State Government Insurance Commission v JM Insurance Pty Ltd [1984] FCA 145

Federal Court of Australia|1984-05-31|Before: Fasner J, Fister J, Fisher J

TRAE PRACTICES - Trade Practices Act 1974 ~ Consumer proLection - - Comprehensive motor venicle insurance - - Newspaper advertisement - Television advertisement - Comparalive advertising - WMrsleading or deceptive comduet - Application for inberlacutory relief granted.

iW THE FELPERAL COURT Gk AUSTRALLIN 3 SOUTH 4USTRAL1A DISTRICT REGISTRY | Ho.G14 of 1984 ? GLeERAL G@1¥V1S TON '

on U & F JUDGE MARKING GRIER : Fasner J. WHERE MATE : Adelside ItATE : Ll tay 1964

THE COUPT ORDERS: l. That the respondent be reetrsined and an angqunetion ss

hereby granted restraining the respondant, rts servants

fiom pubilasnang or causing toa be published wreblner by the medium of television, radio, newspapers. periodicais, posters, brochures, pamphlets or otherwise any statement purporting to give a comparison of tile cust of motor vehicle comprehensive insurance available through the applicant and the re"pondent which 15 an the following form, mamely

Lumieys $155.76 S.G.1.C. $141.95 art + 19.99 Jt 4 99.9% i. SAVING t 95.77 Saving } 41.94 °

or in a Jike form whien fails to stuve securately the nature and cost of Lhe insurance cover offered by esch af them sand any significant differences im the policies providing such caver svailable through the applicant and the respondent.

that there be liberty to either party to apply to vary

or disgeharge this order on 4 days' motice to tne other D3arty.

IN THE PENEVAL COURYT OF 4USTRALIA 3 ) SGUTH AUSTRALIA DISTVICT FEGISTRY ) ) )

FISHER J.: In this matler TI gave oral qudgnent om 11 May 1964 upon receipt of fanal written submissions from the respondent as To suw that the matter was of some urgency. AL tnat time I gave tried reysone for my decision and [ andicated that upon request of either of the parties I would give full written reasons. Thee ITonow do. These ressans are equally apolicable to my decision in the meiter af Security & General Jneurance Company Limited

C'Security &£ General") vo ai Insurance Pky. Lid. ("dm") which was

contending that 14 had contravened and was contravening s.94 and

53 or the Trade Practices ae. 3974 (the Act') and seekine an

injunction restraining JM from anfevanging these seclions in tne

The application was endorsed wivh 3 claim for interlocutory

relief, tne hearing ate for whicn was given as 26 April 1964.

mhaibir1ts, a substantiyal number of wnich it 21s to al tnis =etage. AS Lis 15 such a complex nO Cross-enahinstian of any of the deponents

i empnssise that the findings If wake are sed on the evidence as it mow stands.

nmcluding, in particulur, comprehensive motor venicle insurance.

Tbk 1s a majo1 insurer of motor vehicles in Sautlh Australia. Jn

Goes mot itself provide contracts lor comprehensive insurance of

particular motor vehicie comprenensave policies avallable to lhe public through Royal Insurance, 26 1s competing with s.G.1.C. The advertisement generally seers to aintorm the public thal money can be saved by comprehensively ansuring molor vehicles through dm. Hawever at goe¢ further and makes detailed comperasons between the alloged cest of insuring moter vehicles wath JM on

the one hand and s.G.1.C. and Security & General Cunder the mame

The advertisement appeared oan commercial television stabions an fideluide and was oan Une First aimstance in tne

"Wasual (mage Spoken Words Narrator seated on edge of if you're snout to his dest. amsure your car with SG(C ar Lumleys, dan't. Words om screen: See JN Insurance or you could pay far too much. SO1C $141.02 If you: own 3 1981 di $ 99.99 Holden, Falcon or Sigma 12 monmtns' conprehensive Savang $ 41.04 al SGIC 1s over €140. At Im gust $99.99. A Lumleys $155.76 huge saving. At Linleys ari $ 2.99 $155.76. You will save over $5 at dn. How Saving ¢ SS.77 good's that? Lan't

JM Car (Insurance dM Ineurance Ply. Limited Insurance Agents. Frices BG aL 29/2/84. Policy comaitions may Varye Approved clients a2

AL sboaut ine same Line JM anavertised in mewepanere,

sgtan alleging tnabk wh 45 cheaper to insure comprehensively motor vehicles through dit. The crvieial portion of this

"So, what are the facts? 1381 FALCUN, CUlMMO00RE OR STIGMA

13 nants comorenensive insur anee The farsy fact ais that Lumleys $155.76 5,6,1.C.9141.05 unless you ansure Jia * 99.99 JA + 99.99 torougn Im. you could he payine too much for SAUING * S35.77 SAVING $ 41.04

your car insurance. Just look at these examples: * & photecopy of this sdverLlisement accompanies these reasons ov

$.5,1.C. made complaints cancerming tris form of sdvertising to the Iirector of Lne Federation of Austrslisn Commerezal Televiszron Stations and to Sir Richard Kirby of the Australian furivertisany Standards Advisory Authority. Subsequently an anendnent Was made ta tie television advertisement im that the following words were superimposed on

the visual amsage for approximately 6 seconds duration. The words

nditians msy vary e.g. Lumicys' policy 325 an Jue policy wmirist JH and &$.0,.1.C. sre market 101@2. The 34% policy 1¢ rated for apsroved ye0 326 to 65 years." baal Q ee H n

The essence of the complaint of s.G6.7.0. as thst members of the public who view the advertisewents. whether om television

Or an newspapers w2il be misled into the belref thet the premiums

reaferred dio an the adverlisements are promiunms payable with

respect to like policies. containing lire benefits snd

comizkions. s.G.1.,.C. strongly contends that this is mot the case and othat dhe policres Im 1s orfering contain ao mumber of reeerzsebians to wich no or no adequate reference 15 mane. It

zlso contends that 3 mumber ot ansecuracieés occur an the

Havang viewed the televised advertisements on 3 mimber of occasions my First ampression of the significance of the tables remuins im particular thai thereby JM was advertising that

als specified policies were signifiacanciy cheaper than those

Frior to the decision of the Chief Justice of the Hign Court an the Coarse Grain case, \Australian Coarse firain Pool

Ply. Lto. v Barley Marketing Koarcd of Queensiand (1962-8 Aw.L.E. 296) tne High Court and Full Court of this Court hed indzcsted om 3s number ot occasions Lhe manner am woienh an spplication for anmverjocutory should be consisered. I attempted to dexui briefly with some of these decisions in Nichsel Edaley International Phy. Ltd. £ Others v Asnton's Mominees rly. Lta. (1979) 26 #.L.R. 419 at page 421 as follows: "The principles pom which 1 should exercise i discretion to grant anteram relief are weli sectied ain thas courk. Lorefer in particular to the gusgment af the Chref Judge of this court ain World Series Cricket

Phy. Ltda. v Psrish (1977) 16 ALR 181 st 186, et sea.

it woe at the hearings an this matter not disouted that the onus lies on the Bpplicants to make oub 8 prims

facie case of contravention of the sections (or one oF them) an the sense xplained by the Hrgh Court of fustralia in beecnam Group yv British Laborstories Pty. Ltd. (1968) 118 CLk ol6: £1906] ALR 469. I refer to the following passage atl p.622 of the judgment of the court: "The court sadaresses 1tself in all cases, patent ae well as other, ta two main anquiries. The first is whether the plaintiff has made out = prima facie case, In the seng@e vhat af the evidence remains as it 1s, there 1s a probability tnabtb at Lhe trial of the action the plsantafi will be held anbtitled to relief: Presion vy Luck (1264) 27 Ch OT 497 at 506; Challender v Royle (1067) 3€ Ch f 455 ar 436. Wow strong the probsbality neeas to be depends, mo doubt. upom the nature of Lhe

rights he aeserts ana the practical consequences likely to flow frow the order he seers' (CLR at 6237 ALR at 470), It 18 also incumbent om the applicants to snow

eostion of the balance of convenience thie wid be restrained pending final nearing.

In @stablishing a prima facre case, im the relevant senge, 124 is, contrary Lo the submiseion of counsel for tne respondent, in wy opinion, not mecessary for the applicants to persuade me thet, on the presenti state of the evidence, 14 215 more litely Lhan mot that they wall ultimately succeed. Kather the applicants must show that they nave some real and signiticant prospect that ar ihe evidence remains af it 16 at the moment, they will succeed st trisl. The test of 'a fir chance of success' wae adopted by Bowen CJ in Commercial Bank of Australis Ltd. v Insurance Hrokers' Association of Australas (1977) 1G ALR 161 at 168 and taken up by Brenman Join Vaictorzran Eqq Marketing Board v Parkwood Egas Pby. Ltd. (1978) 20 ALR 129 at 145, and to me Seems very appropriate ain tne present circumstances as indacatung how strong the probability meeds to be."

In the Coarse Grain case, the Chiei Justice stated his

400 me. onctuathstanding wal was said oan Toup Lto. v Bristol Latorstories Fhy. Lud. 8 CLR: £19668] aLh 465, Lost whe proper

ach, if cConmeidering whebher an ainverlocutory anqunction should be granted, ais first to anquaire wunebner there 18 SErilous question to be tried, and lien to determine tne matter on the balance of ComvVenience. In otner words, IT aunciine to Lie view taken by whe House of Lords in American Cyanamid Co v Ethacen Lto. CI978F AC 2963 (119751 1 ALI BR 504. rather than to some of those expressed apiter an Beecham's

Leee grate us to ine validity of a patent, amd the remarks an the gudyment may be restricted to such caees. lt oas mat convenient an the present case to preter the mutter Lo the Full Court 36 that the question fay be reszolyas,"

Weather the Full hiah Court mar ihe Full Court of this Cuurl has yeb ruled on Lie apparent inconsisbencies im these two soproaches, and fortunately Io sm not aim this matter required to chuose betwuecn them. Whetner 1% 1s required to establish a "fair

Iti an these advertisements engages noc only ain boasting 1US Own policies, or more correctly the policies of the Royal Insurance 'Company for which it acts a6 agent. but makes orai slatement= on televasian as well as oan writing comparing generally and am some detsil ats policies with those of tne 2 applicants. In particular the respondent puts forward figures which purport to establish that ite comprehensive inzurance

policies for 3 1981 Falcon, Commodore or Sisma motor vehicle are

$55.77 cheaper than those of the Security & beneral and ¢41.0+4

The spplicant bases its case om the contention that it le misleading to the public Lo mabe these comparisons and also that they are sufiering dirom the untuir advertising. However, I

have primarily considered the matiler from the point of the public

In this saphisticated and haghly technical area of molor vehicle aumsurance JN has cecided to engage an comparative givertising. There 1s in my opinion a heavy reeponsibility on it tO o6@msure Liat its comparisons are accurate, for aunseccurate compar2sans are inherently taikely Lo misiesd the public. I agree

wholeheartedly with tne words of Locknhsry J. an Stuart Alexander

Co (interstate) Pty. Ltd. and Amother v Blenders Fey. Ltd. (1961) 37 ALAR. IGi at p.~loe

"When a person produces 4 Lelevision commercial that mor only bessts nis own product, but se an this case, COMDSIeS AL eritically wath the proguct of smother sa that Lone latter is shown up in am unfavourable light by the comparisons. in my view ne aught ta take particular care to ensure bie statements are correct."

tir. Justice Northrop expressed his agreement with these

views ain Insurance Conmissioner vv fnustralisn Associated hotor

These present matters allustrate now diftircult al as, in Bn ares 3S complex as the insuring of wotur vehicles. to male accurate comparisons, and in particular to ensure that Like policies are compared. General statenents an advertisements may frequently fall anto the category of putfing ouy the comparicone

of costs, bowh oral and visual, an this matter 30 auch furtner

The applicant has an my apinion made out a case tor the intervention of the Court at this anterlocutory stage. This was in eifect conceded by IM which atfered an undertaking to refrain trom advertising ain the relevasb manner unless in both the television and press advertisements the following words appesred and aleoy on television, were spoken, mamely "Felacies do differ.

These examples apply only to drivers aged 26 to 65%.

I have given consinerstion to the question whether tne inelusion of These words, in the form and for the length or time on television proposed, adequately ensure, umbil trial of thas aecion, trast the public 1s mot likely to be misled. My view is that I must goa further, and this is confirmed by the fact that an affidavit filed by Jti appears to establish that tne cost of its policy for persons in the age group 26 to 65 25 not accurately shown iam the edvertisemenl. Moreover to flash the proposed words for 5 seconds prior to displaying the comparative

tigures for sbout 20 seconds 12 mot in my opinion a sufficient

The orger I propose 1s that IN be restrained from advertising the comparative table. There 15 a prima Lacie case thal. or 43 Serious quesiion whether, it Contains insccuracies and is likeiy to mislead. Iam mot sslisfied Lhere 1s any gresv inconvenience to Jrl im requiring it to desist, at leasi for tne time being, from tnas form of sdvertising, 1b appears to me tnt

the possabalaty of injury to the public as consumers outweighs

A4s I have already mentioned, 1% as obligatary on any person who advertises in this way co ensure that its statements and = =comparisans wre securate. I therefore aliso propase restrainsng JM from advertising im 3 Similar manner unless it as able to da so accurately and in 3 way which does withaut doubt compare like with like. In margins] cases 1% may be difficult to enforce this aspect af the order bub I make 1t for the purpose o1 emphasising the heavy responsibility which persons undertake who

The orders of the Court made on 11 May 1984 were as follows:

That the respondent be restrained and an angumction 1¢ hereby geanted restraining the respondent, 16s servants er agents wntil trial of this aetiaon or further order from publishing or causing cto be published whether by the nedium of television, Tago, NeWSPSpers, Periodicals, posters. brochures, pamphlets or otherwise any statement purporting tO give 2 comparison o1 the cost of motor venicle comprehenssve insurance available

through the gpplicant and the respondent which 18 an the

following form, mameliv FIGS] Fsicon. Cammodore or Sigma 12 months comprehensive insurance

Lunleys $155.76 S.G.1.C. #141.0¢ drt ¢ 99.99 aM # 99.99

Saving 6 55.77 Savina $ 41,04 " or in a like form which fails to state accurately the nature and cost of Lhe insurance cover offered by each of Lhem and any sigmiiacanmt differences in the policies providing sucn cover available throujh the applicant and the respondenLl. 3. That there be laberty to erther party to apply to vary or discharge this order on 4 days' motice to the otner perly.

i further oraer tosk the t2me for appeal in tnis watber

I certify that this ans tue -.+, praceding pages are a true copy of the Reasons for Judgment of Mr. Justice Fisher. ie . .

» Everyone: who drives a car néeds 'car insurance: That? S a faces Ohne

a . a only fact you, can. rely: onvinithe confusion:¢ 2 promises; Offers claims aitd:

Cone -~ar ue acely x aT ret%e VE fente wT TF Sipe 4 " ie aatet eats Lea SSE : " colintefclaims fade by tival; 'insurance: companies. = sera

ap Lend tg Jechoni-veages teetate 3

. "3 wt Teron "Sheree ten, a Reet thd "4 oor a 'The. first | 'act is ih es you ascent AS81595. 76%43 3 eS: iG, ike) cs sia. -+-through- JM;you could: 'be paying-too IM mr 1999, 99 j f HSE TF $99 | much for your. car insuraiice.- J Just E look:at = : " these examples? Gs ;*Policy conditions may ie t

: ~ need asafé "policy Wi fssanother-JM benefit which driver excesses) lies

alot ie ° dat EXCESS you choose is Is ]0st- in art to nate

Se Se nettle S Sa eas Seen eee WFD BUSS AT reste Beats pyaar Sp AtStepe ith.

switching from' another Ry% esi eye benefits sound good : surance Company !S¢ 'So SAE 'companies! Seale 'but 'whe at about if je sthey-lla accept, Atul ae re

5 eS Ona Se Pall :-T here are-others 'like' : 'St nen

2 -JM also provides'a yee drivers with safe'records; massive legal hability ¢ cover. in-home service in the - - Wits, policiés"$20 million! metropolitan "Adelaide =:

'And iF your: 'car is ies ra 'than 12 months'old, and is 'written off within the: first - wos ays your 'Bont

will automatically Dé" 27 0 ---2e - er : ~ With IM, there iso - Means it has an extremely, : \ And don' t forget - Jv

than no-claim bonus. It ad extra charge for i 'insuring, | t- Close relationship with ar ' ; means alot more than car

5 derwriters. Once you "=: » called a "'no-blame'" bonus Vehicles under finarice or tun . r on "ses 55 pay your premium to JM insurance. You can put all

~and it means that if. you on dease.° 3; at * you are covered. That' 6g your insurance through the

have an accident, youre ~ , | gk oe et! | act. naan ~~7 one diversified Company « in the right and you can. 2 i= Also with JM, here" 'le eiate re -~~? Tear, boat; Caravan, 'house~ identify the other party," if is no compulsory ¢ excess fi aM Insurance deals "; and,contents. You name it.

a9) = © West Lakes Mall * Colonnades' Shopping Centre * Westfield , 223. 6l (] 0: 32 Shopping Town, Marion * Car. Park Terrace and Main North ; : : Road, Salisbury *,574 Port Road, Allenby Gardens ° 60 North id 8 Grenfell Street - ri East Road, Walkerville © Whyalla (086) 45 1086 ¢ Also at"! 7} _ Adelaide: 5000°% # y >: 1 Wilson Street, BERRI, Ph. (085) 82 2533 A.H, (085) 83 2307 *

tae ne 4: rf . Weekdays 9am - 5. 30pm: and Saturdays mornings. 18

sn Bee 5 = ibs "Aner Hows: 263 ia, 333 1o7! 401 276° 2+ ING Tnsneance Prv Ted "Insurance Been, 2 PE = ae

At a glance

Court

Decision date

Before

Source

Judgment (105 paragraphs)

Cases Cited (2)