Re Hospital Benefits Association v Health Insurance Commission [1990] FCA 45 (23 February 1990)

FEDERAL COURT OF AUSTRALIA

Re: THE HOSPITAL BENEFITS ASSOCIATION
And: HEALTH INSURANCE COMMISSION
Nos. V G313 and G333 of 1989
FED No. 55
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Beaumont J.(1)

CATCHWORDS

Trade Practices - consumer protection - Trade Practices Act 1974, s.52 - conduct likely to mislead or deceive - comparative advertising.

Trade Practices - consumer protection - Trade Practices Act 1974, s.80A(1)(6) - power to order corrective advertising - discretion.

HEARING

MELBOURNE
23:2:1990

Counsel and solicitors J.G. Santamaria and J. Dodds

for the applicant: instructed by Messrs Cooke and
Cussen

Counsel and solicitors Dr. C. Jessup QC and
for the respondent: K. Howard instructed by Minter
Ellison

Counsel and solicitors Dr. C. Jessup QC and
for the applicant: K. Howard instructed by Minter
Ellison

Counsel and solicitors J.G. Santamaria and J. Dodds
for the respondent: instructed by Messrs Cooke and
Cussen

ORDER

In matter No. 313
Declare that the statements made by the respondent in September 1989 in the circulars addressed to paymasters and pharmacy agents purporting to compare the "Top Hospital" Tables of the applicant and the respondent were likely to mislead in contravention of s.52 of the Trade Practices Act 1974 ("the Act").
In matter No. 333

Declare that the television, radio, newspaper and billboard advertisements and promotional brochure authorised by the respondent referred to in the reasons for judgment ("the said advertisements") were likely to mislead in contravention of s.52 of the Act.

Order that the respondent be restrained from advertising matter or authorising the advertisement of matter in the comparative terms, express or implied, of the said advertisements or in any similar comparative terms.

Reserve liberty to the applicant to seek further relief by way of damages.

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

DECISION

The parties to these proceedings, which have been heard together, carry on rival businesses in Victoria as health insurers. They are the major funds operating in Victoria. In the course of seeking business, they advertise the benefits which they offer to existing and prospective contributors to the funds which they operate. The present litigation arises out of "comparative" advertising by the parties which, it is said, is conduct likely to mislead and thus conduct engaged in contrary to s.52 of the Trade Practices Act 1974 ("the Act") (see generally Hospitals Contribution Fund of Australia Ltd. v. Switzerland Australia Health Fund Pty. Ltd. (1987) 78 ALR 483).
The claims made by the Hospital Benefits Association ("H.B.A.") (No. VG 313 of 1989)

2. H.B.A. claims that the Health Insurance Commission, carrying on business as "Medibank Private" ("Medibank"), made several misleading statements in circulars sent to paymasters and pharmacy agents. Although the circulars were addressed to paymasters and pharmacy agents, it can be inferred that, in the ordinary course of their dealings, the paymasters and the pharmacy agents would, in turn, communicate the terms of the circulars to interested members of the public.
The paymasters' circular

3. The circular addressed to paymasters ("the paymasters' circular") sent in late September 1989 and received in early October 1989, was as follows:

MEDIBANK PRIVATE GROUP ARRANGEMENT
TO: PAYMASTERS
MARKETING INITIATIVES FROM OCTOBER '89
Dear Paymaster
You will have noticed in recent weeks a heavier emphasis on television
and radio advertising by Medibank Private. Our presence and profile
within the community is expected to bring about a positive response
from both uninsured and insured people.
Tables being featured are:
. 'Share and Save' - 'That's the Difference]' - by saving up to
25% on contribution payments measured against conventional
tables. Emphasis is on heavy television advertising with
Channels 7 and 9 - continuing for many more weeks.
. 'First Choice' - this table at only $2/week ($8.70/month) is
promoted on radio across the State. It is expected to create
interested response from 'young singles' seeking first time
entry to private health insurance cover.
It is important that you know about a new initiative being introduced by
Medibank Private on 1 October. Contribution amounts will be reduced
for those members having their fund payments automatically deducted
from salaries/wages through a Medibank Private payroll deduction
scheme. This particularly important feature assists Medibank Private
to compare even more favourably in pricing terms with major
competitors.
Total membership of Medibank Private now represents around 40% of the
insured population in Victoria. When our comprehensive benefit range
is compared with competitors' tables - combined with extremely keen
contribution rates, it is clearly in the best interest of staff to join
or transfer to Medibank Private.
Examples of contribution comparisons on major full benefit (no excess)
tables follow:
HBA Medibank Savings
Private
$ $ $
Top Hospital Table
(family rates) 19.80 16.22 3.58/week
Intermediate Table
(family rate) 15.60 13.34 2.26/week
Major Extras
(family rate) 7.00 6.54 0.46/week
(Emphasis added)
Another important introduction for Medibank Private Top Hospital table
members is a new 'Blue Ribbon' 'add on' component cover. This option is
available only to members of full benefit 'Top' Hospital tables. It
will meet whatever moiety or 'out of pocket' expenses apply when
hospitalised in those private hospital having a negotiated benefit
agreement with Medibank Private.
'Blue Ribbon' option is only an additional $1.30/single/week - providing
100% cover in all private hospitals where this arrangement applies. It
refers to the following 17 hospitals at this time, with the list

extending

gradually.
PARTICIPATING PRIVATE HOSPITALS (AT 1 OCT '89)
Warringal Private (Heidelberg) Vimy House (Kew)
Linacre Private (Hampton) Coonara (Melbourne)
Epworth (Richmond) Cedar Court (Glen Iris)
S.F.X. Cabrini (Malvern) Bryson Private (Canterbury)
Freemason's (East Melbourne) St John of God Ballarat (Ballarat)
Melbourne Clinic (Richmond) Bellbird (Blackburn)
The Avenue (Windsor) Cliveden Hill (East Melbourne)
Beleura (Mornington) Waverley Private (Waverley)
Peninsula Private (Frankston)
Thank you for your interest in Medibank Private matters and your
generous support to our membership.

4. On behalf of H.B.A., it is submitted that the circular, and, in particular, the purported comparison of the "Top Hospital Tables", was likely to mislead for several reasons. It will be convenient to deal separately with the issues that arise.
The first issue: Does the circular represent that membership of Medibank's "Top Hospital Table" (Family rates) results in a saving of $3.58 per week when compared with membership of H.B.A.'s "Top Hospital Table" (family rates)?

5. This is not seriously in dispute.
The second and third issues: Does the circular represent that Medibank's and H.B.A.'s "Top Hospital" Tables are truly comparable? If so, is this representation contrary to the fact and thus likely to mislead?

6. On behalf of H.B.A., it is submitted that the representation is likely to mislead because it suggests that it is appropriate to compare the "products" of H.B.A. and Medibank as like products whereas the "products" are, in fact, different in material respects.

7. In my opinion, this submission should be accepted.

8. The circular makes a comparison and thus does suggest that a comparison is appropriate in the sense that like is being compared with like so that they are truly comparable.

9. A similar question arose in the HCF Case. Fox J. (with the concurrence of Davies J.) said (at p 484):

"Statements have been made in this court on a number of
occasions to the effect that where comparative
advertising is concerned, representations coming under
s.52 of the Trade Practices Act 1974 (Cth), which
relates to conduct likely to mislead or deceive, will
be examined more critically. This flows from the
conclusion that, in general, where representations are
made comparing one product with another, the ordinary
person to whom they are addressed is less likely than
otherwise to regard what is said or written as a mere
exaggeration, stated with an excess of enthusiasm. The
language is more likely to be regarded as having been
put forward deliberately and with some precision.
In the present case, there is comparative advertising
between health benefit insurers. The whole topic of
health insurance has, for many years, been rather
confused, but it is my belief that when the registered
health benefit insurers themselves state matters in
their advertising material they will commonly be
regarded as having been stated with accuracy. When it
comes to comparative advertising between them, the two
elements which I have mentioned combine.
The ordinary member of the public to whom the
advertisements are addressed is more likely to be
misled than in many other situations. This result is
to be avoided and obviously can be with proper advertising."

10. Morling J. (with the concurrence of Fox and Davies JJ.) said (at p 489):

"I am of the opinion that the appellant's submissions on
this matter should prevail. The words 'more cover'
immediately follow the words 'less cost'. The
reference to 'less cost' is a reference to the
difference between the appellant's and respondent's top
hospital and ancillary weekly rates, as set out in the
table. The comparability of these weekly rates is
highlighted by the making of the statement that 'you
can save up to $364 a year on top hospital and
ancillary cover compared to HCF'. In other words, a
direct comparison is made between the two funds on the
matter of costs. I think the reader of the
advertisement could only understand from the reference
to 'more cover' that the cover offered by the two funds
is also directly comparable, and that the respondent's
fund offers more cover. This form of advertising is
truly comparative. A person who resorts to such
advertising runs the risk that if the comparison he
makes is not accurate, it will be likely to mislead the reader."

11. It is common ground that, at or about the time the circular was published (i.e. early October 1989): (1) H.B.A.'s "Top Hospital Table" provided cover for all ("100%") "out of pocket" hospital related expenses incurred in certain private hospitals which had negotiated a special benefit (or "provider") agreement with H.B.A.; (2) Medibank offered its contributors four levels of hospital insurance: (i) Basic Public hospital cover; (2) Intermediate Hospital cover; (iii) Top Hospital cover; (iv) "Blue Ribbon" Hospital cover; (3) Medibank's "Top Hospital" Table provided cover which ensured that maximum "out of pocket" hospital related expenses were limited to $20 per day in shared accommodation and $30 per day in a private room in certain private hospitals which had previously negotiated this benefit arrangement with Medibank; and (4) Medibank's "Blue Ribbon" option, which was available from 1 October, but only if an additional premium were paid, provided the same "cost free" ("100%") benefit cover as H.B.A.'s "Top Hospital" Table when a member was treated in one of certain private hospitals having benefit arrangements with Medibank.

12. That being so, it follows, in my view, that the statements in the paymasters' circular was likely to mislead. The circular represented, contrary to the fact, that H.B.A.'s "Top Hospital Table" and Medibank's "Top Hospital Table" were, in truth, comparable. Although it was arguable that a true comparison could have been made between H.B.A.'s "Top Hospital Table" and Medibank's "Blue Ribbon" add-on component, no true or valid comparison was open between H.B.A.'s "Top Hospital Table" and Medibank's "Top Hospital Table".
The fourth issue: What relief, if any, should be granted as a consequence of the contravention of s.52?

13. After H.B.A.'s solicitors had complained that the circular was misleading, on 24 November 1989 Medibank sent a further circular to paymasters and pharmacy agents. The circular sent to paymasters was similar to that sent to pharmacy agents and, for present purposes, it will suffice to refer to the circular sent to pharmacy agents as follows:

You will recall receiving our recent circular about new initiatives
from 1 October 1989. There have been some complaints about the
content of this circular, none of which we view as justified. However
in an endeavour to prevent any possible confusion arising and by way
of clarification we make the following points:
1. On page 2, the pricing comparisons appearing on that page display
on the first two lines, monthly contribution amounts at the single
and family rate for both HBA's and Medibank Private Top Hospital
Table. Figures within the comparison revealed savings of
$6.27/month/single and $46.52/quarter/family for Medibank Private
members.
It should be noted that HBA's Top Hospital Table covers members
of that table for 100% 'out-of-pocket' hospital related expenses
incurred in those 41 hospitals where a special benefit agreement
exists with the HBA fund.
Medibank Private Top Hospital cover ensures that maximum
'out-of-pocket' hospital related expenses are limited to $20 per day
in shared accommodation and $30 a day when occupying a private
room. This benefit arrangement currently exists in 20 private
hospitals in Victoria.
2. Agents and staff should be aware that Medibank Private members
taking the new 'Blue Ribbon' 100% Hospital Cover also receive 'cost
free' benefit cover arrangement when they are treated in one of the
20 private hospitals having a benefit arrangement with Medibank
Private.
With the 'Blue Ribbon' 100% Hospital cover, the Medibank Private
member at both family or single contribution rate would pay less
than the HBA member at this cover level as the following example
explains.
HBA Medibank Private
(Family Rate) (Family Rate)
$ $
Monthly 86.04 84.80
Quarterly 258.12 244.20
Half yearly 516.24 478.40
3. Differences exist between the extras coverage of these two funds.
Pharmacy agents should be aware of these differences.
If you have any queries about benefits or the coverage offered by
Medibank Private, please refer to our published brochures or telephone
[phone].
Thank you for your interest in Medibank Private matters and your
continuing assistance to our membership.

14. H.B.A. does not seek an injunction to restrain any further publication of the original circular, nor does H.B.A. seek damages. However, H.B.A. does seek an order, pursuant to s.80A(1)(b) of the Act, that Medibank publish a "corrective" circular to paymasters as follows:

In September 1989, Medibank Private circulated to Paymastes a document in
which it described its marketing initiatives from October 1989. Among

other
things, that document contained a table in which the contribution rates of
HBA and Medibank Private were compared. In particular, the table suggested

that membership of the "Top Table" (family rates) of Medibank Private
involved a saving of $3.58 per week over membership of the Top Hospital
Table (family rates) of HBA.
HBA has complained that the circular was misleading in so far as it
suggested that the benefits available by reason of membership of Medibank
Private's Top Hospital Table family rates were identical or equivalent to
the benefits available for membership of HBA's Top Hospital Table (family
rates).
Membership of HBA's Top Hospital Table give a HBA subscriber access to
guaranteed 100% cover in hospitals with which HBA has a negotiated
agreement. However, those benefits are not available to a member of

Medibank

Private's "Top Hospital Table". If a member of Medibank Private wishes to
have such benefits he must join the "Blue Ribbon" level of that fund. To

do

so, he must pay an additional $2.60 per week for a family subscription or
$1.30 for a single membership.
In November 1989, Medibank Private circulated to paymasters a document in
which it corrected the earlier document. However, in doing so, it claimed
that the criticism of HBA had not been justified.
In recent proceedings, the Federal Court of Australia found that the
criticisms by HBA of the September document were justified.

15. It will be seen that the matter of real concern to H.B.A. is the failure by Medibank to admit that H.B.A.'s "criticisms" (which were not explained to paymasters in any event) were justified. Medibank has always maintained that its original circulars were not likely to mislead. For this reason, it is appropriate that the Court declare that the relevant statements were likely to mislead and I propose to make such a declaration. However, it is not appropriate, in my view, to order any further corrective advertising. The substance of the case now made by H.B.A. was reflected in the circular dated 24 November. It is unnecessary to take that matter any further.
The pharmacy agents' circular

16. In late September 1989, Medibank addressed a circular to its "recognised pharmacy agents" as follows:

MEDIBANK PRIVATE
MARKETING INITIATIVES FROM OCTOBER '89
Dear Agent and Staff
You may have noticed in recent weeks a heavier emphasis on television
and radio advertising by Medibank Private. This has increased our
profile and is expected to bring a positive response from both insured
and uninsured people.
Tables being featured are:
'Share and Save' - 'That's the Difference] - by saving up to
25% on contribution payments measured against conventional
tables. Emphasis is on heavy television advertising with
Channels 7 and 9 - continuing for many more weeks.
'First Choice' - this table at only $2/week ($8.70/month) is
promoted on radio across the State. It is expected to create
interested response from 'young singles' seeking first time
entry to private health insurance cover.
We ask that Medibank Private agency staff be well versed in both 'Share
and Save' and 'First Choice' cover details thus enabling them to respond
positively to enquiries. New membership to both tables can be
expected.
A new initiative from Medibank Private, intended to attract new
memberships for agents, is the offer of reduced contributions to
members who make their payments through the 'Sure Pay' automatic
deduction facility with banks, credit unions or building societies.
For the substantial number of members paying contributions through
Chemist Agencies quarterly or half yearly, the discount rate is
increased to 4% (quarterly) and 6% (half yearly).
This incentive is to encourage more of your customers to join Medibank
Private and make payments in advance at either of these frequencies (3
or 6 monthly). It is particularly important for your staff to feature

this

facility when comparing the Medibank Private table range and pricing
points with that of our major competitors. As you know, most of them
do not allow discounts for advance payment of contributions.
Our 8% discount rate continues for those Medibank Private members
paying annually.
Total membership of Medibank Private now represents around 40% of the
insured population in Victoria. When your sales staff compare the
comprehensive benefit range offered by Medibank Private (both Hospital
and Extras tables) combined with our extremely competitive contribution
rates, it is clearly in your customers best interests to join or transfer
to Medibank Private.
For Example:
HBA Medibank Savings
Private
$ $ $
Top Hospital Table
Monthly 43.02/single 36.75/single 6.27) for

Medibank

) Private
Quarterly payments 258.12/family 211.60/family 46.52) Members
Intermediate Table
Monthly 33.89/single 30.24/single 3.65) for

Medibank

) Private
Quarterly payments 203.34/family 174.10/family 29.24) Members
Major Extras
Monthly 15.21/single 14.80/single 0.41) for

Medibank

) Private
Quarterly payments 91.26/family 85.20/family 6.06) Members
Another important introduction for Medibank Private Top Hospital
members is a 'Blue Ribbon' add on component which is available only to
those with full benefit 'Top Hospital' table. It will cover the moiety
or out of pocket expenses applying to those private hospitals having a
negotiated benefit agreement with Medibank Private.
'Blue Ribbon' costs another $5.63/single/month - providing 100% cover in
the following 17 major hospitals:
PARTICIPATING PRIVATE HOSPITALS (AT 1 OCT '89)
Warringal Private (Heidelberg) Vimy House (Kew)
Linacre Private (Hampton) Coonara (Melbourne)
Epworth (Richmond) Cedar Court (Glen Iris)
S.F.X. Cabrird (Malvern) Bryson Private (Canberbury)
Freemason's (East Melbourne) St John of God Ballarat
(Ballarat)
Melbourne Clinic (Richmond) Bellbird (Blackburn)
The Avenue (Windsor) Cliveden Hill (East

Melbourne)

Belaura (Mornington) Waverley Private (Waverley)
Peninsula Private (Frankston)
Thank you for your interest in Medibank Private matters and the
support offered to our members through this 'Pharmacy Agency'
arrangement.

17. It will be seen that the circular suffers from the same defects as the paymasters' circular. It follows, in my view, that the circular contravenes s.52. It further follows that the position with respect to the relief to be granted is the same as in the case of the paymasters' circular.
The claims made by Medibank (No. VG 333 of 1989)

18. Medibank alleges that, in the course of an advertising campaign, which commenced in the middle of September 1989 and, in some respects, still continues, H.B.A. made a number of statements which were likely to mislead. It will be necessary to consider the different forms of advertisement separately.
The television advertisement

19. The script of the advertisement complained of is as follows:

SCREEN SOUND
Open on two men (40-50) 1st man 100%
wearing only hospital gowns, Heart bypass?
chatting in waiting room.
2nd man 100%
Heart bypass.
MVO
Men continue chatting Both these men have top table
private health insurance.
1st man 100%
CU 1st man 100% cover?
2nd man 100%
CU 2nd man 100%.
MVO
Men continue chatting Both assume they're covered
100%.
Cut to 2 red lights flashing SFX: 2 Buzzers
simultaneously.
Nurse 100%
Enter female administrator. Heart bypass sir? $3,700
she asks, sweetly, for $3,700. please. Out of pocket
Second man's face drops expenses
Administrator smilingly waves No charge for HBA patients,
1st man through. sir.
Both men get up and walk into
different operating theatres. MVO
In private hospitals, unless
you're with HBA's Top Table,
1st man has his gown securely
tied at the back.
2nd man's gown is slightly open. you're probably not covered
100%.
SUPERS: HBA HBA
100% hospital cover at 100% hospital cover at
all participating all participating
hospitals hospitals
("MVO" means "male voice over"
"CU" means "close up"
"SFX" means "sound effects.)

20. On behalf of Medibank, it is submitted that the advertisement made a number of misrepresentations. It will be convenient to deal with them separately.
The first alleged misrepresentation: That only the H.B.A. "Top Table" provides its members with 100% cover for hospital expenses

21. Reliance is placed by Medibank upon the whole text of the advertisement and, in particular, the statements (1) "In private hospitals, unless you're with H.B.A.'s Top Table, you're probably not covered 100%" and (2) "HBA - 100% hospital cover at all participating hospitals." Medibank contends that H.B.A. is not the only fund which provides 100% cover for its members; that persons insuring on the top table of funds other than H.B.A. will have 100% cover for their entire stay at specified hospitals; and that persons insuring with health funds other than H.B.A. can enjoy 100% private cover at some of the hospitals identified by H.B.A. as "participating hospitals".

22. H.B.A. disputes the construction of the advertisement contended for by Medibank and denies the representation alleged by Medibank. According to H.B.A., the advertisement states that both men have "Top Table" health insurance and correctly indicates the fact that there are health funds which do not provide 100% hospital cover for their Top Table contributors: Medibank's "Top Table" provides less than 100% cover; it is only with Medibank's "Blue Ribbon" option that 100% cover will be provided and this is a separate, and more expensive, category of insurance introduced on 1 October 1989; some other health funds, which do not have "provider" agreements with private hospitals, cannot provide their top table contributors with 100% private hospital cover. H.B.A. submits that the words "probably not covered 100%" do not represent that no other health fund provides its cover at some of H.B.A.'s participating hospitals.
Did the advertisement on its proper construction, make the representation alleged?

23. The first question for decision is to determine the impact of the advertisement upon members of the public, including, in accordance with the settled course of authority, the astute and the gullible, the intelligent and not so intelligent, the well educated and the poorly educated.

24. In my opinion, members of the public viewing the advertisement would recognise that it was divided into three distinct sections: (1) The exchange between the two patients, followed by the discussion with the administrator; (2) the statement (by the "male voice over" (MVO)) that "unless you're with HBA's Top Table, you're probably not covered 100%"; (3) the final statement on the screen ("supers") - "HBA - 100% hospital cover at all participating hospitals." In my view, it is likely that each section would have its own individual impact upon members of the public as follows:
(1) The first section would suggest to viewers that, whilst HBA Top Table would provide a complete cover for the heart by-pass, in the case of other health funds, a contributor to the top table would be out-of-pocket to the extent of $3,700.
(2) The second section would suggest to viewers that contributors to other health funds "probably" do not have 100% cover.
(3) The final section, in stating that H.B.A. provides 100% cover at "participating" hospitals, would suggest to viewers that the top tables of other funds do not, or probably do not, provide 100% cover.
(In the advertisement, it was stated that "you're probably not covered 100%". It would seem that the use of "probably" here would suggest that there would be no cover "in all likelihood". This reflects the ordinary meaning of "probably" (see the Macquarie Dictionary).)
Were the representations made in the advertisement likely to mislead?

25. It is convenient to deal with the representations made in each section of the advertisement separately.
Section (1)

26. In the first instance, it is necessary to consider the position as at 18 September 1989 when the advertisement was first shown. It will be recalled that the "Blue Ribbon" option was not introduced until 1 October 1989.

27. Considering the position as at 18 September, it will be remembered that Medibank's "Top Table" did not provide 100% cover to the extent that a member was liable to contribute $30 per day (private room) and $20 per day (shared accommodation). It follows, in my opinion, that, considered as at 18 September, it was, strictly speaking, accurate to say that only H.B.A. provided a full cover. (A separate question arises as to the amount a patient could reasonably expect to be out-of-pocket for a heart by-pass. I will deal with this when considering the second alleged misrepresentation.)

28. However, when the position is considered as at 1 October, bearing in mind that the "Blue Ribbon" option had then been introduced and the advertisement continued to be shown after that date, the situation had changed. As at 1 October and thereafter, it was no longer accurate to say that only H.B.A. offered 100% cover. In respect of expenditure incurred with its participating hospitals, Medibank also offered full cover. Later, but while the advertisement was still being exhibited, other health funds also offered full cover in respect of expenditure incurred at certain hospitals. For instance, the fund conducted by Australian Natives' Association introduced an option ("H4"), which was similar to Medibank's "Blue Ribbon", as from 1 December 1989. It follows, in my opinion, that the representation was not then accurate and was then liable to mislead.
Section (2):

29. It will be recalled that, in this section, it was represented that contributors to funds other than H.B.A. "probably" do not have 100% cover.

30. Considering the position as at 18 September, the representation was accurate. However, as at 1 October and thereafter, the position had changed. In the case of Medibank, one of the major funds operating in Victoria, full cover was provided. It follows, in my view, that, as from 1 October, it was no longer accurate, and was then likely to mislead, to say that, "probably" (that is, "in all likelihood"), contributors to other funds were not fully covered when one of the State's major funds did provide that cover. Section (3):

31. The position here is the same as with respect to section (2).
Relief

32. In the circumstances, I propose to declare that, in its advertisement, H.B.A. contravened s.52 of the Act. I propose to grant an injunction restraining any further publication of the advertisement or any similar advertisement. I will reserve liberty to Medibank to seek further relief by way of damages if so advised.

33. Medibank further seeks an order for corrective advertising. An order is sought as follows:

The respondent cause to be published an announcement
of not less than 150 square centimetres in size,
with the text in type of 3.5 millimetres of 10 points
in size, and the heading in type of 14 millimetres
or 40 points in size, in each of "The Age" and "The
Sun" newspapers, on one of the first 7 pages of
the newspaper in each case, on two occasions not
less than one week and not more than two weeks apart,
the first such occasion (subject to the availability
of space) to be within seven days of the making of
this order, in the following terms:
IMPORTANT ANNOUNCEMENT BY HBA
The Hospital Benefits Association Limited ('HBA')
in its recent advertising and promotion of its "Top
Table T" private health insurance benefits scheme
claimed that it was the only scheme that provided
100% cover at participating private hospitals.
Having regard to new benefits which became available
from other health insurers in October and in December,
these claims are no longer correct and are withdrawn
by HBA. Further, HBA claimed that persons who were
not members of its "Top Table T" scheme were likely
to pay large out of pocket expenses for surgery at
participating private hospitals even if they had the
highest cover available from another health insurer.
This claim was incorrect and is withdrawn by HBA.

34. The power to order corrective advertising is one to be used protectively and not by way of punishment (see the HCF Case at p 492). In my opinion, there is a real risk that the making of an announcement along the lines suggested by Medibank would confuse rather than protect the public. As the course of the present litigation shows, (the trial took five days), the subject is a complex one. It is difficult to make valid comparisons between the respective "products" offered by the players in the market without stating a great deal of detail in the course of attempting an analysis of the "pros" and "cons" of particular "products". It follows that, whilst on the one hand, it is not practicable to attempt, in a press announcement, to describe every aspect of the insurance cover offered by each player (referred to in a compendious way in the draft announcement as the "new benefits"), yet, on the other hand, any attempt to give an abbreviated version, or summary, of each of the covers available runs the risk that a statement could be a "half-truth" and thus be itself misleading as "selective" quotation (see The King v. Kylsant (Lord) (1932) 1 KB 442 at p 445). Where, as here, the area is complex, reference to some aspects only of the subject can create a false impression (see Australian National Industries Limited v. Consolidated Press Securities Limited, 5 June 1989, Beaumont J., unreported, at pp 6-8).

35. In my view, it would not be in the public interest to order the corrective advertising suggested. This is a strong discretionary ground for refusing that relief. Accordingly, I decline to order any corrective advertising.
The second alleged misrepresentation: That persons subscribing for the Top Table cover provided by funds other than H.B.A. will probably be out-of-pocket $3,700.

36. (A number of alternative, but similar, representations are alleged, but, in the circumstances, it is not necessary to consider them.)

37. As has been noted, Medibank complains that this representation is likely to mislead as to the amount of out-of-pocket expenses which a contributor to a fund having a heart by-pass could reasonably expect to incur.

38. In my opinion, the representation was likely to mislead. It is true that, as at 18 September 1989, a contributor to one of the health funds operating in Victoria could have been out-of-pocket in the amount suggested in the advertisement. However, this fund had a relatively small number of contributors. In the case of most other funds, especially Medibank (which had the largest number of contributors), a contributor would be out-of-pocket substantially less than $3,700. For instance, pursuant to "provider" arrangements previously made, a contributor to Medibank's "Top Hospital Cover" undergoing a heart by-pass at Epworth or Cabrini (the only private hospitals in Victoria offering that procedure) could reasonably expect (i.e. in the absence of complications, which, usually do not occur) to be out-of-pocket approximately $200 in the case of shared accommodation or $300 in the case of a private room. Similar "provider" arrangements were then in place between Epworth and Cabrini and many other health funds operating in Victoria, for instance the funds conducted by the Australian Natives' Association and by Manchester Unity.

39. Other examples of the out-of-pocket cost of other operations given in the advertisement were also misleading, for similar reasons.

40. Selective quotation of the "worst case", on the footing that it is a truly representative example, even if literally accurate, is likely to mislead (see Hornsby Building Information Centre Pty. Ltd. v. Sydney Building Information Centre Ltd. [1978] HCA 11; (1978) 140 CLR 216 per Stephen J. at p 227; see also the Australian National Industries Case, above).

41. As to relief, the position is the same as in the case of the first misrepresentation relied on.
The third alleged misrepresentation: That all participating hospitals could provide heart by-pass operations for H.B.A. contributors

42. On behalf of Medibank it is submitted that, viewed as a whole, the advertisement suggests that all of H.B.A.'s participating hospitals offer the heart by-pass procedures, whereas, in fact, only two of such hospitals do so.

43. In my opinion, the advertisement, whether viewed as a whole, or in sections, would not convey to a member of the public the message contended for by Medibank. A member of the public viewing the advertisement would, I think, be led to understand that the discussion about the heart surgery was an example only of the operation of the system of insurance offered by H.B.A. and that the first statement that H.B.A. offered "100% hospital cover at all participating hospitals" was a description of the insurance cover and not a statement suggesting that all the participating hospitals provided heart by-pass surgery.
The radio advertisement

44. In September 1989, H.B.A. arranged with four Victorian radio stations to broadcast an advertisement along similar lines to the television advertisement. The advertisement, which was broadcast on 21 September, and afterwards, was as follows:

50 Year Old
MVO: I thought I had 100% private hospital cover,
until I had a heart bypass.
I thought my top table would cover
everything. It didn't. Out of pocket
expenses cost me $3700.
If only I'd known about HBA's Top Table.
I'd have paid nothing.
If only I'd thought of HBA.
2nd MVO: For 100% cover at 37 HBA participating
private hospitals, phone the HBA hotline on
609 9833.
Alternative country tel no: 008 331 484.

45. On behalf of Medibank, the same complaints, in essence, are made as in the case of the television advertising. Other, but similar, advertisements were broadcast by radio.

46. In my opinion, the position here is the same, in substance, as in the case of the television advertisement. Accordingly, I make similar findings and propose to grant similar relief.
The first newspaper advertisement

47. In September 1989, H.B.A. arranged for the insertion of an advertisement in two Victorian newspapers. The advertisement, which appeared on 18 September and thereafter, was as follows:

(DIAGRAM OMITTED)

48. On behalf of Medibank, the same complaints, in essence, are made as in the case of the television advertising.

49. In my opinion, the position here is the same, in substance, as in the case of the television advertisement. Accordingly, I make similar findings and propose to grant similar relief.
The second series of newspaper advertisements

50. In September 1989, H.B.A. arranged for another series of newspaper advertisements. The series of advertisements, which appeared on 26 September and thereafter, were as follows:

(DIAGRAMS OMITTED)

51. In my opinion, the position is the same as in the case of the radio advertisement. Accordingly, I make similar findings and propose to grant similar relief.
The promotional brochure

52. In late September 1989, H.B.A. published a promotional brochure as follows:

(DIAGRAMS OMITTED)

53. It will be noted that reference is made, in the brochure, to a "typical private hospital account for a top table member of another health fund". A "cost" of $3,790.00 is detailed. On behalf of Medibank, it is submitted that to suggest that this "cost" is "typical" is likely to mislead or deceive.

54. In my opinion, a member of the public reading the brochure would be likely to understand that "typical" here had its ordinary dictionary meaning. That is to say, it is intended to mean "of the nature of or serving as a type or representative specimen" and "type" there indicates "the general form, style, or character distinguishing a particular kind, class or group" (Macquarie Dictionary).

55. For the reasons already given, the "typical" account was not, in truth, typical. I propose to grant similar relief here also.
The billboard advertisement

56. H.B.A. has also arranged for the exhibition on billboards of the following advertisement:

(DIAGRAM OMITTED)

57. It is clear that this advertisment is intended to be read in conjunction with the other advertising to which reference has been made. The billboard advertisement is linked with, and is part of, a general advertising campaign. That is to say, the billboard is not a free-standing communication. It is anchored in the earlier advertising. As such, it is likely that a member of the public viewing the billboard would associate it with the more specific messages, already widely publicised, which I have found to be likely to mislead. The exhibition on the billboard seeks to remind the viewer of those messages. The advertisement thus, in its effect, restates those messages. It picks up, or incorporates, the previous advertising by reference.

58. It follows, in my opinion, that this advertisement, by restating the earlier material by implication, even if not expressly, is also likely to mislead.

59. The position as to the relief to be granted is the same as in the case of the other advertising.
Costs

60. In each proceeding, the applicant has had substantial success. Because both matters were heard together, it would be difficult to apportion costs if I were to apply the usual rule that costs follow the event and order that, in each case, the respondent pay the applicant's costs. Of the five hearing days, approximately the same amount of hearing time was taken by each case. Thus, it is likely that, if costs were ordered to follow the event in each matter, the costs would (on a set-off) cancel each other out.

61. In all the circumstances, it is appropriate that no order for costs be made in either matter.
Orders

62. I propose to make the following orders:
In matter No. 313

Declare that the statements made by the respondent in
September 1989 in the circulars addressed to paymasters
and pharmacy agents purporting to compare the "Top
Hospital" Tables of the applicant and the respondent
were likely to mislead in contravention of s.52 of the
Trade Practices Act 1974 ("the Act").

In matter No. 333

Declare that the television, radio, newspaper and
billboard advertisements and promotional brochure
authorised by the respondent referred to in the reasons
for judgment ("the said advertisements") were likely to
mislead in contravention of s.52 of the Act.
Order that the respondent be restrained from advertising
matter or authorising the advertisement of matter in the
comparative terms, express or implied, of the said
advertisements or in any similar comparative terms.
Reserve liberty to the applicant to seek further relief
by way of damages.