Australia: Cadbury Successful In Appeal For New Trial Over Darrell Lea’s Use Of Purple

In Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd, the Full Court of the Federal Court of Australia has upheld Cadbury Schweppes Pty Ltd’s appeal from a decision of the Federal Court of Australia over its dispute with Darrell Lea Chocolate Shops Pty Ltd arising from Darrell Lea’s use of a particular shade of purple in the get-up of its chocolate confectionary business.

Background Of Proceedings

Cadbury commenced proceedings against Darrell Lea in the Federal Court of Australia in 2003, claiming that Darrell Lea’s use of a shade of purple in connection with its chocolate confectionary business has the consequence that:

• consumers might mistakenly conclude that Darrell Lea products are Cadbury products; or

• consumers might mistakenly conclude that there is some connection between the respective chocolate confectionary businesses of Darrell Lea and Cadbury.

Cadbury claimed that such use of purple by Darrell Lea amounted to conduct that is misleading and deceptive (thereby contravening the Trade Practices Act 1974), and that such conduct also constituted passing off.

At trial, Cadbury had sought to adduce certain evidence in the form of affidavits from various marketing experts consisting of expert opinions in relation to consumer behaviour and decision-making in the context of retail chocolate confectionary purchases.

Under the Evidence Act 1995, evidence of an opinion is not admissible to prove the existence of a fact about which the opinion was expressed (s76, also known as the "opinion rule"). However, if a person has specialised knowledge due to their training, study or experience, they are able to provide opinion evidence based on that knowledge about the existence of a fact in issue (s 79).

The primary judge considered that expert evidence permitted under s79 of the Evidence Act 1995 was limited to opinions about issues outside the experience of ordinary persons. The primary judge held that the expert opinions sought to be adduced by Cadbury, while based on specialised knowledge, were directed to the making of consumer decisions for the purchase of everyday items, which in the primary judge’s view was a matter not outside the experience of ordinary persons. The primary judge therefore ruled that such evidence was inadmissible because it went only to a matter that is within the knowledge and experience of an ordinary person.

The primary judge ultimately ordered that Cadbury’s claim be dismissed. Cadbury appealed to the Full Court of the Federal Court of Australia from all of the primary judge’s orders, raising two questions for determination, namely:

• Whether the primary judge erred in refusing in the course of the trial to admit the expert opinion evidence; and

• Whether the primary judge erred in concluding - on the basis of the evidence that was admitted - that the use of purple by Darrell Lea did not convey to the reasonable consumer the idea that its business or its products have some connection with Cadbury.

Appeal Decision

The Full Court held that the primary judge had erred in refusing to admit the expert opinion evidence on the basis that the opinion evidence went only to a matter that is within the knowledge and experience of an ordinary person. In particular, the Full Court noted that the primary judge’s decision on this basis was in contradiction to the express language of s80 of the Evidence Act 1995, which provides that evidence of an opinion is not inadmissible only because it is about a fact in issue, an ultimate issue, or a matter of common knowledge.

The Full Court therefore held that the fact that an opinion is expressed concerning the making of consumer decisions for the purchase of everyday items of commerce does not disqualify the opinion from being admissible, so long as s79 is satisfied. Accordingly, the Full Court found that the primary judge had erred in this respect.

As the Full Court was not able to conclude that there was no miscarriage of justice by reason of the primary judge’s error in rejecting the expert opinion evidence sought to be adduced by Cadbury, the Full Court ordered that the primary judge’s orders be set aside, and that the proceeding be remitted back to the primary judge for further trial.

Discretion Under S135 Of The Evidence Act

Section 135 of the Evidence Act confers on the Court an overriding discretion to refuse to admit evidence that would otherwise be admissible if the probative value of that evidence is substantially outweighed by the danger that the evidence might be unfairly prejudicial, misleading, confusing, or cause or result in an undue waste of time.

Although it was strictly not necessary for the primary judge to consider the application of s135 to the disputed evidence, the primary judge nevertheless stated in his judgment that even if the expert opinion evidence in question was admissible, he would have exercised the overriding discretion conferred by s135 and refused to admit the evidence on the basis that the probative value of the evidence is substantially outweighed by the danger that the evidence might cause or result in undue waste of time.

In this regard, the Full Court - having noted that debate on this issue at trial was "limited in the extreme" - observed that the primary judge did not appear to have embarked on any assessment of the time that might have been wasted by the admission of the marketing expert’s opinion evidence. The Full Court nevertheless commented that although it had found the disputed expert opinion evidence to be strictly admissible, "it may be that, on full consideration of the applicability of s135 of the Evidence Act in relation to the whole of the disputed evidence, all of it would be rejected as involving an undue waste of time in light of its probative value." The Full Court stressed, however, that it did not express any view either way as to the application of s135 to the disputed evidence.

While Cadbury’s claims are still alive, and they have had success on the issue appealed, they still have a long way to go to succeed in the action before the Courts.

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