Advanced Hair Studio Pty Ltd v Growth Hair Pty Ltd [2002] FCA 1642

FEDERAL COURT OF AUSTRALIA

Advanced Hair Studio Pty Ltd v Growth Hair Pty Ltd [2002] FCA 1642 TRADE PRACTICES – misleading and deceptive conduct – injunction granted Trade Practices Act 1974 (Cth) s 80 ADVANCED HAIR STUDIO PTY LTD V GROWTH HAIR PTY LTD, ROBYN TEMPLE AND VITTORIA BATTISTINI V 248 OF 2002 MERKEL J 20 DECEMBER 2002 MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIAN DISTRICT REGISTRY V 248 OF 2002

BETWEEN: ADVANCED HAIR STUDIO PTY LTD

(ACN 005 245 143)

APPLICANT

AND: GROWTH HAIR CLINIC PTY LTD

(ACN 098 620 412)

FIRST RESPONDENT

ROBYN TEMPLE

SECOND RESPONDENT

VITTORIA BATTISTINI

THIRD RESPONDENT JUDGE: MERKEL J

DATE OF ORDER: 20 DECEMBER 2002

WHERE MADE: MELBOURNE

UPON THE USUAL UNDERTAKING as to damages having been given by senior counsel on behalf of the applicant the Court orders that: 1. Until further order the first respondent, whether by its servants, agents or howsoever otherwise, be restrained from representing to the public, whether by advertising or by the publication and distribution of brochures, that any product or service provided by it involves hair growth, hair restoration or hair replacement without representing expressly or impliedly that the product or service involves a hair replacement unit such as a hair piece, wig or some other similar product. 2. The Defences of the First, Second and Third Respondents be struck out. 3. The respondents have leave to file and serve an amended defence and any cross-claim by 5pm on 3 February 2003. 4. Adjourn the directions hearing to a videoconference hearing on 7 February 2003 at a time to be fixed. 5. Reserve all costs.

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

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIAN DISTRICT REGISTRY V 248 OF 2002

BETWEEN: ADVANCED HAIR STUDIO PTY LTD

(ACN 005 245 143)

APPLICANT

AND: GROWTH HAIR CLINIC PTY LTD

(ACN 098 620 412)

FIRST RESPONDENT

ROBYN TEMPLE

SECOND RESPONDENT

VITTORIA BATTISTINI

THIRD RESPONDENT

JUDGE: MERKEL J

DATE: 20 DECEMBER 2002

PLACE: MELBOURNE

REASONS FOR JUDGMENT 1 The applicant in these proceedings filed a Notice of Motion on 3 December 2002, seeking, inter alia, an injunction pursuant to s 80 of the Trade Practices Act 1974 (Cth) ("the Act") restraining the first respondent from representing that it offers products or services involving the growth of a person's hair. 2 The evidence is that the first respondent's business does not provide services that re-grow a person's hair. Rather, its business involves customers being provided with what is described as a "hair replacement unit". The second respondent, who was employed by the first respondent, described the process as follows: "Once the client decides to proceed with having the hair replacement unit fitted: · A template is taken of the client's head; · A sample of hair is taken for matching purposes; · The client's hair colour, for the purposes of the hair to be ordered, is determined; · An order for both base and hair is sent to China (where the bases are made and the hair vented in); · The order usually takes between 4 to 6 weeks to be completed; · On arrival at the First Respondent's premises in Subiaco it is fitted to the client, which usually takes about two hours." 3 Between 21 and 27 January 2002 the first respondent caused to be broadcast a television commercial on Channel 10 in the Perth Metropolitan area. The advertisement started with a voiceover and written words stating "Appearance is everything", and moved to a visual overhead sequence of a man's head which, on a fair viewing, seemed to indicate re‑growth of his hair. The voiceover on this sequence stated "get back a full head of hair in four weeks". The first respondent's logo, "Growth Hair Clinic" then appeared, with the voiceover "Growth Hair Clinic, Call us now for your free brochure". 4 The applicant wrote to the first respondent on 31 January 2002 alleging that the advertisement was in contravention of s 52 of the Act and demanded that the first respondent undertake to "cease and forever desist" from broadcasting the commercial. On 13 February 2002 the first respondent entered into an "irrevocable undertaking" to "immediately cease and forever desist from using the words 'get back a full head of hair in four weeks' or any substantially similar statements in any form of advertising." 5 However, between 22 September and 11 October 2002 the first respondent caused to be extensively broadcast on Channel 10 in the Perth Metropolitan area, an almost identical advertisement with only minor changes. The new advertisement, which the first respondent claims did not breach the undertaking, had the same visual overhead sequence of the man's head, referred again to "call us at Growth Hair" and visually displayed the Growth Hair logo, but referred to "get a full head of hair in six weeks". 6 The main change in the advertisement was said to be that the voiceover claims that customers can "get a full head of hair in six weeks" rather than the earlier advertisement which stated customers "get back a full head of hair in four weeks". If the first respondent represented that it can provide a person with a head of hair, it may be that that was capable of being consistent with the offering of a hair replacement unit rather than hair growth or hair implants. But, the use of the visual sequence in association with the first respondent's name, has led me to conclude that the impression conveyed and intended to be conveyed, is one of hair growth. That is a false representation. There is no element of growth in the hair replacement unit provided to customers, nor is there any element of hair implanting. The advertisement is plainly misleading as the first respondent's business does not involve hair growth or implanting but, rather, the provision of hair replacement units such as a wig or a hairpiece. 7 Neither of the first respondent's advertisements expressly or impliedly suggests that the only service being offered is one that relates to a hair replacement unit. It seems to me that both advertisements suffer from the vice of expressly or impliedly representing hair growth. It is also relevant that the first respondent advertises itself, as "Growth Hair Clinic Pty Ltd". Its name implies that it provides services involving hair growth, which it does not do. 8 In the circumstances the applicant has established there is a serious question to be tried. Indeed, it has made out a strong prima faciecase that the advertising, which I regard as audacious, contravenes s 52 of the Act. 9 The commercial was extensively broadcast on prime time Perth television. It is audacious because, having accepted the misleading aspects of the first advertisement, the first respondent engaged in very negligible changes of form which did not in any way change the substance of the representations it made. When the applicant's motion was brought to the first respondent's attention, it sought to argue that the slight changes of form meant that what was represented the second time was not misleading. For the reasons set out above I do not accept that argument. 10 The injunction sought in the present case does not just involve the parties; it also involves protection of the public from misleading advertising. In the circumstances I am satisfied injunctive relief is warranted. The balance of convenience is all in the applicant's favour; the relief will not only protect the applicant from misleading and deceptive advertising but, importantly, will protect the public from misleading advertising. Nothing has been put forward in the material that would suggest that the first respondent would suffer any loss or harm by reason of injunctive relief. Indeed, the only loss or harm it could claim to have suffered from that injunctive relief is the loss of a freedom to engage in what, prima facie, I regard as misleading advertising. 11 In formulating the relief I regard as appropriate in all the circumstances, I have had regard to the fact that notwithstanding the irrevocable undertaking made by the first respondent to desist from repeating the offending advertising, the first respondent has engaged in advertising that substantially, if not literally, repeats the offending advertisement. Secondly, in doing so it engaged in extensive prime time advertising. It seems to me in all the circumstances the Court should take a broad view as to the injunctive relief that is appropriate. While I do not anticipate that the relief would prevent lawful or accurate advertising, I will reserve liberty to apply to the first respondent to vary the injunction if that situation arises. 12 I propose to grant an injunction that until further order the first respondent, whether by its servants, agents or howsoever otherwise, be restrained from representing to the public, whether by advertising or by the publication and distribution of brochures, that any product or service provided by it involves hair growth, hair restoration or hair replacement without representing expressly or impliedly that the product or service involves a hair replacement unit such as a hair piece, wig or some other similar product. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel.

Associate: Dated: 3 February 2003

Counsel for the Applicant: Mr B.R.S Kendall QC with Mr A.K Panna

Solicitor for the Applicant: Stephens Lawyers and Consultants

Solicitor for the Respondent: Mr Peter Whyte of Peter J Whyte

Date of Hearing: 20 Decemeber 2002

Date of Judgment: 20 December 2002