Remington Products Australia Pty Ltd v Energizer Australia Pty Ltd

REASONS FOR JUDGMENT THE COURT: 1 The appellant, Remington Products Australia Pty Ltd, appeals from the judgment of Moore J delivered on 11 March 2008 in which his Honour made orders additional to the final orders of the court made on 14 December 2007. 2 Although the notice of appeal raises a substantial number of grounds, the essence of the appeal is that Remington submits the primary judge did not have power to make the March orders. Remington submits in the alternative that if his Honour did have power, the primary judge did not exercise it within established authority, as the circumstances existing did not render necessary the making of the March orders. There was also argument about the form of the March orders, but these were subsidiary matters to the essential questions to which we have referred. 3 Orders 2, 5 and 6 of the final orders made in December 2007 are in the following terms. 2. Order that on and from 23 January 2008 the Respondent whether by its servants or agents or otherwise be permanently restrained from supplying or distributing Current Varta High Energy AA or AAA Batteries in Current Varta High Energy Packaging. 5. Order that on and from 23 January 2008 the Respondent whether by its servants or agents or otherwise be permanently restrained from making any representation in trade or commerce that or to the effect that Current Varta High Energy AA or AAA Batteries last as long as Energizer or Duracell. 6. Note that it shall not be a breach of the previous order to make a representation in trade or commerce that or to the effect that Current Varta High Energy AA or AAA Batteries last as long as Energizer Max or Duracell CT. 4 The orders which the primary judge made in March 2008 are in the following terms: 2. The respondent forthwith take all available steps: (a) to have removed from public display, by 11 April 2008, all Current Varta High Energy AA or AAA Batteries in Current Varta High Energy Packaging in retail stores to which it has supplied Current Varta High Energy AA or AAA Batteries in Current Varta High Energy Packaging; (b) alternatively to sub-paragraph (a), to oversticker (or otherwise obliterate or conceal from view) before 11 April 2008 the sticker on any and all Current Varta High Energy Packaging in so far as it contains the words "Lasts as Long as Energizer & Duracell". 5 There was no dispute between parties that the December orders were final. 6 The history of the litigation between the parties is set out in [2] to [12] of the reasons of the primary judge in his judgment of 11 March 2008. We do not need to repeat what was set out by his Honour in narrating the history of the proceedings. 7 The disposition of this appeal turns upon whether his Honour correctly applied the principles stated by a Full Court in Caboolture Park Shopping Centre Pty Ltd (In Liquidation) v White Industries (Qld) Pty Ltd (1993) 45 FCR 224 at 234-236. 8 In Caboolture, the Full Court accepted that the true principle which governs the Court's power to make supplemental orders was stated by Lord Lindley in Preston Banking Co v William Allsup & Sons [1895] 1 Ch 141 at 143-144. Lord Lindley there stated that the power may be exercised where circumstances have "…since occurred which [have] rendered a supplemental order necessary." The Full Court observed at 235 that critical to the jurisdiction of the Court is first that the application not be one in any way to vary or alter the initial order. 9 Their Honours went on to say that assistance may be obtained from the decision of the Court of Appeal in Re Scowby; Scowby v Scowby [1897] 1 Ch 741 at 754. In that case the language used by Smith LJ was that the supplemental order "…did not touch the previous orders…" 10 The Full Court in Caboolture went on to say at 235 that there are many cases where supplemental orders will be made and the jurisdiction, while no doubt requiring caution, is not limited to the making of orders in aid of the enforcement and working out of original orders, although the making of supplemental orders may be "appropriate" in such cases. 11 In light of what was stated by the Court in Caboolture, there are three principal issues which arise on the appeal. These are, first, whether the March orders were a variation or alteration of the December orders. The second is whether the March orders were "supplemental" orders. The third question is whether they were "necessary" within the test stated in the authorities. 12 Senior Counsel for Remington, Mr Macfarlan QC, submitted that the orders which his Honour made on 14 December 2008 constituted a "package" or "suite" of orders which effectively precluded the Court from making the orders for removal or over‑stickering contained in Order 2 of the March orders. Mr Macfarlan also submitted that, having declined to make the proposed Order 11 on 14 December 2007, it was not open to the primary judge as a matter of power to make the order for removal and over-stickering, which is contained in the March orders. The effect of Mr Macfarlan's submissions was that, as a matter of substance, these two considerations gave rise to an inconsistency with the December orders. Thus, on his submission, the first and critical condition for the exercise of the power identified in Caboolture was not satisfied. 13 However, Mr Macfarlan fairly conceded that Order 5 of the December orders and Order 2 of the March orders (ie, the order for removal or over‑stickering) could stand side by side. That concession having been made, it seems to us that the first condition for the exercise of the power was satisfied. 14 We do not consider that the fact that his Honour considered but declined to make the over‑stickering order in December gives rise to an inconsistency with the earlier orders or an alteration or variation of them in the sense stated in Caboolture. It does not affect the question of power, but it may go to the question of whether the discretion ought to be exercised. The March orders were, in our view, supplemental orders because they were related to the December orders and were incidental to or in aid of the enforcement and working out of those orders. 15 The effect of Remington's submission on the third issue is that Caboolture is authority for the proposition that the power to make a supplemental order only arises where the circumstances render it necessary to do so. Mr Macfarlan also submitted that the power is limited by the requirement that the circumstances must be those which have occurred subsequent to the making of the initial order. 16 We do not consider that the word "necessary" is used in Caboolture in this limited sense. The expression used in that case was that the supplemental order is to be appropriate to the circumstances of the case. 17 This was effectively recognised by Drummond J in Australian Competition & Consumer Commission v The Shell Company of Australia Limited (1997) 72 FCR 386 at 395. His Honour there observed that common law superior courts of record do not become functus officio merely upon the making and entry of the judgment or order that determines the rights of the parties: they retain power in the same suit to make supplemental orders not limited to orders in aid of the enforcement and working out of the orders determining the rights of the parties. 18 His Honour observed that this Court's ancillary powers flow from authority under ss 22 and 23 of the Federal Court of Australia Act 1976 (Cth) ("FCA Act") to resolve the whole of the controversy between the parties. The power of the Court referred to in s 23 of the FCA Act is, in relation to matters, to make such orders including interlocutory orders as the Court thinks appropriate. Clearly enough, the exercise of the power is not confined to interlocutory orders and extends to the making of final orders. 19 Moreover, in Pelechowski v Registrar, Court of Appeal (NSW) (1999) 198 CLR 435 at [51], the High Court (Gaudron, Gummow and Callinan JJ) observed that the term "necessary" is to be understood as identifying the power to make orders which are reasonably required or legally ancillary to the accomplishment of the specific remedies for enforcement provided in the legislation to which their Honours referred. Their Honours observed that in this setting, the term "necessary" does not have the meaning of "essential"; rather, it is to be subject to the touchstone of reasonableness. 20 It is well-established that the Federal Court has all the powers expressly or by implication conferred by the FCA Act and such powers are as incidental and necessary to the exercise of the power so conferred. The implied powers conferred on the Court are no less than the inherent power of a court of unlimited or general jurisdiction. The implied power carries with it all that is necessary for the proper function of the Court: see Jackson v Sterling Industries Limited (1987) 162 CLR 612 at 619; see also VTAG v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 141 FCR 291 at [30]. 21 It is unnecessary for us to determine the question of whether the power is constrained by the requirement that the circumstances relied upon for its exercise must have arisen since the date of the original orders. We say this because the primary judge found at [19] that circumstances had arisen since the date of the making of the December orders. 22 His Honour observed that Remington had embarked on a program of over-stickering, but without the objective of ensuring that this course be undertaken as soon as possible. Second, his Honour found that Remington had communicated with retailers in a way which misrepresented (at least by failing to fully explain) the reason the orders were made on 14 December 2007 and that Remington endeavoured to create "an unjustified measure of comfort" for the retailers if they continued to display and sell batteries in packaging that his Honour had found to be misleading. 23 In our view it was open to the primary judge to take this view. This is sufficient to dispose of the submission that the circumstances which his Honour relied upon to ground the making of the March orders had not occurred after the making of the December orders. 24 Furthermore, there was evidence to which we were taken in argument that established that other new facts had occurred since the December orders which justified the exercise of the power. First, there was evidence that the old stock, which had not been over-stickered, was juxtaposed with new stock in the retail outlets so as to give rise to inconsistent representations as to the effective life of the batteries. This stock was displayed side by side with Energizer's batteries. 25 Second, the steps to over-sticker the stock undertaken by Remington prior to Energizer's application for a supplemental order had been limited to Coles stores, but they excluded Coles Metro stores and had not extended to other retailers, including Kmart, Harvey Norman, BiLo, Bunnings and Office Works. The over-stickering did not commence until approximately 11 January 2008 notwithstanding the Court's orders made on 14 December 2008, which were premised upon the product packaging being misleading and deceptive. 26 In addition, there was evidence to the effect that the over-stickering was being conducted in an unsatisfactory and incomplete fashion. This evidence may be found in the affidavit of R Hollitt sworn 31 January 2008, in particular at [9] to [11]. The evidence disclosed that Remington's representatives over-stickered some of the batteries in a Coles store leaving quantities of batteries continuing to display the impugned sticker. 27 Mr Macfarlan took us to [14] of the reasons of the primary judge. He submitted that the reference in that paragraph to hundreds of thousands of packets in retail stores with misleading stickers was of importance to the decision. He submitted that this finding was unsustainable in light of the matter to which his Honour next referred in [14], namely, that there was a probably unquantifiable circulation to and within retail organisations of batteries packaged with the old sticker, over-stickered packages and packages with the new sticker. 28 We do not consider that this submission can be sustained. Senior counsel for Energizer, Mr Bannon SC took us to evidence that there were substantial quantities of stock and although this evidence may not have disclosed with precision the quantity it seems to us that the evidence was sufficient to support the finding which the primary judge made. 29 We turn then to the submission as to the form of the orders. It was submitted on behalf of Remington that on one view of the March order it required Remington to both over-sticker and remove the stock from the retail outlets. On this view of the orders, it was submitted that Remington could not choose between the course of over-stickering and removal of the stock and persist with that choice. 30 We do not consider that there is any substance in this submission. In our view the March orders are sufficiently clear in their terms. 31 It was also submitted on behalf of Remington, the March orders required Remington to "take all available steps" and that this order should have been couched in terms of reasonableness. We do not consider that this submission can be sustained. In particular, we were taken to evidence which set out steps that established that Remington has sufficient access to the retail outlets to enable it to give effect to the orders. We do not, therefore, consider that any variation ought to be made to the terms of the existing orders. 32 For these reasons, as we said earlier today, the appeal must be dismissed with costs. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.