Energizer Australia Pty Ltd v Remington Products Australia Pty Ltd (No 2) [2008] FCA 171

FEDERAL COURT OF AUSTRALIA

Energizer Australia Pty Ltd v Remington Products Australia Pty Ltd (No 2) [2008] FCA 171

ENERGIZER AUSTRALIA PTY LIMITED ACN 003 539 026 v REMINGTON PRODUCTS AUSTRALIA PTY LIMITED ACN 007 070 573 NSD 2354 OF 2007

MOORE J

27 FEBRUARY 2008

SYDNEY IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 2354 OF 2007

BETWEEN: ENERGIZER AUSTRALIA PTY LIMITED ACN 003 539 026

Applicant

AND: REMINGTON PRODUCTS AUSTRALIA PTY LIMITED ACN 007 070 573

Respondent

JUDGE: MOORE J

DATE OF ORDER: 27 FEBRUARY 2008

WHERE MADE: SYDNEY

THE COURT ORDERS THAT:

1. The respondent's application, made orally on 12 February 2008, that the applicant's notice of motion, filed 1 February 2008, be stayed or dismissed, is dismissed.

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 NSD 2354 OF 2007

BETWEEN: ENERGIZER AUSTRALIA PTY LIMITED ACN 003 539 026

Applicant

AND: REMINGTON PRODUCTS AUSTRALIA PTY LIMITED ACN 007 070 573

Respondent

JUDGE: MOORE J

DATE: 27 FEBRUARY 2008

PLACE: SYDNEY

REASONS FOR JUDGMENT 1 I gave judgment in this matter on 14 December 2007 in the sense that I made final orders. I published reasons on 8 February 2008: Energizer Australia Pty Ltd v Remington Products Australia Pty Ltd [2008] FCA 58. The applicant, by notice of motion (filed 7 February 2008) has commenced contempt proceedings against the respondent. The applicant has also sought, by notice of motion (filed 1 February 2008), what it characterises as a supplemental order in the proceedings in which judgment was given on 14 December 2007. The respondent has raised several threshold issues concerning the notice of motion filed on 1 February 2008. The respondent contended that I do not have jurisdiction to deal with the notice of motion for the supplemental order, and in the event that I do have jurisdiction to deal with this notice of motion, I should not deal with it until the notice of motion for contempt has been determined. 2 To provide the context for the discussion of this contention, it is necessary to set out the terms of the orders made on 14 December 2007, particulars of the alleged contempt, and the terms of the supplemental order sought by the applicant. The orders made on 14 December 2007 were: 1. In these orders: (a) Current High Energy Varta AA and AAA Batteries shall mean Varta High Energy AA and AAA batteries having the performance characteristics of those batteries made in Germany and supplied by the Respondent in Australia as at the date of these orders; (b) Current Varta High Energy Packaging shall mean packaging in the form of the packaging in which Current High Energy Varta AA and AAA Batteries are supplied in Australia as at the date of these orders with the sticker containing the words "Lasts As Long As Energizer & Duracell"; (c) Current Varta High Energy Billboard shall mean a billboard in the form of the billboard advertising the Current Varta High Energy AA and AAA Batteries as at the date of these orders and containing the words "Lasts As Long As Energizer & Duracell"; (d) Current Varta High Energy Promotional Material shall mean any promotional material other than packaging or billboards but including without limitation trade banners and instore bin and shelf materials advertising the Current Varta High Energy AA and AAA Batteries and containing the words "Lasts As Long As Energizer & Duracell"; (e) Energizer Max shall mean Energizer Max AA and AAA batteries having the performance characteristics of those batteries supplied by the Applicant in Australia as at the date of these orders; and (f) Duracell CT shall mean Duracell CT or Duracell CopperTop AA and AAA batteries having the performance characteristics of those batteries supplied in Australia as at the date of these orders. 2. Order that on and from 23 January 2008 the Respondent whether by its servants or agents or otherwise be permanently restrained from supplying or distributing Current Varta High Energy AA or AAA Batteries in Current Varta High Energy Packaging. 3. Order that on and from 21 December 2007 the Respondent whether by its servants or agents or otherwise be permanently restrained from exhibiting or causing to be exhibited or permitting to be exhibited any Current Varta High Energy Billboard. 4. Order that on and from 4.00pm on 17 December 2007 the Respondent whether by its servants or agents or otherwise be permanently restrained from supplying or distributing any Current Varta High Energy Promotional Material. 5. Order that on and from 23 January 2008 the Respondent whether by its servants or agents or otherwise be permanently restrained from making any representation in trade or commerce that or to the effect that Current Varta High Energy AA or AAA Batteries last as long as Energizer or Duracell. 6. Note that it shall not be a breach of the previous order to make a representation in trade or commerce that or to the effect that Current Varta High Energy AA or AAA Batteries last as long as Energizer Max or Duracell CT. 7. Order that the Respondent by 21 December 2007 issue instructions to the head offices of all retail stores in which the Current Varta High Energy Promotional Material is displayed to remove from that material the words "Lasts As Long As Energizer & Duracell". 8. Costs be reserved. 9. Reserve for later determination, if necessary, any question of damages. 3 At the hearing on 14 December 2007, I decided not to make the following two orders sought by the applicant: 11. Order that on and from 19 December 2007 the Respondent use its best endeavours to remove the sticker containing the words "Lasts As Long As Energizer & Duracell" or oversticker that sticker on all Current Varta High Energy Packaging located in retail stores and in any event ensure that by no later than 29 January 2008 all such stickers on such stock are removed or overstickered. 12. Order that on and from 19 December 2007 the Respondent use its best endeavours to remove or oversticker all Current Varta High Energy Promotional materials wherever located and in any event ensure that by no later than 29 January 2008 all materials are removed or overstickered. 4 The particulars of the contempt are: Contrary to the terms of Order 5 on and since 23 January 2008 the respondent represented in trade or commerce that or to the effect that Current Varta High Energy AA or AAA Batteries last as long as Energizer or Duracell. Particulars The conduct is evidenced by the observations of batteries containing the "Lasts as long as Energizer & Duracell" sticker claim (Old Stocker) on each of the occasions identified in the following affidavits: A list of 43 instances then appears. 5 The applicant submitted that the contempt arises, at least in part, because order 5 required the respondent to remove from display (or procure their removal) thepackets of its batteries which display misleading promotional information. That the order has this effect is said to arise from the judgment of the Full Court in Barton v Croner Trading Pty Ltd (1984) 3 FCR 95. 6 The supplemental order originally sought was: 1. Order that, including in order further to comply with paragraph 5 of the Orders made on 14 December 2007, the Respondent: (a) forthwith take all available and lawful steps: (i) to have removed from public display, by such date to be determined by the Court during February 2008, all Current Varta High Energy AA or AAA Batteries in Current Varta High Energy Packaging in retail stores to which it has supplied Current Varta High Energy AA or AAA Batteries in Current Varta High Energy Packaging; (ii) alternatively to sub-paragraph (i), to oversticker (or other obliterate or conceal from view) before a date to be determined by the Court during February 2008 the sticker on any and all Current Varta High Energy Packaging in so far as it contains the words "Lasts as Long as Energizer & Duracell"; (b) on or before a date to be determined by the Court during February 2008 send (by facsimile or courier) in the form of annexure A to the retailers to which it any time in the period from 1 August 2007 to date supplied Current Varta High Energy AA or AAA Batteries in Current Varta High Energy Packaging; (d) on or before a date to be determined by the Court during February 2008 file and serve an affidavit made by an officer with knowledge of and fully detailing the steps taken by the Respondent pursuant to paragraphs 1(a) to (b) above. 2 The respondent pay the applicant's costs of this motion. 7 The applicant has since indicated that it does not seek to have, in any order made, the words "including in order further to comply with paragraph 5 of the Orders made on 14 December 2007". 8 Before embarking on a discussion of the specific legal issue addressed in this judgment, I should indicate that it is inappropriate, in my opinion, for me to deal further with the contempt proceedings. There is a view that it is inappropriate for a judge who made orders to determine subsequently whether there has been non-compliance with them amounting to contempt. Whether, as a matter of principle, this is so in any case involving allegations of contempt is a matter I need not address. The unusual circumstances in which I made the orders on 14 December 2007, as mentioned in my reasons published on 8 February 2008, lead me to believe that it is inappropriate for me to determine whether the respondent was obliged to act as alleged by the applicant having regard to order 5, particularly when I declined, on that day, to make a specific order directed to the same or substantially the same matter. 9 Accordingly, I confine my consideration to whether I can proceed to deal with the application of 1 February 2008. The respondent referred to a number of authorities in support of the proposition that the contempt application must be determined separately and prior to any other application. The first was Australian Building Construction Employees' and Builders Labourers' Federation v David Syme & Co Ltd (1982) 40 ALR 518. In that matter, the trial judge had dealt with an allegation of contempt by a newspaper publisher who was alleged to have published editorial comment which was said to constitute a wrongful interference with the due administration of justice. The trial judge dismissed the contempt application. The trial judge had also considered an application for injunctive relief restraining the publisher from making comments to the same effect. That application was also dismissed. In an appeal, the Full Court deprecated the process of hearing concurrently what was styled as criminal contempt proceedings with the proceedings for injunctive relief. The Full Court said nothing about the sequence in which such applications should be heard. 10 The next authority was New South Wales Bar Association v Muirhead (1988) 14 NSWLR 173, in which the New South WalesCourt of Appeal dismissed an application for summary dismissal of contempt proceedings. In the contempt proceedings the applicant had also sought injunctive relief preventing the alleged contemnor from engaging, in the future, in conduct which was said to have constituted the contempt. The details of the case are irrelevant. It is sufficient to note that each member of the Court of Appeal made observations similar to those made by the Full Court in Australian Building Construction Employees' and Builders Labourers' Federation v David Syme & Co Ltd concerning the inappropriateness of joining proceedings alleging contempt with proceedings seeking injunctive relief. Again, the members of the Court of Appeal said nothing about the sequence in which the two types of proceeding should be heard. 11 The third authority, Lazar v Taito (Australia) Pty Ltd (1985) 5 FCR 395 was another judgment of a Full Court of this Court. In Lazar, the appellant had been committed to prison for three months for contempt of court. One of the challenges to the finding of contempt was that the trial judge had erroneously entertained an application that the appellant and others lodge the proceeds of the sale of property with the court. Two members of the Court again referred to Australian Building Construction Employees' and Builders Labourers' Federation v David Syme & Co Ltd and referred to the inappropriateness of the claim for a civil remedy being heard with the contempt application. The last authority was a judgment of a single judge of this Court referring to the second and third authority and repeating the principle that proceedings for injunctive relief should not be joined with contempt proceedings: (Re Michael Francis Buggy and Leonie Frances Buggy Ex Parte: Robert William Morton v Canoona Pty Limited; Ronald David Silverstein and Ronald Edward Eggert [1991] FCA 293). 12 The essence of the respondent's contention, is that the quasi-criminal contempt proceedings (see Witham v Holloway (1995) 183 CLR 525) should proceed before the arguably related civil proceedings for the supplemental order. At base, this contention involves the application of a principle akin to what used to be described as the "felony tort rule" and at least implicitly an application to stay the application for the supplemental order. Issues of this kind arise from time to time when there are both criminal and civil proceedings on foot arising from the same factual matrix. It was an issue that was considered comparatively recently, and at some length, by Mansfield J in Guglielmin v Trescowthick (No 3) (2005) 220 ALR 535 at [8] to [21]. In short, Mansfield J recognised that the Court has a discretion to determine whether to stay the civil proceedings. It is generally accepted that considerations which might guide the exercise of the discretion are set out in an earlier judgment of French J. At [9] of his reasons, Mansfield J said: … in Olbers Co Ltd v Commonwealth of Australia (No 2)[2003] FCA 177 at [19] (Olbers), French J provided a list of criteria relevant to determining whether to stay a civil proceeding where there is a criminal proceeding extant against a party to the civil proceeding and the proceedings arise largely out of common circumstances. In Olbers at [19] his Honour said: 1. Prima facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the Court; 2. It is a grave matter to interfere with such an entitlement; 3. The burden is on the defendant, in a civil action, to show that it is just and convenient that the plaintiff's ordinary rights be interfered with; 4. Neither an accused nor the Crown is entitled as of right to have a civil proceeding stayed because of pending or possible criminal proceedings; 5. The Court's task is one of "the balancing of justice between the parties", taking account of the relevant factors; 6. Each case must be judged on its own merits and it would be wrong and undesirable to attempt to define in the abstract what are relevant factors; 7. One factor to take into account when there are pending or possible criminal proceedings is what is sometimes referred to as the accused's "right of silence", and the reasons why that right, under the law as it stands, is the right of a defendant in a criminal proceeding; 8. The plaintiff in a civil action is not debarred from pursuing action in accordance with the normal rules simply because to do so would, or might, result in the defendant, if he wished to defend the action, having to disclose what his defence is likely to be in the criminal proceedings; 9. The Court should consider whether there is a real and not merely notional danger of an injustice in the criminal proceedings; 10. In this respect factors which may be relevant include: (a) the possibility of publicity that might reach and influence jurors in the civil proceedings; (b) the proximity of the criminal hearing; (c) the possibility of a miscarriage of justice, either because the disclosure of the defence allows the fabrication of evidence by the prosecution witnesses or interference with defence witnesses; (d) the burden on the defendant preparing for both sets of proceedings; (e) whether the defendant has already disclosed his defence to the allegations; and (f) the conduct of the defendant. 11. The effect on the plaintiff must also be considered and weighed against the effect on the defendant; and 12. In an appropriate case the proceedings might be allowed to proceed to a certain stage and then be stayed.' It is trite to note the observation in par 6 of that quotation that each case must be judged on its own merits and in its particular circumstances. 13 In these proceedings, the respondent identified two matters which warranted the stay of the application for the supplemental order. The first is that the application would involve the construction of order 5 made on 14 December 2007, alleged non-compliance with which is said to give rise to the contempt. The second is that the respondent may have to make forensic decisions about what evidence to lead or to test in the application for the supplemental order. Those decisions may compromise its capacity to defend the contempt proceedings. 14 As to the first matter, the applicant has said, and I presently accept, that the application for the supplemental order can proceed on the basis that order 5 did not require the respondent to take any of the steps contemplated by the supplemental order. However, it may transpire that this assumption is not correct. If, and when, the construction of order 5 becomes an issue in the application for the supplemental order, I can review my decision not to stay that application. 15 Similarly, it is not apparent to me (and no particulars or examples were provided) that evidence the respondent might wish to lead or test would be evidence that is likely to arise in the application for the supplemental order. The fact that Varta High Energy battery packaging is misleading has already been determined. Findings of fact, although expressed broadly, have already been made that the deceptive packaging continued to be displayed in retail outlets after 28 January 2008. If it transpires that there is a factual dispute about other matters and the existence or non-existence of particular facts forms part of the respondent's defence in the contempt proceedings, it may be necessary to review the question of whether the supplemental order application should be stayed. 16 Accordingly, I am not presently satisfied that it is appropriate to stay the application for the supplemental order. This conclusion leads to a consideration of whether I have jurisdiction to make the order sought which raises the question of whether, in truth, it is a supplemental order. I earlier noted that on 14 December 2007 I refused to make an order broadly similar in effect to the order now sought, although the timeframe in which the earlier proposed order was to operate was different. The leading authority on the jurisdiction of this Court to make supplemental orders is Caboolture Park Shopping Centre Pty Ltd (In Liquidation) v White Industries (Qld) Pty Ltd (1993) 45 FCR 224. The rationale and scope of that jurisdiction was conveniently discussed by Drummond J in Australian Competition and the Consumer Commission v The Shell Company (1997) 72 FCR 386 (at 395): Common law superior courts of record do not become functus officio merely upon the making and entry of the judgment or order that determines the rights of the parties: they retain power in the same suit to make supplemental orders thereafter, not limited to orders in aid of the enforcement and working out of the orders determining the rights of the parties, but including orders affecting persons who are not parties to the litigation; the Federal Court has these same ancillary powers. See Caboolture Park Shopping Centre Pty Ltd (In Liquidation) v White Industries (Qld) Pty Ltd (1993) 45 FCR 224 at 235 and Darling Downs Investments Pty Ltd v Ellwood (1988) 18 FCR 510 at 521 and 525-526. This Court's ancillary powers flow from its authority under ss 22 and 23 to resolve the whole of each controversy that comes before it. 17 Other authorities to similar effect are supportive of the existence of jurisdiction to make supplemental orders (see Owston Nominees No 2 Pty Ltd v Branir Pty Ltd(2003) 129 FCR 558 at [19] per Allsop J; Tenju v Henneberry & Associates Pty Ltd (No. 2) [2000] FCA 1271 at [19]; Kelly v The Public Trustee [2007] NSWSC 1485). 18 I am satisfied that I have jurisdiction to make the proposed supplemental order sought by the applicant. 19 The fact that I refused to make an order on 14 December 2007 which has a broadly similar effect as the proposed supplemental order does not, in my opinion, affect my jurisdiction to make it. This fact may bear upon whether I should, as a matter of discretion, make the proposed order and may also have legal consequences regarding the capacity of the applicant to pursue the application. But these matters do not bear upon my jurisdiction. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.