' : JUDGMENT No. LOREM BTeaae CATCHWORDS TRADE PRACTICES - Advertisements for health insurance - Comparative advertising - Statements as to benefits offered by various funds ~ Accuracy of statements - Claims by respondent as to "best value" and "higher benefits" - Whether mere puffing - Form of orders. Trade Practices Act 1974 ss.52, 80. NSW G.504 of 1987 HOSPITALS CONTRIBUTION FUND OF AUSTRALIA LIMITED v_ SWITZERLAND AUSTRALIA HEALTH FUND PTY LIMITED trading as "HEALTH AUSTRALIA" Wilcox J Sydney 4 November 1987 IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NSW G.504 of 1987 ) ) GENERAL DIVISION BETWEEN: HOSPITALS CONTRIBUTION FUND OF AUSTRALIA LIMITED Applicant/Cross-defendant AND: SWITZERLAND AUSTRALIA HEALTH FUND PTY LIMITED trading as "HEALTH AUSTRALIA" Respondent/Cross-claimant CORAM: WILCOX J PLACE: SYDNEY DATE: 4 NOVEMBER 1987 MINUTES OF ORDER THE COURT ORDERS THAT: 1. The respondent, Switzerland Australia Health Fund Pty Limited trading as "Health Australia", its servants and agents be restrained from publishing or causing to be published any representation that the applicant, Hospitals Contribution Fund of Australia Limited, has the policy of reducing, or will in the future reduce, hospital accommodation benefits payable to contributors of the applicant in respect 3. of days after the expiration of 14 days from the commencement of hospitalisation without, in that same representation, clearly stating that the said policy does not, or that the said future action will not, apply to persons who are, or who will be, patients in public hospitals. The applicant, Hospitals Contribution Fund of Australia Limited, its servants and agents be restrained from publishing or causing to be published any representation that: (1) the health insurance cover offered by the said applicant offers the best value health cover currently available in Australia; or (11) the said applicant pays higher benefits on major health care items without, in that same representation, clearly stating that the said representation does not mean or imply that the said applicant pays to contributors higher benefits than any other fund in respect of hospital accommodation charges assessed at the top cover rate. The operation of orders 1 and 2 herein be suspended until Thursday 12 November 1987. 4. The costs of the Application and of the Cross~-action be reserved. 5. Liberty be reserved to either party to make application upon two days' notice to the other in relation to: (i) the further suspension of orders 1 and 2 herein or either of them; (i1) the making of any order for corrective advertising; or (iii) the making of any order for costs. 6. Leave be granted to either party to apply to the Court upon seven days' notice to the other for the dissolution or variation of any order which, as a result of any change made after this day, would have the effect of restraining the making of a representation which 1s no longer false or misleading. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. NSW G.504 of 1987 ween GENERAL DIVISION BETWEEN: HOSPITALS CONTRIBUTION FUND OF AUSTRALIA LIMITED Applicant/Cross-defendant AND: SWITZERLAND AUSTRALIA HEALTH FUND PTY LIMITED trading as "HEALTH AUSTRALIA" Respondent/Cross-claimant CORAM: WILCOX J PLACE: SYDNEY DATE: 4 NOVEMBER 1987 REASONS FOR JUDGMENT To discerning consumers comparative advertising may be the most persuasive of all advertising. Because a comparative advertisement purports to state precise facts regarding the qualities or prices of competing products, 1t 1s apt to be believed and directly to influence purchasing decisions. It follows that errors in such advertisements are especially significant. They have potential to mislead consumers, to the disadvantage both of the consumers themselves and of the competitor about whose product the misstatement 1s made. In the area of comparative advertising there is little scope for copywriter's licence. I agree with the comments made by Lockhart J in Stuart Alexander & Co (Interstate) Pty Limited v Blenders Pty Limited (1981) 37 ALR 161 at p.163 and by Fisher J in State Government Insurance Commission v_ J M Insurance Pty Limited (1984) ATPR 40-465 at p.45,362. This case concerns comparative advertising, complaints being made by each of the parties about the accuracy of certain statements made in the other's advertisements. Both the parties carry on business as health insurers. Hospitals Contribution Fund of Australia Limited ("HCF"), the applicant in the principal proceeding, has carried on business as a health insurer since 1932. HCF 1s based in New South Wales and 1t holds approximately 22% of the New South Wales market. In contrast, Switzerland Australia Health Fund Pty Limited, the respondent, 1s a newcomer to health insurance. That company entered the market in Victoria on 1 March 1987, trading as "Health Australia" ("HA"). It commenced operations in New South Wales and in the Australian Capital Territory early in October 1987; and immediately launched the advertising campaign which has given rise to this litigation. The case itself consists of an Application by HCF alleging breaches by HA, in connection with both newspaper and television advertisements, of s.52 of the Trade Practices Act 1974 and seeking injunctive relief under s.80 of that Act. HA has responded by making similar complaints about HCF''s advertisements and, by a Cross-claim, seeking injunctions restraining their future publication. The case illustrates the point that the risks associated with comparative advertising do not lie only with the advertiser. A "victim" of the advertisement, by unsuccessfully challenging what has been said, may authenticate the competitor's unfavourable statements about its product. Before going to the facts, I should record that the matter has been heard as a matter of urgency. The Application was filed on Friday 23 October 1987. Pursuant to leave given by Fox J, 1t was made returnable before me on the following Tuesday afternoon, 27 October. At that time 1t was apparent that there were major issues between the parties as to the accuracy of the advertisements and that 1t would be necessary to investigate these issues at some depth in order to deal with the applicant's application for interlocutory orders. There were substantial arguments of inconvenience on each side, as HA's advertising campaign was in full swing. [In the event, the parties agreed to an early final hearing, which took place on 29 and 30 October. I pay tribute to the industry of the parties, and of their legal advisers, in assembling so much information in such a short time. The marketing strategy of HA appears to have three main elements. In the first place, 1n respect of each of the scales of benefits offered by the existing health funds -- generally known as "basic" and "top" -- HA offers insurance at lower cost. [Whether the benefits offered by HA in respect of each of these scales is truly comparable with those offered by HCF in respect of the same scale is a matter which has been debated in these proceedings and to which I shall return.] Secondly, HA offers a new intermediate scale, which 1t calls "private" and which 1s designed to cover the cost of private ward accommodation in a public hospital, with the advantage of patient choice of the attending medical practitioners. Apparently, this scale has not previously been offered by any health fund; but as nothing presently turns upon this aspect of the advertising I need say no more about it. Finally, HA targets what 1t perceives to be a deficiency in the cover provided by the other funds: a "step down" in the daily benefit rate after 14 days hospitalisation. This "14 day rule" provides the second major issue in the case. It is clear that, except to the extent of any restraint imposed by an order of the Court, HA will continue to publish the advertisements complained of by HCF until the completion of the current advertising campaign, in approximately two months' time. The subject newspaper advertisements vary a little, but their essential features are constant. In each case there 1s a banner heading across the top of the advertisemenht, which occupies a whole tabloid newspaper page. The standard heading is "Introducing Health Australia. Saving you up to $364 a year in sickness and in health". Some of the advertisements amend this to refer to "at any Soul Pattinson chemist" or "at any Amcal chemist"; those two pharmacy groups having been appointed as agents of HA. After the figure $364 there is an asterisk directing attention to the rate charged by HCF in its top scale, as shown on the table to which I will refer. The effect 1s to make 1t plain that the saving of $364 a year may be made only by substituting the top hospital and ancillary rate of HA ($17.40 per week) for that of HCF ($24.40 per week). The advertisement includes two photographs of a man in bed; in one case in hospital, the other at home, but in each case wearing a satisfied smile. Underneath the photographs the following appears: For years you may have been paying too much for your health cover. And not getting enough in return. Not only that, ail the major health funds now reduce your hospital cover the longer you're in hospital and the more you need it. it seems grossly unfair to us. So now Health Australia, Australia's newest health tund, offers you a better value alternative. Avateble ACT resusents and other Non-reasctenta of NSW and sce aecunty Denekcaries wht ere exempt from NSW Ambulance Levy Presse deduct 408 sungie, (808 farrety from above raieg Lesscost, more cover. Here's what you get with Health Austraita. You can save up to $364" a year on top hospital and ancillary cover compared to H.C.F. You get up to $160 a day more cover than with Medibank. Health Australia won't reduce your hospital cover after 14 days. All the other major funds will! \ (Except for rehabiitation and paycinatric benefits). With Health Australia you get your full insured hospital cover for 80 days in the first year of your membership, and 180 days after the fourth year. And whatever happens, you're Covered for 365 days on our basic hospital table. (Subpect to the required medical certificate after 36 days). Qs Heatth Australia is the only mayor heath tund that guarantees to hold your quoted contribution rates during the period for which you've paid in advance. @ = There's no waiting period, so join now. °* HA has made two television commercials, one of 60 seconds duration and one of 30 seconds. In each case the visual element shows the same man in a hospital bed, with varying degrees of bed clothing cover; but only the longer advertisement speaks of the 14 day question. In that commercial, a commentator says: "With every major health fund except Health Australia something very interesting happens after 14 days in hospital, they reduce your cover. Yes, after 14 days HCF, MBF and Medibank actually reduce your cover. Health Australia, however, 1S the new health insurance fund that keeps you covered. With Health Australia your cover won't shrink after 14 days, and that could save you thousands of dollars. What's more our rates are so low you'1l save up to $364 a year on top cover compared to HCF, for example, and you'll get up to $160 more hospital cover than Medibank"". The commentary on the shorter advertisement 1S confined to the comparison of prices mentioned in the last sentence quoted above. In relation to their treatment of the "14 day" aspect, the respondents' advertisements are said by the applicant to be misleading in three respects. Firstly, HCF points out that the 14 day rule has no application at all to contributors who are patients in public hospitals. It is a condition of the applicant's registration under the National Health Act, 1953 that benefits be maintained at their initial levels throughout the period of a patient's hospitalisation in a public hospital. Consequently, 1t 18 said by HCF, the advertisements published by HA require a qualification so as to exclude public hospitals from the ambit of the statement being made. The respondent does not dispute the proposition that there 1s no reduction in benefits for public hospital patients. But it resists the claim for relief, upon this aspect of the matter, by adducing evidence that, as the benefits payable in connection with public hospitals are prescribed by government and common to all funds, health insurers never advertise their public hospital benefits. The advertisements, it is said, would be read as referring only to private hospitals. I do not accept this argument. The proportion of insured persons who use public hospitals rather than private hospitals is currently about 50%; there is some dispute about the exact figure. I accept that funds do not ordinarily advertise their public hospital benefits; but I do not think that it follows that readers of the newspaper advertisements, or viewers of the television commercials, would appreciate that the level of benefits 1s maintained without reduction in public hospitals. The rules governing the entitlement to medical and hospital benefits are extremely complex, and ever-changing. I suspect that many people have given up the struggle to remain informed. To a significant proportion of readers and viewers, at least, the advertisements would convey the misleading impression that their public hospital benefits will be reduced after 14 days. An order should be made requiring an appropriate qualification 1n any repetition of the advertisements. The second aspect of the 14 day issue applies only to the newspaper advertisements, which speak of a reduction "the longer you're in hospital". The applicant suggests that these words imply a progressive reduction in the cover, rather than a single step down at the expiration of 14 days. The respondent defends the statement, claiming that 1t would be obvious to a reader of the whole advertisement that reference is being made only to a single step down after 14 days. Attention 1s drawn to the third point made under the heading "Less cost, more cover", I do not think that, in this connection, the advertisement should be stigmatised as misleading. The words above the table are not themselves comparative advertising. They are mere introductory paragraphs, couched in emotive and imprecise language, which are designed to attract the reader's attention to the statements made below. The actual comparative statement, about reduction of benefits, refers to a single reduction after 14 days. Taken by themselves, the words "the longer you're in hospital" are so vague that they would be unlikely to instil any belief as to the facts, true or false. Taken in conjunction with what 1s said below, they are not inaccurate. The third complaint made about the advertisements' references to 14 days is more fundamental. The applicant contends that 1t 1S incorrect to say that it will reduce its hospital cover after 14 days. HCF does concede that its rules prescribe a lower rate of private hospital accommodation benefits for periods extending beyond the first 14 days of hospitalisation, except 1n the case of psychiatric and rehabilitation patients where the "step down" is after 42 and 49 days respectively. But HCF makes the point that many private hospitals reduce their accommodation charges after 14 days, so that the gap between the cost to the patient and the benefits received 1s not then increased. There may be no qap; and health insurance operates as an indemnity only. Moreover HCF points to some other provisions of its rules which have the result that, 1n the case of many patients, no reduction in benefits 1s actually suffered after 14 days. The most important of these provisions is that contained in rule 5.1.6, which provides daily accommodation allowances "for continuing high dependency treatment beyond the nominated first days for a patient, as determined by the Medical Adviser". The amount of the allowance varies with the category of patient but, in each case, that amount currently equals the amount of the "step down" at the expiration of the initial period. It follows that, 1n the case of certified "high dependency" patients, there 1s in fact no "step down". The term "high dependency" is not defined by the rules. The second provision referred to by the applicant 1s rule 5.2.15, which provides a benefit "up to $1,000" for private hospital patients treated in an intensive care un1t. This benefit 1s available against the cost of accommodation, theatre fees and intensive care unit charges. Depending upon the circumstances of particular cases, 1t may serve to offset any reduction in normal accommodation benefits after 14 days. 10. During the course of the hearing officers of HCF made an analysis of the payments made by the fund to contributors, classified as having been admitted to a private hospital for "advanced surgery" between 1 March and 2 October 1987. During that period payments were made to 2,222 contributors. Of them, 242 contributors were hospitalised for a period exceeding 14 days. In 74 cases payments were made under rule 5.1.6, so that there was no "step down". In the remaining 168 cases there was a reduction in hospital accommodation benefits; but 1n 14 cases the effect was offset by other benefits, either under rule 5.2.15 or under the fund's rule regarding interstate transfers. This left 154 cases, almost 7% of all claimants, in which there was an effective "step down" of benefits. In 13 cases it was not possible, within the time available, to determine whether the "step down" had left the contributor out of pocket for his or her accommodation. But, in 103 out of the remaining 141 cases, the contributor did suffer a loss by reason of the policy of HCF, as enunciated in its rules, of reducing accommodation benefits after the first 14 days. No investigation has been made of the position of claimants in the other categories affected by the 14 day rule: surgery/obstetric and medical. A suggestion was made that the proportion of patients in these categories who remained in hospital longer than 14 days would be less than the proportion of advanced surgery patients; but it was accepted that there would be some such patients. ll. The statement about reduction after 14 days is a general one: "Health Australia won't reduce your hospital cover after 14 days. All the other major funds will!". [An exception regarding rehabilitation and psychiatric patients was acknowledged.] The statement deals with a situation which arises in only a minority of cases; upon the sample analysed in the evidence, 11% of advanced surgery cases. But it would be read in that context, the question being what attitude us taken -- by HA on the one hand, and by the other funds on the other -- to patients who are unfortunate enough to be hospitalised for more than 14 days. No complaint may be made of the claim that HA will not reduce its hospital cover after 14 days; notwithstanding some untidiness in drafting, this 1s clearly the effect of the HA rules. No issue is raised about the falsity of the statement insofar as it relates to funds other than HCF. The question is whether -- confining the statement to private hospitals -- it is misleading to say that HCF will reduce its cover after 14 days. As 1s indicated by the evidence to which I have referred, that question must be answered in the negative. A reduction of accommodation benefits after 14 days is the general principle established by HCF's rules. It 1s true that, 1n many cases, that reduction causes no loss to the contributor; either because of some other available allowance or because of a compensating reduction in hospital charges. But in a not inconsiderable proportion of cases -~ in the sample referred to 103 out of 229 analysable cases, 45% -- loss is actually sustained by the contributor as a result of these rules. In relation to 12. private hospitals, it is not misleading for HA to inform members of the public that HCF will "reduce your hospital cover after 14 days". In the result, I uphold HCF's complaint on the 14 days question only to the extent of agreeing that 1t 1s a misrepresentation of the position to make a statement that cover will be reduced by HCF without confining this statement to private hospitals. The second major aspect of HCF's case concerns the heading "Less cost, more cover". HCF concedes that the charges made by HA, in connection with each of basic hospital cover, top hospital cover and ancillary cover are less than the charges made, in connection with the equivalent scales, by HCF. But it is argued that the simple statement "more cover" suggests that the benefits offered by each of the funds are so similar that a comparison may meaningfully be made between the two; and that the differences are such that it cannot. In fact the hospital benefits are readily able to be compared. In relation to basic cover, the dally rates offered by HCF are slightly higher than those offered by HA. In relation to top cover -- even leaving aside the 14 day question -- HA offers more than does HCF. But it is extremely difficult to compare the tables of ancillary benefits. HCF offers some items which HA does not; for example, fitness courses and funeral benefits. In other cases both funds cover the particular type of expenditure, but in a different way. 13. For example, HA offers a flat $22 for a speech therapy consultation, of whatever length and whether an initial or continuing consultation. HCF, on the other hand, offers $30 for a first consultation exceeding 60 minutes, $20 for an initial consultation of less than 60 minutes and $15 and $10 -~- depending on length -~ for follow up consultations. In relation to speech therapy, HA seems to have the advantage but in other cases comparison 1s almost impossible. Much must depend upon the circumstances of individual contributors. Some will find optical benefits more relevant than hearing aids; others will be particularly concerned about the level of dental benefits. Counsel for the respondent say that the words "more cover" invite comparison between the HCF''s total "package", of top hospital cover with ancillary benefits, and that offered by HA. Accepting that, depending upon the needs of individual contributors, views might reasonably differ as to the better schedule of ancillary benefits, counsel say that the clear superiority of HA as to top cover hospital accommodation justifies the claim that, considered as two rival "packages", HA's benefits give "more cover" than those of HCF. The test, they say, is whether HA provides a more adequate system of health insurance; in determining which question the range of items is important, but so 1s depth of cover. I agree that the relevant comparison 1s between the top hospital covers, with ancillary benefits, rather than between basic covers. In the newspaper advertisements the 14. heading "Less cost, more cover" 1S explained by the words "Here's what you get with Health Australia" followed by a series of points. The figures quoted in those points relate to top cover. Those same figures are stated in the television commercials. It appears that, consistently with what is said to be normal practice in the industry, the subject comparative advertising focusses upon the top cover insurance, which 1s the most variable as between insurers. Looking at what 1s offered, by way of top cover with ancillary benefits, by each of HCF and HA, it seems to me that HA does present the more attractive package of benefits. This view is entirely dependent upon the fact that the hospital benefits offered by HA are markedly superior to those of HCF; there 1s no objective basis upon which I can choose between the respective ancillary benefits. But, of course, hospital accommodation benefits are easily the most important type of benefit. The table in the newspaper advertisements shows that each of the five listed funds attributes almost two-thirds of its total premium to hospital cover, rather than to ancillary benefits. I am not persuaded that it 1S misleading for HA to join the claim "more cover" to its uncontestable statement "Less cost". The submission that the words "more cover" imply comparability, so that HA should have indicated in its advertisements that benefits differ between funds, has caused me some hesitation. I agree that it is not possible to speak 15. of "more cover" unless there is, at least, substantial comparability of items; but I do not think that the words imply absolute comparability. A reader may be left wondering whether HA gives benefits in respect of all of the items covered by the other four funds. However, I do not think that he or she would take from the heading an assertion that it did. I think that the correct reading 1s, as counsel for the respondent suggest, an assertion that -- considered overall -- HA provides a more adequate package of benefits, upon the top table with ancillary cover, than do its competitors. It would have been helpful to readers to draw their attention, by an appropriate note, to the fact that there are differences in the items covered by particular funds. But I do not think that, in the absence of such a note, the words "more cover" are misleading. The Cross-claim brought by HA also complains of both newspaper and television advertisements. The print advertisement, also full tabloid page size, bears a banner heading "If you want the best health care cover available it's time you gave your present health fund a check-up". It includes a picture of a stethoscope being applied to a health insurance policy. Under the sub-heading "HCF - the healthiest health fund of them all!" the statement is made: "When you go looking for the best value health cover, you'll soon realise that HCF pays higher benefits on major health care items than any other fund - and it offers a range of benefits that just aren't available elsewhere." 16. The advertisement includes a number of other general statements about the health, and value, of HCF's policy; including the claim made on the cover of an HCF brochure, reproduced in the advertisement, "The best value health cover you can buy!". HA makes three complaints about this advertisement: the claim that HCF provides "the best value" health cover, the claim that HCF offers a range of benefits that are not available elsewhere and the claim that HCF pays higher benefits on major health items than any other health fund. As to the first item, treating "value" as involving a comparison between two products having regard to both costs and benefits, it is clearly incorrect to say that HCF offers better value health insurance than does HA. HCF 1s much more expensive than HA. The percentage differences are: for basic hospital cover 46.5%, for top hospital cover 38.6% and for ancillary cover 43.3%. The basic benefit rates are marginally better than those of HCF, but this small advantage would, for private hospital patients, be outweighed by the "step down" in benefits after 14 days. In money terms, the greatest health risk must be that associated with prolonged hospitalisation. When one turns to top hospital benefits, HA has a clear advantage. In all except one of the 18 categories of hospital benefits -- medical patients in a category "C" accredited hospital, in respect of which HCF pays $5 per day more than does HA -- the benefits paid by HA are equal to, or higher than, those of HCF. In 13 cases HA pays more -- sometimes 17. much more ~- than HCF; and it does so without the 14 day step down. In regard to ancillary benefits, as I have said, I cannot separate the two funds; but HA's price advantage clearly makes 1t the better value. It is false and misleading for HCF to claim that it offers the best value health cover which is currently available. The submission 1s put on behalf of HCF that a statement such as "best value" is not a statement likely to mislead members of the public, that 1t would be seen by readers as mere "puffing" and dismissed by them from further consideration. I am unable to accept this argument. I agree that the terms "value" and "best value" are often used by advertisers in contexts where they are meaningless, and would be likely to be dismissed immediately by readers or hearers. But the claim of "best value" 1s a major theme of this advertisement, the whole point of which is that readers should compare their own health insurance policy with that offered by HCF. That theme comes through the sub-heading "healthiest health fund of them all", which refers to benefits, not to reserves. After a section headed "HCF - the healthier alternative" is one entitled "Some health funds aren't so healthy"; that is, they do not pay so well. Immediately before the action line "Join now for Immediate Cover" 1s the refrain: "So, with HCF, you'll continue to get the best value health cover - and much more besides". At the very end of the script the writer returns again to the comparison. Under the heading "The only choice" are the words: "When you give other funds a check-up, you'll agree that HCF 1s the only choice for 18. the discerning, value-seeking buyer. We're the healthiest health fund of them all". This is followed by the reproduction of the brochure, with its "best value" claim. After the bold capital letters "HCF" the text repeats "HCF - the healthiest health fund of them all". In short, the advertisement can only be described as one in which the claim 1s seriously made, by an advertiser whose reputation and length of service to the Australian community is emphasized in the text, that, upon a full consideration of all available policies, HCF provides the best value ie, the most favourable balance of benefits against cost. Not many people are likely to have the time, the inclination, the information and the capacity to "give other funds a check-up"; to the point of making their own judgment on "best value". It seems to me probable that many people are likely to accept the message of the advertisement at face value; that, no doubt, is why it was published. If they do, they will be led into error. An order should be made to restrain repetition of the "best value" claim. The second complaint about the advertisement is its claim that HCF offers a range of benefits that are not available elsewhere. I am not satisfied that this claim 1s incorrect. The range of ancillary benefits -- as distinct perhaps from their depth and overall adequacy -- offered by HCF is greater than that of HA; and there is no evidence to compare HCF with any other fund. It may be true that HCF offers a range of benefits that are not elsewhere available. 19. Finally, complaint is made of the statement "HCF pays higher benefits on major health care items". This 1s defended upon the basis that HCF 1s shown to pay higher benefits on some major health care items than does HA. Counsel argues that the statement does not imply that HCF pays higher benefits on all health care items. I accept that the statement under attack does not imply that HCF pays higher benefits on each and every item which may fall within the description "major health care items". But hospital accommodation 1s the most significant item in health insurance, to insurer and insured alike. To make an unqualified statement about "major health care items" which is untrue in respect of the leading health care item is, at least, potentially misleading. The HCF advertisement, unlike that of HA, does not focus attention upon top cover hospital accommodation. What 1s said about "major health care items" may not be untrue of basic cover; it would certainly be untrue if applied to top cover. In my opinion the position is not unlike that arising out of the omission of a public hospital qualification in HA's advertisements. Because of the way in which they order their affairs, some people will not in fact be misled. But others probably will be misled, in connection with a matter of primary importance to them in considering what cover they should take. The words are not mere puffing. They make a specific claim which many people may be expected to take at face value. The reputation of HCF gives added weight to that 20. claim. I think that, in saying that it provides higher benefits on major health care items without any qualification relating to top scale hospital accommodation, HCF publishes material likely to mislead a significant proportion of the public. An order should be made restraining any repetition of this conduct. I should add that counsel for HCF tendered an amended form of the newspaper advertisement. The amended version omits the words "than any other fund". I accept that, without the necessity of any order from the Court, HCF would in future adopt this amended form. But the amendment does not affect the substance of the claim made. The comparison retained in the truncated version must be a comparison with what 1s available elsewhere, that 1s from other funds. The television advertisement may be disposed of shortly. The "voice over" commentary in that advertisement speaks of "your right to choose HCF top cover" "because HCF top cover gives you the best value health cover for those you care about". It goes on to refer to "your right to choose the best", which words are then repeated. It follows from what I have already said that I am of the opinion that, upon proper appraisal, 1t cannot truthfully be said that HCF provides the best value health cover. In particular, it 1s incorrect to say that HCF top cover 1s "best value". At that level the value is much inferior to that offered by HA. Although the television advertisement does not repeat the "best value" theme so frequently as does the newspaper advertisement, this 21. 1s the sole message in the advertisement; the words "best value" being reinforced by the repeated reference to viewers' "right to choose the best". The words are more than puffing. They constitute a misleading statement in relation to which an order should be made. Counsel for the applicant requested me to reserve for later argument any question of corrective advertising. As relief 1s to be granted to each party, I reserve liberty to each of them to apply, on two days' notice, in that connection. Having regard to practical considerations, it seems appropriate to defer the operation of the restraining orders for a short period. Some time will be needed, for the amendment of the current advertisements and to give appropriate instructions to the relevant newspaper publishers and television stations. I propose to defer the operation of these injunctions for seven days from today. In case it should be necessary, I will grant liberty to any party to apply for an extension of that period; but I indicate now that I would not be disposed to grant such an extension unless I were satisfied that, notwithstanding all diligence, satisfactory arrangements cannot be made within that time. At this stage I make no order as to costs. I prefer to defer that matter for later consideration in the light of any submissions which counsel may wish to make, having regard to the principal orders made. Application may be made in connection with costs by either party on giving two days' notice to the other. 22. Finally, the orders to which I have referred reflect the current position of the parties in connection with benefits and costs. That position may change. It would be wrong to continue a restraint if, as a result of any change, the relevant statement is no longer misleading. Leave should be granted to either party to apply to the Court upon seven days' notice to the other for the dissolution or variation of any order which, as a result of any change made after this day, would have the effect of restraining the making of a representation which 1s no longer false or misleading. I certify this and the twenty-one (21) preceding pages to be a true copy of the Reasons for Judgment of his Honour Justice Wilcox. Necoeiates hawt fore Date: November 1987 Counsel for the Applicant/ Cross-defendant: Mr R V Gyles OC with Mr M J Slattery Solicitors for the Applicant/ Cross-defendant: Murphy & Maloney Counsel for the Respondent/ Cross-claimant: Mr A H Goldberg QC with Mr P F Esler Solicitors for the Respondent/ Cross-claimant: Clayton Utz Date(s) of hearing: 29 and 30 October 1987