Fiji Times Ltd v Fiji Post Company Ltd - judgment [1995] FJHC 135; Hbc0314j.95s (9 August 1995)

IN THE HIGH COURT OF FIJI
At Suva
Civil Jurisdiction

CIVIL ACTION NO. 0314 OF 1995

Between:

FIJI TIMES LIMITED
Plaintiff

- and -

FIJI POST COMPANY LIMITED
First Defendant
TANIELA BOLEA
Second Defendant

Mr. J. Howard and Mr. M. Young for Plaintiff
Mr. G.P. Lala for Defendants

JUDGMENT

On the 3rd of July this court granted on the ex-parte application of the plaintiff company, the publisher of the 'Fiji Times' newspaper, an interim injunction restraining the defendants who are the owner and publisher respectively, of the 'Daily Post' newspaper, from: "... supplying and or offering to supply and, or advertising the supply of advertising services to supermarkets on condition that they agree to advertise exclusively ... in the Daily Post newspaper."

On the same day the granting and terms of the injunction were notified to the 2nd defendant by a facsimile letter sent by the plaintiff's solicitors and in compliance with the court's order all relevant papers and a sealed copy of the injunction were served on the registered office and principal place of business of the 1st defendant company.

The following day 4th July this Court entertained an oral application by solicitors acting for the plaintiff company seeking a variation of the terms of the original injunction. This was made necessary because despite the injunction, radio and television advertisements referring to 'exclusive' advertising by supermarkets in the Daily Post newspaper, were broadcast during the evening of the 3rd July. The injunction order was then amended so as to include a further injunction restraining the defendants from:

"... publishing or broadcasting any advertisement commercial or promotional statement whatsoever which refers directly or indirectly to exclusive advertising arrangements made or proposed to be made by the defendants in respect of supermarket advertising."

On 5th July the defendants' solicitors returned an 'acknowledgment of service' and at the same time lodged an application for the removal or dissolution of the injunction supported by a brief affidavit deposed by the 2nd defendant. In it the 2nd defendant denies any illegality in its actions and asserts "(its) freedom ... to do such advertisements at such rate as the Defendant ... as the defendants thinks fit."

More particularly, the defendants deny any breaches of the Fair Trading Decree and states (without any details) that, "... the injunction is causing serious loss and harm ..." Finally, it is asserted that should the plaintiff succeed in its action damages would be an adequate remedy. The defendant's summons was fixed to be heard on the 11th of July.

On 10th July the managing director of the plaintiff company filed an affidavit opposing the dissolution of the injunction and in turn sought "... an order bolstering the present injunction." The affidavit contained annexures which clearly, even graphically, demonstrated how the plaintiff company has lost supermarket advertising as a direct result of defendant's allegedly illegal activity.

I am grateful to both counsels for the comprehensive submissions and authorities placed before the court to assist it in its deliberations on the relevant provisions of the Fair Trading Decree 1992 which is designed "... to promote the interests of consumers and the effective and efficient development of industry, trade and commerce through the encouragement of fair competition and to prevent the unfair or undesirable trade practices and to provide for an equitable, competitive and informed and safe market place, and provide for regulation, where necessary, for supply of goods and services and for related purposes."

In this case the "undesirable trade practice" complained about is "Exclusive Dealing" which is prohibited by Section 46 and is defined in subsection 2 in the following terms (so far as relevant for present purposes):

"A person engages in the practice of exclusive dealing if the person

(a) supplies, or offers to supply, goods or services;

(b) supplies or offers to supply goods or services at a particular price;

on the condition that the person to whom such person supplies, or offers or proposes to supply, the goods or services ...

(d) will not, or will not except to a limited extent, acquire goods or services, or goods or services of a particular kind or description, directly or indirectly from a competitor of such person ..."

Then subsection 10 provides that 'exclusive dealing' is not an offence

"unless -

(a) the engaging by that person in that conduct has the purpose, or has or is likely to have the effect, of substantially lessening competition."

and by way of further clarification and expansion subsection 13 states:

"In this section -

(a) a reference to a condition shall be read as a reference to any condition, whether direct or indirect and whether having legal or equitable force or not, and includes ... a condition the existence or nature of which is ascertainable only by inference from the conduct of persons or from other relevant circumstances; and

(b) a reference to competition ... shall be read as a reference to competition in any market in which-

(i) any person engaged in the conduct ... or

(ii) any person whose business dealings are restricted, limited or otherwise circumscribed by the conduct ...

supplies ... or acquires or ... is likely to supply or acquire ... goods or services or would, but for the conduct, supply ..., or be likely to supply or acquire, goods or services."

Finally reference may be usefully made to the terms of Section 4 which provides by subsection 2(a):

"a reference to engaging in conduct shall be read as a reference to doing ... any act, including the making of, or the giving effect to a provision of a contract or arrangement, the arriving at, or the giving effect to a provision of, an understanding ..."

By Subsection 8:

"For the purpose of this Decree, ... "market" means a market in Fiji and when used in relation to any goods or services, includes a market for those goods or services ..."

and subsection 39(b) which provides:

"a person shall be deemed to have engaged or to engage in conduct for a particular purpose ... if

(i) the person engaged or engages in the conduct for purposes that included or include that purpose; and

(ii) that purpose ... was or is (a) purpose ..."

Having regard to the above provisions in the context of the present case at this interlocutory stage and bearing in mind the relative novelty of fair trading litigation in this Court, after considering the opposing written and oral submissions of counsels for the plaintiff company and the defendants I am satisfied that this Court should approach this application according to the principles or 'tests' set-out in the leading case of American Cyanimid v. Ethicon (1975) A.C. 392 namely:

(1) Whether there is a 'serious question to be tried'?

(2) Whether 'damage would be an adequate remedy'?; and if not,

(3) Where does the 'balance of convenience' lie?

As to the first and acknowledged pre-condition to the grant of an interlocutory injunction, learned counsel for the defendants submits in writing that the evidence led by the plaintiff company is insufficient to ground an injunction i.e. the 'onus of proof' under Section 46(10) has not been satisfied, and further, the proposal by the first defendant company is of limited duration and will have a 'pro-competitive' effect given the present dominance of by the plaintiff company the likely market.

Orally counsel for the defendants submitted that there was no 'serious question to be tried' in so far as there was no "substantial lessening of competition" in that the plaintiff company appeared to be only concerned with 7 named supermarkets and not with all supermarkets in Fiji and therefore the effects (if any) on competition for such advertising would be insubstantial. Pressed to explain how the defendant company's proposal could be 'pro-competitive' counsel submitted that it would be so as a matter of pricing.

I note however that counsel's written submission appears to concede at p.4 that 'at face value' the defendant company's proposal conditioned as it would be does amount to 'prima facie exclusive dealing'. Furthermore in the context of the 'market' to be affected, the submission recognises at p.5 within the 'range of possibilities':

"(a) Supermarket advertising within Fiji;"

(b) Newspaper display advertising which might be limited to the Fiji Post and the Fiji Times."

I confess that having carefully considered counsel's written and oral submissions and the various authorities referred to, I am constrained to disagree in several respects.

In the first place, in so far as the submission refers to the 'onus of proof' and the particular elements or requirements of the offence under Section 46(10) it plainly misconceives the nature and purpose of an interlocutory injunction and the clear wording of Section 125(7) of the Fair Trading Decree.

In this regard Lord Diplock in the American Cyanamid case (op. cit.) said at p.509:

"When an application for an interlocutory injunction to restrain a defendant from doing acts alleged to be in violation of the plaintiff's legal rights is made on contested facts, the decision whether or not to grant an interlocutory injunction has to be taken at a time when ex hypothesi the existence of the right or the violation of it, or both, is uncertain and will remain uncertain until final judgment is given in the action. It is to mitigate the risk of injustice to the plaintiff during the period before that uncertainty could be resolved that the practise arose of granting him relief by way of interlocutory injunction;"

(my underlining)

and later at p.510 after rejecting the notion that the plaintiff was required to establish a "(strong) prima facie case" in seeking an interlocutory injunction and in affirming the principle that the court must be satisfied "that there is a serious question to be tried", his lordship said:

"It is no part of the court's function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with at the trial."

In the second place, and here I agree with the submissions of counsel for the plaintiff company that "... the defendants have by their submissions identified ... serious issues which require to be tried" namely, the issues arising out of a detailed consideration of the provisions of Section 46(10).

I am satisfied on the materials before me that the defendant's undisputed letter of June 6th, 1995 raises several 'serious questions to be tried' including the 'purpose' and 'effect' of the defendant's (proposed) conduct outlined in the letter; the nature of the 'market' sought to be affected thereby; and the degree to which 'competition' within the ascertained 'market' is being or is likely to be affected by the defendant's proposed conduct.

I turn next to consider where the 'balance of convenience' lies bearing in mind counsel's submission that damages are an adequate remedy for the plaintiff company and here again I turn to the words of Lord Diplock in the American Cyanimid case where he said of the factors to be considered by the court in assessing the 'balance of convenience' at p.511:

"... it is a counsel of prudence to take such measures as are calculated to preserve the status quo. If the defendant is enjoined temporarily from doing something that he has not done before, the only effect of the interlocutory injunction is to postpone the date at which he is able to embark on a course of action which he has not previously found it necessary to undertake;"

and a little later in his judgment:

"... the extent to which the disadvantages to each party would be incapable of being compensated in damages in the event of his succeeding at the trial is always a significant factor in assessing where the balance of convenience lies; and ... it may not be improper to take account ... the relative strength of each parties' case as revealed by the affidavit evidence adduced on the hearing of the application."

In this regard the following factors have weighed heavily with the Court in assessing where the 'balance of convenience' lies in this case, namely, this is a novel 'course of action' being undertaken or proposed by the defendants; the extent of damage likely to be suffered by the plaintiff company and directly occasioned by the defendants' proposed 'course of action' would be extremely difficult to assess or quantify; and lastly, there is a 'public interest' element to be considered in the case of an injunction granted under the provisions of the Fair Trading Decree 1992 which has as one of its declared objectives:

"... to secure effective competition in industry, trade and commerce."

(See also: ICI Australia Operations Pty. Ltd v. Trade Practices Commission (1992) A.T.P.R. 41-185.)

In all the circumstances I am firmly of the view that the 'balance of convenience' lies in the continuation of the interlocutory injunction granted to the plaintiff company and accordingly the defendant's application to dissolve the injunction is dismissed until the final determination of the action, with costs to the plaintiff to be taxed if not agreed.

(D.V. Fatiaki)
JUDGE

At Suva,
9th August, 1995.

HBC0314J.95S