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[2015] FCA 978
Federal Court of Australia
2015-09-04
Beach J
Original judgment source is linked above.
The Court notes the confidentiality undertaking in the form annexed and marked "A" in relation to documents to be discovered pursuant to order 1 below which are designated as confidential by the Prospective Respondent ("the proposed confidentiality undertaking").
BETWEEN: L'ORÉAL AUSTRALIA PTY LTD (ABN 40 004 191 673)
In relation to documents or information contained therein discovered by the Prospective Respondent pursuant to order 1 of the orders made by Beach J on 4 September 2015 and designated as confidential by the Prospective Respondent (Confidential Information), the Prospective Applicant, its legal advisers and any independent experts shall comply with the following conditions:
IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 285 of 2015
BETWEEN: L'ORÉAL AUSTRALIA PTY LTD (ABN 40 004 191 673)
JUDGE: BEACH J DATE: 4 SEPTEMBER 2015 PLACE: MELBOURNE
REASONS FOR JUDGMENT 1 L'Oréal Australia Pty Ltd (L'Oréal Australia) has applied under r 7.23 of the Federal Court Rules 2011 (Cth) (the Rules) for an order that BrandPoint Pty Ltd (BrandPoint) give preliminary discovery to L'Oréal Australia of: All documents which record or evidence the method, process or basis for, and/or the results of, any trials, testing or analysis conducted by, for or on behalf of BrandPoint in relation to the performance of BrandPoint's PuraSonic product. All advertising and promotional material relating to the PuraSonic product containing claims as to the performance of those products, along with any correspondence by which that material was distributed. All documents recording or evidencing the identity of the recipients of such advertising and promotional material. 2 At the conclusion of the hearing of the application, I indicated to counsel that I had formed the view that preliminary discovery should be granted, but only in respect of alleged representations contained in a promotional email distributed by BrandPoint in October 2014. I then granted leave to the parties to file further submissions as to the proposed form of orders. Having considered such further submissions, in my view it is appropriate to order that BrandPoint give preliminary discovery of the following documents: 1 All documents which record or evidence: (a) the method, process and any assumptions used in; and (b) the results of, any trials, testing or analysis conducted by, for or on behalf of, the Prospective Respondent in relation to the claims made in the impugned representations. 2 All advertising and promotional material relating to the PuraSonic product containing any of the impugned representations, along with any correspondence by which that material was distributed. 3. All documents recording or evidencing the identity of the recipients of the advertising and promotional material referred to in paragraph 2. In these categories of documents: (a) advertising and promotional material is limited to material disclosed by Brandpoint to any third party in Australia; (b) impugned representations means the representations in relation to the PuraSonic product referred to in paragraph 34 of the affidavit of Vincent Lo affirmed 29 May 2015. 3 The preliminary discovery application concerns representations made by BrandPoint about a type of beauty product described as a "sonic facial cleansing brush", a product principally marketed to the fairer sex with the allure of its miraculous transformational properties. L'Oréal Australia promoted and distributed such a product under the brand name "Clarisonic" which competed with a similar product sold by BrandPoint known as the "PuraSonic". L'Oréal Australia contended that BrandPoint may have dollied up its promises for the PuraSonic product and made misleading, deceptive or false claims as to the performance of the PuraSonic product in a promotional email distributed in October 2014 (BrandPoint email representations) and on the PuraSonic website (BrandPoint website representations). Ms Cynthia Cochrane appearing with Ms Frances St John, counsel for BrandPoint, opposed the application on the ground that r 7.23(1) had not been satisfied and that in any event I should exercise my discretion to refuse preliminary discovery. 4 In support of its application, L'Oréal Australia relied upon the affidavits of Vincent Lo, Clarisonic sales and marketing manager for L'Oréal Australia, affirmed 29 May 2015 and 6 August 2015, and Philip Anthony Catania, solicitor for L'Oréal Australia, sworn 29 May 2015. BrandPoint relied on the affidavit of Patrick Dennis McCarthy, managing director of BrandPoint, sworn 27 July 2015. 5 In my view, preliminary discovery should be given by BrandPoint concerning the BrandPoint email representations. There is no substance to L'Oréal Australia's application concerning the BrandPoint website representations.
BACKGROUND 6 The Clarisonic product was launched in the USA in 2004 by Pacific Bioscience Laboratories Inc (PBL). Over the next seven years, the Clarisonic range was expanded to include various models of the sonic facial cleansing brush (including the "Mia 2" and the "Aria"), skincare cleansers and masks, replacement brush heads and chargers (the Clarisonic products). PBL distributed, advertised, promoted, offered for sale and sold the Clarisonic products in the USA, Canada, Europe and the Asia Pacific region including Australia and New Zealand. PBL also conducted studies to test the effectiveness of the Clarisonic products. 7 In or about November 2010, PBL appointed BrandPoint as its exclusive distributor of the Clarisonic products in Australia and New Zealand pursuant to a distribution agreement (the distribution agreement). BrandPoint, a company based in Queensland, was founded in 2008 by Mr McCarthy. It had an annual turnover of approximately $11 million and the equivalent of 20 full-time employees. It distributed beauty, fragrance, health and personal care goods in Australia to department stores, pharmacies and online retailers. As exclusive distributor, BrandPoint received information from time to time about the Clarisonic products including technical and marketing material. 8 In 2011 L'Oréal SA (L'Oréal), a French company, acquired PBL including all rights and trade marks in relation to the Clarisonic products. L'Oréal is L'Oréal Australia's parent company. 9 The distribution agreement expired in November 2012. In anticipation thereof, PBL had sent a letter to BrandPoint on 27 June 2012 confirming the transition details including: (a) provision of the Clarisonic customer database by BrandPoint to L'Oréal Australia to facilitate ongoing customer service; (b) return by BrandPoint of Clarisonic marketing and communication materials, samples and supplies; and (c) collaboration on mutual communications including "co-visits with the L'Oréal team" to retail partners. 10 Since the expiry of the distribution agreement, L'Oréal Australia has imported, warehoused, marketed, sold and distributed the Clarisonic products in Australia and, later, in New Zealand. L'Oréal Australia was incorporated in Australia in 1934. It currently employs more than 700 employees throughout Australia and has offices in Melbourne and Sydney and distribution centres in Dandenong South and Perth. For many decades L'Oréal Australia has distributed numerous personal care products in Australia including from brands such as Lancôme, Giorgio Armani beauty, YvesSaintLaurent Beauté and Ralph Lauren fragrances. Its Clarisonic products are sold in department stores, pharmacies and online. 11 The Clarisonic products have dominated the market for sonic facial cleansing brushes since their launch in Australia in 2010. It is only BrandPoint's PuraSonic product that has posed any real threat to the Clarisonic products in the Australian market. 12 In October 2014, BrandPoint launched the PuraSonic product in Australia. Since that time, 16,000 units have been sold in department stores, pharmacies and online. There was a drop in sales of the Clarisonic products after the launch of the PuraSonic product. 13 BrandPoint has asserted that the PuraSonic product was operationally similar to the Clarisonic Mia 2 and Clarisonic Aria, but was sold at a lower price. They each had similar degrees of movement, similar sizes, similar rounded shapes, brush heads that oscillate at more than 300 movements per second, one-minute pulsating timers and magnetic inductive chargers.
The BrandPoint email representations 14 L'Oréal Australia became aware of the PuraSonic product in October 2014 when one of its retail customers informed it about a promotional email and brochure launching the PuraSonic product that it had received from BrandPoint's sales director on 29 October 2014. The email stated: As you are aware Brandpoint launched the Clarisonic Brand in Australia, it was subsequently purchased globally by Loreal and is available in Myer and David Jones. … The Purasonic cleansing device is half the price on the equivalent Clarisonic Aria product with all of the same features. 15 The promotional brochure attached to the email contained numerous representations about the PuraSonic product. It stated that the PuraSonic product uses oscillating technology with over 300 movements per second and removes up to six times more dirt and makeup from skin than manual cleansing. Under the heading "Efficacy Research", the brochure stated that the PuraSonic product: (a) is six times more effective at removing makeup than traditional cleansing; (b) is ten times more effective than manual cleansing using water only; (c) is more effective at removing makeup within pores or acne scars; (d) results in over 60% improved absorption of moisturiser; and (e) reduces the appearance of wrinkles and fine lines. 16 Under the heading "Efficacy Research Participant Results", the brochure stated that: (a) 80% noticed reduced appearance of wrinkles, fine lines and pores and greater skin elasticity after only 12 weeks; (b) over 80% improved appearance of healthy, clean skin; (c) over 65% reduction in dry areas and pores; (d) over 90% reported softer skin; and (e) over 70% reduction in imperfections and blemishes. 17 There was no description in the BrandPoint brochure of any testing or trials that had been undertaken to support the representations. Further, the evidence adduced by BrandPoint as to any testing conducted in relation to the above representations was thin, if not evasive. There was specific evidence concerning testing underpinning the BrandPoint website representations. Contrastingly, there was only a vague implication that "internal testing" may have been conducted prior to the BrandPoint email representations. In my view, it is a fair inference from the material that BrandPoint did not carry out adequate testing prior to the BrandPoint email representations. 18 As to the dissemination of the email and brochure, Mr McCarthy said that the email was in fact a draft and had been sent in error. He said that it was sent to approximately 26 retailers, three of which had apparently purchased the PuraSonic product without receiving updated information, although updated brochures were subsequently distributed. 19 Mr Lo said that there were similarities between the BrandPoint email representations and certain findings contained in studies conducted by PBL about the Clarisonic products in 2006 and 2008. PBL's studies reported that: (a) the Clarisonic products oscillated at over 300 movements per second; (b) the Clarisonic products removed six times more makeup than manual cleaning; (c) the Clarisonic products cleansed 11 times better than hands alone; (d) manual cleansing leaves makeup trapped in fine lines and pores; (e) there was up to 61% greater absorption of vitamin C after using the Clarisonic products compared to manual cleansing; (f) the Clarisonic products reduced the appearance of fine lines and wrinkles; (g) 80% of subjects reported improvement in the appearance of elasticity and firmness; (h) the Clarisonic products minimised the appearance of pores; (i) 83% of subjects reported improvement in the appearance of healthier looking skin; (j) 81% of subjects reported improvement in the appearance of cleaner skin; (k) 69% of subjects reported improvement in the appearance of dry patches and 68% reported improvement in pore size; (l) 94% of subjects reported improvement in the appearance of softer skin; and (m) 70% of subjects reported improvement in the appearance of blemishes. 20 Mr Lo said that in his experience retail customers give close attention to claims made about new beauty products contained in promotional material.
BrandPoint website representations 21 BrandPoint launched a website promoting its PuraSonic product on 3 November 2014. Mr McCarthy said that the website contained claims about the PuraSonic product which had been validated by "internal testing". He said that not all details about the studies were included on the website as it was still being developed. In early February 2015 the website was updated to refer to the specific studies. It was again updated on 24 April 2015 to reflect further testing of the PuraSonic product. 22 Mr Lo stated that the representations made by BrandPoint about the PuraSonic product on its website, which he said appeared to have been uploaded in early 2015, differed from those made in its promotional brochure. There was no suggestion that the PuraSonic product had changed prior to the website being launched. 23 The BrandPoint website made the following representations which it said had been drawn from an "External Independent Trial", an "Internal Consumer Trial … measured by industry recognised skin analysis software" and a "Consumer survey": (a) the PuraSonic product was seven times better than manual cleansing using only water; (b) imperfections in skin texture decreased by up to 70%; (c) there was up to a 40% reduction in large open pores; (d) "+ 70%" saw improvement in skin radiance; (e) "+ 80%" saw improvement in cleanliness and smoothness of the skin; (f) "+ 90%" experienced improved absorption of skin care products after cleansing with the PuraSonic product.
Differences in the representations for the same product 24 There were differences in the email representations and the website representations including the following: Email representations (2014) Website representations (2015) 10 times more effective than cleansing than manual cleansing using water only [sic] It was 7x better than manual cleansing using only water Over 70% reduction in imperfections and blemishes Imperfections in skin texture decreased by up to 70%, creating visibly smoother skin Over 65% reduction in dry areas and pores There was up to a 40% reduction in large open pores Over 80% improved appearance of healthy, clean skin + 70% saw improvement in skin radiance +80% saw improvement in cleanliness and smoothness of the skin Over 60% improved absorption of moisturiser after cleansing +90% experienced improved absorption of skin care products after cleansing with the PuraSonic
APPLICABLE PRINCIPLES 25 Rule 7.23 of the Rules provides: 7.23 Discovery from prospective respondent (1) A prospective applicant may apply to the Court for an order under subrule (2) if the prospective applicant: (a) reasonably believes that the prospective applicant may have the right to obtain relief in the Court from a prospective respondent whose description has been ascertained; and (b) after making reasonable inquiries, does not have sufficient information to decide whether to start a proceeding in the Court to obtain that relief; and (c) reasonably believes that: (i) the prospective respondent has or is likely to have or has had or is likely to have had in the prospective respondent's control documents directly relevant to the question whether the prospective applicant has a right to obtain the relief; and (ii) inspection of the documents by the prospective applicant would assist in making the decision. (2) If the Court is satisfied about matters mentioned in subrule (1), the Court may order the prospective respondent to give discovery to the prospective applicant of the documents of the kind mentioned in subparagraph (1)(c)(i). 26 L'Oréal Australia must comply with paras (a), (b) and (c) of r 7.23(1) before it can ask the Court to exercise its discretion under subrule (2). Further, if the requirements are satisfied, the Court may nevertheless exercise its discretion to refuse preliminary discovery. 27 The principal debate before me has concerned whether r 7.23(1)(a) has been satisfied. 28 The following principles, which I have set out previously in GlaxoSmithKline Australia Pty Ltd v Pharmacor Pty Ltd [2014] FCA 1202, are not in dispute: First, for the belief to be reasonable, mere assertion or conjecture is not sufficient. Second, there must be some evidence that inclines the mind towards the matter of fact in question. Third, L'Oréal Australia does not have to establish every element of the foreshadowed cause of action. Uncertainty as to one element might be compatible with holding the requisite reasonable belief, but uncertainty as to a number of such elements may be sufficient to undermine the reasonableness of the required belief. Fourth, the terms of r 7.23 are to be construed beneficially so as to be given the fullest scope that its language will allow. See generally ObjectiVision Pty Ltd v Visionsearch Pty Ltd [2014] FCA 1087 at [31] to [38] per Perry J; Optiver Australia Pty Ltd v Tibra Trading Pty Ltd (2008) 169 FCR 435 at [47] to [48] per Heerey, Gyles and Middleton JJ; St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147; [2004] FCA 1360 at [26] per Hely J; Apache Northwest Pty Ltd v Newcrest Mining Ltd (2009) 182 FCR 124 at [2] per Moore and Gilmour JJ and [26] per Flick J; AstraZeneca AB v Alphapharm Pty Ltd [2014] FCA 9 at [33] to [35] per Besanko J and Reeve v Aqualast Pty Ltd [2012] FCA 679 at [65] per Yates J. 29 Generally, I only have to be satisfied that L'Oréal Australia "reasonably believes" that it "may" have the right to obtain relief in this Court from BrandPoint. It is not required to be shown that the belief is that L'Oréal Australia would have such right to relief.
(a) Reasonable belief as to right to relief 30 L'Oréal Australia contended that it had a reasonable belief that it may have the right to obtain relief from BrandPoint for the purposes of r 7.23(1)(a) for misleading or deceptive conduct or false representations in contravention of ss 18 and 29 of the Australian Consumer Law (set out in Schedule 2 of the Competition and Consumer Act 2010 (Cth)) (ACL). L'Oréal Australia asserted that BrandPoint may have used information about the Clarisonic products to promote its PuraSonic product and that the BrandPoint email representations and BrandPoint website representations may have been false. 31 To establish the necessary reasonable belief, L'Oréal Australia asserted a number of propositions which it submitted needed to be considered together. It referred to BrandPoint's access to information about the Clarisonic products in its role as exclusive distributor of such products, the similarity between the BrandPoint email representations and the study findings made by PBL about the Clarisonic products, the absence of any reference to or evidence of testing to support the BrandPoint email representations, and the subsequent reference to testing in the BrandPoint website representations which were published several months later. It also relied on what it said were incompatibilities between the BrandPoint email representations and the BrandPoint website representations, alleging that the former had overstated the performance of the PuraSonic product. 32 Ms Cochrane for BrandPoint submitted that L'Oréal Australia had had the opportunity to purchase and conduct testing on the PuraSonic product in order to impugn the representations, but had chosen not to do so. She submitted that there was no evidence that the representations about the PuraSonic product were misleading or false. Further, she submitted that there was no evidence that the BrandPoint email representations conflicted with the BrandPoint website representations. 33 Section 18 of the ACL provides that: (1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. (2) Nothing in Part 3-1 (which is about unfair practices) limits by implication subsection (1). 34 Paragraphs 29(1)(a) and (1)(g) of the ACL provide that: (1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services: (a) make a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use; or … (g) make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits; … 35 In terms of looking at potential classes of persons and how they might understand the relevant promotional material, the intended audience or potential classes are either actual or potential retailers and ultimately actual or potential consumers of the PuraSonic product. Where there is a dispute as to the effect of conduct on a class of persons, what is considered is whether an ordinary and reasonable member of that class would be or was likely to be misled or deceived (Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435 at [6] to [9] per French CJ, Crennan and Kiefel JJ). Further, in considering the hypothetical ordinary and reasonable member of the relevant class, one considers the dominant message conveyed (Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at [20], [40] and [45] per French CJ, Crennan, Bell and Keane JJ). Moreover, the question is whether there is a real rather than a remote possibility of the member of the relevant class being misled or deceived. Further, where general injunctive relief is being sought, all that may be required to be shown is that the relevant statement has a tendency to lead persons of the relevant class into error; contrastingly, if a damages claim is being made, causation, including reliance questions, needs to be specifically addressed. For completeness, I have not separately addressed whether the representations made by BrandPoint were fact or opinion, putting to one side the functional utility of such a division (cf Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486 at [38] per French CJ, Gummow, Hayne and Kiefel JJ). BrandPoint did not advance any separate argument based upon that division. 36 As to the question of silence or non-disclosure: One looks at the relevant course of conduct as a whole in light of the surrounding facts and circumstances (Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at [109] per McHugh J (dissenting in the result but not the principle)). Silence is to be assessed as a circumstance like any other (Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 32 per Black CJ). A practical approach may be to consider whether there is a reasonable expectation of disclosure as an aid to the necessary factual enquiry, but this is not to be taken as any reformulation of the statutory test (Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357 at [20] to [21] per French CJ and Kiefel J). 37 In my view, L'Oréal Australia has satisfied r 7.23(1)(a) in relation to the BrandPoint email representations. 38 First, there is little doubt that there is a reason to believe that the representations were made. They are arguably apparent from the email and attachment. 39 Second, there is material demonstrating that the BrandPoint email representations were made to at least 25 retailers. 40 Third, there is a reasonable basis for saying that no appropriate trials, testing or analysis was carried out at the time of and to support the making of the BrandPoint email representations. 41 Fourth, there is an appropriate foundation for saying that the BrandPoint email representations were misleading or deceptive, likely to mislead or deceive, or were false because: (a) if statements of fact, they were inaccurate; (b) if statements of opinion, they lacked reasonable grounds. 42 Such a proposition is supported by at least two matters. There was no appropriate trials, testing or analysis of the product at the time of the BrandPoint email representations. Further, the BrandPoint website representations arguably differed from or were at odds with the BrandPoint email representations. In circumstances where one was dealing with the same PuraSonic product, there was an appropriate basis for saying that one of either sets of representations were misleading or deceptive or likely to mislead or deceive. L'Oréal Australia took the position that the BrandPoint email representations were misleading or deceptive given that at the time they were made there was no adequate testing and they conflicted in some respects with the BrandPoint website representations. In my view, that was a reasonable belief to hold. 43 I should say at this point that L'Oréal Australia's application in relation to the BrandPoint website representations was entirely speculative. Unlike the BrandPoint email representations, there was apparently appropriate testing carried out for the BrandPoint website representations. Further, L'Oréal Australia contrasted the BrandPoint website representations with the BrandPoint email representations to demonstrate that the BrandPoint email representations were misleading or deceptive. That assumed that the BrandPoint website representations were the "correct" standard to contrast with the BrandPoint email representations. In my view, L'Oréal Australia advanced nothing more than mere speculation in asserting the misleading or deceptive nature of the BrandPoint website representations. Moreover, that assertion was in tension with how it was seeking to establish the appropriate reason to believe in relation to the BrandPoint email representations. 44 Fifth, in my view, there is an appropriate basis for saying that L'Oréal Australia may be entitled to some relief in relation to the BrandPoint email representations in the form of declarations and damages. The retailers who received the BrandPoint email and attachment were likely to have been influenced thereby in a manner disadvantageous to L'Oréal Australia's commercial interests. More generally, inaccurate or misleading representations about the performance of BrandPoint's product would have been likely to have had a potential impact on the market for sonic facial cleansing brushes generally and therefore L'Oréal Australia's commercial interests. 45 Sixth, BrandPoint has asserted that L'Oréal Australia must also establish that it has a subjective belief that it may have a right to obtain relief. It asserts that neither Mr Lo nor Mr Catania has so sworn. Whether or not Mr Lo or Mr Catania have so sworn explicitly, it seems clear to me that I can infer that such a belief is held from the evidence before me. BrandPoint's submission elevates form over substance.
(b) Reasonable inquiries 46 Despite repeated requests, BrandPoint refused to provide information as to the BrandPoint email representations. Accordingly L'Oréal Australia did not have sufficient information to assess whether there was a proper foundation for such representations and the extent to which they were disseminated in order to decide whether to commence proceedings. BrandPoint submitted that L'Oréal Australia elected not to purchase and test the PuraSonic product and therefore failed to make reasonable inquiries. But that absence of testing does not per se establish that L'Oréal Australia failed to make reasonable enquiries.
(c) Reasonable belief as to existence of documents 47 There is little doubt that the documents sought are in the control of BrandPoint.
(d) Discretion 48 Ms Cochrane for BrandPoint has contended that even if I were to consider that any of L'Oréal Australia's case under r 7.23(1)(a) rose above mere assertion or speculation, that this was an appropriate case in which to refuse preliminary discovery in the exercise of my discretion. In Benchmark Certification Pty Ltd v Standards Australia International Ltd (2004) 212 ALR 464; [2004] FCA 1489 at [128], Emmett J said: Even if there were some basis for conjecturing as to the possibility of a right to relief, I do not consider, in the exercise of discretion, that it is appropriate to make an order for discovery having regard to the uncertainty as to all of the relevant elements on the material presently before the court. (see also Specsavers Pty Ltd v Canstar Blue Pty Ltd [2010] FCA 1153 at [55] per Edmonds J). 49 In my view, uncertainty is inherent in the preconditions to be established under r 7.23(1)(a) in order to justify preliminary discovery. If such a precondition has been satisfied, I accept that I have a discretion to refuse relief nevertheless. But I do not see a proper basis to refuse preliminary discovery based upon some more general assessment of uncertainty in terms of the elements of r 7.23(1)(a). Further, as to the matters raised in [41] of BrandPoint's submissions, the assertion in [41(a)] is yet to be established, but in any event does not support the conclusion sought. Further, the matter in [41(c)] has already been considered in [46] above. Finally, as to [41(b)], there will be a costs order in BrandPoint's favour. None of these matters justify the conclusion sought.
form of orders and COSTS 50 The parties subsequent to the hearing filed competing submissions on the form of the discovery orders to conform with my ruling that preliminary discovery should be given concerning the BrandPoint email representations. 51 BrandPoint submitted that: (a) First, I should confine the orders to the five identified impugned representations only. (b) Second, there was no basis for discovery dealing with the broader dissemination of the BrandPoint email representations. (c) Third, it should be given two months to provide the discovery ordered. 52 I reject each of these submissions. 53 First, as L'Oréal Australia correctly contends, its submissions in relation to the BrandPoint email representations were put on the basis of: (a) the similarity between the BrandPoint email representations and the representations made by L'Oréal Australia in relation to the Clarisonic products; (b) the absence of any reference to testing in the BrandPoint email to support the BrandPoint email representations; (c) the failure of BrandPoint's evidence to suggest that there was any testing to support the BrandPoint email representations; and (d) the contrast between the BrandPoint email representations and the BrandPoint website representations. 54 It is artificial to carve up the BrandPoint email representations in the manner proposed by BrandPoint. L'Oréal Australia may not then be in a properly informed position to decide whether to pursue a substantive proceeding in relation to the BrandPoint email representations. Further, Mr Lo's first affidavit does not purport to set out an exhaustive list of the differences between the BrandPoint email representations and the BrandPoint website representations. 55 Second, the ambit of dissemination of the BrandPoint email representations goes to the right to obtain relief and the assessment of whether L'Oréal Australia pursues a substantive proceeding. Preliminary discovery is necessary to ascertain the extent of the impugned conduct. Moreover, the extent of the dissemination of the BrandPoint email is uncertain. Mr McCarthy stated that the BrandPoint email was "sent to approximately 26 retailers as far as I can tell" (my emphasis). Mr McCarthy as he described it "interrogated" BrandPoint's computer systems, but there is no precise detail as to how this was conducted. Further, Mr McCarthy does not set out the detail of any enquiry made as to whether the BrandPoint email representations were included in any other marketing or promotional materials. 56 Third, as to the time for the provision of discovery, given my ruling on 19 August 2015, BrandPoint should have more than sufficient time to give the discovery ordered by 30 September 2015. Generally, there is no substance to BrandPoint's submission that the ambit or timing for the provision of discovery is oppressive. 57 As to the question of costs, in my view the competing positions advanced by each party are unsatisfactory. I propose to adopt a different approach. 58 First, as to BrandPoint's costs in providing the discovery ordered, it is appropriate that in the first instance such costs be paid by L'Oréal Australia and paid forthwith. But if proceedings are instituted by L'Oréal Australia and it is ultimately successful in such an action, it should be entitled to reclaim any costs so paid. I will order accordingly. 59 Second, as to the costs of the present application, each party has had some success. Nevertheless, L'Oréal Australia engaged in over-reach, matched only by BrandPoint's obfuscation. I have rejected each party's position, which is, unsurprisingly, that each should have a costs order in its own favour against the other. The appropriate order is to allow costs to lie where they fall if no proceeding is instituted. But if proceedings are instituted, it is not inappropriate or inconsistent to treat the costs of the present application as being each party's costs in that cause. 60 I will make orders accordingly. I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Beach.
L'Oréal Australia Pty Ltd
BrandPoint Pty Ltd
(2009) 182 FCR 124
(2013) 250 CLR 640
(2004) 212 ALR 464
(2004) 218 CLR 592
(1992) 39 FCR 31
(2012) 247 CLR 486
(2013) 249 CLR 435
(2010) 241 CLR 357
(2008) 169 FCR 435
(2004) 211 ALR 147