Calsil Ltd v TVW Enterprises Ltd & Ors [1984] FCA 105

Federal Court of Australia|1983-09-15|Before: Jenkinson J

Trade practices - consumer protection - building material -

newspaper advertisement - television advertisement - misleading or

Trade Practices Act 1974 - ss. 52(1), 53{a), 53(c) and 55.

CALSIL LIMITED v. TVW ENTERPRISES LTD. (First Respondent), SdAN TELEVISION & RADIO BROADCASTERS Pry. LTD. (Second Responaent) AWwDb

CLAYBRICK MANUFACTURERS ASSOCIATION OF WESTER AUSTRALIA (Third Respondent )

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WESTERN AUSTRALIA DISTRICI REGISTRY ) No. WAG 43 of 1983

BETWEEN: CALSIL LIMITED Applicant AND: TVW ENTERPRISES LTD. First Respondent AND: SWAN TELEVISION & RADIO BROADCAST&ERS PTY. LTD. Second Respondent AND CLAYBRICK MANUFACLURERS ASSOCLATION OF WisTuURN AUSTRALIA Third Respondent Coram: Jenkinson J. Place: Pérth Date: 11 April, 1984 ORDERS

The Court declares that the third respondent was party to

1974 and to a contravention of s.55 of the said Act

constituted by transmission by the first respondent on 15

September 1983 of the television advertisement referred

to in the amended statement of claim filed on 19 December

The Court declares that the third respondent was party to a contravention of s.52(1) of the Trade Practices Act 1974 and to a contravention of s.55 of the said Act

constituted by transmittion by the second respondent on

15 September 1983 of the said television advertisement.

The Court declares that the third respondent was party to a contravention of s.52(1) of the Trade Practices Act and to a contravention of s.55 of the said Act constituted by publication on 17 September 1983 in The West Australian newspaper of the advertisement, a copy of which is

The Court declares that the third respondent was party to a contravention of s.52(1) of the Trade Practices Act and to a contravention of s.55 of the said Act constituted by publication on 18 September 1983 in The Sunday Times newspaper of the advertisement a copy of which is

The Court declares that the third respondent was party to

a contravention of s.52(1) of the Trade Practices Act

constituted by publication on 15 October 1983 in The West

Australian newspaper of the advertisement a copy of which

The Court orders that the third respondent be restrained

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from transmitting and from causing to be transmitted and from otherwise publishing and from otherwise causing to

The Court orders that the third respondent be restrained from publishing and from causing to be published the

advertisement a copy of which is annexure A to the said

The Court orders that the third respondent be restrained

from publishing and from causing to be published the

advertisement a copy of which is annexure B to the said

The Court orders that the applicant's costs of the proceeding, including costs heretofore reserved, to and including this day, and the costs of and incidental to

entry of the orders this day pronounced, be paid by the

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IN THE FEDERAL COURT OF AUSTRALIA ) WESTERN AUSTRALIA DISTRICT REGISTRY ) No. WAG 43 of 1983 GENERAL DIVISION )

AND: SWAN TELEVISION & RADIO BROADCASTERS PTY. LTD.

CLAYBRICK MANUFACTURERS ASSOCIATION OF WESTERN AUSTRALIA

CORAM: Jenkinson J. PLACE: Perth DATE: 11 April, 1984

Trial of questions between the applicant and the third respondent.
The publication which that respondent has admitted that

it procured of two newspaper advertisements and the broadcasting which it admitted that it procured of an advertiserent by televison transmission are alleged by the applicant to have

constituted contraventions of ss.52(1), 53(a), 53(c) and 55 of the

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The proceeding has been discontinued as against the other respondents. After discontinuance, Toohey J. made an order that "The question of damages in this matter be postponed sine die until after the determination of the other issues in the case". The parties were agreed that issues raised by the allegations in paragraph 25 of the amended statement of claim filed 19 December 1983 and the third respondent's denial thereof should not he tried by me but should be deferred, and I have accepted their proposal. Otherwise I am trying all the questions, in the sense in which that word is used in Order 29 of this court's rules, in the proceeding, other than the question of damages, and I have available for exercise the powers conferred by Rules 3 and 4 of

The third respondent' admitted that it was a trading corporation within the meaning of paragraph 51(xx) of the Constitution, and a trade association incorporated in this country, all the members of which are manufacturers of clay bricks. The third respondent also admitted the following

allegations in the applicant's amended statement of claim:

"4, The applicant at all material times carried on and continues to carry on the business in trade or commerce of the manufacture and sale of calcium silicate and concrete bricks.

The vast majority of structures, including houses, in the Perth metropolitan area are built of prick.

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G. There are three kinds of brick used in building houses in the Perth metropolitan area, namely:

(b) calcium silicate bricks; and (c) concrete bricks. 8. The applicant is the principal manufacturer

and supplier of calcium silicate and concrete bricks in Western Australia.

The clay bricks manufacturered by the members of the third respondent and promoted by it in trade or commerce are, in the Perth metropolitan area, in direct competition with the calcium silicate and concrete bricks manufactured by the applicant, particularly when used in internai walls."

The television advertisement shows a young woman and a

bearded man in what might be taken for the living room of a modern

The wall of the room appears to be faced with white

A male voice, not that of a person on screen, is heard

"How can you tell if a builder uses double clay brack? Ask the salesman.

Another clean-shaven male then walks into view and is addressed by

The bearded man takes the other man by the arm and asks

Cracks then appear over the figure of the clean-shaven male and

then the figure appears to shatter into pieces which fall out of sight towards the floor. The voice of the unseen male is then

"Lf he cracks under pressure, you will know. 93 per cent of Perth's builders prefer double clay brick, first for strength but also because they don't shrink or fade. Remember, always ask."

While those words are being spoken, the figure of the clean-shaven male reassembles into a whole out of fragments, and then on the word "fade" the figure recedes and diminishes in size to disappear from the screen. Another male figure then is seen with the couple who first appeared, in another room, one wall of which appears to

be of exposed clay bricks. The female asks the newcomer: "Is this a double clay brick home?"

The newcomer responds confidently and emphatically:

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The first published of the two newspaper advertisements includes a representation of the head in profile and upper torso

of an adult male clothed in shirt and tie. Lines of cracks run

across the face and the collar of the shirt. The upper torso is

covered by, or perhaps it may be conceived consists of, many

shards, each patterned in stripes suggestive of the pattern of the

shirt collar, which are so disposed as tod suggest the

disintegration of the man if he were conceived as a ceramic

figure. Above that figure are printed the following:

"Before you buy a new home ask the salesman if it's double Clay Brack.

Firstly for their strength, but also because they don't shrink or fade.

Kiln firing at temperatures exceeding 1000 C gives Clay Bricks their real strength.

They emerge rock hard and colour-fast ready to weather the effects of time and the elements.

What other building material has the same textures, styles and finishes?

Double Clay Brick also provides an excellent barrier to heat, sound and fire.

Honestly are you prepared to accept substitutes? Especially when the bricks only account for around 7% of your total building costs.

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Below the figure of the disintegrating man are printed the fol] lowing: "*Independent Survey July 15, 1983. If he cracks under pressure you'll know it's not." 5. The other newspaper advertisement has in place of the

cracked figure a photograph of the full face and upper torso of a male whose clenched fists appear on either side of the head, from which it may be inferred that when the photograph was taken his arms were raised to the level of his shoulders. The photograph

might be thought to suggest masculine strength and confidence.

"Before you buy a new home ask the salesman Lf it's double Clay Brick.

Why? Because theyr'e strong and don't shrank or fade.

Kiln firing at temperatures exceeding 1000 C gives Clay Bricks their real strength.

They emerge rock hard and colour-fast ready to weather the effects of time and the elements.

Choose double Clay Brick for the widest range of textures,

Insist on the brick that builders prefer. Especially when bricks only account for around 7% of your total building costs.

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Association of W.A." Below the photograph is printed the foilowing: "*Independent Survey July 15, 1983."

The television advertisement was broadcast throughout the metropolitan area of Perth on two occasicns by each of the first and second respondents in September 1983. On 17 September 1983 the first published newspaper advertisement appeared in The West Australian newspaper, and on 18 September 1983 in The Sunday Times newspaper. The other newspaper advertisement was published on 15 October 1983 in The West Australian. Both newspapers are

The parties were 1n agreement that the expression "double

clay brick" meant, in the context which the advertisements supplied, a mode of building construction which constitutes the perimeter wall as two parallel walls of clay bricks separated by a few centimetres. If the inner surface of the inner wall has been overlaid, visual inspection of the building by a person ignorant of building construction may not disclose the mode of construction as "double clay brick". Hence the introductory verbiage of each

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construction, but in recent decades calcium silicate bricks and concrete bricks have won a share of that market. Very few

It was alleged in paragraph 16 of the amended statement of claim that in the advertisements the following representations

"(a) That clay bricks are better than calcium silicate and concrete bricks, particularly when used in internal walls, because:

(i) clay bricks are stronger than those bricks; (ii) clay bricks do not cause cracking;

(121) clay bricks do not shrink (anda therefore do not cause cracking in walls or other problems);

inferior to clay bricks, particularly when used in internal walls, because:

(ii) they crack or cause cracking in walls or are prone to crack or cause cracking in walls;

(iv) they shrink with resultant cracking or other problems;

(v) they fade; (vi) their use leads to structural problems.

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It was alleged in paragraph 17 of the amended statement of claim that "the third respondent expressly or impliedly represented in

(a) unfortunately for the public. and, in particular, for home buyers, some builders use alternatives (being calcium silicate and concrete bricks), particularly for use in internal walls;

(b) there is an element of dishonesty in the use of calcium silicate and concrete bricks, perticularly in their use in internal walls;

(c) calcium silicate and concrete bracks are an inferior substitute for clay bricks, in particular when used in internal walls;

July 15 1983, 93 per cent of Perth's builders prefer to use double clay brick."

The first published of the newspaper advertisements does in my opinion suggest, by the combination of its pictorial representation of cracking with the verbal reference to the cracking of the salesman under pressure, that the reader should consider cracking of what in the advertisement is comprehended by the words "alternatives" and "substitutes", and cracking of other material in a house in the construction of which such "alternatives" or "substitutes" are used in place of clay bricks, to be likely consequences of the use in construction of those other materials. The word "unfortunately" in the advertisement

strengthens the suggestion. That word suggests in its context

that the use of "alternatives" is fraught with the risk of some

defect in a building, or at least in a* dwelling house, in the construction of which another building material is used in lieu of clay bricks, and that the risk is obviated by the use of double clay brick construction. Those suggestions are also strengthened by the contrast which the attribution of strength and hardness to clay bricks implies between those bricks and the "alternatives" and "substitutes". Cracking of material is commonly attributed by an unreflecting mind to weakness of the material, and weakness of

material 1s commonly conceived by such a mind as a defect or

deficiency in material considered as a component of a building.

In my opinion, the television advertisement conveys the same suggestion, albeit not so plainly. There is no reference to alternative building material in the television advertisement, nor any verbal, as distinct from pictorial, suggestion that a new house not of double clay brick construction may be defective or may be subject to cracking, but in my opinion the combination of the words spoken and the visual images does convey the same

The final rhetorical question with which the newcomer concludes the television advertisement suggest no more, when carefully considered, than that a building material or mode of construction proposed for use in place of "double clay brick" wil] be found to lack one or other of the three qualities to which the question refers. But an opportunity for careful consideration of

the verbiage of the television advertisement is not afforded the

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viewer, who could well understand from what he had seen and heard that shrinking and fading and lack of that strength which the clay brick is asserted to have are attributes, all and not merely one of which are being assigned by the newcomer to other building materials which might be used in the construction of a house

None of the advertisements gives any indication as to what the "alternatives" and "substitutes" are to which clay brick is to be preferred. But the evidence established that in the Perth metropolitan area the only "alternatives" in common use were calcium silicate bricks and concrete bricks. Of those to whom the advertisements were addressed - those who were contemplating the purchase of a new home - many would be aware that calcium silicate bricks and concrete bricks were building materials offered in lieu of clay bricks. Many of them would understand, and reasonably understand, that the words and pictures of the television advertisement were inviting comparison of clay bricks with bricks made of calcium silicate and bricks made of concrete. They would understand, and reasonably understand, that cracking in buildings was being suggested as a likely consequence of the use in

construction of those calcium silicate and concrete bricks.

Further, the emphasis throughout both the television advertisement and the first newspaper advertisement on the strength of clay brick as a desirable attribute of building

material, and the association suggested between cracking and

pressure, would, as I find, induce in some of those persons the belief that it is the strength of the clay brick which obviates, as it is the lack of strength in the ''''substitutes" which occasions, cracking in buildings. I find that the words and

pictures of each of those two advertisements are likely to induce

such a belief - they suggest what many would take them to be suggesting. 10. I have expressed conclusions as to what the first

newspaper advertisement and the television advertisement "suggest". I do not consider, however, that what is suggested can be said to have been explicitly communicated, either by words written or spoken or by a combination of words and pictorial images, or to have been presented to the mind as an inference necessarily to be drawn from what the words and images do communicate. The suggestion that cracking may be a consequence of the use of materials other than clay bricks is achieved by stimulation of one or other of two dissimilar psychological processes. An unsophisticated mind giving less than alert attention to either the newspaper or the television advertiserent might be left, in consequence mainly of subliminal impressions and associations, with no more than a vague impression that houses not built of double clay brick were asserted to be not as sound and strong as those which were so built. Such a mind might not be conscious that the images of cracking had suggested, in the

context, cracking of buildings, or that cracking of buildings was

suggested at all, or that the impression concerning the relative

strength and soundness of different houses had been induced partly

by the excitation of subconscious association between the cracking

An alert and attentive mind, on the other hand, would connect the pictorial representations of the cracking human figure with the cracking of house walls, and thence by wholly conscious inference reach the conclusion that cracking of house walls was being suggested to be a consequence of the use of materials other

It may be a question whether s.52(1) or s.55 comprehends conduct which induces in the mind of a person aware of that

conduct a belief which is erroneous by inducing psychological

processes in the subconscious mind of that person. In Parkdale

Custom Built Furniture Pty. Ltd. v. Puxu Pty. Ltd., (1982) 42

A.L.R. 1 at 6, Gibbs C.J. said that s.52 "must be regarded as contemplating the effect of the conduct on reasonable members of the class" of consumers likely to be affected by the conduct. In that case, both the conduct alleged to have contravened s.52 and a false assumption, to the existence of which the conduct had not contributed, were thought to have had an influence on the reasoning which led to the erroneous belief alleged to have been induced by that conduct. It was held that the conduct did not

contravene s.52. But Mason J. said (42 A.L.R. at 16):

"There may be situations where to exploit mistaken views of the public would contravene s.52.""

To exploit subconscious mechanisms so as to mislead the conscious mind to an erroneous belief may also be in some circumstances to

contravene the section, but I need express no opinion on the

At the other extreme, it might be said that a person who recognised the attempt to suggest cracking of buildings by verbal and pictorial play on "cracking" would not fail to notice that the author or authors of the first newspaper advertisement and the television advertisement had been willing to wound, and yet afraid to strike : that there was no explicit assertion in either advertisement concerning the cracking of buiidings. It might be said that when both the veiled suggestion and the lack of any

explicit assértion have been recognised, no credence is likely to

be given to the suggestion. While an incredible imputation may be

defamatory, an imputation does not contravene s.52 unless it is

likely to be believed. I think that there would, however, be persons who would recognise the suggestion without reflecting that

the credibility of the suggestion was diminished by the absence of

explicit assertion and would accept the suggestion as correct.

ll. The second of the newspaper advertisements does not in my

opinion suggest that cracking is a possible consequence of the use of a building material or a mode of construction other than

"double clay brick". Nor in my opinion does it suggest that any

other building material is less "strong" than clay brick. The

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mere assertion that clay bricks are strong and do not shrink or fade does not imply a suggestion that calcium silicate bricks or concrete bricks are less strong. It might be said that to a person aware that the alternative building materials in use in the Perth area are calcium silicate bricks and concrete bricks, the assertions that clay bricks are strong and do not shrink or fade, and that for those reasons 93 per cent of Perth's builders prefer to use double clay brick, imply an assertion that at least one, perhaps both, of those alternative materials lacks at least one of those three desirable qualities. But no more than that can, in my opinion, be reasonably thought to be implied. I find that of the representations alleged in paragraphs 16 and 17 of the amended statement of claim in respect of the second newspaper advertisement, only those specified in paragraphs 16(c) and 17(d)

It will be apparent that I regard the inclusion in the first newspaper advertisement of the sentence "Unfortunately some builders use alternatives" as introducing to those aware of the use of calcium silicate and concrete bricks in house construction

comparisons between those bricks and clay bricks which are not to be discerned in the second newspaper advertisement. It may fairly be said that there is a degree of unreality in distinctions based on minor variations in the verbiage of texts, neither of which is likely to be read attentively by more than a small proportion of

those who look at the advertisements. But even if only a few

persons - those who trouble to read in an effort to understand -

are likely to be misled into an erroneous belief, the publication of the misleading advertisement will constitute misleading

I find that clay bricks in use in the Perth area are not, as a matter of generality, stronger than calcium silicate bricks or concrete bricks in use in that area. The strengths of bricks, of batches of bricks and of models of brick vary. No general superiority of strength could be attributed to any one of the three classes of brick designated clay, calcium silicate and concrete. Nor was any insufficiency of strength for use in the

construction of dwellings shown in respect of any of those

Mr.. Ipp, who appeared with Mr. Steytler for the applicant, submitted that it was a contravention of s.52 and of s.55 to assert that all clay bricks are strong because there was evidence that some clay bricks did not satisfy certain Australian Standards Association criteria of strength. I reject that submission. I was not persuaded that any clay bricks sold in the State of Western Australia, except occasional batches which by mischance were imperfectly manufactured, were so lacking in a strength required for use in building construction that the general assertion of strength would be misleading or would

The physical and chemical properties of the three kinds

of bricks are such that unless the mode of construction of a house is adapted to the particular kind of brick used, one or more of those properties is likely to tend, within the system of forces operating on and within the walls of the house, to cause cracking. For example, a clay brick tends to expand over a long period and in a long, unbroken clay brick house wall one or more expansion joints may therefore be required if cracking is to be avoided. For another example, a calcium silicate brick absorhs moisture rapidly and shrinks as it dries. The appropriate' mortar for the bonding of calcium silicate bricks 1s therefore one which tends to inhibit the absorption of moisture from the mortar by the newly laid calcium silicate brick. Those observations about calcium silicate bricks are true also of concrete bricks. The ways are numerous in which cracking of house walls, whether the bricks or the mortar or the material with which the brick wall is faced, can be caused. But if the mode of construction is correctly adapted to the particular kind of brick used, no one of the three kinds of brick under present consideration wil] tend more than any other of

In the Perth area during the last two decades the adaptation of the mode of construction to calcium silicate bricks and to concrete bricks has often been less perfect than the adaptation of the mode of construction to clay bricks. In particular, bricklayers have not infrequently failed to use the appropriate mortar and have failed to keep the bricks dry when

laying calcium silicate and concrete bricks. Whether by reason

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only of those circumstances or by reason of those and cther circumstances, cracking of walls is believed by some persons engaged in the house building industry in the Perth area to be more often experienced in houses in the construction of the walls of which calcium silicate bricks or concrete bricks have been used

than in houses constructed in the "double clay brick" mode. I am

Accordingly, although it is, as I find, a misrepresentation of fact to assert that cracking of house walls

in the Perth area is a consequence of a lack in the calcium

silicate brick or in the concrete brick of a strength which is to be found in the clay brick or in the double clay brick mode of construction, I do not consider it to be a misrepresentation, or conduct likely to mislead or deceive, to suggest that the use in construction of a house in that area of calcium silicate bricks involves a risk of cracking in the perimeter walls. It is the suggestion that the cracking may be a consequence of some deficiency of strength in the calcium silicate brick or in the concrete brick as building material for use in house construction

The suggestion of deficiency as building material in house construction in what are called "alternatives" and "substitutes" is, I consider, made in the first newspaper advertisement. The deficiency suggested is lack of "strength",

and cracking is suggested to be a consequence of that deficiency.

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I consider that the same suggestions are made in the television

advertisement, although no reference is explicitly made to alternative or substitute materials. Those to whom either advertisement was published and who knew, as many persons in the Perth metropolitan area did know, that calcium silicate bricks and concrete bricks were in use in house construction in that area, would take the suggestions to relate to those bricks. Some of those persons would accept the suggestions as correct. The publication of each of those two advertisements was likely to mislead persons to whom it was published to accept as correct those suggestions, which were not correct. In my opinion, the publication of each advertisement was on that ground conduct which constituted a contravention of s.52(1) and of s.55 of the Trade Practices Act 1974. I am not convinced that the publication of

any of the advertisements contravened s.53(a) or s.53(c).

I am not persuaded that in either advertisement the suggestion is made that the tendency of an alternative to clay brick to shrink is a cause of cracking. If I were wrong in that conclusion, it would not follow that such a suggestion would constitute a contravention of Division 1 of Part V of the Trade Practices Act 1974. Each of the three kinds of brick will shrink under certain environmental circumstances, but in the Perth area it is only the shrinkage of calcium silicate bricks and concrete bricks which is of sufficient magnitude to cause any problem in house construction. By minimising moisture absorption before and

during construction of the house the builder may prevent

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undesirably substantial shrinkage of the calcium silicate brick and the concrete brick during the period when the brick dries. It would therefore be correct to say that cracking caused by shrinkage of substantial magnitude is attributable to the builders' failure to minimise absorption of moisture. But clay bricks may be laid quite wet without risk of cracking by shrinkage, while calcium silicate bricks and concrete bricks may not. The evidence indicated that calcium silicate bricks and concrete bricks are sometimes laid wet or become wet during construction in the Perth area and that cracking is sometimes a consequence. In those circumstances I am not persuaded that he who in that area asserts that the tendency of those bricks to shrink is a cause of cracking in house walls is guilty of misleading conduct. That tendency may be regarded as one of the

It was submitted by Mr. Ipp that because the evidence established that the use in construction of calcium silicate and concrete bricks involved no risk of cracking unless the mode of construction was defective, it was misleading to assert or to suggest that their use in construction did involve such a risk. I do not accept that submission. It would be more accurate to say that their use in construction involves such a risk because of the risk that the mode of construction will be defective, but I do not consider that omission of the reason necessarily makes the assertion misleading or constitutes conduct, proscribed by s.55 of

the Trade Practices Act, "liable to mislead the public as to the

nature .... the characteristics (or) the suitability for their purpose .... of" those bricks. Whether or not any particular assertion or suggestion of that kind involves a contravention of a provision of Division 1 of Part V of the Trade Practices Act will depend on the context in which it is made and on its terms and on other circumstances. Mr. Ipp was understandably anxious that the third respondent be enjoined from making any assertion or suggestion that a physical or chemical property of the calcium silicate brick or of the concrete brack rendered it less suitable than the clay brick for use in building construction when the evidence established, in his submission, that it was only when an anappropriate mode of construction was adopted that any problem in use of the calcium silicate or concrete brick occurred. But it is, in my opinion, not an appropriate exercise of the power conferred by, s.80 of the Trade Practices Act that the court attempt the very difficult task of distinguishing by the terms of an injunctive order, among all the many observations and suggestions which words and pictures might convey on this subject,

that which would be misleading from that which would not.

The evidence established that the tendency of clay bricks to expand was a cause of cracking in buildings in the construction of which inadequate provision had been made by expansion joints and other techniques for that expansion. It was submitted by Mr. Ipp that it was misleading to suggest, as two of the advertisements did suggest, that cracking is not a risk in

buildings made of clay brick. It may well be misleading - I need

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express no concluded opinion - to couple the suggestion that the clay brick is free of any property or characteristic capable of causing cracking with the suggestion that the calcium silicate brick or the concrete brick has such a property or characteristic, for the coupling of the two suggestions tends to induce the mistaken belief that it is only an inherent property or characteristic of the brick which causes cracking. But I am not persuaded that it would be misleading merely to assert that single dwellings made of clay brick are less likely tod be presently found, in and in the vicinity of Perth, marred by cracking than single dwellings in the construction of which calcium silicate

Mr. Ipp's submission was that such an assertion as I last mentioned would be misleading, but he also submitted that the advertisements were misleading, as in his submission any assertion that the use of clay bricks involves no risk of cracking would be misleading, because the advertisements would be understood to comprehend the use of clay bricks not only in single dwellings but also in large buildings, including buildings containing a number of "homes", and in such large buildings the expansion of clay bricks in a long wall had, as Mr. lpp submitted with justification

that the evidence established, not infrequently caused cracking.

I am included to think that the assertions and suggestions contained in the advertisements would be thought by

At a glance

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Judgment (244 paragraphs)