s ad Rev ° #I be CATCHWORDS Trade Practices - misleading or deceptive conduct - application for anterlocutory iuniunction - respondent enaaged in comparative advertising - obligation to ersure accuracy - whether serious question fo be tried as to whether advertising misleading or deceptive - consideration of balance of convenience Trade Fractices Act 1974 ss.52, 80 ARLINGTON NOMINEES PTY. LTD. v. DOWN UNDER EXHAUSTS PTY. LTD. e No. WA G10 of 1986 TOOHEY J. PERTH 26 FEBRUARY 1986 IN THE CEDEPAL COURT } uF AUSTRALTA , WESTERN AUSTRALIA ) No. WA Fi of 1346 , ) tu om (Ts DISTRICT PEGISTRY GENERAL DIVISION BETWEEN : ARLINGTON NOMINESS PT' TD. Applicant and OGWN UNDER EXHAUSTS PTY. LTD. Respondent MINUTE OF ORDER JUDGE MAKING ORDER: TOOHEY J. DATE OF ORDER: 26 February 1986 WHERE MADE: Perth THE COURT ORDERS THAT: 1. The respondent be restrained and an injunction is hereby granted restraining the respondent, its servants or agents until trial of this action or further order from publishing or causing to be published whether by the medium of television, radio, newspapers, periodicals, posters, brochures, pamphlets or otherwise any statement purporting to qagive a comparison of the cost of complete exhaust systems or muiflers which 1s in the form of annexure A to the affidavit of Raymond Della-Polina sworn 17 February 1986 and filed herein or in a like form and which fails to state accurately the cost of the product of the applicant and any differences ' : 2. in the preducts of che applicant and the respondent and whether fretting or extras are included in the applicant so and the respondent s prices. Z. The costs of the hearing of the application for interlocutory relief be reserved. Note: Settlement and entrv of orders is dealt with in Order 36 of the Federal Court Rules. they at" 7 amt ' ' ' * . - - dado * ' . ' ' "ycate ad . rn Soph \ . ey yt ' . ba > ee oy . . . ' . ' " of ' Pre ' ' ; . , ' ~ ~ , . ' t ' ' . wit , wo ' IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT PEGISTRY GENERAL DIVISTON No. WA 310 of 1986 BETWEEN: ARLINGTON NOMINESS PTY. LTD. Applicant and DOWN UNDER EXHAUSTS PTY. LTD. Respondent CORAM: TOOHEY J. 26 February 1986 REASONS FOR JUDGMENT The applicant and the respondent are both involved in the competitive business of selling motor vehicle parts and accessories. Each has branches in various suburbs. The respondent has engaged in comparative advertising by advertising in The West Australian newspaper the price of its own mufflers and exhaust systems for a range of vehicles, compared with the prices said to be charged by several of its competitors including the applicant. The applicant contends that the advertising is misleading or deceptive and seeks an interlocutory aunjunction to restrain the respondent from advertising in any manner which fails to state accurately the cost of the applicant's product, any differences between that product and the respondent's product and whether fitting or extras are included in the price. Fach party has filed affidavits in support of its case. Nao deponent has been required to attend for cross-examination. The matter therefore must be determined on the affidavits presently before the Court. (Qversimplifying the matter somewhat, the case for each of the parties may be put this way. The applicant says that it has a price for 1ts mufflers and exhaust systems for various vehicles, a price that includes fitting. It has a catalogue in which the correct prices of its products are listed and these catalogues are in its stores. It also advertises its prices in the Sunday Times newspaper. The respondent says that the prices identified as the applicant's prices in the respondent's newspaper advertising were obtained by accountants in the firm of K.M.G. Hungerfords who, at the respondent's request, telephoned the applicant's branches and obtained prices for exhaust systems for the various vehicles mentioned in its advertisements. Its advertisements make it clear that it obtained the applicant's prices by survey. While the applicant was in no position to respond by affidavit to the various affidavits filed on behalf of the respondent when the hearing began vesterday, 1t contends that on any view of the matter the respondent's advertisements are misleading or deceptive. In particular, 1t claims that references by the respondent to the applicant's prices did not make a fair comparison in that the components of the exhaust systems supplied by the respondent were not the same or of similar quality to that supplied by the applicant. By way of illustration, questions arise as to the comparative cost of Hills mufflers and Repco Fach partv has filed affidavits 1n support of its case. No deponent has been required to attend for cross-examination. The matter theretore must be determined or the affidavits presently before the Court. Oversimplifying the matter somewhat. the case for each of the parties may be put this wav. The applicant says that 1t has a price for its mufflers and exhaust systems for various vehicles, a price that includes fitting. It has a cataloque in which the correct prices of its products are Listed and these catalogues are in its stores. It also advertises its prices inthe Sunday Times newspaper. The respondent says that the prices identified as the applicant's prices in the respondent's newspaper advertising were obtained by accountants in the firm of K.M.G. Hungerfords who, at the respondent's request, telephoned the applicant's branches and obtained prices for exhaust systems for the various vehicles mentioned in its advertisements. Its advertisements make 1t clear that it obtained the applicant's prices by survey. While the applicant was in no position to respond by affidavit to the various affidavits filed on behalf of the respondent when the hearing beaqan vesterday, it contends that on any view of the matter the respondent's advertisements are misleading or deceptive. In particular, it claims that references by the respondent to the applicant's prices did not make a fair comparison in that the components of the exhaust systems supplied by the respondent were not the same or of similar quality to that supplied by the applicant. By way of illustration, questions arise as to the comparative cost of Hills mufflers and Repco 3. mutflers fitted to exhaust svstems. Ouestions also arise as to the quality of the exhaust systems and the extent to which the fittina of svstems and anv extras are included in the various prices shown by the respondent 1n its advertisements. These are matters that I am in no position to resolve at this stage. It 1s enough to say that, by its affidavits and notwithstanding the affidavits filed on behalf of the respondent, the applicant has shown that there 1s a serious question to be tried as to whether the respondent has engaged in misleading or deceptive conduct. The courts have on more than one occasion emphasised the responsibility of anyone who engages in comparative advertising to ensure that any statements made are correct and are not misleading. See State Government Insurance Commission v. J.M. Insurance Pty. Ltd. £1984] A.T.P.R. 40-465 at 45,362 and the cases mentioned therein. The question then becomes one of where the balance of convenience lies. The applicant contends that it is suffering damage by reason of the respondent's advertisements but that this damage is not easily capable of assessment in money terms. An unterlocutory injunction, it is said, is the only way of protecting the applicant until a substantive hearing takes place. In answer, the respondent arques that, even if the price of the applicant's products as shown in the respondent's advertisements 1s not entirely accurate, no one is really misled for, even on the applicant's fiqures, its prices are higher than those charged by the respondent. To some extent this arqument begs the question for comparative prices can be misleading unless the products are un all mater1al respects identical. Comparative advertising would seem to be an important part of the respondent's business but Ido not think that an injunction, suitably framed, should interfere with the leqitimate prosecution of that business. In the absence of some injunctive relief, the applicant does stand to suffer damage which will be difficult to assess if the matter proceeds to trial. The applicant has qiven the usual undertaking as to damages. It has suggested a form of interlocutory injunction which 1s sultable, with minor amendments. It is, I think, as precise as the evidence and argument presently permit. The order I propose is in the following terms but I shall give counsel an opportunity to speak to the precise terms of the injunction: "That the respondent be restrained and an injunction is hereby granted restraining the respondent, its servants or agents until trial of this action or further order from publishing or causing to be published whether by the medium of television, radio, newspapers, periodicals, posters, brochures, pamphlets or otherwise any statement purporting to give a comparison of the cost of complete exhaust systems or mufflers which is in the form of annexure A to the affidavit of Raymond Della-Polina sworn 17 February 1986 and filed herein or ina like form and which fails to state accurately the cost of the product of the applicant and any differences in the products of the applicant and the respondent and whether fitting or extras are included in the applicant's and the respondent's prices." The costs of the hearing of the application for interlocutory relief will be reserved. I certify that this and the preceding three pages are a true copy of the reasons for judgment herein of his Honour Mr. Justice Toohey t a oot / Associate Dated: 2h Jel (Tae