Capilano Honey Ltd & Anor v Golden Circle Ltd [2001] QSC 227

4- l- l I \ Cl · .i l. ·1 . St t R . B . (~ Queensland Governm,ent a e e p Ort Ing Ure aU ~ Departmentofjustlrea~ A!t=y~n(ral Transcript of Proceedings Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau. SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION WHITE J CAPILANO HONEY LIMITED (ACN 009 686 435) and HONEY CORPORATION OF AUSTRALIA (ABN 55 009 686 435) and GOLDEN CIRCLE LIMITED (ABN 85 054 355 618) . BRISBANE .. DATE 14/06/2001 JUDGMENT h Floor, The Law Courts, George Street, Brisbane, a. 4000 1 REVISED COPIES ISSUED State Reporting Bureau Date IL/-; t:, I O I First Applicant Second Applicant Respondent Telephone: (07) 3247 4360 Fax: (07) 3247 5532 -- 1 of 7 -- 14062001 Tl/TEl M/T 1/2001 (White J) HER HONOUR: As you will be aware, gentlemen, this is just the occasion for recording the reasons for the decision that was given yesterday. Late yesterday afternoon I granted the applicants an interim injunction until 4 p.m. on Friday, 15 June which restrained the defendant from causing a television advertisement from being published. I now publish my reasons. The thrust of the advertisement which first went to air on television on Monday evening is to invite the viewer to compare the defendant's jam with four jams marketed under four brand names, Cottees, Monbulk, Allowrie and IXL and informing the viewer that all four are foreign owned whereas the defendant's jam is owned by Australian farmers. The video is "RDM6" to the affidavit of Roger Masters filed by leave on 13 June. Mr Masters is the managing director of 1 10 20 30 the applicant companies. The text and video description is 40 "BJKl" to the affidavit of Barry Kelly, the managing director of the defendant and a copy will be attached to these reasons. The applicant companies are both 100 per cent Australian owned companies, the shareholders of which live and work in Australia. The first named applicant owns the second and it is convenient to refer to them as Capilano. Capilano was founded in 1953 and is a well known brand in Australia. It 2 JUDGMENT 50 60 -- 2 of 7 -- 14062001 Tl/TEl M/T 1/2001 (White J) is, Mr Master deposes, one of the world's largest honey producing and marketing companies. It markets a number of separate brands of honey including Capilano and Allowrie. It has used the latter name to market its honey since 1974. Since 1995 Capilano has been licensed to sell honey under the Allowrie brand owned by Bonlac Foods Limited, a foreign company. Mr Masters deposes that the Allowrie brand is one of Capilano's three top selling brands of honey and marketed as a separate brand. "RDM3 11 and "4 11 to Mr Masters' affidavit are the labels from the squeeze pack and jar of Allowrie honey including the lid of the jar. The label has a picture of the Australian flag on it with the words "Proudly 100 per cent Australian owned". The words on the lid state that the product is "Australian made 1 10 20 30 and owned." The word "AUSBUY" is on the lid. The brand 40 name Allowrie is in large distinctive red lettering and the product is described as "Pure Australian Honey". Mr Masters deposes to the power of labelling by reference to a change of colour for the label last July and a more prominent lettering for the brand name which Mr Masters asserts was the reason for a significant increase in the revenue of the product. Mr Masters deposes that Allowrie honey products are usually located in the same section of 3 JUDGMENT 50 60 -- 3 of 7 -- 14062001 Tl/TEl M/T 1/2001 (White J) the supermarket as jams, including Allowrie jam, which is not Capilano's product. As I understand it, the defendant, a well known producer of tinned pineapple and other produce and drinks, has recently entered the jam market. According to Mr Kelly the defendant has arranged to have the advertisement about its jam product broadcast during the period 11 to 30 June 2001. Capilano contends that the advertisement is likely to mislead or deceive the viewer into a belief that all products with the Allowrie brand are foreign owned and not Australian owned and therefore not worthy of Australian consumer patronage. The defendant contends that no reasonable viewer would think that the advertisement is about anything other than jam and jam is not Capilano's product, but honey. 1 10 20 30 The cases to which I have been referred make clear what is, 40 with respect, commonsense. Namely, that advertisements and the like are not to be minutely examined for subtle nuances but taken as a whole to understand their impact on a viewer who is not too analytical in his or her approach to such things. See Parkdale Custom Built Furniture Proprietary Limited v. Puxu Proprietary Limited (1982) 149 CLR 191; Tobacco Institute of Australia Limited v. Australian Federation of Consumer Organisations Inc. (1992) 38 FCRl; and Telstra 4 JUDGMENT 50 60 -- 4 of 7 -- 14062001 Tl/TEl M/T 1/2001 (White J) Corporation Limited v. Optus Communications Pty Ltd (1997) ATPR 41-541. Merkel Jin the Telstra case approached it thus: "I have applied these principles to the Optus commercials. They will be seen by the casual but not overly at tentative viewer viewing a free-to-air program with only a marginal interest in the advertisements shown between the segments of the program. In that context it will be the first impressions conveyed to that viewer, rather than an analysis of the cleverly crafted constituent parts of the commercial, which will be determinative. The observations I have referred to above are of particular relevance to television advertising where the message is basically one of the impression 1 10 20 30 conveyed. In television and print advertising where a 40 false dominant impression is conveyed, its message will not be ameliorated by the accuracy of the detailed message which is derived from a careful analysis of all of the constituent parts of the advertisement." The defendant will amend its advertisement from Sunday next by the addition of the word "jams" after the reference to all the brands so that it will then state, "Yes indeed, IXL, Allowrie, Monbulk and Cottees are all foreign owned jams." 5 JUDGMENT 50 60 -- 5 of 7 -- 14062001 Tl/TEl M/T 1/2001 (White J) Mr O'Donnell QC for Capilano submits that the focus of the advertisement and the message which would be conveyed to a reasonable viewer is about supporting Australian owned companies rather than about Australian companies which sell jam with the emphasis on jam, as the defendant contends. There is considerable emphasis on brand names by visual close ups and by naming the brands in the advertisement. Mr Morrison, for the defendant, submitted that at worst the advertisement might leave the viewer in a state of confusion or wondering, as discussed in McWilliam's Wines Proprietary Limited v. McDonalds System of Australia, 1980, 49 FLR 455, and that this is insufficient to constitute misleading and deceptive conduct or conduct which is likely to mislead or deceive. Ms Kirkwood, a marketing co-ordinator for Capilano deposes to speaking by telephone with a member of the public who saw 1 10 20 30 the advertisement and asked how the claim could be made on 4 o the lid and label of the Allowrie honey that it was Australian owned when it was foreign owned. For what it is worth, in evidentiary terms, this is not a confused but an annoyed or even angry viewer. So although the labels say "Australian Owned" a viewer may very likely conclude that it is a false statement rather than separate out the Allowrie honey from the Allowrie jam. Although minds might differ on first and second impressions, in my view, the prominence of the brand names overwhelms the 6 JUDGMENT 50 60 -- 6 of 7 -- 14062001 Tl/TEl M/T 1/2001 (White J) exclusively 11 jammy 11 nature of the product. That is, "Buy Golden Circle products, it is Australian owned and not IXL, Cottees, Monbulk or Allowrie products because they are foreign owned." As to the balance of convenience, it will always be difficult to assess damages in such cases with respect to either party. Mr Morrison submitted that the defendant, just entering the market, will have no past performance with which to compare what its losses are whilst Capilano will have its figures readily enough available. The defendant has expended in excess of $700,000 on this advertising campaign. It can take up the TV time already paid for at a later date. The costs of the advertisement are known. Capilano, on the other hand, is concerned for its reputation which can never be recovered should it be successful by correction advertising or the like. That I think favours Capilano on the balance of convenience. As I ordered yesterday afternoon, the defendant is restrained from publishing the advertisement until 4 p.m., 15 June and the costs are reserved. 7 JUDGMENT 1 10 20 30 40 50 60 -- 7 of 7 --