Luxottica Retail Australia v Specsavers [2010] NSWSC 54 (1 February 2010)

Last Updated: 12 February 2010

NEW SOUTH WALES SUPREME COURT

CITATION:
Luxottica Retail Australia v Specsavers [2010] NSWSC 54


JURISDICTION:
Equity Division

FILE NUMBER(S):
2010/16265

HEARING DATE(S):
1 February 2010


EX TEMPORE DATE:
1 February 2010

PARTIES:
Luxottica Retail Australia Pty Limited (Plaintiff)
Specsavers Pty Limited (Defendant)

JUDGMENT OF:
McDougall J

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
P L Dodson (Plaintiff)
D B Studdy (Defendant)

SOLICITORS:
Norton White (Plaintiff)
Minter Ellision (Defendant)


CATCHWORDS:
PRACTICE AND PROCEDURE - Civil Procedure Act 2005 (NSW) s 72 - application for order to prohibit disclosure of information tending to reveal identity of a witness in proceedings - comparison advertising using findings of mystery shoppers - whether prohibition on disclosure of identity of mystery shoppers necessary to secure proper administration of justice in proceedings - order granted.

LEGISLATION CITED:
Civil Procedure Act 2005 (NSW)

CATEGORY:
Procedural and other rulings

CASES CITED:


TEXTS CITED:


DECISION:
See paragraphs [14] to [16] of the judgment.



JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION



McDOUGALL J

1 February 2010 (ex tempore – revised 1 February 2010)

16265/10 LUXOTTICA RETAIL AUSTRALIA v SPECSAVERS PTY LTD

JUDGMENT

1 HIS HONOUR: On 20 January 2010, I heard an application for an interlocutory injunction to restrain the broadcasting of a television advertisement. The advertisement made, or purported to make, a comparison of the defendant's products and prices with those of the plaintiff; the defendant and the plaintiff being in competition. It appeared in the course of the hearing that the material on which the defendant's advertisement was based had been obtained from purchases made by "mystery shoppers". It was suggested that the identity of those shoppers should be kept confidential, as should any information that might tend to identify them, and that those matters should be disclosed only to counsel and external solicitors for the plaintiff.

2 The matter is apparently heading towards a final hearing. The plaintiff wishes to investigate the circumstances in which the mystery shoppers carried out their assignment, for the purpose of ascertaining whether the advertisement properly and accurately represented the outcome of the mystery shopping campaign. No-one has suggested that the plaintiff should not be permitted to do so. Clearly enough, for the plaintiff to be able to carry out that exercise, it will need to know more than it does at present about the mystery shoppers and the individual transactions.

3 The defendant's evidence is that the ability of people to act as mystery shoppers depends very much on their identity remaining a mystery. It is not difficult to understand why this is so. Particularly in rural areas or small centres of population, if it became known that Mr or Ms X were a mystery shopper, that knowledge is likely to spread throughout the community.

4 In addition, it is clear from the defendant's evidence that it may wish to carry out further mystery shopping expeditions against the plaintiff. It says that it does so to enable it to ensure that its prices remain competitive, and that mystery shopping is the only step realistically open to it to achieve that end. There is of course an important public interest in open competition, and it is unlikely that the interests of consumers would be advanced if the defendant were unable to compete effectively with the plaintiff on price for equivalent products of similar quality.

5 The defendant accepts that the plaintiff and its legal advisers, and relevant employees of the plaintiff, should have details of the identity of the mystery shoppers. However, it says, that should be on condition. The condition suggested is in each case that the legal advisers and employees should enter into appropriate confidentiality undertakings. The defendant proposed forms of order, and undertakings, on 22 January 2010. It received no substantive response to what was proposed. Although the plaintiff has put on evidence in opposition to the orders sought today by the defendant, that evidence is conspicuously silent as to any forensic or other legitimate disadvantage that the plaintiff might suffer from the regime proposed by the defendant. The plaintiff does not suggest that, within the constraints propounded by that regime, it could not effectively prepare its case.

6 The plaintiff's opposition to the orders sought was cast at the level of principle. First, it suggested, the confidentiality involved was not that of the defendant but, rather, that of the external consultants retained by the defendant and the mystery shoppers retained by those external consultants as sub-contractors. However, the defendant's evidence makes it clear that the defendant proposes to continue its mystery shopping campaigns and to retain those external consultants. The evidence also makes it clear that there is a relatively small group of mystery shoppers who can carry out exercises such as that in the present case. Those mystery shoppers need to be people with a current prescription for spectacles, falling within a defined range of correction. It is not a matter of going out and whistling in the street, or praying tales.

7 In my view, the defendant's evidence makes out an interest of a real practical kind in the protection of the confidentiality of the mystery shoppers.

8 Next, the plaintiff called in aid the proposition that justice should be done openly and transparently. There is no doubt that this is so, and that the Court should (as it does) strive to ensure that justice is done openly and transparently. However, it is not at all clear why this particular principle is of any great relevance. All that will be suppressed (if the matter goes to hearing) is, at the most, names and identifying details of the mystery shoppers and transactions in question. There is no suggestion that their evidence should be given in closed court. Their identities can be protected, if necessary, by the making of pseudonym orders. In truth, there is no suggestion that the hearing will be conducted other than openly and in public, and that the evidence of the mystery shoppers (should they give it) will be given openly and in public.

9 It was submitted for the plaintiff that if it appeared that any mystery shopper had engaged in some form of deception or trickery then this fact should be made known in the public interest. I accept that, at least at the level of principle. The concern can be accommodated by making confidentiality orders subject to the further order of the Court, and reserving liberty to apply.

10 As I have said, the plaintiff's evidence and submissions did not suggest that its preparation of its case would be in any way impeded.

11 One other matter that did appear from the plaintiff's evidence is that the plaintiff does have the ability to record, on its computer system, personal details of its customers. That computer system is available for access throughout all branches of the plaintiff's retail empire. It follows that if any employee became aware that a particular customer was a mystery shopper, and desired to make a record of that fact on the plaintiff's computer system, he or she could do so unless restrained. Although the evidence suggested that the plaintiff might have no interest in doing this, I do not regard that as plausible. On the contrary, I think, if the plaintiff became aware that it was being "mystery shopped" and of the identity of the mystery shoppers, it would be more likely than not to record that fact so that, if the mystery shopper in question subsequently visited an outlet of the plaintiff, the employee who dealt with that shopper could become aware of the fact. It is at least likely, as the defendant's evidence suggests, that whatever retail transaction ensued might not be of a representative kind. I do not suggest of course any impropriety in this, at least in the absence of court order.

12 Section 72 of the Civil Procedure Act empowers the Court by order to prohibit, among other things, the publication or disclosure of information that might tend to reveal the identity of a witness in proceedings. It may do so if it is necessary to secure the proper administration of justice in the proceedings. The defendant may wish to lead evidence from the mystery shoppers to prove that its advertisement was fair, and based on real "facts". The mystery shoppers, on the evidence before me, would be reluctant to give evidence if they thought that there were any risk that their identity might be disclosed. On the evidence, that would be likely to compromise their ability to earn a living, or further income, by working as mystery shoppers. It might therefore tend to dissuade them from giving evidence. In my view, on the evidence, it is open to conclude, and I do conclude, that the proper administration of justice does require a prohibition on the disclosure of information of the kind in question.

13 I accept that this needs to be balanced against the other interests to which I have referred. That can be ensured by making the orders subject of a further order of the court and reserving liberty to apply.

14 For those reasons, I make orders in accordance with paragraphs 1 to 3 of the Short Minutes of Order initialled by me and dated today's date. For the avoidance of doubt those orders apply unless and until the Court otherwise orders. I reserve liberty to apply on forty-eight hours notice for the variation or discharge of those orders. I note paragraph 4 of the Short Minutes of Order.

(COUNSEL ADDRESSED ON COSTS)

15 The defendant seeks its costs of today. The plaintiff suggests that costs should be reserved, in case it should transpire that the regime is for some reason unworkable. I do not agree with the plaintiff's position. The plaintiff has had adequate opportunity to consider the regime. Indeed, it was at the plaintiff's request that the hearing was advanced rather than dealt with further down the track, as the defendant had proposed. If the plaintiff wished to submit that the regime was likely to prove unworkable, it could have done so on the basis of evidence. If it should transpire that the regime is unworkable, the plaintiff can apply to have it discharged or modified, and if the defendant opposes that then any opposition may well be at the defendant's risk as to costs.

16 In the meantime, I think, the costs of today's application should follow the event and accordingly I order the plaintiff to pay the defendant's costs of today.

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LAST UPDATED:
11 February 2010