FEDERAL COURT OF AUSTRALIA

Director of Consumer Affairs Victoria v Domain Register Pty Ltd (No 2) [2018] FCA 2008

ORDERS

THE COURT ORDERS THAT:

Injunction

1.    For a period of 6 years from the making of this order, the Respondent be restrained whether by itself, its servants or agents or otherwise howsoever, from sending unsolicited notices containing an offer to register a domain name that is substantially similar to a domain name already held by the recipient, without including on the face of the notice the words “This is not a bill. You are not required to pay any money” in the text that is the most prominent text in the notice and is the equivalent of at least 14 point Times New Roman.

Public Notice

2.    The Respondent will cause to be published within 10 days of the date of this order:

(a)    within pages 2 to 15 inclusive of The Australian newspaper;

(b)    within pages 2 to 40 inclusive of the Herald Sun newspaper in Victoria;

(c)    within the Early General News section of the Daily Telegraph newspaper in New South Wales; and

(d)    within the Early General News section of the Courier Mail newspaper in Queensland,

an Important Public Notice in the form and with the content of Annexure A to this order. The notice shall:

(a)    be a minimum size of 20 cm x 8 columns across (A4 size);

(b)    use a minimum type size of 12 point Times New Roman or equivalent; and

(c)    be in full colour.

3.    By no later than 14 days from the date of these orders, the Respondent will cause the Important Public Notice annexed to these orders to be published on the internet at the homepage of all websites which are owned, operated or maintained by or on behalf of the Respondent, including the website accessible via uniform resource locator (URL) or web address www.domainregister.com.au (Domain Register Website) (or if any such URL is replaced or changed, the internet homepage of the corresponding website), for a period of 6 months from the date of these orders, and use its best endeavours to ensure that:

(a)    the notice is viewable by clicking through a “click-through” icon located on the Domain Register Website;

(b)    the “click-through” icon referred to in the previous subparagraphs is located in a central position on the homepage of the Doman Register Website;

(c)    the “click-through” icon contains the words “MISLEADING OR DECEPTIVE CONDUCT BY DOMAIN REGISTER - IMPORTANT NOTICE ORDERED BY THE FEDERAL COURT OF AUSTRALIA” in capital letters using a minimum type size of 16 point Times New Roman or equivalent), clearly and prominently in red on a contrasting background, and the words “Click Here”; and

(d)    the notice annexed to these orders occupies the entire page which is accessed via “click-through” icon.

4.    For a period of six months from the date of these orders, commencing on the first date of the Respondent’s publication in accordance with Order 3, the Respondent is to publish a link to the Important Public Notice (as displayed on all of the Respondent’s websites in accordance with Order 2) on the social media platform Facebook using the account operated by the respondent https://www.facebook.com/DomainRegister with the following post:

“MISLEADING OR DECEPTIVE CONDUCT BY DOMAIN REGISTER - IMPORTANT NOTICE ORDERED BY THE FEDERAL COURT OF AUSTRALIA. You may be entitled to a refund if you were sent a notice by Domain Register between 1 January 2011 and 30 May 2014 and paid for the acquisition of a “.com” domain name from Domain Register as a result. Important information is now available at [website link].”

Redress order

5.    That the Respondent use reasonable endeavours to provide a copy of the Important Public Notice, and a copy of the application form which is Annexure B to these orders, to each of the 9,851 persons to whom the Respondent sent a Notice and who acquired a “.com” domain name but did not subsequently renew that registration.

6.    That the Respondent within seven months of the date of these orders pay $249 to each person who:

(a)    paid to register a domain name with the Respondent after having received a notice sent between 1 January 2011 and 30 May 2014;

(b)    has not already received a refund from the Respondent for the registration of that domain name;

(c)    did not subsequently renew the registration of that domain name; and

(d)    returns a completed application form (in the form of Annexure B to these orders) that is sent to support@domainregister.com.au or Domain Register, Level 3, 480 Collins Street, Melbourne, Victoria 3000 within six months of the date of these orders.

7.    That the Respondent within eight months of the date of these orders file and serve an affidavit or affidavits regarding its compliance with the orders including:

(a)    verifying whether or not the notice was published as required by Order 2;

(b)    verifying whether or not the notice and link were published as required by Orders 3 and 4;

(c)    verifying whether or not notification was sent to 9,851 persons as required by Order 5; and

(d)    identifying the persons who sought a refund and stating whether or not the refund has been paid.

Costs

8.    The Respondent shall pay the Applicant’s costs on a party/party basis, save that the respondent is entitled to costs thrown away by reason of the adjournment of the hearing listed on 28 and 29 July 2016.

9.    Liberty to apply.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Annexure A – Important Public Notice

In legal proceedings taken by the Director of Consumer Affairs Victoria, the Federal Court of Australia has declared that DOMAIN REGISTER PTY LTD has contravened the misleading and deceptive conduct provisions of the Australian Consumer Law by sending out 437,819 unsolicited standard form notices to 301,083 persons between 1 January 2011 and 30 May 2014 who have a registered business name with a “.com.au” domain name offering to supply registration of a “.com” domain name for two years for $249.

The documents sent out to particular persons appeared deceptively similar to invoices for the registration of a domain name that was deceptively similar to a domain name that the person had already registered for, thereby representing that the payment of $249 was for the registration or renewal of the person’s existing domain name when in fact the payment was for the registration of a new domain name that the person had not requested.

As part of its orders, the Federal Court of Australia also:

•    imposed injunctions restraining DOMAIN REGISTER from repeating its misleading and deceptive conduct

•    ordered DOMAIN REGISTER to pay a FULL REFUND to non-party consumers

You are entitled to apply for a full refund of $249 if: (i) you were sent a notice from Domain Register between 1 January 2011 and 30 May 2014; (ii) you were misled or deceived by the notice; (iii) you paid for the registration of a “.com” domain name as result; (iv) you have not previously received a refund from Domain Register for the “.com” name; and (v) you did not subsequently renew the registration of the “.com” domain name.

To apply for a full refund of $249 you must complete and return an application form to support@domainregister.com.au or Domain Register, Level 1, 480 Collins Street, Melbourne, Victoria 3000. The application form can be downloaded from Domain Register’s website, www.domainregister.com.au. Forms received after 13 June 2019 will not be eligible to receive a refund.

If you successfully apply for a full refund of $249 from Domain Register then you will not be able to recover any other loss or damage from Domain Register in relation to Domain Register’s misleading or deceptive notices sent between 1 January 2011 and 30 May 2014.

This Notice is published and paid for by DOMAIN REGISTER in accordance with the Orders of the Federal Court of Australia made on 13 December 2018 in the legal proceedings taken by the Director of Consumer Affairs Victoria.

Annexure B – Application

Application for refund from Domain Register Pty Ltd

This application form must be returned to support@domainregister.com.au or Domain Register, Level 3, 480 Collins Street, Melbourne, Victoria 3000. Forms received after 13 June 2019 will not be eligible to receive a refund.

Contact details of person completing this form

Name:

Telephone number:

Address:

Domain registration details

Domain name acquired from Domain Register:

Name of entity/person acquiring Domain Name

Approximate month and year in which the domain name was acquired:

Bank account details

Account name:

Account number:

BSB number:

Declaration

I,                         , was misled or deceived by the notice provided by Domain Register to acquire the domain name,                         , and have not previously received a refund from Domain Register.

Signature:

Date:

REASONS FOR JUDGMENT

MURPHY J:

1    The Court has found that the conduct of the respondent, Domain Register Pty Ltd (Domain), in sending out unsolicited standard form notices (Notices) to persons who have a registered business name with a “.com.au” domain name, offering to supply registration of a “.com” domain name on payment of a specified price, constituted misleading or deceptive conduct or conduct which is likely to mislead or deceive in breach of s 18(1) of the Australian Consumer Law (ACL) in Schedule 2 of the Competition and Consumer Act 2010 (Cth) and s 18(1) of the Australian Consumer Law (Victoria) (ACL (Vic)): see Director of Consumer Affairs Victoria v Domain Register Pty Ltd [2017] FCA 1603 (the liability judgment or LJ ).

2    The applicant, the Director of Consumer Affairs Victoria (the Director), now seeks orders for relief. For the reasons I explain, I have made orders: (a) to restrain Domain for six years from sending unsolicited notices containing an offer to register a domain name that is substantially similar to a domain name already held by the recipient without prominently stating that the notice is not an invoice; (b) to require Domain to refund $249 to affected consumers who make a claim; and (c) to require Domain to send a public notice to affected consumers informing them of their right to redress, and to publish that notice by way of newspaper advertisements in Victoria, New South Wales and Queensland and on the homepage of its website and its Facebook page. For convenience I will refer only to the ACL although it should be understood that the provisions of the ACL and ACL (Vic) are relevantly the same.

THE BACKGROUND FACTS

3    In the liability judgment the Court found that Domain carries on a business as a supplier of internet domain name registration services and its business model is to send a Notice to persons who have a registered “.com.au” domain name, offering registration of a similar “.com” domain name on payment of $249. Between 1 January 2011 and 30 May 2014, Domain sent a total of 437,819 Notices to 301,083 persons who were registrants of a “.com.au “ domain name, and during that period 21,089 “.com” domain names were registered through Domain (LJ at [17]-[18]). Subsequently 11,238 of the persons who registered a “.com” domain name through Domain renewed that registration (LJ at [21]), which means that 9,851 persons did not.

4    The Notices were all in substantially the same form, formatted in the style of an invoice, addressed to the specific domain name registrant and included options for payment of $249 for a two year registration. The Court found that, having regard to the knowledge to be imputed to the persons to whom the Notice was addressed, the form of the Notice, and the circumstances in which consumers were likely to have read it, many of them were likely to have understood it as an invoice for their existing “.com.au” domain name rather than an invitation to register a new “.com” domain name (LJ [100]-[113]). The Court found that, while most of the persons to whom a Notice was sent did not understand it to be an invoice, Domain’s conduct was likely to mislead or deceive many members of the class. The number of persons actually misled by the Notice was a subset of the 21,089 persons who acquired a “.com” domain name, although the Notice was likely to mislead or deceive a greater number of persons (LJ at [114]).

INJUNCTIVE RELIEF

5    The Director seeks an order under s 232 of the ACL to restrain Domain, for a period of six years from the making of the order, from sending unsolicited notices containing an offer to register a domain name that is substantially similar to a domain name already held by the recipient, without including on the face of the notice the words “This is not a bill. You are not required to pay any money” in text that is the most prominent text in the notice and is the equivalent of at least 14 point Times New Roman.

6    Domain does not oppose an injunction in these terms. Domain’s conduct was intentional and it was not isolated, having occurred on more than 437,000 occasions over more than three years. I am satisfied that an injunction is appropriate to prevent repetition of the offending conduct, to induce compliance with the law and to counterbalance the injury to the public interest: ICI Australia Operations Pty Ltd v TPC (1992) 38 FCR 248 at 268 (French J); Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591; [2000] HCA 11 at [79]-[80] (Gummow J).

7    I have granted an injunction in the terms the Director seeks.

THE NON-PARTY CONSUMER REDRESS ORDERS

8    The Director seeks an order pursuant to s 239(1) of the ACL to require Domain to refund $249 to non-party consumers who responded to the misleading Notice and acquired a “.com” domain name. Domain opposes such an order.

The legislative framework

9    Subdivision B of Division 4 of the ACL is headed “Orders for non-party consumers” and contains ss 239 to 245. Section 239 relevantly provides:

Orders to redress etc loss or damage suffered by non-party consumers

(1)    If:

(a)    a person:

(i)    engaged in conduct (the contravening conduct) in contravention of a provision of Chapter 2, Part 3-1, Division 2, 3 or 4 of Part 3-2 or Chapter 4;

(ii)     is a party to a contract who is advantaged by a term (the declared term) of the contract in relation to which a court has made a declaration under section 250; and

(b)    the contravening conduct or declared term caused, or is likely to cause, a class of persons to suffer loss or damage; and

(c)    the class includes persons who are non-party consumers in relation to the contravening conduct or declared term;

a court may, on the application of the regulator, make such order or orders (other than an award of damages) as the court thinks appropriate against a person referred to in subsection (2) of this section.

Note 1: For applications for an order or orders under this subsection, see section 242.

Note 2: The orders that the court may make include all or any of the orders set out in section 243.

(2)    An order under subsection (1) may be made against:

(a)    if subsection (1)(a)(i) applies - the person who engaged in the contravening conduct, or a person involved in that conduct; or

(b)    …

(3)    The order must be an order that the court considers will:

(a)    redress, in whole or in part, the loss or damage suffered by the non-party consumers in relation to the contravening conduct or declared term; or

(b)    prevent or reduce the loss or damage suffered, or likely to be suffered, by the non-party consumers in relation to the contravening conduct or declared term.

(4)    …

10    Section 240 sets out some matters to which the Court may have regard in determining whether to make an order under s 239(1). It relevantly provides:

Determining whether to make a redress order etc. for non-party consumers

(1)    In determining whether to make an order under section 239(1) against a person referred to in s 239(2)(a), the court may have regard to the conduct of the person, and of the non-party consumers in relation to the contravening conduct, since the contravention occurred.

(2)    …

(3)    In determining whether to make an order under section 239(1), the court need not make a finding about either of the following matters:

(a)    which persons are non-party consumers in relation to the contravening conduct…;

(b)    the nature of the loss or damage suffered, or likely to be suffered, by such persons.

11    Pursuant to s 241, a non-party redress order under s 239 is binding on a non-party consumer if loss or damage suffered by the non-party consumer has been redressed in accordance with the order and the non-party consumer has accepted the redress. Section 241 provides:

(1)    A non-party consumer is bound by an order made under section 239(1) against a person if:

(a)    the loss or damage suffered, or likely to be suffered, by the non-party consumer in relation to the contravening conduct, or the declared term, to which the order relates has been redressed, prevented or reduced in accordance with the order; and

(b)    the non-party consumer has accepted the redress, prevention or reduction.

(2)    Any other order made under section 239(1) that relates to that loss or damage has no effect in relation to the non-party consumer.

(3)    Despite any other provision of:

(a)    this Schedule; or

(b)    any other law of the Commonwealth, or a State or a Territory;

no claim, action or demand may be made or taken against the person by the non-party consumer in relation to that loss or damage.

12    Section 243 sets out the type of orders that can be made under s 239(1) and other provisions. Subsection (d) provides that an order may be made “directing the respondent to refund money or return property to the injured person”.

The power to make an order under s 239

13    Sections 239 to 242 of the ACL are in substance the successors to s 87AAA of the Trade Practices Act 1974 (Cth) (the TPA), which was introduced into the TPA by the Trade Practices Amendment (Australian Consumer Law) Act (No 1) 2010 (Cth). In Australian Competition and Consumer Commission v Yellow Page Marketing BV (No 2) (2011) 195 FCR 1; [2011] FCA 352 at [128]-[129] Gordon J considered s 87AAA of the TPA and set out the criteria that must be satisfied before the Court may make an order.

14    By analogy the same criteria apply to s 239(1). By reference to the text of s 239 and applying the criteria identified by Gordon J, I am satisfied that the Court has power to make an order under s 239(1) in the circumstances of present case:

15    First, it is established that Domain engaged in conduct in contravention of s 18, which is found in Chapter 2 of the ACL (s 239(1)(a)(i)).

16    Second, that conduct caused, or at least was likely to cause, a class of persons to suffer loss or damage (s 239(1)(b)). The Director argues that the relevant class of persons is those to whom the misleading Notice was sent, because the contravening conduct caused or, at least, was likely to cause loss and damage to those persons who did not want a “.com” domain name. With the benefit of hindsight I doubt that the class is as broad as that. The appropriate class is a narrower one; those persons to whom the Notice was sent and who went on to acquire a “.com” domain name but who then did not renew that domain name, i.e. the 9,851 persons previously referred to. They have suffered loss or damage or are likely to have suffered loss or damage because they have or are likely to have acquired a “.com” domain name they did not want or intend to acquire.

17    Third, the class includes persons who are non-party consumers in relation to the contravening conduct (s 239(1)(c)). The relevant persons paid $249 to acquire a domain name and they fall within the definition of consumer in s 3 of the ACL. They also fall within the definition of “non-party consumer” in s 2 of the ACL, which includes “a person who is not, or has not been, a party to an enforcement proceeding in relation to the conduct”.

18    Fourth, the order will redress, prevent or reduce the loss or damage suffered by non-party consumers in relation to the contravening conduct (s 239(3)(a) and (b)).

19    I now turn to the question of whether in the circumstances of the present case it is appropriate to make the non-party consumer redress orders the Director seeks.

Domain’s contentions as to the appropriateness of an order under s 239

20    The power to make a non-party redress order under s 239(1) is discretionary. Domain’s primary submission is that, in the circumstances of this case, it would not be an appropriate exercise of the power in s 239(1) to order Domain to provide refunds to non-party consumers.

21    Domain argues that the circumstances in which a non-party redress order may be appropriate were identified in the second reading speech to the Trade Practices Amendment (Australian Consumer Law) Bill 2009 (Cth). The part of the second reading speech upon which Domain relies, which counsel for Domain said was the pertinent part, states:

This is not a general power to award damages, but a power to order redress where that loss or damage is clearly identifiable and there is no need to decide the merits of each case.

22    It contends that there is a need to decide the merits of each case because it needs to be determined whether each person who acquired a “.com” domain name was misled or deceived. It says, for example, that if a person knew that he or she was acquiring a “.com” domain name then they have not suffered any loss or damage, nor were they likely to have suffered any loss or damage, as a result of Domain’s contravention.

23    Domain submits that, in the ordinary course, a person would need to establish that they suffered loss or damage as a result of Domain’s misleading or deceptive conduct to be entitled to relief, and it contends that if the Court makes the non-party redress order a person will become entitled to a refund merely by asserting that they suffered loss or damage as a result of the contravening conduct. In those circumstances it says it will be denied any opportunity to test or challenge the claims of persons asserting that they suffered loss or damage, and there will be no agreement or finding that those particular persons have suffered any loss or damage. In Domain’s submission granting relief in these circumstances would not be an appropriate exercise of the power in s 239(1).

24    Domain further argues, and I accept, that it is not the case that refunds will only be given to persons who have actually suffered loss or damage as a result of Domain’s contravention. Some persons may seek a refund when they may not be able to establish before a court that they were in fact misled or deceived or that they suffered loss or damage.

25    Domain submits that if an order is to be made, then the appropriate order is one which notifies the 21,089 persons who acquired a “.com” domain name that they may have a claim against Domain as a result of the contravention. In essence its position is that if a non-party consumer submits a claim, Domain will provide a refund where it is satisfied that the person had been misled or deceived. It notes that, pursuant to s 240(1) of the ACL, the Court may have regard to the conduct of the contravenor since the contravention, and relies on the fact that it provided a refund to each of the five consumers referred to in the liability judgment upon being satisfied that the person had in fact been misled or deceived.

26    Finally, Domain argues that there is a smorgasbord of remedies available to the Director or affected non-party consumers to achieve redress without seeking an order under s 239(1), including that:

(a)    a non-party consumer could commence a class action seeking a refund on behalf of all affected consumers; and

(b)    the Director could apply for a compensation order pursuant to s 237 of the ACL.

It submits that a s 239(1) order might be appropriate where there is an indeterminate class of persons affected but the Court could be satisfied that they have all suffered loss or damage, such as in a consumer guarantee case. However, it argues that where the Court cannot be satisfied that all the class has, or is likely to have, suffered loss or damage, ordering a refund is inappropriate.

Analysis

27    I do not accept Domain’s submissions.

28    First, the text of s 239(1) is clear having regard to its context and purpose. Section 240(3) expressly provides that when deciding whether to make an order under s 239(1) the Court need not make findings about which persons are the non-party consumers in relation to the contravening conduct, or the nature of the loss or damage suffered or likely to be suffered by such persons. That is inconsistent with Domain’s contention that an order under s 239(1) should only be made where the loss or damage is clearly identifiable, or where there is no need to decide the merits of each case.

29    I do not accept Domain’s interpretation, derived from the second reading speech, of the meaning of s 239. However, even if the second reading speech did support Domain’s position, s 15AB of the Acts Interpretation Act 1901 (Cth) does not permit recourse to that speech for the purpose of departing from the ordinary meaning of the text: Re Australian Federation of Construction Contractors; Ex parte Billing (1986) 68 ALR 416 at 420; ICI Australia Operations Pty Ltd v Fraser (1992) 34 FCR 564 at 569.

30    Second, s 239 is a remedial provision enabling consumers to obtain redress for loss or damage suffered as a result of a person’s contravening conduct without having to take action themselves against that person. For that purpose the Court is given a wide power with respect to the kind of orders that can be made under s 239: Swishette Pty Ltd v Australian Competition and Consumer Commission (2017) 249 FCR 483; [2017] FCAFC 45 at [25] (Middleton, Foster and Davies JJ). As Mortimer J said in Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd (No 2) [2016] FCA 62 at [293]:

Section 239 is a remedial power. It is designed to allow the Court to undo damage to third parties caused by contravening conduct. The manner in which damage caused might need to be undone will inevitably need to be tailored to the circumstances of the contravening conduct, to the loss or damage suffered, and to the circumstances of the contravener and those involved in the contravention. There are no boundaries drawn in express terms in the way the power is conferred. The terms of s 243 provide examples of the way power might be exercised but should not be construed as confining s 239: Acts Interpretation Act 1901 (Cth), s 15AD. Rather, the use of the standard of appropriateness is a clear indicator that the legislature intends the Court to be able to fashion orders to suit the circumstances of a given case. It is precisely the kind of power where what is important is to look at the “reality” of the financial circumstances of the contraveners, and those involved in the contravention.

31    I do not accept Domain’s contention that a non-party consumer redress order should not be made because some of the 21,089 persons who acquired a “.com” domain name through Domain’s conduct may have intended to do so, or because the proposed orders will allow non-party consumers to claim and receive a refund without proving that they were actually misled or deceived or that they actually suffered loss or damage. As s 240(3) expressly indicates, there is no such limitation on the power in s 239(1). Section 239 is intended to enable consumers to obtain redress for loss or damage suffered or likely to be suffered through contravening conduct, without having to take individual action to establish the loss or damage.

32    In my view a subset of the 21,089 persons who acquired a “.com” domain name in the relevant period are likely to have suffered loss or damage by reason of Domain’s misleading conduct, and the orders operate to undo, as best as possible, the damage done by Domain’s contraventions. I consider the orders are appropriately tailored to the circumstances of the case, including because:

(a)    section 240(1) provides that the Court may have regard to the conduct of the non-party consumer since the contravention occurred. In circumstances where there is no evidence that the renewal notices are themselves misleading, renewal of a “.com” domain registration by a person tends to show that they intended to acquire it in the first place. In my view it is only appropriate to make a non-party consumer redress order in relation to those persons who acquired a “.com” domain name and did not subsequently renew it. This means that only 9,851 of the 21,089 persons who acquired a “.com” domain name will be eligible to claim a refund;

(b)    applications for a refund are required to be in writing on an application form which is either directly sent to the relevant person or may be downloaded from Domain’s website;

(c)    the identity of each person who acquired a “.com” domain name, and the date upon which they did so, is known to Domain from its records. There is no opportunity for persons who did not acquire such a domain name in the relevant period to obtain a refund;

(d)    the public notice will be directly sent to 21,089 persons and also published in major newspapers and on Domain’s website and Facebook page. It states that persons are only entitled to apply for a refund if: (i) they were sent a Notice by Domain between 1 January 2011 and 30 May 2014; (ii) they were misled or deceived by the Notice; (iii) they paid for the registration of a “.com” domain name as result; (iv) they have not previously received a refund from Domain Register for the “.com” name; and (v) they did not subsequently renew the registration of the “.com” domain name; and

(e)    each person who seeks a refund must complete and sign the following statement on the application form:

Declaration

I,                         , was misled or deceived by the notice provided by Domain Register to acquire the domain name,                         , and have not previously received a refund from Domain Register.

Signature:

33    Domain’s contention that a non-party consumer must establish that they were actually misled and actually suffered loss or damage is inconsistent with: (a) s 239(1)(a) which only requires the contravening conduct to be likely to cause a class of persons to suffer loss or damage; and (b) s 240(3) which expressly provides that the court need not make a finding as to which persons are non-party consumers in relation to the contravening conduct or the nature of the loss or damage suffered or likely to be suffered.

34    The fact that Domain provided refunds to the five consumers considered in the liability judgment does not mean it should be allowed to decide whether or not to accept an application for a refund. There is evidence that Domain initially refused to pay a refund in some cases or initially made only a partial refund and I do not accept that Domain provided the refunds as readily as it now contends. I am not prepared to rely upon Domain to decide which non-party consumer claims are accepted and which are not.

35    Contrary to Domain’s submissions there are several decisions of the Court, albeit in the context of orders jointly proposed by the parties, which indicate it may be appropriate to order refunds for non-party consumers under s 239(1) without requiring persons to prove that they had actually been misled and actually suffered loss or damage. In Australian Competition and Consumer Commission v Reebok Australia Pty Ltd [2015] FCA 83 at [168]-[170] McKerracher J made s 239(1) orders in a case involving misrepresentations about the benefits of particular shoes in improving leg and buttock toning and strength. The orders allowed non-party consumers to claim a refund of $35 on proof of purchase of such shoes, without any requirement to prove that they had been misled or deceived. In Australian Competition and Consumer Commission v Lifestyle Photographers Pty Ltd [2016] FCA 1538 Markovic J made s 239(1) orders in a case involving misleading conduct in the sale of photograph collections. The order allowed non-party consumers to claim a refund of the amount they paid for the photographs without proving they had been misled or deceived and, where they had already received their photograph collection, even without returning it.

36    Third, Domain’s reliance on the second reading speech is misplaced. In full, the Minister said in relation to proposed s 87AAA:

Redress for non-parties will allow the ACCC and ASIC to act more effectively where, for instance, thousands of consumers suffer small losses on which each of them might not take action individually because of cost and inconvenience. Businesses should not profit from consumer detriment, just because the amount is small or the harm is spread widely.

This is not a general power to award damages, but a power to order redress where that loss or damage is clearly identifiable and there is no need to decide the merits of each case. It could be used to order redress such as an apology, the exchange of goods or a refund.

(Emphasis added.)

37    Sections 239 to 242 of the ACL were introduced through the Trade Practices Amendment (Australian Consumer Law) Act (No 2) 2010. The Explanatory Memorandum explains that s 87AAA of the TPA and ss 239 to 242 of the ACL are materially the same.

38    Read in full the second reading speech does not indicate that the availability of s 239(1) orders is as limited as Domain contends. It discloses a legislative intention to allow non-party consumers to recover loss or damage where they might not take action individually because of cost and inconvenience, and a purpose of preventing businesses from profiting through contraventions just because the amount of loss or damage is small or the harm is widely spread.

39    This also weighs in favour of making a s 239(1) order in the circumstances of the present case. It would be costly, inconvenient and uneconomic for 9,851 persons to be required to bring proceedings to prove that they were misled and suffered loss and Domain should not be permitted to profit from its contravening conduct.

PUBLICATION ORDERS

40    The Court has power to make a publication order under ss 246 and 247. The proposed orders require Domain to give notice to the public that it has contravened the ACL and also to advise people that they may have a right to claim a refund. The authorities reveal various rationales behind the making of such orders, including to:

(a)    alert consumers to the fact that there has been misleading and deceptive conduct;

(b)    protect the public interest by dispelling the incorrect or false impressions that were created by the wide and far reaching advertising campaign; and

(c)    support the primary orders and assist in preventing repetition of the contravening conduct.

: see Australian Competition and Consumer Commission v TPG Internet Pty Ltd (No 2) [2012] FCA 629 (TPG) at [143] and the cases there cited.

41    Domain does not oppose the making publication orders per se, but it made submissions on the form of the notice and the manner in which it was to be published. I am satisfied that publication orders are appropriate in the present case, but have made several changes to the orders and public notice the Director seeks including to specify that: (a) non-party consumers seeking a refund must claim it through an application form rather than just by telephoning Domain; (b) non-party consumers who renewed their “.com” domain name need not be directly sent the notice as they are not eligible for a refund; (c) non-party consumers should be sent an application form along with the public notice. These changes are reflected in the orders and in the Important Public Notice which is Annexure A.

42    It is common ground between the parties that the public notice should be published by the following two methods:

(a)    first, direct communication from Domain. Domain knows the identity of each person who acquired a “com.” domain name and it is required to use reasonable endeavours to provide a copy of the public notice and a copy of the application form (being Annexure B) to the approximately 9,851 persons to whom Domain sent a Notice and who acquired a “.com” domain name and who did not subsequently renew that registration. The application form should be sent along with the public notice because the process for claiming a refund should be as straightforward as possible; and

(b)    second, publication on the homepage on Domain’s website.

43    The Director however submits that the public notice should also be published in a range of newspapers. Domain argues that there is no need for such an order in circumstances where it is required to use reasonable endeavours to directly provide the public notice to the relevant class and to publish it on its website.

44    I consider the public notice should also be published in newspapers. A significant period of time has elapsed since the contravention and many of the affected persons may have changed addresses or ceased operation, and they therefore may not receive a notice directly sent to them. It is unlikely that many affected consumers will visit Domain’s website and see the public notice there. Publishing the public notice in newspapers will increase the likelihood that those persons who are not directly contacted will be notified of their entitlement to a refund.

45    Publication through newspaper advertisements also has the benefit that the outcome of the proceeding and the orders are more likely to come to the attention of the general public. That operates to inform the relevant markets of the outcome of the litigation so that those in the market have at least a broad understanding of the orders made against the contravenor and the way in which the contravenor has had to change its conduct. It will assist in ensuring that Domain’s competitors have an understanding of the orders, which may aid in the enforcement of the orders and in preventing repetition of such contravening conduct: Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc (1999) 95 FCR 114; [1999] FCA 1387 at [49]; TPG at [154].

46    It is appropriate that the public notice be published in The Australian newspaper, and in the highest circulation daily newspapers in Victoria, New South Wales and Queensland, being the Herald Sun, the Daily Telegraph and the Courier Mail respectively.

COSTS

47    At the conclusion of the hearing I directed the parties to file and serve short written submissions and any supporting material on the question of costs. Domain accepts that it should pay the applicant’s costs on a party/party basis but seeks an order for costs thrown away by reason of the adjournment of the hearing listed on 28 and 29 July 2016. The Director did not file submissions on costs.

48    The background is that, in the lead up to the liability hearing listed for 28 and 29 July 2016, Domain corresponded with the Director and said that the Fast Track Statement (FTS) only alleged misleading or deceptive conduct in relation to the five named consumers. Domain argued that the Director’s submissions filed shortly before the hearing sought to take the case outside that pleaded in the FTS and said that the Director could not now litigate a case alleging that Domain misled a class of persons.

49    Before the Court on 28 July 2016 the Director contended that the FTS did advance a claim of misleading or deceptive conduct addressed to the class of persons who acquired “.com” domain names from Domain, and argued that, properly understood, its case was not limited to the conduct identified in the five individual cases pleaded. In my view however the pleading was not as clear as it could have been on that point. In the finish the Director sought and was granted leave to amend the FTS and an adjournment was the result. In such circumstances it is appropriate to order the Director to pay the costs thrown away by reason of the adjournment of that hearing.

Associate:

Dated:    13 December 2018