FEDERAL COURT OF AUSTRALIA Foxtel Management Pty Ltd v Australian Video retailers Association Limited [2005] FCA 107 PRACTICE AND PROCEDURE – findings previously made as to misleading and deceptive conduct against respondent and cross-respondent – issues as to consequential relief – submission of one party that corrective advertising should not be ordered against either party – limited scope of consequential relief ordered FOXTEL MANAGEMENT PTY LTD v AUSTRALIAN VIDEO RETAILERS ASSOCIATION LIMITED (NOW AUSTRALIAN VIDEO RENTAL RETAILERS ASSOCIATION) N 1054 OF 2004 CONTI J 16 FEBRUARY 2005 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1054 OF 2004 BETWEEN: FOXTEL MANAGEMENT PTY LTD APPLICANT AND: AUSTRALIAN VIDEO RETAILERS ASSOCIATION LIMITED (NOW AUSTRALIAN VIDEO RENTAL RETAILERS ASSOCIATION LIMITED) RESPONDENT AUSTRALIAN VIDEO RETAILERS ASSOCIATION LIMITED (NOW AUSTRALIAN VIDEO RENTAL RETAILERS ASSOCIATION LIMITED) CROSS-CLAIMANT FOXTEL MANAGEMENT PTY LTD CROSS-RESPONDENT JUDGE: CONTI J DATE OF ORDER: 16 FEBRUARY 2005 WHERE MADE: SYDNEY ORDERS THE COURT ORDERS THAT: 1. Orders 1 and 3 made on 8 December 2004 on an interim basis be discharged. 2. AVRA be and is hereby restrained from further publishing and distributing and causing to be published and distributed by any means (including without limitation at AVRA's website at www.avra.com.au): (i) each of the three sets of advertising material attached to the Court's reasons for judgment published on 8 December 2004; and (ii) any material containing or making representations to the effect of those representations contained in those three sets of advertising materials and found by the Court to be misleading and deceptive. 3. Within 28 days AVRA deliver up on oath to Foxtel or its nominated agent, for destruction under the supervision of Foxtel: (i) all materials constituting or forming part, or which have previously formed part of, AVRA's 'pro rental kit' (that is, similar to Exhibit A6 in the proceedings), which are in its possession, custody or control; and (ii) all other advertisements, pamphlets and other documents or materials in any form (whether electronic or hard copy) in its possession, custody or control containing any representation to the effect of those the subject of the three sets of advertising materials annexed to the Court's reasons for judgment published on 8 December 2004. 4. AVRA pay Foxtel's costs of the proceedings to date, other than those the subject of AVRA's cross-claim, such costs to be taxable and payable within fourteen days of taxation. 5. AVRA have liberty to apply in relation to the scope of Order 3 above. 6. Foxtel be and is hereby restrained from further distributing and publishing advertisements in relation to Foxtel's Box Office service in or to the effect of the following: (i) page 4 of the 'Welcome to the Revolution' brochure as distributed to members of the public on or about 26 March 2004 (being referred to in par 105 of the Court's reasons for judgment published 8 December 2004); (ii) page 5 of the 'Television Revolution is Coming' brochure as distributed to members of the public on or about February 2004 (being referred to in par 106 of the Court's reasons for judgment published 8 December 2004); (iii) the first two paragraphs of page 2 of the Lift-Out Advertisements which appeared in the 'Herald Sun' newspaper and 'Adelaide Advertiser' newspaper on 17 March 2004 and in the Brisbane 'Courier Mail' newspaper on 18 March 2004 (being referred to in par 107 of the Court's reasons for judgment published 8 December 2004); (iv) page 6 of the extract from Foxtel's website at www.foxtel.com.au as at 26 June 2004 (being referred to in par 108 of the Court's reasons for judgment published 8 December 2004); and (v) the so-called 'movie availability misrepresentation' and 'comparison misrepresentations' the subject of the 'Television advertisement' identified by key number FXTBR1624 (being referred to in par 110 of the Court's reasons for judgment published 8 December 2004). 7. Foxtel pay AVRA's costs of the cross-claim of AVRA in the proceedings, such costs to be taxable and payable within fourteen days of taxation. 8. Foxtel have liberty to apply in relation to the scope of Order 6 above. 9. The matter be listed for directions as to pursuit of the parties' respective claims as to damages on 3 March 2005 at 4.20pm. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1054 OF 2004 BETWEEN: FOXTEL MANAGEMENT PTY LTD APPLICANT AND: AUSTRALIAN VIDEO RETAILERS ASSOCIATION LIMITED (NOW AUSTRALIAN VIDEO RENTAL RETAILERS ASSOCIATION LIMITED) RESPONDENT AUSTRALIAN VIDEO RETAILERS ASSOCIATION LIMITED (NOW AUSTRALIAN VIDEO RENTAL RETAILERS ASSOCIATION LIMITED) CROSS-CLAIMANT FOXTEL MANAGEMENT PTY LTD CROSS-RESPONDENT JUDGE: CONTI J DATE: 16 FEBRUARY 2005 PLACE: SYDNEY REASONS FOR FINAL RELIEF Background 1 On 8 December 2004, I gave reasons for judgment in these proceedings, and made interim orders. In these reasons I will adopt the same abbreviations as appear in those reasons. On 20 December 2004 I was provided with extensive submissions in writing by both parties as to the form of relief which should be put in place on the claim and cross-claim. Subsequently on 3 February 2004, I gave directions for determination of the scope of the final relief which should be granted in conformity with my reasons for judgment of 8 December 2004. Those directions, and my reasons therefor, extended over some 11 pages, and need to be read by way of preliminary context to my reasons for final relief now to be published. 2 Subsequently the issues as to the final relief, relating both to the claim and cross-claim, were the subject of a hearing before the Court on 9 February 2005, concerning which I was provided with the following written material, in addition to the oral submissions made on behalf of both parties on that day: (i) Supplementary submissions of AVRA on final orders dated 9 February 2005, which, without abandoning its principal position as set out in its written submissions of 20 December 2004, annexed draft short minutes of order purporting to give effect to my reasons of 3 February 2005; (ii) Two variants of Foxtel's draft short minutes of order both prepared on 9 February 2005, to which suggested corrective text and an accompanying letter to be provided by AVRA, and a suggested correction to be placed on Foxtel's website were attached to the second; an alternative to the injunction against Foxtel in both variants was also received from Foxtel's solicitors on 10 February 2005; (ii) Further supplementary submissions of AVRA as to form of relief dated 10 February 2005; and (iv) Submissions of Foxtel dated 11 February 2005 in reply to AVRA's further supplementary submissions as to the form of relief. 3 Hence it may be seen that the parties have presented the Court with a somewhat complex task of adjudication upon the terms of appropriate relief, each adopting both primary and 'fall back' or secondary positions. 4 Foxtel's updated primary position concerning the grant of relief generally in the proceedings is that there should be no order for corrective advertising made against either party. In that regard, counsel for Foxtel pointed out that some eleven months had elapsed since the majority of the conduct of Foxtel complained about, except for 'one or two small statements very deep in a website that might have been there until June of which there is no evidence… which was seen by people because… our advertising took place in February and March 2004'. As to the offending posters, display etc material produced by AVRA and sent by AVRA to and displayed by video stores, Foxtel sought delivery up on oath of all such material in the possession or control of AVRA, along the lines of the familiar text commonly imposed by courts in the circumstances of offending pamphlets, hoardings and like advertising or promotional media. 5 In the event that AVRA would not agree that there should be no order as to corrective advertising against both parties, and of course by Foxtel in particular, Foxtel's second set of draft orders sought the following corrective advertising, additionally of course to delivery up of the offending material still in AVRA's possession: '4. The respondent, at its own expense, cause to be published in the industry magazine prepared on its behalf a notice occupying one full page in the form annexed to these orders and marked "A" (the "Corrective Text"). 5. The respondent is to cause to be printed, and to distribute not later than 25 February 2005, one "A1" poster which bears the Corrective Text (the "Corrective Poster") to each video store or video store operator to whom at least one Pro Rental Kit was distributed. The Corrective Poster is to be accompanied by a letter from the respondent in the form annexed to these orders and marked "B" (the "Accompanying Letter") that requests that that video store or video store operator display the Corrective Poster in their video/DVD store. 6. The respondent, within 28 days of the date of the orders, at its own expense, is to cause to be published on its website at www.avra.com.au (the "Respondent Website") a notice in the form of the Corrective Text as follows: (a) the Corrective Text should appear in an automatically generated active pop-up window or message box, whereby a member of the public is required to interact with the window or message box to close it, where such window or message box is automatically generated when a member of the public accesses that section of the Respondent Website entitled "Members" at http://www.avra.com.au/members.php; (b) the Corrective Text should be legible and the type should be at 12 point Time New Roman font and be right and left justified; (c) the notice should have a bold type heading of at least 14 point; (d) the Corrective Text should, when the window or message box appears on screen, be not less than 20% of the size of the screen; (e) the Corrective Text should remain in place in the manner provided in (a) above for a continuous period of not less than 28 days. 7. The respondent pay the applicant's costs of its claim in the proceedings to date, such costs to be taxable and payable forthwith.' Foxtel provided drafts of that so-called Corrective Text the subject of each of those media, which are not necessary to reproduce. 6 AVRA was unmoved by Foxtel's open offer as to mutual compromise as to the scope of relief namely in relation to no corrective orders being made against either party, and sought orders as to corrective advertising by Foxtel in any event, such advertising to be prominently placed on Foxtel's website and in Foxtel's industry magazine. AVRA raised no objection to publishing corrective advertising on its website and in its own magazine, however to my perception on the footing implicitly that there would be corrective advertising ordered against Foxtel. 7 There is substance in Foxtel's submission to the effect that the corrective advertising sought by AVRA was excessive, and tended to continue to create the impression, earlier effected by AVRA publicity, that AVRA had achieved a substantial vindication by the outcome of the proceedings (I have earlier made a critical observation in that regard in relation to AVRA's unfortunate news release of 8 December 2004). If any comparison may be made as to the advertising of AVRA the subject of Foxtel's upheld complaints with that of the two segments of advertising of Foxtel the subject of AVRA's upheld complaints, those offending representations promoted by AVRA tended to be significantly more confrontational than the offending representations of Foxtel. Taking a broad conspectus of the material the subject of my findings made adversely to AVRA in my reasons for judgment of 8 December 2004, I have a concern that AVRA's present proposals as to corrective advertising by Foxtel, as Foxtel has submitted, tend to reflect a measure of continuation of efforts on the part of AVRA to achieve a vindication from the outcome of the proceedings to an extent beyond what is commensurate to the findings which I have established in AVRA's favour. Given however my disinclination to make corrective orders against Foxtel, I will not as already foreshadowed make corrective orders conversely against AVRA, despite my earlier inclination to do so. 8 However I see no good reason why AVRA should not be subjected to the usual orders as to delivery up of all of the offending AVRA advertising still subject to its possession or control. AVRA had been already able to passively receive the strategic advantage of advertising wrongly adverse to Foxtel, in a real sense with impunity, by reason of having sold and delivered its offending advertising material to its numerous member owned or controlled stores, as well as to some non-member owned or controlled stores, thereby inhibiting Foxtel's capacity to physically recover that material, short of incurring the massive cost and expense of taking proceedings against numerous video store proprietors. I see no good reason why AVRA should not be subjected at least to delivery up for destruction offending material for which it has no longer any legitimate use. 9 Having given the matter some thought, I think that the approach in principle as to my withholding of relief by way of corrective advertising against both parties, as put forward by Foxtel, should be upheld as a fair, realistic and equitable one, and I will make final orders accordingly. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. Associate: Dated: Counsel for the Applicant: R Cobden with C Dimitriadis Solicitor for the Applicant: Allens Arthur Robinson Counsel for the Respondent: RJ Weber SC with IR Pike Solicitor for the Respondent: Gadens Lawyers Date of Hearing: 9 February 2005 Date of Judgment: 16 February 2005