is required to be published refers to what the Federal Court has -12- . found. I would consider directing that Pfizer, now that it has lodged a notice of appeal, be permitted to adda note stating that the decision of the Federal Court is under appeal. If the appeal were finally successful Pfizer would no doubt be able in due time to publish further information calling attention to that fact. Counsel for Janssen points out that the Judge has held that Pfizer has published material for purposes of gain which is grossly misleading to the public. He submits they should not by means of a stay be permitted to continue to reap the benefits of any misconceptions they have planted in the public mind. These should be corrected at the earliest vossible time. The provisions of ss.52 and 53 of the Trade Practices Act are designed for the protection of the public and this necessarily weighs heavily in the exercise of discretion. Counsel for Janssen further points out that included in the material held by the Judge to be grossly misleading is comparative advertising referring to his client's product "Vermox" in a manner which must have the potential to do considerable damage to the market prospects of Vermox. The claim for damages had been abandoned, but this was on the basis of obtaining an expedited hearing of the claim for injunctive and other relief, which was in fact achieved. Any continuance of the effect of the representations pending the hearing of the appeal could only have the effect of causing further damage to Janssen. otros tet sper a. wires wr ry pow oy an D cere ree co on -13- I should add that the notice of appeal having been filed only on 3 December 1985 it is not now practicable for the appeal to be heard before the first term in 1986. This matter has caused me some concern. However, I have come to the conclusion that Pfizer has not made out a case fora stay in respect of order 5 or order 6. As I have indicated, I propose to direct that when Pfizer publishes the notices referred to in Order 6 it may add at the end of each notice the words: "A notice of appeal has been lodged against the above decision of the Federal Court." The application for a stay will be dismissed with costs. { certify that this and the / A (twelve ) preceding pages are a true copy of the reasons for Judgment herein of His Honor 7) Cher 4p. Justice pole Nee! BONN Hl Decamber ma oy, ee er ee re ee ee ee " " we ae ee ne ne we &. - — trae ee CATCHWORDS Practice and Procedure - application under Order 52 rule (17) for stay of mandatory injunction pending appeal - applicant found at first instance to have engaged in misleading and deceptive conduct - need to correct misconceptions in the mind of consumers as early as possible - consideration of conflicting interests of the parties. Federal Court Rules Order 52 rule (17). JANSSEN PHARMACEUTICA PTY. LIMITED v PFIZER PITY. LIMITED G220 of 1985 CORAM: Bowen C.J. Sydney 11 December 1985 A Tete ee ry ee syoac ww. ear ae 77 peo oe IN_THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G220 of 1985 ) ) GENERAL DIVISTON CORAM: DATED : PLACE: BETWEEN: JANSSEN PHARMACEUTICA PTY. LIMITED Applicant AND: PFIZER PTY. LIMITED ory Respondent Bowen C.d. 11 December 1985 Sydney MINUTE OF ORDER THE COURT ORDERS THAT: Ll. 2. NOTE: The application be dismissed. The applicant, Pfizer Pty. Limited, pay the respondent Janssen Pharmaceutica Pty. Limited its costs of the application. The aoplicant Pfizer Pty. Limited be permitted to add to the announcement which it 15 reau2zred to publish by Order 6 of tne Orders made by Burcnett J. 'on 19 November 1985 a note that tne decision of tn= Federal Court is under appeal. Settlement and entry of orders 1s dealt with in Order 26 of the Federal Court Rules. D ween cee rer Tear era 5 7 nad atc waa Neeetetnek te eater? IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. G220 of 1985 wevevw GENERAL DIVISION BETWEEN JANSSEN PHARMACEUTICA PTY. LIMITED ee Applicant AND: PFIZER PTY. LIMITED Respondent CORAM: Bowen C.J. DATED: 11 December 1985 REASONS F'OR JUDGMENT BOWEN C.J: This is a motion under Order 52 rule 17 of the Federal Court Rules for a stay in respect of two orders of Burchett J. pronounced on 19 November 1985. Janssen Pharmaceutica Pty. Limited ("Janssen") brought proceedings against Pfizer Pty. Limited ("Pfizer") claiming certain declarations injunctive relief and damages. The claim was brought upon the Trade Practices Act 1974. It related to alleged misleading or deceptive conduct in trade or commerce engaged in by Pfizer in advertising its drug "Combantrin". The advertising consisted of: (a) the dissemination to pharmacists for viewing by pharmacists, members of the public and for loan for pone er ee Rr oe | rn en _ Lf. me ee = re oe a5 ese T to, Pat ia aed Baas «cre -2- viewing by members of the public of copies of a video recording ("the video") alleged to contain misleading or deceptive representations; (bh) the dissemination to pharmacists for their use of copies of a brochure ("the brochure") alleged to contain misleading or deceptive representations; (c) television and radio advertising alleged to contain misleading or deceptive representations. s The facts which he found are set forth in the reasons for judgment of Burchett 7. Broadly, his Honour's conclusion was as follows: "I conclude that by the video, the radio advertisements referring to "three common types of worms", the television advertisement, and the brochure, and each of them, the Respondent has, in trade or commerce, engaged in misleading and deceptive conduct within the meaning of s.52 of the Trade Practices Act. It has also, within the meaning of s.53, in trade or commerce, in connexion with the supply and possible supply of goods, and in connexion with the promotion by each of the means mentioned of the supply and use of goods, made false and misleading statements concerning the need for gocds, the goods being its medication Combantrin."" Later his Honour said: "There is plainly a strong case for appropriate relief. The Respondent's product has been promoted through advertising which -3- made a meretricious appeal to medical science to justify exciting the fears and emotions of parents by seriously misleading statements. While parental feelings thus aroused were exploited for gain, a competitor's product was in the process misleadingly denigrated. In my view, relief should be granted, which should include, if the Court's power extends so far, a mandatory order to correct the misinformation purveyed. He discussed the question whether he had power under 8.80 of the Trade Practices Act -in addition to restraining the continuance of the conduct complained of, to make a _ mandatory order requiring the publication of corrective advertisements. He came to the conclusion he did have this power. In the result his Honour made orders as follows: "(1) The Respondent by itself its servants and agents be restrained from publishing or disseminating the video recording entitled "Worms - Knowledge & Treatment" ("the video") and the manual entitled "Pfizer Pharmacy Reference Manual" ("the manual") and from causing or permitting to be broadcast the television advertisement made on behalf of the Respondent in relation to its product "Combantrin" ("the television advertisement") and such of the radio advertisements broadcast on behalf of the Respondent as suggest expressly or by implication that there are three common human-infesting gastro-intestinal nematode worms in Australia ("the radio advertisements"). (2) The Respondent forthwith cause such steps to be taken as may be necessary to recall and procure to be redelivered to the Respondent all copies of the video and so far as may be in its power the manual which have been published and disseminated by the Respondent within Australia and to prevent the future (3) (4) (5) (6) -4-— broadcast of the television advertisement and the radio advertisements. The Respondent forthwith cause to be destroyed all copies of the video and the manual in its possession save for two (2) copies of the video and five (5) copies of the manual which it may keep for its own record purposes only, and forthwith upon recall of any video or manual previously disseminated cause such video or manual to be destroyed, destruction in respect of the video for the purposes of this order to include the wiping by magnetic means of the material recorded on the cassette tape forming part of the video. The Respondent by itself its servants and agents be restrained from without the prior leave of the Court publishing or making by any medium any of the representations or any representations which are substantially the same as the representations set out in the Schedule to the Amended Application. Where a representation in the Schedule is expressed in the alternative this order refers to each of the alernative versions of the representation. The Respondent forthwith inform the applicant by affidavit of all persons to whom the Respondent is aware after all reasonable enquiry that it has delivered or caused to be delivered a copy of the video or the manual or either of them. The Respondent forthwith cause to he published prominently in "Pharmacy Trade" and "Australian Journal of Pharmacy" an announcement in the following terms: "IMPORTANT ANNOUNCEMENT BY PFIZER LIMITED The Federal Court of Australia has ruled that Pfizer Pty. Limited in its recent advertising and promotion of Combantrin has engaged in conduct that is misleading or deceptive in that it has made statements or representations including the following: wees ee e -5- (i) That there are only three types of human-infesting gastro-intestinal nematode worms in Australia - i.e. threadworm, ruondworm and hookworm - whereas in fact, there are at least five such types of worms - i.e. threadworm, roundworm, hookworm, whipworm and Strongyloides stercoralis. (ii) That threadworm, yroundworm and hookworm are common in Australia whereas only threadworm is common and roundworm and hookworm are extremely rare. Pfizer Pty. Limited will forthwith be ceasing and withdrawing any and all such advertising and promotional material, including a Manual entitled "Pfizer Pharmacy Reference Manual", a television advertisement, a number of radio advertisements and a recently released pharmacy/consumer video. Pfizer Pty. Limited requests pharmacists to cease further distribution and use of such promotional material pending its collection by a Pfizer Pty. Limited representative." as well as cause to be published prominently in a national daily newspaper an announcement in the following form: "IMPORTANT ANNOUNCEMENT BY PFIZER PTY. LIMITED The Federal Court has ruled that Pfizer Pty. Limited in its recent advertising and promotion of Combantrin has engaged in conduct that is misleading or deceptive in that it has made statements or representations including the following: \ (i) That there are only three types of human-infesting gastro-intestinal nematode worms in Australia - i.e. threadworm, roundworm and hookworm, - whereas in fact, there are at least five such types of worms - i.e. threadworm, roundworm, hookworm, whipworm and Strongyloides stercoralis. epee ree a . wage see is aw mre se ae r Seo -6- (ii) That threadworm, roundworm and hookworm are common in Australia whereas only threadworm is common and roundworm and hookworm are extremely rare." (7) The Respondent pay the Applicant's costs of these proceedings. (8) Liberty to apply on 21 days notice in the event of a change of circumstances. (9) The orders made in paragraphs 5 and 6 hereof be stayed for 14 days from 19th November 1985. (10) The operation of the order made in paragraph 4 hereof be suspended until 19th December, 1985, insofar as any representations set out on the sachet dispensers exhibited to the affidavit of Kenneth James Moran sworn on 16 November, 1985, and filed in these proceedings, and marked with the letters '"KJM-1" and "KIM-2" respectively are concerned." The order in paragraph 9 staying the orders in paragraph 5 and 6 was made in order to give Pfizer time to consider its position concerning an appeal and an application under Order 52 r.17 fora continuing stay of orders 5 and 6 pending the hearing and determination of any appeal. At the end of the hearing of the motion before me I reserved my decision and made an order continuing the stay until delivery of judgment on the motion. At the trial the claim for damages was abandoned. On the hearing of the motion before me on 3 December 1985 evidence was tendered to show the steps being carried out to comply with orders 1 to 4 inclusive and to support the application for a stay of orders 5 and 6. An affidavit by ere -7- Kenneth James Moran, Marketing Director Pharmaceutical Products of Pfizer, sworn 3 December 1985 was by leave filed and tendered. In this he stated: "5, ",...I crave leave to refer to the affidavit of Neil Mitchell Jones sworn on 17 November, 1985 and in particular paragraphs 5, 6, 7 and 8 thereof wherein Mr. Jones describes the training seminars conducted by the respondent. The names of the pharmacy assistants and pharmacists who have attended the training seminars conducted by the respondent are of commercial value to the respondent as such pharmacy assistants and pharmacists come from pharmacies which are viewed by the respondent as "key outlets" for the sale of its "over the counter" products. I apprehend that the applicant is likely to make use of such names in its own marketing so as to diminish their value to the respondent and obtain an advantage over the respondent in the marketplace. I am fearful that if the stay of order 5 is not continued by this Honourable -Court pending the respondent's appeal, it will not be possible to reverse the effects referred to in paragraph 6 hereof and the respondent's proposed appeal will thereby be rendered nugatory. " He further stated: "9, 10. I apprehend that publication of the notices as required by order 6 is likely to cause significant commercial damage to the respondent in terms of its goodwill and its image in the market Place, both at the retail and trade levels. Iam fearful that if the stay of order 6 is not continued by this Honourable Court pending the respondent's proposed appeal it will not be possible to —+ + t ' -8- reverse the adverse commercial effects referred to in paragraph 9 of this my Affidavit on the respondent's goodwill and image by the publication of the Notices and that, as,a result, the proposed appeal by the respondent will be rendered nugatory." The respondent, Janssen, had no opportunity of meeting this evidence but declined any adjournment to enable it to do so. At the time when the hearing before me took place on 3 December 1985 no notice of appeal had been filed. A draft notice of appeal was handed up and it was stated from the Bar table that the intention was it would be filed when re-engrossed. I have since been supplied with the notice of appeal which was filed later on 3 December 1985. The grounds stated in the notice of appeal are as follows: "1. That His Honour erred in concluding that the Appellant, by its video recording its radio advertisements, its television advertisement and its brochure had breached the provisions of s.52 of the Trade Practices Act 1974. 2. That His Honour erred in concluding that the Appellant had aiso breached the provisions of s.53(f) of the said Act. 3. That His Honour erred in concluding that s.80 of the said Act empowered the Court to grant a mandatory injunction of the type contained in paragraph 6 of the orders made on 19 November, 1985. 4. Alternatively to Ground 3 above, His Honour erred in exercising his discretion ' - te ne ne nee ee a ee = mite ae ten ernie nnn = -g- in favour of the Respondent to make an order in terms of paragraph 6 of the orders made on 19 November, 1985. 5. That His Honour erred in making an order in terms of paragraph 5 of the orders made on 19 November, 1985." In argument on behalf of Pfizer it was said that an appeal court would see, read and hear the video, brochure and television and radio material and would be in as good a_ position as the trial judge to form a view whether the alleged misleading or deceptive representations had been made by this material. The trial Judge's findings are very strong. I propose to treat them as prima facie correct. No particular error has been suggested and it has not been suggested that I should view the material in order to make some assessment of the prospects of success on the appeal. It was submitted that the point that the Judga lacked the power to make mandatory orders such as orders 5 and 6, was important. This question was argued in the Court below and his Honour held that he did have power. I feel I should say no more on this point than to say it might be considered to be arguable. On the final ground of wrong exercise of discretion the appellant will, of course, have to meet the rule that appellate courts do not interfere with the exercise of a discretion conferred upon a judge unless an error falling within the well-known types is shown. ope an oan a ~10- Pfizer has an appeal as of right from the decision of the trial Judge. However, Order 52, r.17 provides as follows: "17,(1) An appeal to the Court shall not - (a) operate as a stay of execution or of proceedings under the judgment appealed from; or (b) invalidate any intermediate act or proceeding, except so far as the Court of a Judge or the court below may direct. (2) The Court may vary or vacate any direction of the Court or the court below referred to in sub-rule (1). (3) An application for a direction of the Court or a Judge under sub-rule (1) shall be made to the Court or a Judge by motion upon notice, and may be made whether or not a similar application has been made to the court below. An application for a direction under sub-rule (2) shall be made to the Court by motion upon notice, and may be made whether or not a similar application has been made to the court below." In order to obtain a stay under this rule an appellant has to make out a case for a stay. Notwithstanding there is a right of appeal, the decision of the trial Judge is prima facie correct. There may be a balance of conflicting interests to be considered in determining whether a stay should be granted. Where the subject matter of the dispute would be lost or destroyed and any decision of the appeal Court rendered nugatory if a stay were not granted, a stay will generally be given. we ee ee el ee ee on ee ee -1li- I deal first with order 5. The complaint here is that it might not be possible to reverse the effects referred to in paragraph 6 of Mr. Moran's affidavit of 3 December 1985 unless the stay is granted. The effects referred to are comprised in the last sentence in paragrah 6, namely: ",..I apprehend that the applicant is likely to make use of such names in its own marketing so as to diminish their value to the respondent and obtain an advantage over the respondent in the marketplace." This is evidence of Mr. Moran's apprehension. It is not evidence of the fact. I am informed by Counsel for Janssen from the Bar table that although cross-examination could have been directed to that point during the trial, none took place which even suggested Janssen might act in such a manner. Iam not persuaded that a case has been made out for a stay of order 5. A factor which influenced the making of order 5 appears to have been the advisability of enabling Janssen to monitor the performance of orders 2 and 3. I turn to order 6. Certainly compliance with this order involving a public circulation of the statement that the Federal Court had found that Pfizer in its recent advertising and promotion of Combantrin had engaged in conduct that was misleading or deceptive would be likely to cause damage to Pfizer. It is said this would be irreversible. I do not consider it would be entirely irreversible. The statement which is required to be published refers to what the Federal Court has a ee ee. i nr ~s ae -- --- T "eT FS an Sr ce nr Sem ere oe 7 7 ar 5 wow we get eg re te te ee ne ten le tnens ee coe nr < -~1L2- found. I would consider directing that Pfizer, now that it has lodged a notice of appeal, be permitted to adda note stating that the decision of the Federal Court is under appeal. If the appeal were finally successful Pfizer would no doubt be able in due time to publish further information calling attention to that fact. Counsel for Janssen points out that the Judge has held that Pfizer has published material for purposes of gain which is grossly misleading to the public. He submits they should not by means of a stay be permitted to continue to reap the benefits of any misconceptions they have planted in the public mind. These should be corrected at the earliest possible time. The provisions of ss.52 and 53 of the Trade Practices Act are designed for the protection of the public and this necessarily weighs heavily in the exercise of discretion. Counsel for Janssen further points out that included in the material held by the Judge to be grossly misleading is comparative advertising referring to his client's product "Vermox" in a manner which must have the potential to do considerable damage to the market prospects of Vermox. The claim for damages had been abandoned, but this was on the basis of obtaining an expedited hearing of the claim for injunctive and other relief, which was in fact achieved. Any continuance of the effect of the representations pending the hearing of the appeal could only have the effect of causing further damage to Janssen. eye ene oT we separ ott a~ Te woe; ERE age TO re oere Se eee Soy Sere a7 eee eee eh Me me ee eee ee rt ee ee ee re eee ee A ete ee ee -- -13- I should add that the notice of appeal having been filed only on 3 December 1985 it is not now practicable for the appeal to be heard before the first term in 1986. This matter has caused me some concern. However, I have come to the conclusion that Pfizer has not made out a case fora stay in respect of order 5 or order 6. As I have indicated, I propose to direct that when Pfizer publishes the notices referred to in Order 6 it may add at the end of each notice the words: "A notice of appeal has been lodged against the above decision of the Federal Court." The application for a stay will be dismissed with costs. | certify that this and the AR (iwelue) preceding pages are a true copy of tha reasons for Judgment herein of His Honor PeaCusep Mr. Justice p71 Nigel ReWwen,, ra Associate Dae // Deconbar (GES sere ate cen aoe + ne ooo