FEDERAL COURT OF AUSTRALIA Optus Mobile Pty Limited v Hutchison 3G Australia Pty Limited [2003] FCA 974 OPTUS MOBILE PTY LIMITED v HUTCHISON 3G AUSTRALIA PTY LIMITED N 724 of 2003 ALLSOP J 19 SEPTEMBER 2003 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N724 of 2003 BETWEEN: OPTUS MOBILE PTY LIMITED APPLICANT AND: HUTCHISON 3G AUSTRALIA PTY LIMITED RESPONDENT JUDGE: ALLSOP J DATE OF ORDER: 19 SEPTEMBER 2003 WHERE MADE: SYDNEY THE COURT ORDERS: 1. That the orders made on 4 July 2003 be varied by: (a) amending Declaration 2(d) by inserting the number "1" and a comma before the number "4" and after the word "tabs"; (b) amending Declaration 3(d) by inserting "or $38" after the symbol and numbers "$32". 2. That within 7 days the solicitors for the parties agree upon a place for storage of the original exhibits in these proceedings and a mutually satisfactory regime for access. 3. That within 7 days the solicitors for the parties take custody of the original exhibits from the associate to Allsop J. 4. That within 7 days the parties file any submissions as to costs. 5. Stand the matter over to a date to be fixed in relation to the making of orders as to costs. 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 N724 of 2003 BETWEEN: OPTUS MOBILE PTY LIMITED APPLICANT AND: HUTCHISON 3G AUSTRALIA PTY LIMITED RESPONDENT JUDGE: ALLSOP J DATE: 19 SEPTEMBER 2003 PLACE: SYDNEY REASONS FOR JUDGMENT 1 On 4 July 2003 I pronounced orders in this matter. These are my reasons for those orders and for two amendments to those orders. 2 The applicant and the respondent compete for customers in providing mobile phone technology and services to the public. The applicant claimed that the respondent had engaged in conduct that was a contravention of s 52 and subs 53(c) of the Trade Practices Act 1974 (Cth) (the TP Act) and that the respondent threatened to engage in conduct that would continue to amount to such a contravention. 3 The matter came before me on 16 June 2003 for short service. An interlocutory hearing took place on 19 June 2003. I made orders on that day restraining, until further order, the distribution of a particular brochure. With the agreement of the parties that it was both appropriate and necessary, I set the matter down for final hearing on liability issues on 26 June 2003. I heard the matter on 26 June 2003, 30 June 2003, and 1 July 2003. There was little cross-examination. Virtually all relevant facts were not in dispute. 4 The respondent had recently begun an advertising campaign for its services. It presently possesses a distinct advantage in the market place because of its possession of an advanced technical attribute of its mobile phone service. How it sought to promote and feature that advantage in its advertising was largely what this case was about. 5 Some background is necessary. the technology 6 Mobile phones operate by use of wireless technology. The first mobile phones used analogue voice signal. They are sometimes referred to as the "first generation". Later, digital encoding was used to transmit voice signals, sometimes referred to as "second generation" or "2G" system or technology. Technological improvements brought the capacity to send encoded digital voice signals, which allowed further functions to be achieved on mobile phones. This is sometimes referred to as "2.5 G" technology. So called "third generation" or "3G" technology allows various forms of high speed multi-media transmissions to be made and accepted on a mobile phone handset. 7 One of the particular attributes of this 3G technology is the function which allows video calling on the telephone; that is one can have a telephone call with someone whom one can see "live" on the telephone screen on the telephone which is being used for the conversation. 8 At the present time, the respondent is the only company in Australia which provides video calling. It desires to press that advantage in the market place. The respondent calls itself the "3 network" and uses the number "3" in a stylised logo of different colours to represent its brand. 9 A range of services were said to be available on the "3 network". These can be broken down into four categories: (a) First, there was "video talk" which is the ability to make live video calls via the telephone. (b) Secondly, there are a range of other video services which provide various types of information from street directories, to information on restaurants, bars, events, movies, sport etc. (c) Thirdly, there was a service known as a message centre through which email, voicemail, text messages, multimedia messages and fax mail can all be sent and accessed. (d) Fourthly, the "3 network" allows ordinary phone calls to be made. 10 At the time the matter came on for hearing, "3" was only able to provide the live video calls and the second of the four groups of services in Australia in parts of Sydney and in parts of Melbourne. Those parts covered 74% of the population of Sydney and 72% of the population of Melbourne. This area was known in some of the advertising as the "video zone". 11 At about the time of my orders, the areas in which these services were available had been expanded to include Brisbane, Adelaide and Perth (covering 87%, 89% and 83% of the populations of each of these cities, respectively). At the time of the hearing and of my orders it was not intended to cover Canberra, Darwin or Tasmania or regional areas of any State or Territory. 12 Each of the main mobile networks of Optus, Telstra and Vodafone, covers, for telephone calls, more than 90% of the Australian total population, not just a large proportion of the population of some capital cities. This was important, as the applicant strongly pressed the proposition that the advertising, both individually and as a whole, was being put out to the public in a context where much of the public would assume that, unless anything were said to the contrary, coverage of any mobile phone services, including such video calls, would be widespread. 13 The respondent provided the services thirdly referred to at [9] above in an area wider than the video zone but in an area smaller than the maximum coverage of the network for telephone calls. The maximum cover of the "3 Network" for ordinary mobile phone services was substantially identical to that covered by Optus, Telstra and Vodafone in their mobile networks. 14 The attack on the advertising of the respondent ranged over virtually the totality of the current advertising campaign. It would be cumbersome in the extreme for me to insert into this judgment the precise form of all the advertising complained of. Some of it was in video form. Some of it was in large glossy fold out form. Much of the debate centred on impression. 15 I had the assistance of careful and full written submissions prepared by counsel for both the applicant and the respondent. May I take this opportunity to thank counsel and solicitors for the care and comprehensiveness of those submissions. They will be left with the file. 16 I do not propose to recite in detail all arguments. The most appropriate course in my view is to express as briefly as possible my impressions as to each piece of advertising impugned, identifying why I thought it was, or was not, misleading or deceptive. 17 I propose to approach the matter by dealing with the pieces of advertising which I found in my orders to have been misleading or deceptive. 18 Before considering the advertisements in question, I should consider the relevant class of consumers: Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45, 87. In this matter I think the relevant class is ordinary and reasonable, actual and potential, customers for mobile phones in Australia. This is a wide group of the general public, of virtually all (post childhood) ages and education and social backgrounds, who might wish to buy a mobile phone in particular, perhaps, of the most up-to-date technology. However, I do not think that there would be any particular sophistication in this group of people and I approached the matter on that basis. 19 In coming to the views that I have, I have taken into account in respect of each advertisement the injunction of Hill J in Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1, 49-50: Where …the advertisement is capable of more than one meaning, the question of whether the conduct of placing the advertisement in a newspaper is misleading or deceptive conduct must be tested against each meaning which is reasonably open. tab7 of SDT1 and SDT2 20 The first advertisement the subject of the orders on the 4 July was that behind tab 7 of exhibit SDT1 to the affidavit of Stuart Donald Tucker affirmed on 16 June 2003 and also found as exhibit SDT2 to the affidavit of the same Mr Tucker of 19 June 2003. That advertisement had a number of vices. First, by the juxtaposition of a number of paragraphs it made the representation, which was false, that consumers could access all the respondent's services including live video calls and other video services in 92% of Australia's populated areas. Two paragraphs adjacent to each other in the glossy brochure read as follows: The 3 Network lets you make mobile calls, video calls, send video messages and high-speed email, get news and sports news video and lots more. You can make your usual mobile calls from just about anywhere. On 3 you have coverage in 92% of Australia's populated area. You can make video calls to the UK and Italy. Other 3 countries around the world are coming soon. 21 Adjacent to that section of the advertisement was a heading "Any questions". There was the question posited "Can I use my 3 handset Australia wide?" The answer given was: Yes, when you connect with 3 you can access a network that has coverage of 92% of Australia's population. 22 Given that the whole thrust of the advertisement was the use of the handset for the particular advantage, being live video calls, an advantage prominently displayed throughout the advertisement, there was, it seems to me, a clear misrepresentation to the relevant class of the public that consumers could access all of the respondent's services including live video calls and other video services in 92% of Australia's populated areas. 23 There was also the representation that a consumer connected to the respondent's network could make live video calls to the UK, Italy and London. There was no geographical limitation on those areas. In the light of the totality of the advertisement and the otherwise unqualified (and false) assertion of coverage for video services in Australia, any reasonable reader of the advertisement could understandably be led to believe that the width of coverage in London, the United Kingdom and Italy was the same as in Australia, that is, as widespread as could be expected with mobile telephone services. 24 The advertisement also carried some material on the reverse side of the brochure. It was stated that consumers who purchased a handset could make $32 worth of live video calls free "nationally" each month on the respondent's network. There was also a representation that consumers who purchased another type of handset could make $38 worth of live video calls free "nationally" each month on the respondent's network. In the context in which these representations appeared, these statements could reasonably be taken by any reader of the advertisement to be a representation that video calls could be made nationwide on the phone. This, as I have said, was false. It was said that the use of the word "national" was clearly a usage of language in contradistinction to "international". I do not think that is correct; but even if someone had appreciated that, that person would have thought quite reasonably, it seems to me, that video calls (equivalent to national STD calls) could be made with this phone. That, as I have explained, was false also. 25 From these matters to which I have referred, there was a representation which was also false that consumers could, within Australia, make and receive live video calls and access all the respondent's services: (i) in the same or substantially the same geographical areas as they are able to use all other services on the respondent's network, including mobile telephone services; (ii) in a substantial part of the populated areas of Australia; (iii) nationally over Australia. For these reasons I made orders 3(a), (b), (d), (e), (f) and (i) about this advertisement. tab 8 of SDT1, SDT3 and tab 2 of AH1 26 The advertisement, appearing at tab 8 of this said exhibit SDT1 and being also found in substantially the same form as exhibit SDT3 to the second affidavit of Mr Tucker and Tab 2 of exhibit AH1 to the affidavit of Amanda Lynne Hutton of 19 June 2003, appeared prominently in the press. It made the same representations about "National video calls" as were contained in the advertisement of tab 7 of exhibit SDT 1 referred to above. For the same reasons a reasonable viewer of this advertisement in the press could take the view that one could make video calls STD in Australia whereas in fact the calls could only be made in certain limited areas. tabs 9 and 10 of SDT1 27 Exhibits at tabs 9 and 10 of the said exhibit SDT1 were also press advertisements. They made similar representations about national video calls. In particular the representations were made in them which were referred to in orders 3(d), (f) and (i) for the reasons which I have given above. tab 4 of AH1 28 In the advertisement at tab 4 of exhibit AH1 there was the statement that: Only 3 lets you talk face to face on a live video call to other 3 customers in Australia, the UK and Italy… There was no qualification to this. This contained the representation that consumers could make live video calls to all other customers of the respondent in Australia, or other customers of the respondent in Australia who had an appropriate handset and also made a representation that consumers connected to the respondent's network could make live video calls to anywhere in the UK or Italy. Orders 3(c)and (i) related to these representations. tab 5 of AH1 29 The advertisement at tab 5 of exhibit AH1 stated without any qualifications that: 3 lets you … get up close and personal with a national or international live video call. Whilst, strictly speaking, this may be true, without any qualification whatsoever, the statement was a representation to the effect that customers can make live video calls to other customers in Australia nationally or indeed internationally, which could reasonably lead people to think that this service was available generally, without limitations as to coverage. The use of the words "national" and "international" carried with them an aspect of coverage, which, to be accurate, needed to be qualified. Orders 3(f) and (i) related to these representations. tab 6 of AH1 30 In tab 6 of AH1 it was stated with some qualification as follows: Only 3 lets you talk live and face to face to other 3 customers: family and friends across town or interstate. People back in the office. Your mama in Milan or your friends in London.* The "*" took one to a statement at the foot of the page stating: Video calls only available in Video zones. The phrase "Video zones" was not elaborated upon. Again, in my view, these statements, unqualified, were representations that consumers can use the handset to make face to face calls in Australia and internationally. I do not think that the qualification sufficiently qualified the otherwise general representation as to width of coverage. 31 This advertisement (tab 6 of AH1) also contained a statement that $38 worth of "free national video calls" could be included in arrangements made. For the reasons expressed above this also contained the representation that the video calls could be made nationally across Australia. Order 3(d) did not fully reflect my intention "or $38" should have been inserted after "$32" and I will make a change to the orders made pursuant to and relying upon O35 r 7(2)(e). 32 Orders 3(d), (f) and (i) were directed to this advertisement. tab 7 of exhibit AH1 33 I made order 4(c) restraining the respondent from using this advertisement. The advertisement contains two young people standing back to back telephoning each other using the telephone. The advertisement included the following statement: Only 3 lets you talk live and face to face to other 3 customers: family and friends across town or interstate. People back in the office. Your mama in Milan or your friends in London.* The asterisk took the reader to a sentence at the bottom of the page which stated: Video calls only available in Video zones. 34 A reasonable construction of this paragraph is that the qualification by reference to what is at the foot of the page only relates to the last sentence. In this light, it seems to me that the paragraph is misleading in that it tells the reader that one can use this telephone for this service across town (any town) or interstate (that is, nationally across Australia). This is and would be misleading or deceptive given the limitations on the service. tab 8 of AH1 35 The advertisement behind tab 8 of AH1 contained the express representation that video calls could be made to clients in the UK and Italy. This was in part a statement dealing with coverage. There was no qualification whatsoever. Said so generally, this was capable of misleading people to think that the calls could be made to anywhere in Italy and the UK. Thus, a representation of the kind referred to in Order 3(c) was made and was false. tab 10 of AH1 36 The advertisement behind tab 10 of AH1 simply stated that the use of the respondent's handset would enable live video calls and other video services to be made. The character promoting the handset in this advertisement was reinforcing the image that general communication could be made. At the foot of the page the following appears: With Australia's most advanced mobile network at his fingertips, Dave can do everything he did on his old mobile plus enjoy live video calls, video messaging, high-speed mobile email, sports news and news video updates, movie video previews, restaurant reviews and a lot more. Change the way you view your world, visit www.three.com.au for the location of your nearest 3 Shop or dealer. 37 Whilst it is not perhaps free from doubt, without some qualification, the viewer of the advertisement could understand that usage of the handset for live video calls and other video services was general rather than geographically specific, as was the usage "on his old mobile". It might be said that this was at the margins of misleading or deceptive conduct and I would easily accept that here minds might very well differ about the conclusion that I drew. tab 11 of AH1 38 As to tab 11 of exhibit AH1, there was a representation that under certain considerations "$32 worth of national video calls" could be obtained free. For the reasons I gave earlier, this was a representation that the live video calls could be made across Australia, which was false. This carried with it the more general representation of national usage also referred to in orders 3(d), (f) and (i). tab 13 of AH1 39 The advertisement behind tab 13 of AH1 once again had the representation that "$32 worth of national video calls" could be made under certain circumstances, thereby making a representation as to national usage: see orders 3(d), (f) and (i). tab 14 of AH1 40 The advertisement behind tab 14 of AH1 also contained representations that in certain circumstances a monetary amount of "national video calls" could be made, thus raising the representations referred to in orders 3(d), (f) and (i). tab 15 of AH1 41 The advertisement behind tab 15 of AH1 contained similar representations and similarly offended the TP Act (see orders 3(d), (f) and (i)). I should add that in the advertisement behind tab 15 there was a small asterisk adjacent to the words "video calls" which indicated that video calls were only available "in video zones". The expression was nowhere elaborated upon, and in my view did not obviate what was the otherwise clear representation of a general (national) availability of the video calls across Australia. tab 17 of AH1 42 In tab 17 of AH1 there was a pricing advertisement which also contained representations of various amounts of free "videotalk" and "national videotalk" without clearly identifying the limitations on the video telephone service. For the reasons I have expressed earlier this also offended and gave rise to the need for orders 3(d), (f) and (i). SDT4 and SK1 43 The advertisement being exhibit SDT4 to Mr Tucker's affidavit of 24 June and exhibit SK1 to the affidavit of Silloo Kabraji of 23 June 2003 were further brochures containing the representations of national video calls in certain circumstances, otherwise unqualified, leading to the representations to which orders 3(d), (f) and (i) were directed. Also, there was the representation that: On 3 you have voice coverage in 92% of Australia's populated areas. You can also make video calls to the UK and Italy, with other countries coming soon. By the juxtaposition of these sentences the representation was made that video calls could be made nationally in Australia over that area and also generally to the UK and Italy. This gave rise not only to the orders to which I have just referred but also the need for orders 3(a) and (c). R1 and R2 and tab 3 of TC1 44 The advertisements in exhibits R1 and R2 and appearing at tab 3 of exhibit TC1 to the affidavit of Trent Ashley Clinton Czinner of 19 June 2003 concerned maps detailing the coverage areas of the "3 Network". After the proceedings commenced, the respondent purchased advertising space covering a full page in daily newspapers under the heading of: Thinking of joining 3 Here is an important message about our coverage There was then set out in coloured maps coverage in Sydney and Melbourne and the forthcoming coverage in Brisbane, Adelaide and Perth. Unfortunately, the maps were quite inaccurate, as is common ground. I do not need to identify the inaccuracies further than as was covered by orders 3(g) and (h). 45 These were the advertisements which gave rise to the representations to which declarations in 3 were directed. 46 Before explaining why other material said by the applicant to be misleading or deceptive was not, in my view, of that character, it is necessary to make one further correction to the orders made on 4 July to reflect my then intentions, pursuant to O 35 r 7(2)(e). The oversight was in relation to the advertisement behind tab 1 in exhibit AH1. This advertisement contained the representation that for a certain arrangement entered there would a certain amount of "national voice calls". There was no adequate qualification and in the context of the advertisement as a whole there was a representation of the kind referred to in order 3(d), (f), and (i). Advertisements which are not misleading and deceptive 47 All the advertisements which I have found to be misleading or deceptive or likely to mislead or deceive were published prior to the proceedings. Some of the others published prior to the proceedings were not misleading or deceptive. Others intended to be published at the time of the hearing were also not misleading or deceptive. I deal with these in turn. Exhibit A 48 Published prior to the proceedings were advertisements recorded on a video tape which was exhibit A. It was alleged that all except for the eighth and final advertisement recorded on that video tape were misleading or deceptive. The first three advertisements recorded in exhibit A are what might be described as "episodic" advertisements. They feature, in different order, a series of vignettes incorporating the number 3 in some unusual or surprising setting. Those episodes include a little boy needing to do "number threes", an unhappy litigant gesticulating with three fingers, a footballer talking of a "game of three halves", three chimes of a clock at two o'clock, Dracula's three teeth and a maiden's three teeth marks from his bite, as well as the Chinese lady's three chopsticks. There is a repetition to a degree of the advertisements ending with a woman in a tattoo parlour making a video call to a man in a noodle shop in order to show him her new tattoo being a heart with a third lump at the top while another tattoo is of three cherries, the man then looks across the noodle house to a smiling Chinese lady eating with three chop sticks. The scene is followed by a picture of a video phone against a white background with a stylised "3" logo on the screen accompanied by a voice over saying "change the way you view your world". 49 The applicant submitted that while the greater part of each advertisement made no mention of video calls, the advertisements were deliberately obscure as a presumed device to cause the viewer to pay attention to them. The advertisements were to be seen, it was said, as a sophisticated part of an overall campaign promoting the ability to make video calls as the special feature of the "3 Network". It was said that the associations made within the advertisements with video calls and the apparent statement of the capacity to make video calls on the "3 Network" necessarily carried with it the obligation to clearly identify the limitations on the usage of the phone for video calls. Part of the argument was based upon the natural expectations of persons in the community, now used it was said on the evidence, to Australia wide coverage. 50 I do not accept these arguments about the advertisements. These advertisements were, as the respondent said, an exercise in creating brand recognition and do not say anything at all about the coverage of video calls. They are quite different, I think, from stating in writing – "use this phone and you can call nationally or to the UK (generally)." There is a clear statement, and one which is entirely accurate that video calls can be made on these telephones. I do not think any viewer of the advertisement would be caused to think that the advertisement was telling him or her that video calls could be made Australia wide or particular place or places internationally. This was an exercise, as the respondent submitted, in creating a recognition of the brand. It can, of course, be seen as part of an overall campaign, but I do not think that there was anything misleading or deceptive about them. 51 My conclusions are the same about the fourth, fifth, sixth and seventh advertisements recorded on exhibit A. The fourth, fifth and sixth of these advertisements tell stories featuring one or other stereotypes involving people making video calls on the "3 Network": (a) there is an advertisement of the father telling his small daughter a goodnight story by video call with his wife looking on; (b) there is the advertisement of the husband/boyfriend called by his wife/girlfriend about the purchase of an ugly dog which he says looks like her mother (the mother being present, but slightly out of view on the screen until the comment by the husband/boyfriend is passed); and (c) there is the advertisement in which an Italian mother receives birthday greetings by video call from her Australian relatives standing in front of the Sydney Harbour Bridge. It is true that these advertisements are not simply about brand recognition. They are about video calls. However, looking at each of them no precise representation is made as to particularity of coverage and the call is being made from somewhere to somewhere. In the sixth advertisement from Australia to Italy. I do not think these amount to or contain the same representation made in the print advertising to which I have referred to the effect that there is an ability to call anywhere in Italy or anywhere in Australia. 52 Importantly, in my view, in this conclusion is my view that most people using mobile phones in Australia will understand coverage to be an issue. Whilst the three major telephone companies provide coverage to over 90% of the Australian population, I do not think it can be doubted that as a matter of ordinary human experience or judicial notice, I can conclude that questions of coverage and reliability of coverage are matters which any mobile phone user will appreciate. Therefore, unless there is some representation as to width of coverage as some of the earlier advertising makes, more or less specifically, I do not think that it can be said that whenever the respondent shows the ability of its phones to allow video calls to be made there must be a demonstrably clear identification of the precise coverage areas of such service. It all depends upon the context. 53 The seventh advertisement recorded on exhibit A is about the rates for video calls on the "3 Network" and promises consumers that they will be able to make some video calls free. It was submitted by the applicant that the reference to free video calls was particularly likely to remind consumers who have seen the print advertisements which promise free video calls such as those in the advertisements in tabs 8 to 10 of exhibit SDT 1 and tabs 1, 2, 11 and 13 of exhibit AH1, that those are said to be "national" video calls. 54 I do not think that this level of perspicacity of connection is likely to be made. I see nothing misleading or deceptive about the seventh advertisement. tab 3 of Exhibit AH1 55 This advertisement was similar to those I discussed above dealing with a free amount of video calls if certain handsets were bought or other arrangements were entered. The important difference in the advertisement behind tab 3 of AH1 is that the phrase "national video calls" was not used. Rather, the phrase "video calls" was used with an asterisk taking one to the foot of the page. That particular asterisk, however, did not direct the reader to the relevant comment below. However, there was, sufficiently adjacent to that which the reader was taken by this asterisk, another mark which contained adjacent to it the following: Video calls, content and some messaging services available only in video zones. 56 The applicant argued that this was an inadequate explanation because it did not tell the reader of the narrowness of the video zones. It was submitted that for the footer to be adequate it should at least make clear the limitations inherent in the use of the telephone for video calls. I do not agree. I do not think that there is any direct representation from the phrase "video calls" that the service can be availed of nationwide (which was the case in this advertisement's predecessors for the reasons I have earlier expressed). No representation, it seems to me, flows from this advertisement that the video calls were available in any particular area. Further, what is at the foot of the page made plain that there was a limitation on the coverage for video calls, content and some messaging services. The advertisement was otherwise silent as to that precise limitation. This did not make the advertisement misleading; nor did it make the information at the foot of the page meaningless, merely less than precise and less than comprehensive. tab 9 of exhibit AH1 57 This was another advertisement with an Australian film maker indicating that being on "3" is changing the way he communicates. There is a clear identification of the important advantages said to attend use of the video phone. At the top of the page there is the statement: Video calls, content and some messaging services only available in Video zones. 58 Whilst this advertisement is not dissimilar to that behind tab 10 of AH1 discussed at [37] above, I think this advertisement, in particular with this statement, is on the other side of the line and does not mislead as to coverage. tab 12 of exhibit AH1 59 This is a colour advertisement with a figure of Dracula with three teeth. The advertisement does have the statement that there will be $32 worth of video calls free every month if a particular handset is bought. There is no qualification at the foot of the page to the effect that this is only in the video zones; however, there is no statement anywhere in the advertisement of any particular coverage of Australia or internationally of these video calls. Whilst there is elsewhere used in the advertisement the phrase "national voice calls" I do not think there is any representation about video call coverage in this advertisement. I do not think it is misleading or deceptive. TC3 60 Exhibit TC3 to the affidavit of Trent Ashley Clinton Czinner sworn 25 June 2003 was the script of a revised television advertisement which contained one of the advertisements previously shown and contained in exhibit A. The change was the imposition of a superscript at the bottom stating that "content services only available in video zones in Sydney and Melbourne with other capital cities in July". Given the views I have expressed about the lack of misleading or deceptive quality of the advertisements without the superscript I need say no more about them, except that the superscript does not create any misleading impression in the way it appears. TC4 61 Exhibit TC4 to the affidavit of Mr Czinner of 25 June 2003 is again a script of a previous video which I have already dealt with, with added to it the superscript about the video zones. For the same reasons I need not deal with it. TC5 62 Exhibit TC5 to Mr Czinner's affidavit of 25 June 2003 contained scripts of video advertisements previously discussed with superscripts on them. For the same reasons I need not discuss them further and I do not consider them misleading or deceptive. R3 and R4 63 Exhibits R3 and R4 were further video advertisements none of which I find to be misleading or deceptive. Exhibit B 64 Exhibit B (confidential), a video, was tendered as confidential and was marked as exhibit B. It concerns a spectator at a cricket match. The confidence was, perhaps, doubtful; however there was nothing misleading or deceptive about it. TC6 65 Exhibit TC6 to Mr Czinner's affidavit of 25 June 2003 was an advertisement which used the expression "live video calls" with a footer which stated: Video calls, content and messaging services only available in video zones in Sydney and Melbourne, with Brisbane, Adelaide, and Perth from July. Whilst the advertisement also used the phrase "national voice calls", I do not think that with the qualification there was any misleading or deceptive statement within the advertisement or to be taken from it. Underlying the opposition to this advertisement and those like it, was the proposition that the reader would assume without the clearest statement to the contrary that live video calls were available on much the same coverage as national voice calls or other usages of the phone. I do not think that one can assume that the public would come to this advertisement with that fixed premise. As I said earlier, I think many people would assume there were coverage issues in the operation of mobile phones. Direction is made to the foot of the page where an otherwise accurate identification of limitations is made. The applicant required not only this kind of identification of limitation, but also a limitation as to the percentage numbers of people in the different cities who were covered. I disagree. I think that this statement "video zones in Sydney and Melbourne" etc is adequate to disclose generally the existence of limitations, which can be the subject of detailed enquiry if the person is interested. I do not think there is anything misleading or deceptive about this advertisement. TC8 66 Exhibit TC8 to the affidavit of Mr Czinner of 25 June 2003 was a coloured customer brochure of some ten pages including the cover. On two of the pages there is the news as to the spreading of video calls to Austria and Sweden and that there was a launch in Brisbane, the Gold Coast, Adelaide and Perth. Whilst there are some general statements on this page as to usage of the phone to foreign countries and within Australia there is on the same page in the same sized font the following note: Coverage note: Video calls, content and some messaging services are only available in Video Zones in most areas in major capital cities from July. When making an International Video call to customers of the 3 Networks overseas, the caller needs to be in Video Zone and the receiver also needs to be in Video Zone in that country. I think this adequately puts the matter in a way which is not misleading or deceptive. I do not think that there is any part of this brochure which is otherwise misleading or deceptive, in particular in the light of the part which I have just identified. TC9 67 Exhibit TC9 to the affidavit of Mr Czinner of 25 June 2003 was another coloured brochure. In a reasonably prominent place on the second page the following appears: In the 3 Network video coverage areas, you can make mobile calls, video calls, send video messages and high-speed email, get news and sports news video and lots more. Our video coverage zones are in most areas of Sydney, Melbourne, Brisbane, Adelaide and Perth. Check our coverage at www.three.com.au. You can make your usual mobile voice calls from just about anywhere. On 3 you have voice coverage in 92% of Australia's populated areas. You can make video calls to customers in video areas on other 3 networks in the UK, Italy, Austria and Sweden. Other 3 countries around the world are coming soon. 68 I do not think that there is anything misleading or deceptive about this. It is said that there has to be a more precise identification of the limits of the video coverage zones. I do not agree. I think the reader is told tolerably plainly that there are limitations on the video zones and the reader can identify those with precision if he or she wishes. 69 On another part of the brochure there are advertisements for "video calls free each month" up to a certain value if certain handsets are bought. As I have indicated earlier, once the offending adjective "national" is taken out at this point, I do not see any difficulty in particular since once again on this page there is a footer to which one is drawn by the relative asterisk indicating that: Video calls only available in Video Zones in Sydney, Melbourne, Brisbane, Adelaide and Perth. 70 I do not think that there is anything misleading or deceptive about exhibit TC9. TC10 71 Exhibit TC10 to the affidavit of Mr Czinner of 25 June 2003 is another brochure which opens out into a large double-sided glossy advertisement containing information. In the description of the network the following appears reasonably prominently: We're the first to bring 3G to Australia. One of the most advanced networks in the world. In the 3 Network Video Coverage areas, you can make mobile calls, video calls, send video messages and high-speed email, get news and sports news video and lots more. Our video coverage zones are in most areas of Sydney, Melbourne, Brisbane, Adelaide and Perth. Check our coverage at www.three.com.au. You can make your usual mobile voice calls from just about anywhere. On 3 you have voice coverage in 92% of Australia's populated areas. You can make video calls to customers in video areas on other 3 networks in the UK, Italy, Austria and Sweden, other 3 countries around the world are coming soon. 72 The applicant complains that there is insufficient particularity in the limitation there set out of the video coverage areas. That is the essential complaint involved in the proposition that this brochure is misleading or deceptive. I cannot agree. I think that anyone reading this brochure would realise that there was some real limit to the video coverage areas generally described in the brochure. Anyone who wanted the precise detail of that limitation could go to the website identified. It is no doubt true that the brochure heavily emphasises the commercial and technological advantage held by the respondent. True it is that elsewhere in the brochure it is stated that "you actually video call to friends on 3 across town or even in London". But this is in the context of the passages to which I have referred and also other parts of the brochure which identify the limitation such as the following: 3 has a great range of video and other content services that are available in video coverage zones in major capital cities. 73 On the reverse of the brochure there are offers for amounts of "video calls free" should certain types of handsets be purchased. I have already discussed these. With the adjective "national" removed I do not think that there is anything misleading or deceptive in this part of the brochure. Once again, also, the footer to this part of the advertisement identifies the restriction of video calls to video zones in Sydney, Melbourne, Brisbane, Adelaide and Perth. 74 I find nothing misleading about exhibit TC10. TC11 75 Exhibit TC11 to the affidavit of Mr Czinner of 25 June 2003 was relevantly the same as exhibit TC10 and nothing further needs to be said. TC12 76 Exhibit TC12 to the affidavit of Mr Czinner of 25 June 2003 was relevantly the same as TC10 and nothing further needs to be said. 77 The above deals with the specific advertising sought to be restrained by the applicant. 78 The applicant gave certain undertakings which were set out in the orders. I made orders for corrective advertising in the terms of order 7. The primary reason for my making the orders in the terms there identified was that on the evidence I concluded that the advertising, which was false, had been widespread and repetitive. The public had been subjected to a well planned and expensive advertising campaign, no doubt to obtain maximum advantage in market share whilst the technical and commercial advantage rested with the respondent, an aim, in itself, that was legitimate. 79 The advertisements contemplated by order 7 were large and were to be repeated. In all the circumstances, I thought it appropriate to make orders of that kind where inaccurate, well funded and directed advertising takes places emphasising a particular commercial advantage. 80 It was put by the applicant on a number of occasions that the disclaimers identifying "video zones" were meaningless and therefore irrelevant. I do not agree. I think the footnote qualifications used by the respondent in the advertisements which I have found not to be misleading or deceptive were sufficiently clear as to put any reader on notice of the existence of some limitations, the precise extent of which could be the subject of further enquiry. 81 Significant parts of the applicant's submissions emphasised the effective comparative nature of the advertising. Whilst it was recognised that there was no direct comparison, it was said that the heart of the campaign the statement of an advantage over other mobile phones and thus an implicit comparison. I think there is force in the proposition that there was a degree of implicit comparison. However, I have taken that into account in assessing whether any of the advertisements which I have found not to be misleading or deceptive were such. I have not applied any special rule to these advertisements on the basis that they are comparative: Stuart Alexander & Co (Interstate) Pty Ltd v Blenders Pty Ltd (1981) 37 ALR 161, 163 and Gillette Australia Pty Ltd v Energizer Australia Pty Ltd (2002) 193 ALR 629. Nevertheless, in stating its advantage the respondent is required not to mislead or deceive. It has some on occasions; it has not on others. 82 Also, it was submitted that some of the brochures were plainly replacements for others which had (as I have found) a misleading or deceptive quality to them. Thus, in dealing with exhibit TC9 the point is made that the earlier brochure having been misleading in its detail would mean that fewer people were likely to read the detail of this brochure. I do not think one can conclude from the evidence that the later brochures which I find to be inoffensive would not be read in detail because of the previous misleading conduct. In any event, the orders which I made for corrective advertising were designed to correct any misunderstanding caused by the earlier advertisements. 83 It was said that the reference to major capital cities was also misleading, because it did not include Canberra, Darwin and Hobart. I have set out the various disclaimers (for want of a better expression) earlier in this judgment. Sometimes the expression "other capital cities" is used, sometimes "major capital cities" is used. I think neither is misleading. To the extent that it is left vague, it is certainly clear that some capital cities are left out. There may be a lack of clarity, and there may be offence to State or Territorial pride, but I do not think that creates a misleading or deceptive communication. 84 I should say that in coming to the conclusions I have, I have given virtually no weight to the fact that there is available on the internet the precise coverage and the fact that, if it be the case, there is the real possibility of point of sale clarification. If I had found any of the advertisements misleading or deceptive or likely to mislead or deceive I would have restrained them, irrespective of any accuracy on the website, and irrespective of any point of sale clarification being a possibility or a probability. 85 Submissions were made as to the deliberateness of the respondent's conduct. In essence the applicant submitted that the respondent's conduct was deliberate and calculated to mislead. That may be putting the submission too high, but as I apprehended, that was what was intended. I think the submission goes too far. I have no doubt that the respondent was quite deliberate in how it drafted its advertising. I think it probably took a risk in the advertising which I have found to be misleading or deceptive. I do not think that the conduct of the respondent was dishonest. Rather, I think that a more balanced and common sense approach to the initial advertising campaign would have dictated a more cautious approach. 86 As to costs, I have indicated to the parties that I would hear them after these reasons were delivered. In order to assist the parties in considering the matter I think it appropriate that I make these preliminary comments. I have examined the correspondence between the parties and considered the nature of the matters which I have found to be misleading or deceptive with some care. As I have said above, I do not think that the conduct of the respondent was dishonest. However, I do think that it probably took a risk in its advertising getting as close to what it thought to be the limit of what was appropriate in order to maximise its commercial advantage. 87 A more prudent view came to be exhibited after the complaints which led to the interlocutory hearing. The respondent had substantial success on the advertisements amended to take account of the evident deficiencies of the earlier advertising. That does not mean, it seems to me, that the respondent should be the beneficiary of an order for costs as to debate over these later advertisements. Its conduct brought this matter to court. The interlocutory hearing was necessary. The respondent should pay all of the costs of the interlocutory hearing and its preparation. Its conduct changed thereafter. However, litigation, once begun, in particular between close commercial rivals, is difficult to stop. Whilst I have not found the later advertising, in large part, to be misleading or deceptive I think that, in all the circumstances, including the conduct of the applicant in taking the risk which I think it did, a fair and appropriate regime for costs is that the respondent pay the applicant's costs of the interlocutory hearing and one half of the applicant's costs of the final hearing. These views are not final and I will hear the parties about them. I certify that the preceding eighty seven (87) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop. Associate: Dated: 19 September 2003 Counsel for the Applicant: Mr J T Gleeson SC Mr M Darke Solicitor for the Applicant: Minter Ellison Counsel for the Respondent: Mr S Finch SC Mr R Cobden Solicitor for the Respondent: Allens Arthur Robinson Dates of Hearing: 26 and 30 June, 1 and 4 July 2003 Dates of Orders: 4 July and 8 July 2003 Date of Delivery of Reasons: 19 September 2003