Australian Coarse Grain Pool Pty. Ltd. v Barley

Federal Court of Australia|1985-06-20|Before: Moriing J, Morling J

CATCHWORDS Trade Practices - misleading conduct - slander of goods - applicant's product used in respondent's advertising campaign - whether such use constitutes misleading conduct - whether malicious - no overlap

Trade Practices Act 1974, sub-s.52(1); para. 53(a); s.55

Australian Coarse Grain Pool Pty. Ltd. v Barley Marketing Board of Queensland (1982) 46 ALR 398

DECOR CORPORATION PTY. LIMITED v BO-WATER SCOTT LIMITED

BETWEEN : DECOR CORPORATION PTY. LIMITED Applicant AND: BO-WATER SCOTT LIMITED Respondent ORDERS JUDGE MAKING ORDERS : Morling J. DATE OF ORDERS : 20 June 1985

The applicant 1s to pay the costs of the application for interlocutory relief, including

The order for confidentiality made by Smithers J. on 18/6/1985 be continued, and expanded by interpolating in paragraph 4, after the words "untal further order" the following: "paragraphs 21 and 22, (and the information

BETWEEN : DECOR CORPORATION PTY. LIMITED Applicant AND: BO-WATER SCOTT LIMITED Respondent MORLING J. 20 June 1985

This 1S an application for interlocutory relief in proceedings in which the applicant seeks to restrain the respondent from showing or causing to be shown, on television, advertisements in a large-scale advertising campaign to promote

one of the respondent's products, namely a new brand of toilet

The applicant manufactures and sells a large range of high quality products, including homewares, gardenware, laghting, office products and specialty wine products. It isa market leader in its field in Australia and has won many awards for design and manufacturing excellence. All of its products are made from durable plastic material. One of its products is

a wine cooler, known as the Decor BYO wine bottle-cooler. The

evidence presently before the Court makes out a strong case that this wine cooler is a fine example of an innovative product of excellent deign. It was first marketed some 51x years ago and has met with considerable market success. It received the Australian Design Award in 1979 and in 1980 won the Prince Phillip Design Award for Australia in the consumer section. Such is the distinction of the product that in 1983 it was placed in the permanent collection of the New York

Advertising of the wine cooler has been and 1s wide- spread throughout Australia. The applicant has expended a large sum of money 1n promoting the cooler and its other products. In promoting the wine cooler, the applicant relies on its high quality. It claims that the cooler has acquired a very high reputation for utility and quality of manufacture. This claim, so far as the evidence presently stands, is unchallenged. The applicant has put other products onto the market to capitalize on the success of the wine cooler. These additional products include the Decor Icicle, which 1s an insulated wine cooler, the Decor Winewell, which is an iceless

The respondent manufactures and sells toilet paper under the name Sorbent toilet tissue. It plans to promote a new brand of this product by an extensive television

advertising campaign which 1s due to commence on Monday next.

It 15 proposed to use four short television films in the advertising campaign. The first two of these films are shot in a restaurant where a couple arrive holding a BYO cooler, with the letters BYO prominently displayed on the cooler. When at the table to which they are shown, a waiter removes the top of the cooler and 1s taken aback by the sight of a roli of Sorbent

toilet paper. The advertisement then proceeds with its theme

The two films are in substantially the same form, but one is somewhat shorter than the other. The third film which it is proposed to use in the advertising campaign shows a guest arriving at a party. On arrival he is greeted by his hostess who takes his coat. The coat has been concealing a roll of the respondent's toilet tissue. The fourth film shows an architect travelling in a lift and laden with a bundle of architectural plans. 3 roll of toilet paper falls from the Bbundie and comes to rest at the foot of a young woman. In all the advertiserents much 13 made of the statement that people should "brings their own" toilet paper. The message common to

all the films is that viswers should use the respondent's brand

of toilet parer, so as to ensure that they have the best

diceics.. his compary 215 extremely concerned about what he

cal. cemigrati: cf25 _ts product by the respondent's use of

the wine cooler in the advertisements. He feels the films will damage the applicant if they are shown on television. He fears that people seeing the films will be deterred from buying the applicant's wine cooler. It 15 the applicant's intention to mount its own advertising campaign in the near future to promote its own products. Mr Feely is concerned that should the respondent's advertisements be shown on television more or less contemporaneously with the applicant's advertisements, the

result will be that his company's products will be ridiculed.

There is some evidence that it is the accepted practice in the advertising industry that where one organisation seeks to utilise a product, brand, logo or trademark belonging to another organisation to support the promotion and advertising of the former's product, it seeks the latter's permission to do so. There is other evidence that it is only when a trademark or logo is used that consent 158 sought, and that consent is not sought when another trader's

products are used merely as props in films without displaying a

It 15 necessary to refer ina little more detail to the trading activities of the respondent. It isa large manufacturer of paper products. It markets a large range of products including toilet tissue, facial tissues and paper

towels. It claims to have established a reputation in the

Australian market place for making and supplying quality products. It claims to be one of the largest manufacturers of paper products in Australia. In 1980 1t resolved to introduce anew toilet tissue to the Australian market. It has spent some $2 million developing the new product. It proposes to develop the new product under the name "new generation Sorbent" and hopes to acquire a larger share of the toilet tissue market with it. It is of the view that an intensive television advertising campaign 15 necessary effectively to introduce the new product to consumers. Accordingly it has retained the services of a large advertising agency to advise upon and execute an extensive advertising campaign. It has expended to date some $270,000 on the services of the advertising agent, the whole of that sum being expended on the television aspect

The respondent has committed itself to spend $2 million on television advertising. If ait is obliged to withdraw the two films which are the sutject of the present proceedings it says it would have three options open to 1t; first, to abandon the advertising campaign involving it in cancellation fees of $100,000; secondly, to postpone the campaign and make two other films which would cost akcut $100,000; or thirdly, to proceed with the campaign with the two remaining films. It is said that if the third option were adopted the advertising campaign would los2@ much cf 1ts impact

Although the name "Decor" does not appear anywhere on the wine coolers used in the two films I think 1t 1s proper to infer (as the evidence presently stands) that many viewers of the films would recognise the wine coolers as being of the

The respondent joins issue with the applicant as to the propensity of the advertisements to denigrate the wine cooler. It claims that, if anything, the films would bring before the viewing public the existence of the applicant's wine

cooler and that this would do it no harm commercially.

The principles upon which I should determine this application are not in doubt. I propose, 1n accordance with

Australian Coarse Grain Pool Pty. Limited v Barley Marketing

Board of Queensland (1982) 46 ALR 398 to inquire first whether there is a serious question to be tried and then to determine

I turn first to the question whether there is a serious question to be tried. The applicant puts its case ona number of bases. It claims that the respondent's conduct is proscribed by sub-s.52(1), paragraph 53(c) and 35.55 of the

Trade Practices Act 1974. It also claims that if the

respondent televises the films it will be guilty of the tort of

Slander of qoods. It seeks injunctive relief to restrain the

arprehended breaches of the Act and the commission of the

Whether or not the applicant succeeds at the trial in

will depend upon whether the films make any that counsel for the applicant submits they that a viewer of the films would understand

that the cooler is a means of carrying toilet paper that 15 used by sensible and

that the cooler has a new use, namely, as a discreet means of carrying tollet paper for use whenever and wherever required as well as its old use as a wine bottle carrier and that the new use is compatible with the

Were I persuaded that there is a real question that a reasonable viewer would regard either of the films as making any of those statements I would be disposd to find in favour of the applicant on this branch of the case. However, I do not think that there is an issue of a sufficiently substantial kind that this is the case. I think it is wrong to treat the film too literally. I do not think a reasonable person would regard the use of the wine cooler as being anything other than a prop um the exercise of getting the name of the respondent's toilet

Both films, short though they are, must be viewed in their entirety. The proper approach to the question whether conduct 15 proscribed by the Trade Practices Act 1s referred to

an the decision of Gibbs C.J. in Parkdale Custombuilt Furniture

Ety. Limited v Puxu Pty. Limited (1982) 149 CLR 191 at p.199,

"Section 52 does not expressly state what persons or class of persons should be considered as the possible vicitims for the purpose of deciding whether conduct 1s misleading or deceptive or likely tO mislead or deceive. It seems clear snough that consideration must be given to the class of consumers likely to be affected by the conduct.

Although 1t 15 true, as has often been said, that ordinarily a class of consumers may include the inexperienced as weil as the experienced, and the gullible as well as the astute, the section must in

my OPinion be regarded as contemplating the effect of the conduct on reasonable members of the class."

"The conduct of a defendant must be viewed as a whole. It would be wrong to select some words or act, which, alone, would be likely to mislead if those words or acts, when viewed in their context, were not capable of misleading. It 1s obvious that where the conduct complained of consists of words it would not be right to select some words only and to ignore others which provided the context which gave meaning to the particular words. The same is true of acts."

I do not believe that there is a real issue that a reasonable person would think that the films make any of the statements attributed to them by counsel for the appellant. All the films do is to use the wine cooler quite incidentally to achieve the result of advertising the respondent's toilet paper. It 15 a mistake to ignore all else that goes on in the falms including the restaurant setting, the conversation with the waiter, the presence of other people, and so on, and to concentrate sniy on the fact that toilet paper 15s taken from tne wine cooler. They are not the most tasteful of advertise- ments but that is not to the point for present purposes. The

real point 15 that the statements attributed to the advertise-

It 15 significant that there is no overlappiong at all

Eetween the appliczant's and the respondent's products. Compare 7. Pesion: -=ty. Limited v Playbov Enterprises (1932) 'S RAF Ill. - cat aim wnich one party manufactured female

wearing apparel and the other conducted a restaurant business said to be of doubtful reputation. In that case, Fisher J. said in respect of a claim that there had been some

"The applicant must establish, to the relevant extent, that by their conduct the respondents have misrepresented themselves as having a business association with the Cue Shop. I am not satisfied that this 1s, or is likely to be the result. The respondents carry on a totally different type of business, catering at least to a substantial extent for the tastes of a different class of the public and in a different area of the city. There 1s at the present time no overlapping of the two business

It seems to me that the products of the parties to this case are so different that no reasonable person could

think there was any association of one with the other.

What I have so far said leads to the resuit that there 15 not a serious question to be tried that the respondent is threatening to engage in conduct which is misleading or deceptive or likely to mislead or deceive. It is not engaging 1n such conduct because the films do not make the statements attributed to them. Paragraph 53(c) of the Act proscribes the making of a representation that goods or services have a sponsorship or approval which they do not have. I do not think that the evidence establishes that there 15 a serious

question to be tried on this part of the applicant's case.

here may well be cases wher titre is such a relatic

yectween two products that the use of one in conyunction with

another might give rise to an inference that there is some sponsorship by the one of the other. Thus, if a particular brand of motor oil were advertised in conjunction with a particular motor vehicle, perhaps some such inference might arise. But I do not think that the mere use of the wine cooler in the films gives rise to a serious question whether there is a sponsorship or approval of the respondent's toilet,

Section 55 of the Act provides that a person shall not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose or the quantity of any goods. Because of my view that the advertisements do not make the statements attributed to them, I am also of the opinion that there is no serious question to be

I turn now to consider the claim based on the alleged

tort of slander of goods. Counsel for the respondent did not

contend that it was outside the jurisdiction of the court to entertain this claim. I think it was proper for him to make this concession opecause this claim 1s clearly within the Court's accrued jurisdiction. To make out the tort of slander of goods, it is necessary for a claimant to establish three matters: first, that afalse statement 15 made about the

claimant's goods; secondly, that 'tne statement 1s made

maliciously and, thirdly, that the owner of the goods has suffered damage. My fanding that the advertisements do not make the statements attributed to them 15 sufficient to answer this part of the applicant's case. I need not separately consider the question of malice but I think 1t 1s open to the gravest doubt whether there 1s any evidence of malice on the facts as presently before the Court, . Mr Lewisohn argued that malice could be inferred froma deliberate attempt by the respondent to sell its own product at the expense of the applicant's product and at the expense of exposing the appd@licant's product to ridicule. I do not think there is any evidence presently before the Court that the respondent had any motive in using the wine cooler other than as a convenient

means of ensuring that its own product was advertised.

The views that I have so far expressed make it unnecessary to consider the question of the balance of convenience. However, as the matter has been argued, I should express my opinion on it. The evidence discloses that the applicant has a substantial trade in wine coolers and that its sales have shown a quite consistent pattern over the last two years. If the matter goes to trial and the applicant succeeds, 1t may not be difficult for it to quantify a claim for any damage it might sustain. If its saies fell, other things being equal, the trial judge might well be persuaded to infer that the fall in sales was due to the televising of the

evidence presently before the Court does not oersuade me that any damage which the applicant would suffer would be substantial. In any event 1t would be offset to a degree by the benefit of having its product widely displayed on

On the other hand, the respondent would suffer considerable damage by the grant of interlocutory relief. Its advertising campaign could proceed with only the other two films, but that would seriously prejudice the campaign. Therefore, if I had to determine the matter, on the balance of convenience, I would find in favour of the respondent on that

For these reasons the application for interlocutory relief is dismissed. The matter will stand over toa date to

At a glance

Court

Decision date

Before

Source

Judgment (79 paragraphs)

Parties

Cases Cited (2)

Cited By (1)