PROPOSED APPEAL GROUNDS and submissions
32 It is convenient to first address the parties' submissions in relation to the strength, or otherwise, of the proposed grounds of appeal and the prospects of Martin & Pleasance successfully obtaining leave to appeal.
33 The draft notice of appeal relied on by Martin & Pleasance contains 14 grounds. Five of the appeal grounds, grounds 1 to 5, relate to the primary judge's finding that Nelson had a prima facie case that Martin & Pleasance had engaged in misleading and deceptive conduct based on the similarities between the packaging of the Rescue product and the packaging of the RestQ products. Seven of the appeal grounds, grounds 6 to 12, relate to the primary judge's findings concerning the balance of convenience. One of the grounds, ground 13, relates to the primary judge's finding that damages would not be an adequate remedy for Nelson and another ground, ground 14, relates to the fact that the primary judge did not make an order requiring Nelson to provide security for costs.
34 It is unnecessary and probably undesirable to consider the proposed grounds of appeal at length, particularly given that they will be the subject of detailed consideration by the Full Court in considering and determining the application for leave to appeal and, if it comes to it, the appeal. Needless to say, on the one hand, Martin & Pleasance contended that the grounds of appeal all raise errors of the sort identified in House v R (1936) 55 CLR 499 at 504-505 and that the grounds were arguable, if not strongly arguable, and strongly supported the grant of leave to appeal. On the other hand, Nelson contended that the proposed appeal grounds did not raise errors of principle and, in any event, were unmeritorious.
35 The oral submissions advanced by Martin & Pleasance in support of the extension of the stay focussed primarily on errors of principle that it contended were made by the primary judge in addressing the balance of convenience. It is appropriate, in those circumstances, to focus on those grounds, though Martin & Pleasance maintained that the grounds relating to the primary judge's finding that Nelson had a prima facie case were also meritorious. In short summary, Martin & Pleasance submitted that the primary judge made four errors of principle in concluding that the balance of convenience supported the making of the interlocutory injunction.
36 First, it was submitted that, while the primary judge apparently accepted that Martin & Pleasance would suffer harm as a result of the making of an interlocutory injunction, his Honour did not weigh that harm against any harm that Nelson might suffer if the interlocutory injunction was not made. Rather, in Martin & Pleasance's submission, his Honour simply found that the fact that there was a prima facie case that the marketing of the RestQ product by Martin & Pleasance was misleading and deceptive tilted the balance of convenience in Nelson's favour.
37 Second, it was submitted that the primary judge failed to properly assess and weigh the strength of the prima facie case in the balance. That was said to be particularly significant given his Honour's acceptance that there was a real prospect that the making of the interlocutory injunction would be tantamount to final relief. In those circumstances, an interlocutory injunction should not have been granted unless Nelson was able to demonstrate a relatively strong case: cf Samsung at [72]-[74], [87]-[89]. In Martin & Pleasance's submission, his Honour made no such finding.
38 Third, Martin & Pleasance submitted that the primary judge erred in approaching the issue whether an interlocutory injunction should be made to preserve the status quo until the final hearing on the basis that the status quo was the state of affairs prior to the time that Martin & Pleasance entered the market with the RestQ products. The correct approach, so it was submitted, was to assess the state of affairs in the period immediately before the commencement of the proceeding seeking injunctive relief. The state of affairs in that period was that the RestQ products had been in the market for over two weeks.
39 Fourth, it was submitted that, in assessing the harm that Nelson may suffer if an interlocutory injunction was not granted, the primary judge erred in failing to have regard to the fact that Nelson was not presently able to supply its Rescue products in Australia. The evidence demonstrated that Nelson was unable to lawfully supply its Rescue products until a regulatory issue concerning the registration and sponsorship of its products in the Australian Register of Therapeutic Goods (ARTG) had been resolved. That was said to be a relevant consideration that the primary judge was required to, but failed to, take into account.
40 For its part, Nelson submitted that the draft grounds of appeal disclosed no errors of principle or errors of the sort considered in House. Rather, the grounds in essence simply sought to attack the application of established principles to the facts of the case. Nelson pointed out, in that regard, that some of the grounds simply challenged the weight that the primary judge gave to different factors and that others simply attacked findings of fact. In Nelson's submission, the primary judge was correct when he found, in the context of the Stay Judgment, that the proposed appeal grounds did not involve errors of principle or any errors that would attract the intervention of the Full Court.
41 Nelson also submitted that the arguments advanced by Martin & Pleasance were for the most part based on an unfair or inaccurate reading of the Interlocutory Judgment. To give but one example, Nelson submitted that, contrary to Martin & Pleasance's contention, the primary judge did make a finding concerning the harm that would be suffered by Nelson, in the form of damage to its goodwill in the Rescue product, if an interlocutory injunction was not made: Interlocutory Judgment [45] and [51]. Nelson also contended that, contrary to the submission advanced by Martin & Pleasance, the primary judge did weigh the harm that Nelson would suffer if Martin & Pleasance was not restrained from continuing to market the RestQ products against the harm that Martin & Pleasance claimed it would suffer if an interlocutory injunction was granted.
42 Nelson submitted that the primary judge was right to find that the balance of convenience weighed in favour of the grant of an interlocutory injunction. In its submission, the complaints made by Martin & Pleasance concerning the primary judge's findings in relation to the balance of convenience were unfounded. Nelson submitted, in that context, that the evidence of harm that was relied on by Martin & Pleasance amounted to little more than evidence of Mr Holyman's subjective fears or beliefs, unsupported by objective facts. In any event, in Nelson's submission, any harm that might be suffered by Martin & Pleasance as a result of the making of an interlocutory injunction was harm of their own making given that they had chosen to promote, market and supply their products using a name and packaging that was deceptively similar to the name and packaging of Nelson's product that it had previously distributed. As for the harm that would be suffered by Nelson if an interlocutory injunction was not made, Nelson submitted that it faced losing its established place in the Australian market and on pharmacy shelves to a misleadingly branded rival which was less established.
43 As for the grounds of appeal relating to the primary judge's findings or reasoning concerning the status quo, Nelson submitted that the primary judge was plainly right to find, in effect, that the purpose of the interlocutory injunction was to keep the "invader of its existing market at bay until a decision has been reached as to whether the invasion is lawful or not": cf Beecham Group Limited v Bristol Laboratories Pty Limited (1968) 118 CLR 618 at 627. The status quo, in other words, was the state of affairs before Martin & Pleasance's entry into the market.