Dunnes Stores Limited (plaintiff) v Mandate (defendant).

Injunction - Interlocutory application to prohibit publication of advertisement - Whether advertisement "misleading advertising" - Fair question - Balance of convenience - European Communities (Misleading Advertising) - Regulations 1988 (51 No 134 of 1988).

The High Court (before Mr Justice Murphy); judgment delivered 5 December 1995.

BOTH the Council Directive and the Regulations made thereunder give some guidance as to how misleading advertising should be identified. Of particular significance is the fact that the 1988 Regulations provide that it shall not be necessary for an applicant to prove either actual loss or damage to him or recklessness or negligence on the part of the advertiser and also the fact that the publication of misleading advertising is not made a criminal or even a civil wrong by either the Regulations or the Council Directive. The contravention of the Regulations would not entitled the aggrieved party to damages. They were entitled to restrain the advertiser in certain circumstances from publishing inaccurate or misleading statements or to have such statements, if published corrected.

In the instant case, where the plaintiff sought an interlocutory injunction to restrain the publication by the defendant, of a particular advertisement or any similar advertisement, the effect of granting such an injunction at the interlocutory stage would be virtually definitive in the circumstances of the ease. The plaintiff was free to provide the public with its version or account of the matters dealt with in the defendant's advertisement or such other topics as the plaintiff felt should be brought to the attention of the public.

The High Court so held in refusing to make the order sought. Frank Clarke SC, Richard Nesbitt SC and Lyndon McCann BL or the plaintiff Michael Collins SC, Peter Charleton SC and Anthony Kerr BL for the defendant.

MR JUSTICE MURPHY said that at midday on Friday 24 November 1995 Pat O'Donaghue, the group financial controller of the plaintiff company, saw for the first time a copy of an advertisement which the defendant, had booked to be carried in the national press on Saturday 25 November 1995. As the plaintiff contended that the advertisement was false and misleading, it applied to and obtained from Miss Justice Carroll an interim injunction to restrain the publication of the advertisement or any advertisement to a similar effect until the following Monday and liberty was given to serve short notice for the hearing of an interlocutory application on that date. The motion was then listed for hearing before Mr Justice Murphy on Wednesday 29 November 1995 and heard on that date.

Mr Justice Murphy said that the plaintiff was directly or indirectly the proprietor of the well known stores and supermarkets in which several thousand workers were employed. The work force comprised both male and female employees some of whom were employed on a full time basis and others part time. He said that distinctions also existed in the terms of employment of those engaged at different times. The defendant was a trade union which claimed the majority of the plaintiffs employees as its members. There had been considerable industrial unrest between the parties over a period of several weeks and the particular advertisement of which the plaintiff complained and which the defendant had proposed to publish admittedly formed part of the defendant's current programme of industrial action against the plaintiff.

Mr Justice Murphy said that the plaintiff contended that the proposed advertisement would have been misleading advertising with the meaning and for the purposes of the 1988 Regulations and accordingly sought an order prohibiting such publishment. Mr Justice Murphy said that the 1988 Regulations provide by paragraph 4(1) thereof as follows:

"Any person, including the Director of Consumer Affairs and Fair Trade, may upon giving notice of the application to any person against whom the order the subject of the application is sought, apply to the High Court for, and may, at the discretion of that court, be granted, an order prohibiting the publication, or the further publication, of advertising the publication of which is misleading advertising."

Paragraph 2(2) of the 1988 Regulations provides that:

"A word or expression that is used in these regulations and is also used in the Council Directive has, unless the contrary intention appears, the meaning in these regulations that it had in the Council Directive."

Mr Justice Murphy said that the Council Directive referred to in that paragraph (being the directive in pursuance of which the 1988 Regulations were made) was Council Directive 84/450 of 10 September 1984 entitled "Relating to approximation of the laws concerning misleading advertising" and that directive defined "advertising" and "misleading advertising" in Article 2 thereof in the following terms:

"1. "Advertising" means the making of a representation in any form in connection with a trade, business, craft or profession in order to promote the supply of goods or services, including immovable property, rights and obligations;

2."Misleading advertising" means any advertising which in any way, including its presentation, deceives or is likely to deceive the persons to whom it is addressed or whom it reaches and which, by reason of its deceptive nature, is likely to affect their economic behaviour or which, for those reasons, injures or is likely to injure a competitor."

Mr Justice Murphy said that both the Council Directive and the 1988 Regulations gave some guidance as to how misleading advertising should be identified but of particular importance was the fact that the Regulations provided that it should not be necessary for an applicant to prove either actual loss or damage to him or recklessness or negligence on the part of the advertiser. He said that the publication of misleading advertising was not made a crime or even a civil wrong by either the 1988 Regulations or the Council Directive.

Mr Justice Murphy said that it was necessary then to refer to the terms of the proposed publication. The caption included the question: "Do they know it's Christmas time at all?" and a representation of a broken Christmas tree. The text of the publication commenced with a paragraph which included a reference to an agreement which was reached between the plaintiff and the defendant following the intervention of the Labour Court in the summer of that year. The paragraph concluded with the statement that since the strike, things had got worse rather than better. It was in that context that the second paragraph went on to make more specific allegations. It was alleged that the plaintiff had failed to act upon what was agreed in good faith; that it had taken a unilateral decision to cut Christmas pay rates; failed to act on the Labour Court recommendation to immediately award workers a 3 per cent rise under the PESP and failed to create the 200 full time jobs which they had agreed to do.

Mr Justice Murphy said that the third paragraph of the publication was a more general criticism of the plaintiff which stated that the plaintiff's decision to cut pay rates for Sunday working during Christmas was the last major straw for workers who genuinely wanted to find a positive constructive way forward. The paragraph continued that the plaintiff's competitors were still paying the traditional triple time for Sunday working at Christmas. It pointed out that for many of the plaintiff's workers, their Christmas pay was absolutely vital and that even with it, a full time worker still earned a lot less than the average industrial wage. It concluded that with Christmas pay, the plaintiff's workers were able to afford Christmas presents for their families and that this now had been taken away from them.

Mr Justice Murphy inferred that the agreement which it was alleged that the plaintiff failed to act upon was the agreement referred to in the first paragraph, namely the agreement reached following upon the intervention of the Labour Court. If that was so, he thought that it could be stated confidently that the allegation that the plaintiff had taken a unilateral decision to cut Christmas pay rates in breach of such agreement was not merely misleading but erroneous. Neither the recommendation of the Labour Court nor the agreement made in pursuance thereof dealt with Christmas pay rates.

Mr Justice Murphy said that the position with regard to the 3 per cent pay rise under the PESP and the creation of 200 full time jobs was less clear. Certainly the Labour Court intended that the 3 per cent increase should date from 4 September 1995 and that payment should be made with immediate effect. Payment of that increase had not been implemented by the plaintiff. The plaintiff drew attention to the fact that the recommendation for an increase was made in the context of a related recommendation likewise accepted by the parties that discussions would begin between them on a quid pro quo for that increase and that those discussions would likewise begin immediately. Those discussions had not taken place either and a serious difference of opinion existed between the parties as to which of them was responsible for the delay in that regard. The plaintiff said in relation to the particular statement that it was incomplete and that it did not tell the complete story.

Mr Justice Murphy said that the creation of 200 full time jobs had been recommended by the Labour Court and that the plaintiff admitted that they had not yet been created. On the other hand in a letter of clarification of 5 July 1995 in relation to those jobs, the Labour Court indicated that they expected the process of creating those jobs would be commencing immediately on the resumption of normal working. The plaintiff contended that the process had indeed commenced and that already some jobs had been created.

Mr Justice Murphy said that the statement to the effect that the plaintiff's workers would not be able to afford Christmas presents for their families might have been something more of an opinion or conclusion than the immediately proceeding statement to the effect that a full time worker in the plaintiff company still earned a lot less than the average industrial wage. However even in that ease, it was not possible to say whether the statement was entirely correct or otherwise. Distinctions had to be drawn between the gender of the worker and the date on which their employment commenced before valid comparisons could have been drawn. As Mr Justice Murphy understood the figures, the full time female workers would have received more than the average industrial wage whereas the full time male workers would not have. However, Mr Justice Murphy said that the foregoing were tentative views based on evidence which was hurriedly compiled and untested by cross examination of the witnesses by which affidavits were sworn. A final determination on the facts would have to await a plenary hearing in the case.

Mr Justice Murphy said that similarly, and perhaps even more important, was the requirement to obtain a judicial determination on the proper interpretation of the 1988 Regulations and the Council Directive on which they were based. It had been argued on behalf of the defendant that the posed or intended to be made in connection with a trade, business, craft or profession and even if it were, that most assuredly it had not been made in order to promote the supply of goods or services. It was said that the publication would not constitute advertising, still less misleading advertising in accordance with the definition of those terms as incorporated in the 1988 Regulations by reference to the Council Directive. He said that, as was pointed out in the first of the Campus Oil cases [1983] ILRM 258, a final decision on this important question of law must likewise await the plenary hearing of the action and the judgment of the court based on the full argument presented by the parties.

In the meantime he said that there was no difficulty in recognising that the plaintiff had established that there was a fair question, both on the facts and the law, to be decided so that the issue at this stage reduced itself to one based on the balance of convenience in the granting or withholding of an interlocutory injunction. Mr Justice Murphy said that even if, on the plenary hearing, the plaintiff's claim was upheld, the court would have a discretion to grant or withhold injunction relief. This was clearly indicated by the terms of paragraph 4 of the Regulations and the judgment of Mr Justice Keane in O'Connor and Others v Powers Supermarkets Limited (unreported, 15 March 1993).

Mr Justice Murphy said that at the present stage of the proceedings, it seemed to him that the balance of convenience and the proper exercise of the discretion of the court lay in favour of withholding interlocutory relief. There was difficulty in applying the established criteria to the present claim. The contravention of the regulation would not entitle the aggrieved party to damages. The aggrieved party was entitled to restrain an advertiser in certain circumstances from publishing inaccurate or misleading statements or to have such statements, if published, corrected. On the other hand, if the intended publication were to prohibited at that stage, such merits as the advertising campaign based on an emotive appeal to financial stringency at Christmas time would be wholly and, for all practical purposes, permanently defeated.

Mr Justice Murphy said that if no injunction was granted the defendant would be free (so far as the present proceedings were concerned) to publish the proposed advertisement and of course the plaintiff would have equal liberty, and presumably have more than adequate resources, to provide the public with its version or account of the matters dealt with in the defendant's advertisement or such other topics as the plaintiff felt should be brought to the attention to the public. It seemed to him that this procedure, though unsatisfactory and disappointing in certain respects, was a more attractive temporary solution than the granting of an injunction at an interlocutory stage the effect of which would have been virtually definitive in the circumstances of the case.

Mr Justice Murphy said that in the circumstances he would refuse to make the order sought.

Solicitors: William Fry (Dublin) for the plaintiff; John J. McDonald & Co. (Dublin) for the defendant.