JUIP OR rong opt. AOT 1 &¥. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. G161 of 1988 GENERAL DIVISION BETWEEN: DURACELL AUSTRALIA PTY. LIMITED Applicant AND: UNION CARBIDE AUSTRALIA LIMITED Respondent CORAM: FOSTER, J. DATE: 19 MAY, 1988. PLACE: SYDNEY. REASONS FOR JUDGMENT (EXTEMPORE ) HIS HONOUR: These proceedings come before the Court by way of a claim made by the applicant, Duracell Australia Pty. Limited, that the respondent, Union Carbide Australia Limited should be held to be in contempt of court for the breach of a certain undertaking given to the Court at the conclusion of prior litigation between the parties. That litigation concluded on 17 February, 1988 when the parties settled an action brought by the applicant against the respondent for alleged breaches of s. 52 of the Trade Practices Act, 1974. The undertaking in question was clearly given upon consideration. The wording along with the wording of other undertakings was reduced to writing in a form handed up to the Court so that the Court could formally note the undertaking in the precise terms in which 1t was given. The question before me 1s whether it has been proved in these proceedings that there has been a breach of the undertaking constituting a contempt of the Court. The subject of breaches of undertaking and their constituting a contempt was considered in Australian Consolidated Press Ltd. v. Morgan & Anor. (1964) 122 C.L.R. 483. In that case, Mr. Justice Owen, at p. 515, expressly adopted with approval, the words of Mr. Justice Jenkins in the case of Redwing Ltd. v. Redwing Forest Products Ltd. (1947) 177 Law times Reports, 387, where his Honour in refusing an application that the respondent be found guilty of contempt of court said:- "I cannot say I think that the undertakings : contained in the order were clearly drawn and [I cannot say I regard the questions of construction involved in them as entirely easy questions, but in my judgment, a defendant cannot be committed for contempt on the ground that upon one of two possible constructions of an undertaking being given he has broken his undertaking. For the purpose of relief of this character I think the undertaking must be clear and the breach must be clear beyond all question." Mr. Justice Windeyer, at page 508, expressed general agreement to what Mr. Justice Owen said in this regard. I have 3. heard considerable argument as to the standard of proof to be applied in the case before me. It has been submitted that the standard of proof should be as high as the criminal standard of proof and as I understand the submission of the applicant, it 15 put that a mere civil onus of proof may well be appropriate; that 1s, proof on the balance of probabilities. I do not understand any cases subsequent to Morgan's Case to cast doubt upon the general proposition that in establishing a contempt of court on the basis that an undertaking given to the Court has been broken that guilt can be established on any basis other than that, "the breach must be clear beyond all question." I do not think 1t necessary in this case for myself to embark upon any close consideration of the authorities on standard of proof that have been cited to me. Before referring to the undertaking in question, it 15 appropriate that I mention that the undertaking was given after the Court had embarked upon a consideration of certain television advertising material, normally referred to as commercials, which the respondent had caused to be telecast. These commercials have been described in argument before me as being of a terse, aggressive character and hard hitting. Those descriptions, in my view, are certainly reasonably appropriate to that material, a part of which I have seen today, again, as a result of a ruling on evidence made by me in the course of the proceedings. 4. The alleged breach which I must consider in this case relates to the telecast of a similar commercial on some recent occasions. The fundamental question for decision is whether that commercial constitutes a breach of the undertaking previously given. I turn then to the text of the undertaking. For relevant purposes, 1t reads as follows:- ",.. the Respondent will not, prior to 1 June 1988, whether by itself, 1ts servants, agents or otherwise howsoever, in any advertising or marketing, make any claim of superiority of any nature whatsoever, directly or indirectly, in relation to the performance of ..". and then certain batteries being products of the respondent are referred to. And the advertising material, which had been the subject of the previous litigation in respect of which a settlement occurred and the undertaking was given, clearly asserted the superiority of the respondent's Energizer batteries over the applicant's batteries of a similar type. The words which were, as I recollect it, repeated several times in the earlier commercial were that Energizer lasts 20 per cent longer than Duracell and, in a subsequent commercial in the same series, the claim was made in the same terms and in the same aggressive manner that the Energizer battery lasted 30 per cent longer than Duracell. And there can be no doubt whatever in relation to those earlier advertisements that a distinct, definite and very direct claim of superiority was made. 5. The commercial which is alleged to constitute a breach of that undertaking, is undoubtedly of a similar hard-hitting kind, the personality purveying the advertising message is the same personality and had obviously been selected for his ability to convey advertising messages with some agressive force. The words used in the 1mpugned advertisement are, and I quote: "Tests prove 1t, no battery lasts longer." This statement was made both by the person involved in purveying the message and also as a result of subtitles. The undertaking required that the respondent make no claim of superiority directly or indirectly. In light of the words spoken and visually presented in the advertisement, I am quite satisfied that no direct claim of superiority could be held to have been made. It is submitted, however, that an indirect claim has been made on a number of bases which relate to some of the essential qualities of similarity between the earlier advertisements, where there was a direct claim of superiority, and the impugned advertisement. It 1s said that adopting a broad interpretation of the word "claim", which interpretation is not conceded in argument by the respondent, that persons receiving this advertising material as viewers of the televised commercial would understand it as being a claim made on behalf of the respondent that its batterles were superior. 6. I note, of course, that the words "claim of superiority", apart from the use of the expression, "directly" or "indirectly" are not qualified in any way such as to reduce the term "claim" to the term "suggestion" or some similar term. Putting that matter aside, however, and looking at the previous material and the impugned material and considering the case from the way it is put by the respondent, namely that viewers who had, to some extent, been sensitized by the earlier material would on seeing the subsequent material regard 1t as conveying the same message. I ask myself whether in light of the statement of principle in Morgan's Case, to which I have referred, I should come to the conclusion that there has been a breach beyond all question of the undertaking previously given. I find myself quite unable to come to any such decision. I am simply not satisfied that a claim of superiority, even interpreted in the very general way, pressed upon me by the respondent, has in fact been asserted in the impugned advertising material. I therefore find that the charge of contempt of court un relation to the breach of that undertaking 1s not established. I certify that this and the five preceding pages are a true copy of the reasons for judgment herein of his Honour, Mr. Justice M. L. Foster. Dated: 2 aii 1988. Associate: due