Trade Practices Commission v. Glo Juice Company Pty Ltd [1987] FCA 230

Federal Court of Australia|1987-05-19|Before: Burchett J

TRADE PRACTICES - Consumer protection - Injunction under s.80 at sult of T.P.C. in respect of breaches of ss.52(1), 53(a) and 55 - Form of injunction - Whether wide form of injunction should be granted by reason of admitted conduct of a particular kind although its terms would embrace other possible conduct in which the respondent was at risk of being involved but which was (a) arguably not in breach of the Act; (b) not alleged in the Statement of Claim against the respondent - Representation as to strength of reconstituted orange juice made from concentrate - Principle that the consequences of a breach not previously established against or shown to be threatened by the respondent should not be converted to the penalties applicable to contempt of Court ~ Principle that contempt proceedings should not be the occasion for the determination of the question whether in fact a contravention of the Act has occurred - Discretion of the Court in respect of injunctions - Desirability of specifying the

Trade Practices Act, 1974 - ss.52(1), 53(a), 55, 80.

Judge Making Order: Burchett J. Date of Order: 19 May 1987 Where Made: Sydney

The matter be stood over to a date to be fixed to enable counsel to put any further submissions as to. the drafting of a proposed order in the following form and as to the date when it should come into effect:

The respondent be restrained from representing in trade or commerce that product labelled as or as containing orange fruit juice and supplied by it contains a certain percentage of the juice of oranges unless:

(1) The respondent shall have diligently obtained from each supplier of concentrate used in the manufacture of the orange fruit juice the most accurate and up-to-date information available from that supplier on the basis of which to calculate the correct quantity of water required to reconstitute single strength orange juice from each container of concentrate supplied by that supplier; and

concentrate used in the product on the basis of the information so obtained, save only for the correction of any error detected in that information, and so that the strength of the product would be not less than the strength stated on the respondent's label.

That questions of costs be reserved for consideration on the date to be fixed.

Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The respondent is a company which manufactures orange fruit juice drink. Its share of the Australian market for that product is about 5 to 8 per cent. In its Statement of Claim, the applicant alleged that the respondent supplied goods for sale by retailers in containers labelled "ORANGE FRUIT JUICE DRINK -

CONTAINS 35% FRUIT JUICE", which goods did not contain 35 per

cent of the juice of oranges and were not fairly described on the

containers. Particulars of this allegation were given as

"(a) In or about September 1984 the Respondent supplied, either directly or through a distributor, a container labelled as "orange fruit juice drink - contains 35% fruit juice" to Franklins' store at Wallaceway Shopping Centre, Chatswood, New South Wales, the contents of which contained not more than 17% of

(b) In or about November 1984 the Respondent supplied, either directly or through a distributor, a container labelled as "orange fruit juice drink - contains 35% fruit juice" to Franklins' store in the Birkenhead Point Shopping Complex, Birkenhead Point, New South Wales, the contents of which contained not more than 17% of the juice of oranges.

supplied, either directly or through a distributor, a container labelled as "orange fruit juice drink - contains 35% fruit juice" to the Coles New World Supermarket, corner of Rickard Street and Lady Cutler Drive, Bankstown, New South Wales, the contents of which contained not more than 15% of the juice of oranges.

No further samples as foreshadowed in particular (d)

It was alleged that by the conduct referred to the respondent engaged in conduct, in trade or commerce, that was misleading or deceptive, or was likely to mislead or deceive,

contrary to the provisions of s.52(1) of the Trade Practices Act

1974 ("the Act"). Reliance was also placed on s.53(a), s.55 and s.80(1)(a) of the Act. The relief sought was by way of injunction, the form of the injunction the Court was asked to make being refined during the course of the proceedings to the following:

orange fruit juice drinks supplied by the respondent that that orange fruit juice

drink contains a certain percentage of the juice of oranges when in fact 1t contains less than the stated or represented percentage of the juice of oranges."

The respondent did not dispute the allegations to which I have referred, nor did it suggest that the adulteration to which those allegations pointed 1s explicable on any basis other than the negligence of some person or some deliberate act. of course it was unnecessary for the applicant to show either

negligence or deliberation (see Parkdale Custom Built Furniture

Proprietary Limited v. Puxu Proprietary Limited (1982) 149 C.L.R.

191 at 197), and no evidence was led by either party to show how the matters alleged in the Statement of Claim had in fact arisen. The adulteration may have occurred during a process performed by the respondent, or the respondent may have failed to detect adulteration in concentrated orange juice purchased and used by

it. The General Manager of the respondent, Mr. Sainsbury, who

gave evidence and was cross-examined at length, only joined the

The issue disputed between the parties was simply the extent to which, and the terms in which, it was appropriate to grant injunctive relief. At the risk of over-simplification, the respondent's position may be summarised as follows. It produces orange fruit juice drink by mixing and diluting concentrates of orange juice purchased from a variety of sources, both overseas and within Australia. It 1s necessary and appropriate for it to act upon the basis that the concentrate supplied to it complies with the specifications upon which that concentrate was supplied,

and it 1S not reasonable in the circumstances of this case to

subject 1t to an injunction the terms of which 1t might be unable to avoid breaching by virtue of circumstances applying generally

in the orange fruit juice industry in Australia, and which would be beyond its control as an individual company utilizing

An aspect of this problem which received a great deal of attention during the hearing 1s the universal, or certainly virtually universal, practice in the Australian orange fruit juice industry of producing concentrated orange julce_ for reconstitution according to a conventional strength of natural orange juice rather than for attempted reconstitution to the original strength of the particular batch of juice from which the concentrate was made. The measure of strength adopted for this purpose is degrees Brix, a measure of the total soluble solids in the orange juice. Concentrators, whether independent companies or co-operatives of orange producers, do not measure and record the degrees Brix of particular batches of orange juice which they concentrate, but provide information to enable reconstitution on the basis of what is taken to be the approximate average degrees Brix of Australian orange juice, namely ten degrees Brix. In fact some of the juice may be in the region of eight degrees Brix, and other juice may be in the region of twelve degrees Brix. Theoretically speaking, each orange may have a different Brix value, and it is the case that values vary broadly with countries, localities, orchards and parts of orchards, even sides of trees, seasons, varieties of orange, orcharding practices, and

The picture is complicated by the widespread use of concentrates imported from overseas, where Brix values are generally higher than in Australia, as is evidenced by the fact that in the United States, where a comparable convention exists, the standardized Brix value is 11.8. It is obvious that adherence to such a convention must make it theoretically possible for a particular batch of reconstituted orange juice to be either over or under the original strength of the juice from which the concentrate was made. The extent to which this result would be likely to be affected in practice in Australia by the blending of differently sourced concentrates, and concentrates made from the juices of oranges of different varieties, was not explored in the evidence of either party at the hearing. It did appear that the respondent and other converters (as those who manufacture reconstituted juice from concentrates are called) do commonly blend different batches of concentrates. There was no evidence that any particular orange juice product of the respondent had ever been found to be diluted below its represented strength by reason of the reconstitution of concentrate in accordance with the concentrator's directions based on the Australian convention to which I have referred. The applicant pointed to the existence of a risk of under-strength reconstitution, while the respondent pointed to the prospect that much orange juice would be reconstituted at increased strength, particularly in the current season, when according to some evidence large quantities of juice expressed from Australian Oranges have been found to be well below the conventional

The applicant's argument was not concerned with the merits, from the point of view of public health, of the supply of a drink containing a precise proportion of juice of particular oranges, whether of low or high Brix value, as against the supply of a drink containing juice at a standardized strength, nor did either side concern itself with the question whether (in the case of a sale of full-strength juice) it is or is not healthy for human beings to drink orange juice of high Brix value undiluted. These, of course, would be questions, not for the Court, but for the authorities responsible for the formulation of pure foods regulations. So far as the lawfulness of conduct involved in the production and sale, as orange juice, of juice reconstituted according to the Australian industry standard is concerned, the question depends upon a= proper understanding of what is represented by the label and of what may be shown to have been done in the particular case. However, since an l1njunction 1s a discretionary remedy, wider questions are involved in reaching a decision as to the appropriate relief to be granted in the

Although the case was fought over a quite narrow field of conflict, the parties disputed 1t very thoroughly. The hearing originally concluded on 28 June 1985, but by consent it was re-opened on 4 October 1985 for the calling of fresh evidence. It finally concluded, after the calling of yet further fresh evidence, on 23 May 1986, subject to the lodgment of written submissions. very detailed submissions were lodged by the parties, culmininating in a fifty-two page submission on

behalf of the applicant lodged on 18 December 1986.

The evidence reveals that there 1s a degree of arbitrariness about what is recognized as being orange juice. For reasons related both to the desirability of reducing the bulk and weight of liquid to be transported long distances and the greater immunity of concentrates from bacterial attack and other

causes of deterioration, orange juice as sold to the consumer 1s normally a product of reconstitution from concentrates. Dr. Chandler, the expert relied on by the applicant, said that orange juice processors in Brazil, which is the world's largest exporter of orange juice, do not operate by providing a correct reconstitution ratio of the juice but by specifying a method of dilution guaranteed to produce a product conforming to a set of composition requirements. Those requirements are expressed as ranges within which each particular chemical component of the juice must fall, for it to be accepted as genuine orange juice. They were established by West German scientists, West Germany being a major importer of Brazilian juice. They are known as R.S.K. values. While a failure to fall within a sufficient number of these ranges will provide scientific evidence of adulteration, Dr. Chandler made it clear that the German scientists do not claim, nor did he suggest, that sufficient compliance demonstrates the precise reconstitution of a concentrate into a juice identical with that which was originally concentrated. (Indeed, a letter in evidence from a leading German authority, Prof. Bielig, consulted by Dr. Chandler, asserted the impossibility of proving or finding out from a concentrate the characteristics of the original juice, and Dr.

Chandler himself, though arquing for a stringent insistence that

reconstituted orange juice be as close as possible to the original batch of juice from which 1t was made and that a standardized Brix value be not considered acceptable, conceded that a reconstituted orange juice with 95% juice content should be regarded as orange juice.) What compliance demonstrates 1s that the reconstituted juice meets chemical requirements accepted as sufficient. This situation may be compared with the use of standardized Brix values in the United States and, to date, in Australia. Also, certain volatile flavouring substances or distillable oils normally present in fresh juice squeezed from oranges, which are regarded as important quality characteristics of orange juice, are lost in the concentration process, and are usually replaced by a converter, not in an attempt to achieve a precise reconstitution of the original juice, which would be impossible, but according to his estimate of the tastes of the

There are, too, what I think can only be described as conventions concerning the nature of the fruit used to produce a concentrate of what is called orange juice. No one using ordinary English would decline to call the juice of oranges "orange juice" merely because chemical tests showed the oranges in question had not fully matured, though apparently ripe, or even if they did not appear quite ripe. But Dr. Chandler made it clear that juice of that kind would not qualify 1n an expert sense, and that upon analysis it would be likely to fall quite outside the R.S.K. parameters. It is intended to be proscribed under a proposed code presently under discussion by a committee

of the National Health and Medical Research Council] with a view

to its adoption by regulation throughout Australia. At the same time, because international food regulations allow ten percent of mandarin juice to be incorporated in concentrated orange juice, Dr. Chandler considered imported orange juice could well be composed of such a mixture, and he said that under the proposed code for Australia "it is suggested you can m1x mandarin juice and still call it orange juice", as recognized by the international regulations. I do not think the ordinary consumer would (outside a shop selling processed fruit drink) call mandarin juice orange juice, and according to Dr. Chandler, in at least one respect, its carotenoid value, the chemical composition is "significantly different". By way of contrast to the position in respect of mandarin juice, Dr. Chandler referred to Seville orange juice as juice of "a different variety of oranges from Navel and Valencia oranges", but said that Seville orange juice is not allowed to be included in orange juice in any country except America, where it may be added to a limit of five percent. It may be thought that, in principle, none of this would really surprise a purchaser of the respondent's product who read the label and saw that it indicated (as it did) that the drink was made from "concentrated orange juice". He would know that that ingredient did not come straight from a tree, and would expect it to conform to some established manufacturing procedure. After all, water is a large part of any fruit juice, and the water ina reconstituted juice was never part of the fruit - as a very prominent Dutch expert, Prof. Pilnik, rather sarcastically pointed out in a letter in evidence dealing with what he thought were naive objections to a reading of E.E.C. regulations which accepted the standardized nature of fruit juice as an item of

It will be clear that neither in Europe nor in America can it be said that a reconstituted orange juice is identical in composition to the original batch of juice from which the concentrate was made. Nor can this be said in Australia. But the applicant's argument left aside the lost volatile flavouring substances and their replacement, and the other matters to which I have referred, to focus on the practice of the Australian producers of specifying a reconstitution ratio to yield a juice of ten degrees Brix. It was argued there could be a reconstituted juice made by the respondent from an Australian concentrate, which had come from a batch of orange juice the Brix value of which was greater than ten, and that if the producers' directions were followed such a juice would be diluted compared to the juice in the original batch. The product might indeed have the Brix value of an average orange juice - but not that of the particular juice from which 1t was made. An example might arise if concentrate of Navel orange juice (which is at the higher end of the Brix range) were used without being blended, as is usually done, with Valencia orange juice (which is at the lower end of the Brix range), or 1f the juice, whether or not blended, happened to exceed ten degrees Brix. The applicant's argument assumed that it would therefore be misleading to call it orange juice, even if it were made clear that it was

The case pleaded in the Statement of Claim 1s not a case where scientific analysis, according to R.S.K. values or on any

other basis, has detected an over-dilution resulting from the use

of Australian concentrate reconstituted in accordance with the conventional ten degrees Brix. In a case of that sort, the precise wording of the label might have to be examined, particularly if it included (as the respondent's label does) a statement indicating that the product was made from concentrated orange juice, in the light of the Australian practice of reconstitution to what is taken to be an average strength, and in the light of the fact that apparently nowhere in the world is reconstitution actually attempted to the precise composition of the particular batch of original juice. In interpreting the label, regard might be had to the conventional nature of the definition of orange juice adopted by experts such as Dr. Chandler. But, as I have said, this is not a case of that kind. What led to the present application was something different altogether - a deliberate or negligent adulteration by some person or persons whether employed by the respondent or by a

In the present case, the respondent says that it would be wrong, where what has been proved is a quite limited number of breaches of a particular character, not involving any difficult definitional niceties, to grant an injunction in the terms sought by the applicant. For it is said that those terms would embrace, not only a case of a breach of the kind which has been established, but also a case of the kind I have referred to, should the Court before which 1t came regard it as indeed involving a breach. That would be to convert the consequences of a breach, not previously established against or shown to be

threatened by the respondent, from the penalties provided by the

Act, under which a contravention of s.52 sounds only in civil remedies (see s.79(1)), and no contravention is in itself a contempt, to the grave penalties applicable to contempt of court by breach of an injunction. It would also be to make the contempt proceedings the occasion for the determination of the question whether in fact the respondent had contravened the

statute by engaging in conduct of the particular kind envisaged.

In World Series Cricket Pty. Ltd. v. Parish (1977) 16

"When an injunction 1s sought to restrain a corporation from engaging 1n conduct of a certain kind, the issue is whether conduct of that kind would = answer the statutory description if the corporation were to engage in it. The statutory remedy by way of injunction is in the discretion of the court

both as to the making of an injunctive order and as to its' terms." (Emphases added.)

In Victorian Egg Marketing Board v. Parkwood Eggs Pty Ltd (1978)

"A grant of jurisdiction to make interim injunctions to restrain conduct that contravenes or would contravene Pts IV or V, contemplates that the court will satisfy itself that the person being restrained has engaged or has threatened to engage in such conduct. Having determined that issue, the manner in which the court will proscribe the conduct depends on principles drawn from the general law, except as modified by the succeeding subsections."

Later on the same page he referred to the showing of a contravention or an attempted or intended contravention as the

satisfaction of a condition on which the injunctive power

commences to operate. See also the passage from the judgment of

Gibbs J. in Mikasa (NSW) Pty Ltd v. Festival Stores (1972) 127

The conduct sought to be restrained in the present case (as appears from the applicant's suggested form of order in the context of the evidence, and as frankly acknowledged by its counsel) includes conduct in which the respondent was not alleged to have engaged, or to have threatened to engage. It includes conduct which may or may not have occurred or be likely to occur, depending upon the respondent's purchasing and blending practices, sources of supply, manufacturing procedures, and labelling of its products. To take but one example, the evidence is that it is common to blend Navel and Valencia juices, and (despite what has already been said about the risks of reconstitution) a blended juice of that kind might well have a Brix value of ten degrees or lower, tending to produce over rather than under concentration upon reconstitution. Yet the contest before me was not concerned with the respondent's blending practices, since there was no suggestion its breaches were a consequence of reconstitution of Australian concentrate to ten degrees Brix. The evidence dealt with the risks inherent in the use of concentrates supplied by others, of whom some were within the jurisdiction but formulated their product according to an inexact convention (which, however, Dr. Chandler said "may be reasonable for Australian sourced concentrate"), while some were overseas so that their procedures were not within reach of any possible kind of continuous monitoring by the respondent. That

evidence was called because the respondent suggested it showed

the form of injunction sought was inappropriately wide, not because the Statement of Claim raised any issue, to use the language of s.80(1), that the respondent had "engaged or [was] proposing to engage in conduct [involving the reconstitution of Australian concentrate as directed by the concentrators in accordance with the Australian orange juice producers' practice to ten degrees Brix] that constitutes or would constitute ... a contravention of a provision of Part Vv." The applicant itself asserted, in cross-examination and in argument, that what was alleged in the Statement of Claim, as particularised, was conduct of a quite different kind, an over-dilution not explicable by reference to any industry practice. A similarity of consequence

Even if, notwithstanding the form of the pleading, the case is assumed to raise the question whether the respondent "is proposing to engage" in conduct involving the concentration practice under discussion (see s.80(1)), there would still be the difficulty that it has not been shown that in fact conduct of that kind "would constitute ... a contravention" within the meaning of s.80(1)(a). The evidence points to a risk, but no more. The only contraventions pleaded occurred in some other way. In the absence of evidence that the Australian concentration practice, as implemented in respect of the particular blends of concentrates used by the respondent, and in its processes, has ever brought about a contravention of the Act, I would not be prepared on the material before me to conclude that the respondent is proposing to enqage in conduct that would

constitute a contravention of the suggested kind. The case

should be decided on the basis pleaded of the particular contraventions which have occurred. That the Court should have regard to what is alleged and proved under s.80(1) is emphasized by the limited extension of 1ts powers, in the case of a consent order, conferred by subsection (1AA). I have not overlooked subsection(4), but I do not think it can enlarge, or 1f it gives me a discretion that I should exercise it so as to enlarge, the

"In exercising its statutory discretion, however, the court refers to equitable principles if only to ensure that factors which are relevant to the exercise of the discretion are not omitted from consideration. Although the principles of equity do not mark the limits of relevancy or solely determine the exercise of the statutory discretion, they are relevant norms which may provide assistance in larger or smaller measure according to the closeness of the equitable analogue to the case in hand."

In the same case one of those equitable principles was

the orders made restrained conduct that was misleading or deceptive and another' two restrained the use of certain expressions 'in such a way as to be misleading or deceptive' or 'in such a way as to mislead or deceive'. In my view, it is often undesirable to frame interlocutory orders in such a way as to raise the very issues that will fall to be decided at the hearing. If the conduct is again called in question, it will usually not be possible to determine, on a_ contempt application, whether or not the interlocutory order has been infringed (Australian

Consolidated Press Ltd. v. Morgan (1965) 112 C.L.R. 483; (1966) A.L.R. 387). By leaving that question to the final hearing, there will be a failure to meet the need for urgent relief, and the party enjoined will, on the final hearing, be put at risk not only of a final injunction but also of being in contempt. That is not a purpose which an interlocutory order 1s meant to serve."

This passage is concerned with interlocutory orders, but 1t expresses a principle that is equally applicable to the framing of a final order in such a way as to raise an issue not decided at the final hearing, and which will fall to be decided at the hearing of a contempt application in the event that circumstances coming within the terms of the order do occur, so as to put the respondent at risk not only of an injunction in respect of the occurring of those circumstances but also of being then in contempt. That is not a purpose which an interlocutory order is Meant to serve; it 1S not a purpose a final order is meant to serve either. In Trade Practices Commission v. Walplan Pty Ltd (1985) 7 A.T.P.R.~ 47,174 at 47,176 Pincus J. took the same view of what Bowen C.J. said, as providing "guidance as to the proper form of injunctions generally". Pincus J. stated the principle in the following terms:

such a case as this it would be unorthodox simply to order that the respondent not breach sec.52 of the Trade Practices Act. That would make the contempt proceedings the occasion on which the question whether the respondent's conduct had ever breached the section would be decided."

In Victorian Egg Marketing Board v. Parkwood Faqs Pty

Ltd (supra) at 305 Bowen C.J. referred to his own proposition in

the World Cricket case. At 306, in the course of applying that statement of the law to the case in hand, he said:

facie in contravention of the law, it is better to proscribe that conduct."

The respondent also relied on the principles stated in the joint judgment of the Full Court in Australian Federation of

Construction Contractors v. Australian Building Construction

Employees' and Builders Labourers' Federation (1984) 73 F.L.R. 61 at 62:

"The court is always concerned to ensure, so far as it can, that its orders are certain and provide clearly for what parties affected by them are bound to do or refrain from

The same principle was stated by Woodward J. at p.106 of his

unreported judgment of 20 December 1985 in Australian Transport

Insurance Pty Ltd v. Graeme Phillips Road Transport Insurances Pty Ltd. He said:

permanent injunction are expressed as precisely as possible. It has been said in relation to mandatory injunctions that 'the court must be careful to see that the defendant knows exactly in fact what he has to do and this means not as a matter of law but as a matter of fact' (per Lord Upjohn in Redland Bricks Ltd v. Morris [1970] A.C. 652 at 666). Whilst that reminder 1s particularly apt in the case of mandatory injunctions, it is I think generally applicable to the granting of all injunctions, in view of the substantial penalties which may follow any breach."

Of course, in any particular case, while guided by the applicable principles, the Court has a broad discretion to frame

an injunction appropriate to all the circumstances. As French J.

said in OD Transport Pty Ltd. v. The Western Australian

Government Railways Commission (unreported, 10 March 1987):

"The discretion of the court in formulating the terms in which a final injunction may be granted under sub-s. 80(1) is as wide as the phrase 'as the court determines to be

Even in the context of s.90AA of the previous Trade Practices Act

1965, which nominated (as s.80 of the present Act does not) the

precise terms of a very broad form of order open to the Court, 1t

was held by the High Court in Mikasa (NSW) Pty Ltd v. Festival Stores (1972) 127 C.L.R. 617 that the Court had a discretion in

each particular case whether or not an injunction should be granted and whether any injunction that was granted should be

broad or limited in its terms (see per Barwick C.J. at 632, per Menzies J. at 639, and per Walsh J. at 649-50). At 651 Gibbs J.,

"In my opinion s.90AA does not confer on the Court a discretion of an arbitrary kind. It appears from the section that the object of granting an injunction is to restrain a person who has already engaged in an unlawful practice from again engaging in that practice. To require, rather than permit, the Court to grant an injunction once the condition precedent to its grant had heen established would deny the Court the power to adapt the remedy to the needs of the case and would lead to injustice; moreover, an injunction 18 1n its nature a discretionary remedy. Since the discretion 1s conferred on a court and is to be exercised in proceedings lnter partes, 1t must be concluded, when there 1S no indication in the Act tao the contrary, that it 1s to be exercised judicially."

If I were to make an order in the form sought by the applicant, the central issue in a proceeding for contempt, 1f an alleged breach were due to the reconstitution of Australian concentrate to ten degrees Brix, would be an issue unresolved by the present case. Furthermore, the respondent argues, it would be difficult for the respondent to know what it has to do as a matter of fact if it assumes the law requires a statement about the percentage of the juice of oranges in a product containing reconstituted orange juice to be construed as referring, not to a compositional norm, but to the particular batch of orange juice from which the particular concentrate used was made. The applicant's expert, Dr. Chandler, made it clear the respondent would have to reconstitute according to its supplier's directions, and not according to some continuous process of R.S.K. analyses. Dr. Chandler acknowledged the R.S.K. tests were not suitable for such a use. But how could the respondent then make certain, it asks, to the stringent degree requisite for action to comply with an injunction, that an Australian supplier, who had never attempted before to produce concentrate except according to the prevailing practice, had not misinformed it? Or, alternatively, that its blending operations or other measures left a sufficient margin for error? In the case of a foreign supplier, there is the question whether the breaches proved are enough to sway the discretion of the Court to make the order as asked despite the respondent's obviously great problem of verification. Dr. Chandler thought a much reduced set of tests, though not conclusive of the product's freedom from anv

adulteration, would be a practical measure of quality control;

but, however practical it might be to adopt his suggestion, 1f an injunction issues in absolute terms, pursuit of a ""practical"

course would not provide for the respondent a safe bridge over

The applicant urged that suppliers of concentrate would have to provide better information. It was admitted that Australian concentrators do not presently conduct their operations so as to be able to supply, nor do they attempt to do so, the information required. But it was said that they could change their ways, though at some expense (very considerable expense according to producer witnesses), if pressure were brought to bear on them. I do not think it would be a proper use of the Court's injunctive power, grounded upon a particular category of breach, as pleaded in the Statement of Claim, to deploy it to put pressure upon parties other than the respondent (the concentrators) in order to prevent possible abuses of a different kind. Especially is that so when I do not know how likely it is the possible abuses will arise, when a consequence would be to require the respondent to deal with its suppliers on perhaps uniquely unfavourable terms compared with its competitors, and when the evidence is the whole problem of the practices of the concentrators has been under review by the National Health and Medical Research Council for some time and 1s expected in the near future to be remedied by regulation. The object the applicant seeks to serve in respect of the reform of the industry may be a very desirable goal, but the Court should

Against these considerations, the applicant makes several points. It says the respondent would not guite be in an uniquely unfavourable position, since some other companies have consented to orders in similar terms; but the circumstances of those cases may have been quite different, and in any case the orders were not the subject of debate but were made by consent. It was not shown they would have any relevance to the clear problem the respondent would have if forced to seek concentrate that would accord with reconstitution specifications which other purchasers do not require and upon which most suppliers are not in a position to supply. The evidence showed that producers (including a cooperative with 27% of the Australian juice market) would find it quite uneconomic to meet the requirements to enable them to guarantee the respondent the information to enable their concentrate to be reconstituted, not to the standard ten degrees Brix, but to the Brix value, whether higher or lower, of each particular original batch of juice - quite uneconomic, that 1s, in the absence of a regulation compelling their competitors to do

Then it was said the applicant would not prosecute unreasonably in the event of unavoidable breach of an injunction, and that, if it did, the respondent could put the facts excusing it before the Court. Counsel asserted the Court would be excusing a breach of the law in advance 1f it did not issue an injunction in the form sought. Counsel seemed almost to suggest that to refrain from granting this remedy would be to offer the

respondent something in the nature of an indulgence.

I think there 1s more polemic than reason to such an approach. The Court does not impose the heavy obligation of an injunction upon a party with the intention that 1t may be breached with impunity, whether because of leniency or the exercise of reasonable discretion, by the applicant or by the Court. An order is intended to be obeyed, and there 1s no such

defence to proceedings for contempt as _ reasonable' conduct:

McNair Anderson Associates Pty Ltd v. Hinch (1985) V.R. 309. Nor

would the failure of an injunction to issue afford any defence, in a case actually involving a breach of the law, to independent proceedings in respect of that breach. Where the postulated breach would be different in kind from any breach which led to the injunction proceedings, it may be most appropriate that it be

When the evidence was re-opened, the applicant sought to strengthen its case by reference to other alleged breaches than those pleaded. It appeared that the respondent was, i1n 1984, prosecuted by Ballarat City Council for an _ offence of adulteration of juice, but that prosecution was withdrawn following some debate about the correct interpretation of the analyses upon which it had been based. It also appeared that at some unspecified time prior to the engagement of Mr. Sainsbury as managing director, the respondent had incurred nine convictions in N.S.W., but these all arose out of a particular prosecution in respect of the addition to products of a stabilizer - a quite different matter from the present problem. Finally, it appeared that during the pendency of the present proceeding the respondent

was convicted at Bankstown Court 1n respect of a deemed sale of

orange juice which does appear to have involved conduct similar to that which led to the present case, in respect of a similar product. Bearing in mind the scale of the respondent's operations in the Australian market, and also as an exporter of orange juice products, I do not regard this record as one which should lead me to draw particularly adverse conclusions about the respondent. The breaches alleged and proved furnish a ground for the issue, in the Court's discretion, of an appropriate

injunction to restrain conduct of the kind established.

In an appropriate case, the Court should not be deterred by a respondent's difficulties of compliance with a proper order. But to make the injunction sought would be to train the heavy guns of the law upon the respondent. Having regard to all of the circumstances, I do not think that would be the right way in which to exercise my discretion in this case. The appropriate injunction is one designed to protect the public against the sort of breach which has been shown to have occurred on a limited

number of occasions in the course of large-scale operations, without at the same time exposing the respondent to the risk of finding itself in contempt of court because of a different problem altogether, the problem created by a practice in the orange juice concentration industry in Australia about which expert opinion differs but which is in any case likely very soon

In determining the form which the injunction should take, I have been influenced by the fact that both Mr. Sainsbury

and Dr. Chandler agreed on the proposition that the respondent

should reconstitute orange juice on the basis of information obtained from the suppliers of the concentrate 1t uses. I accept Dr. Chandler's evidence that R.S.K. tests are highly reliable (though some of the precise values requisite for their best use in Australia have been under review and may not yet have been finally determined), but are not appropriate as a tool for quality control. In written submissions, too, the applicant accepted that the respondent must trust its suppliers. Neither

party was able to suggest a form of order requiring some

particular set of tests to be performed regularly as the means of

ensuring in practical terms the authenticity of the product.

I propose to order that the respondent be restrained from representing in trade or commerce that product labelled as or as containing orange fruit juice and supplied by it contains a

(1) it shall have diligently obtained from each supplier of concentrate used in the manufacture of the orange fruit juice the most accurate and up-to-date information available from that supplier on the basis of which to calculate the correct guantity of water required to reconstitute single strength orange juice from each container of concentrate supplied by that supplier; and

(2) it shall have reconstituted all concentrate used in the product on the basis of the information so obtained, save only for the correction of any error detected in that information, and so that the strength of the product would be not less than the strength stated on the respondent's label.

I shall stand the matter over for a short time to enable

counsel to put any further submission as to the drafting of the

proposed order, and other details such as the date when it should

wished to put his submissions as to costs after my delivery of

these reasons, and I shall hear counsel on that matter also.

I certify that this and the preceding twenty-four (24) pages are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Burchett.

Counsel for the Respondent: Solicitor for the Respondent:

27, 28 June 1985, 4 October 1985, 18, 19 December 1985, 22, 23 May 1986.

At a glance

Court

Decision date

Before

Source

Judgment (132 paragraphs)