viagogo AG v Australian Competition and Consumer Commission [2022] FCAFC 87
ORDERS
Appellant | ||
AND: | AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Respondent | |
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. The appeal is dismissed with costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
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THE COURT:
1 This is an appeal by viagogo AG on liability and penalty in civil penalty proceedings. The respondent is the Australian Competition and Consumer Commission (ACCC) in its capacity as the regulator under the Competition and Consumer Act 2010 (Cth) (CCA) and the Australian Consumer Law (ACL) (set out in Sch 2 to the CCA).
2 The primary judge found viagogo liable for contraventions of ss 18, 24, 29(1)(h)-(i), 34 and 48(1) of the ACL: Australian Competition and Consumer Commission v viagogo AG [2019] FCA 544 (LJ) and imposed pecuniary penalties in the total sum of A$7 million (in addition to non-pecuniary relief): Australian Competition and Consumer Commission v viagogo AG (No 3) [2020] FCA 1423 (PJ).
3 The primary judge pithily captured the essence of the contest below at LJ [1]:
…[viagogo] is a company incorporated in Switzerland. It operates an Australian website at http://www.viagogo.com.au … from which tickets for live events may be bought and sold. Viagogo refers to this as an online “marketplace” where people who hold tickets for live events may resell them via the viagogo website at a price of their own choosing. If a buyer is found, viagogo adds certain charges, including a booking fee of about 28% of the price of the ticket. The present case in large part depends on whether or not viagogo has made it sufficiently clear that it is not itself an authorised vendor of tickets but the facilitator of re-sale of tickets and that such charges will be levied. The [ACCC] … contends that it has not. It claims that viagogo has engaged in misleading conduct in the manner in which it advertises in its sponsored links on Google and the manner in which it presents particular pages of its website. It contends that the conduct of viagogo is in breach of ss 18, 29(1)(h), 29(1)(i), 34 and/or 48(1) of the [ACL]. It claims relief in the form of declarations, injunctions, pecuniary penalties and publication orders.
4 The primary judge found that the ACCC had established that viagogo’s conduct in making the four categories of representation alleged against it was in contravention of the relevant provisions of the ACL and granted relief accordingly.
5 The four categories of representations were described as: (1) the Official Site Representation; (2) the Total Price Representation; (3) the Part Price Representation; and (4) the Quantity Representations. The appeal in relation to liability is confined to the Official Site Representation (Ground 1), the Total Price Representation (Ground 2) and the Part Price Representation (Ground 3). viagogo does not appeal from the declaration and injunction made in respect of its contraventions in making the Quantity Representations.
6 In addition to declaratory and injunctive relief and orders requiring viagogo to establish a compliance program, the primary judge imposed pecuniary penalties totalling $7 million pursuant to s 224(1)(a)(ii) of the ACL made up as follows:
(1) A$2.5 million in respect of viagogo’s contravention of ss 29(1)(h) and 34 of the ACL by reason of the Official Site Representation;
(2) A$1.5 million in respect of viagogo’s contraventions of s 29(1)(i) of the ACL by reason of the Total Price Representation;
(3) A$500,000 in respect of viagogo’s contraventions of s 48(1) of the ACL by reason of the Part Price Representation; and
(4) A$2.5 million in respect of viagogo’s contravention of s 34 of the ACL by reason of the Quantity Representations.
7 The appeal on penalty is confined to a single ground (Ground 4). viagogo contends that the total amount of pecuniary penalty imposed was manifestly excessive for one or more of four reasons. viagogo filed an amended notice of appeal on the final day of the hearing in which inter alia it sought an order, predicated on an assumption that it otherwise succeeds on the liability appeal, imposing a pecuniary penalty in respect of the Quantity Representations in the sum of A$1 million, instead of $2.5 million.
8 For the reasons which follow, the appeal, on both liability and penalty, is dismissed.
9 The declarations of contravention made by the primary judge and paraphrased in paragraphs [10] to [18] below serve as a summary of the key findings.
10 The first representation was made in the viagogo advertisement which appeared on Google web search results pages in response to search terms that included reference to an event or performance. The remaining three representations were made on pages of the viagogo Australian website (https://www.viagogo.com/au).
The Official Site Representation
11 During the period 1 May 2017 to 26 June 2017 (the relevant period), viagogo:
(1) by using the phrase “Buy Now, viagogo Official Site” in the viagogo advertisement on Google, and
(2) by failing to disclose, or adequately disclose in viagogo advertisements that it was not a primary ticket seller,
represented to consumers located in Australia that:
(3) they could purchase official original (i.e. not resold) tickets through the viagogo Australian website; and/or
(4) viagogo had the sponsorship of, approval from, or was affiliated with, the relevant team, musician, entertainer or event promoter, organiser or venue (Host) as an “official” agent of the Host to sell original (i.e. not resold) tickets to the Host’s event(s) directly to the public;
when, in fact:
(5) the tickets available from the viagogo Australian website were being resold via an online secondary ticketing platform; and/or
(6) viagogo did not have any such sponsorship, approval or affiliation;
and thereby in trade or commerce:
(a) engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the ACL;
(b) engaged in conduct that was liable to mislead the public as to the nature of the services viagogo provided, in contravention of s 34 of the ACL; and
(c) in connection with the supply or possible supply of services or in connection with the promotion of that supply of services, made false or misleading representations that viagogo had the sponsorship, approval or affiliation of a Host in contravention of s 29(1)(h) of the ACL.
The Total Price Representation
12 The Total Price Representation was made in trade or commerce on the “Tickets and Seating Selection Page” of the viagogo Australian website during the relevant period. The representation was that a consumer could purchase tickets for the amount stated on that webpage, when, in fact, consumers could not purchase tickets for the amount stated on that webpage because consumers had to pay additional fees. In making the Total Price Representation viagogo:
(1) engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the ACL; and
(2) in connection with the supply or possible supply of services, made false or misleading representations with respect to the price at which consumers could acquire event tickets through the viagogo Australian website, in contravention of s 29(1)(i) of the ACL.
13 viagogo also made the Total Price Representation on 18 May 2017 in respect of tickets for three particular events (the 18 May 2017 tickets).
14 viagogo represented that a consumer could purchase:
(1) a ticket for a seat in the Grand Circle section at the Princess Theatre in Melbourne to see a performance of the musical “The Book of Mormon” on Saturday, 20 May 2017 through the viagogo Australian website for A$135 per ticket;
(2) three tickets for seats in the Bronze section of the Gabba cricket ground in Brisbane to attend the Ashes cricket test match on Sunday, 26 November 2017 through the viagogo Australian website for A$110.05 per ticket;
(3) two tickets for seats in the Upper Tier section at Rod Laver Arena in Melbourne to attend a Cat Stevens concert on Monday, 27 November 2017 through the viagogo Australian website for A$225 per ticket;
when, in fact, a consumer could not purchase any of the 18 May 2017 tickets from the viagogo Australian website for the relevant prices because consumers had to pay additional fees. viagogo thus, in trade or commerce:
(a) engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the ACL; and
(b) in connection with the supply or possible supply of services, made false or misleading representations with respect to the price at which consumers could acquire each of the 18 May 2017 tickets through the viagogo Australian website, in contravention of s 29(1)(i) of the ACL.
15 viagogo made the Part Price Representation on 18 May 2017 in respect of the price for each of the 18 May 2017 tickets on the Delivery Page on the viagogo Australian website. The essence of the representation was to state a ticket price that excluded further fees payable without also specifying, in a prominent way and as a single figure, the ticket price that included the additional fees payable. viagogo made the representation in trade or commerce, in connection with the supply or possible supply to another person of goods or services of a kind ordinarily acquired for personal or household use or consumption and in so doing made a part price representation in contravention of s 48(1) of the ACL.
16 The primary judge rejected the ACCC’s contention that in making the Part Price Representation viagogo also contravened s 18 of the ACL.
17 The Quantity Representations comprised eight distinct representations that were made in pop-up windows on various pages of the viagogo Australian website as consumers navigated between the webpages in the ticket acquisition process. The pop-up windows in which the Quantity Representations appeared were windows of varying sizes that displayed on top of the existing page that was open on screen.
18 The Quantity Representations were made during the relevant period and included statements such as the following (where “X” is a variable number):
(1) “Less than [X]% of tickets left for this event”;
(2) “Less than [X]% tickets remaining”;
(3) “Only [X]% of tickets left”;
(4) “Tickets are likely to sell out soon”;
(5) “Only a few tickets left”;
(6) “Only [X] tickets left”;
(7) “LAST CHANCE!”; and
(8) “Tickets for this event are selling fast”.
In making the Quantity Representations viagogo did not adequately disclose that the references to the number or percentage of tickets still available for any of the events were references to the number or percentage of tickets available for purchase through the viagogo Australian website only, and not for the venue as a whole. viagogo thus, in trade or commerce:
(a) engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the ACL; and
(b) engaged in conduct that was liable to mislead the public as to the quantity of tickets available to events advertised on the viagogo Australian website, in contravention of s 34 of the ACL.
19 Grounds 1 to 3 address liability and are as follows:
Ground 1 – Official Site Representation
1. The primary judge erred in finding (at LJ[129], [130], and [132]) that the Official Site Representation conveyed to consumers that viagogo was the authorised seller of tickets and therefore holding that viagogo contravened ss 18, 29(1)(h) and 34 of the ACL (at LJ[142] and [143]), in circumstances where:
a. the context of the representation included organic search results which, taken together, demonstrated that viagogo was not an authorised ticket seller; and
b. the context of the representation included the viagogo website, which stated that viagogo was a ticket marketplace.
Ground 2 – Total Price Representation
2. The primary judge erred in finding that the Total Price Representation was made (at LJ[166] and [171]) and therefore holding that viagogo contravened ss 18 and 29(1)(i) of the ACL (at LJ[174]), in circumstances where his Honour:
a. accepted (at LJ[166]) that the ordinary consumer would ordinarily expect to pay a small handling fee in addition to the ticket price; and
b. accepted (at LJ[168(3)] that the Tickets and Seating Selection Page conveyed that prices are set by sellers and exclude booking and delivery fees.
Ground 3 – Part Price Representation
3. The primary judge erred in his application of s 48 of the ACL in relation to the Part Price Representation (at LJ[188]) to the price displayed on the Delivery Page because the ticket was supplied by a third party and his Honour ought to have found that the price specified on that page was the whole price for the supply of the ticket and that s 48 had no application.
20 Grounds 1 to 3 raise no point of principle. Each ground is a complaint about the application of well-established principles to the particular facts in issue.
21 Sections 18(1) and 29(1) of the ACL relevantly provide:
18 Misleading or deceptive conduct
(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
…
29 False or misleading representations about goods or services
(1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:
…
(h) make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation; or
(i) make a false or misleading representation with respect to the price of goods or services; or
Note 1: A pecuniary penalty may be imposed for a contravention of this subsection.
22 Section 34 provides:
34 Misleading conduct as to the nature etc. of services
A person must not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the characteristics, the suitability for their purpose or the quantity of any services.
23 Section 48 relevantly provides:
48 Single price to be specified in certain circumstances
(1) A person must not, in trade or commerce, in connection with:
(a) the supply, or possible supply, to another person of goods or services of a kind ordinarily acquired for personal, domestic or household use or consumption; or
(b) the promotion by any means of the supply to another person, or of the use by another person, of goods or services of a kind ordinarily acquired for personal, domestic or household use or consumption;
make a representation with respect to an amount that, if paid, would constitute a part of the consideration for the supply of the goods or services unless the person also specifies, in a prominent way and as a single figure, the single price for the goods or services.
Note: A pecuniary penalty may be imposed for a contravention of this subsection.
(2) A person is not required to include, in the single price for goods, a charge that is payable in relation to sending the goods from the supplier to the other person.
(3) However, if:
(a) the person does not include in the single price a charge that is payable in relation to sending the goods from the supplier to the other person; and
(b) the person knows, at the time of the representation, the minimum amount of a charge in relation to sending the goods from the supplier to the other person that must be paid by the other person;
the person must not make the representation referred to in subsection (1) unless the person also specifies that minimum amount.
Note: A pecuniary penalty may be imposed for a contravention of this subsection.
....
(5) For the purposes of subsection (1), the person is taken not to have specified a single price for the goods or services in a prominent way unless the single price is at least as prominent as the most prominent of the parts of the consideration for the supply.
....
(7) The single price is the minimum quantifiable consideration for the supply of the goods or services at the time of the representation, including each of the following amounts (if any) that is quantifiable at that time:
(a) a charge of any description payable to the person making the representation by another person unless:
(i) the charge is payable at the option of the other person; and
(ii) at or before the time of the representation, the other person has either deselected the charge or not expressly requested that the charge be applied;
(b) the amount which reflects any tax, duty, fee, levy or charge imposed on the person making the representation in relation to the supply;
(c) any amount paid or payable by the person making the representation in relation to the supply with respect to any tax, duty, fee, levy or charge if:
(i) the amount is paid or payable under an agreement or arrangement made under a law of the Commonwealth, a State or a Territory; and
(ii) the tax, duty, fee, levy or charge would have otherwise been payable by another person in relation to the supply.
24 Having regard to the scope of the appeal on liability it is useful to set out the liability judgment in some detail. In doing so, we have noted which parts of the liability judgment are the subject of each ground of appeal before moving to our consideration of the grounds of appeal, commencing at [83] below.
25 The primary judge made comprehensive findings in respect of the way in which consumers experienced and interacted with, first, the viagogo advertisement which appeared on Google search results pages and if clicked, linked to the viagogo Australian website, and secondly, the viagogo Australian website itself. Many of the findings of fact made by the primary judge are not the subject of challenge on appeal and may therefore be summarised at a relatively high level.
Context in which representations made
26 The primary judge began by making findings in respect of the context in which the alleged representations were made and explaining how the viagogo advertisement and the viagogo Australian website were likely to appear to, and be experienced by, consumers. The evidence included multiple screen and video captures of the relevant website pages as well as evidence of five ACCC consumer witnesses, who had acquired tickets from the viagogo Australian website during the relevant period.
27 The primary judge set out the relevant facts in respect of the viagogo advertisement and incorporated image captures: LJ [35] – [38]. The way in which the Google results page displayed varied according to the consumer’s means of access to the Google search engine (mobile device or personal computer). There was no dispute that when the name of an event or performance was entered into a Google search, the results generated were displayed in a list. The first appearing results were sponsored links or advertisements. In the relevant searches the first result was the viagogo advertisement which when clicked, linked through to the viagogo Australian website. During the relevant period, the viagogo advertisement included the words “Buy Now, viagogo Official Site” and appeared in search results generated by the Google search engine: LJ [35]. If the search term entered into the Google search was limited to the name of the event or performer then the embedded link in the viagogo advertisement, when clicked, would transport the consumer to the viagogo home page. If the search terms included the event or performer name and the word “viagogo”, the embedded link when clicked linked to the “Event Specific Page” on the viagogo Australian website.
28 viagogo contended before the primary judge that the ACCC’s evidence did not sufficiently contextualise the viagogo advertisement because the evidence did not include a full list of the search results returned by the Google search engine so as to enable a proper evaluation of the Official Site Representation: LJ [36]. viagogo also submitted that the relevant context in which to assess the Official Site Representation included an examination of viagogo’s Australian website, which viagogo argued made it clear that viagogo operated as an online ticket marketplace: LJ [125].
29 At LJ [39] to [75] the primary judge described the dynamic way in which a consumer interacted with the viagogo Australian website at each stage of the process of selecting and acquiring tickets during the relevant period. There were nine webpages on the viagogo Australian website that a consumer could navigate through (in order): Home, Category Specific; Event Specific; Tickets and Seating Selection; Quantity Selection; Buyer Details; Delivery; Payment; and Review. Each involved a significant amount of content, both primary content and additional content (reposed in drop down menus, pop-up windows or linked fields). Scrolling was required to see the whole of the primary content on individual webpages. The extent of scrolling required varied according to size of the screen on the device used to access the site.
30 It is informative to reproduce the primary judge’s overarching findings about the consumer’s experience of the viagogo Australian website (at LJ [75]):
…Each of the webpages is rich in information and provides access to additional information by clicking on links available. None of the pages can be seen in its entirety on a single screen of device likely to be used by the ordinary consumer. The consumer is directed to select links that meet his or her desire in terms of ticket acquisition. As one moves through the process, the website encourages, with increasing urgency, the consumer to advance through the acquisition so that the opportunity to acquire the desired tickets is not lost. This process has the effect, if not the design, of distracting the consumer from content that is available (or that might be available by following other links) beyond that which is immediately needed to progress through the site, and corralling him or her towards speedy completion of the purchase. The use of an interactive website is to be contrasted with other media by which goods or services are promoted and sold. In the present case the website serves the function of both promoting the sale of tickets and also enabling a consumer to enter the transaction. The consumer is drawn not only into a marketing web, but also into a transactional web. The site encourages the consumer to commit to a transaction; he or she selects the event of interest, then in the Tickets and Seating Selection Page is invited to choose the desired number of tickets and, once selected, commit (or at least signify an interest in doing so) to “Buy” them for a nominated price. At each stage the consumer is assured that tickets are running short, that time is running out to buy, and that the tickets that they have selected will soon be released to other, competing purchasers. The increasing urges to completion and the “hurry up” messages create such an impression that the consumer is at risk of missing out on tickets, that he or she is likely increasingly to confine attention to only that information necessary to enter details and complete the transaction.
31 The primary judge’s reference to the “increasing urges to completion” and “the hurry up messages” are to the pop-up windows housing the Quantity Representations.
The Quantity Representations
32 While the finding of contravention in respect of the Quantity Representations is not appealed, the primary judge’s findings in respect of the effect of these representations provide important context for the primary judge’s findings in relation to the Official Site Representation, the Total Price Representation and the Part Price Representation, and the marketing web and transactional web of which they form part. The primary judge’s findings as to the effect of the Quantity Representations on consumers as they navigated through the website are of particular relevance to the primary judge’s findings in respect of whether the Total Price Representation and the Part Price Representation were, as a matter of fact, dispelled by information otherwise present on the viagogo Australian website.
33 The Quantity Representations concerned the quantity of tickets that viagogo said that it had available for sale. The primary judge found that viagogo misrepresented on its website that the seats remaining for sale were the seats available for the event or performance at the venue, when in fact they were only the seats that viagogo had available for sale via its website: PJ [9]. The Quantity Representations were made in a variety of forms and on numerous occasions as a consumer moved from the commencement of the booking process to the point of ticket purchase: PJ [64]. The primary judge found that the Quantity Representations were made on an “industrial scale” in the relevant period: PJ [69]. They had the effect that consumers were induced to believe that because of the limited availability of tickets at the venue, unless they completed a purchase, they would lose the opportunity to acquire tickets at all. The effect of the manner in which the Quantity Representations were made was to distract consumers from the inadequate disclaimers otherwise present on the viagogo Australian website. They were productive of anxiety on the part of consumers: PJ [64]; LJ [75], [150] and [152].
34 In this way, the Quantity Representations had the effect of drawing the consumer further into a marketing and a transactional web, “lured by repeated assurances that the only tickets available at the venue are going fast; if the consumer did not convert the interest in the tickets to an acquisition, the opportunity to acquire tickets would be lost”: PJ [67], LJ [75], [150]. The primary judge regarded the Quantity Representations as very serious misrepresentations: PJ [64].
35 The primary judge noted that the viagogo advertisement and the viagogo Australian website are directed to members of the public at large who have an interest in acquiring tickets online for live events. Accordingly, the representations contained within them must be judged by their effect on ordinary or reasonable members of that class of prospective consumers. Before the primary judge the parties were in broad agreement that the relevant class of ordinary consumers would reasonably be expected to possess knowledge and familiarity with the internet and conducting searches online and in navigating web pages. They would have an understanding of purchasing items on the internet, although not necessarily any specialised knowledge of the online acquisition of tickets for live events: LJ [110]. They were not likely to have been aware of viagogo or that it operates a ticket marketplace for the re-sale of tickets for events: LJ [111].
36 The primary judge found that the price of the tickets being acquired was not insignificant and in that sense an ordinary consumer would be expected to approach the acquisition with some care. In the particular context of the viagogo Australian website, the ordinary consumer was not likely to read every word on the webpages or click on every link to additional information contained on those webpages: LJ [112].
37 Turning to the three categories of representation which are challenged in the liability appeal, the primary judge made the following findings.
38 The Official Site Representation is the subject of Ground 1 of the appeal.
39 The Official Site Representation was found to have been made during the relevant period which comprised a period of 57 days: PJ [6]. Examples of the viagogo advertisement are in section 3.1 of the LJ and are not reproduced here.
40 It was an agreed fact below that during the relevant period, the viagogo advertisement included the words “Buy Now, viagogo Official Site”.
41 At LJ [128], the primary judge found that the ordinary consumer will typically be interested in acquiring “official” tickets, that is, tickets that are authorised for sale by, or on behalf of, the venue, performer or the host in order to be confident of obtaining access to the performance or event. Further, that the use of the term “official” reinforces the consumer’s assumption that the tickets acquired by the consumer have been issued with the authority of the venue, performer or host and that the provenance of the ticket is not in doubt. This finding is not challenged on appeal.
42 Ground 1 focusses on the findings (at LJ [129], [130] and [132]) in respect of the viagogo advertisement. It is convenient to reproduce those paragraphs in full:
[129] There is perhaps an element of ambiguity about the advertisement, because the words “viagogo Official Site” could be taken either to mean that the URL below is a link to the “official” website for viagogo, or that it is the “official” site for the acquisition of the Queen and Adam Lambert Tickets. In both cases the word “official” conveys approval or authorisation. However, I think that the room for ambiguity is slight. In my view the ordinary consumer who reads the viagogo ad is likely to take the latter view, and thereby to be led into error. In context “official site” is most likely to be understood to be the site for the sale of the Queen and Adam Lambert tickets promoted, not the “official” viagogo website. “Official” in that context qualifies “site” and not “viagogo”. In doing so, it indicates that by following the link below the consumer will be taken to the place permitted or authorised by the event organisers or performers to issue the tickets. The alternative construction, that the site is the viagogo official site, might be more natural if the order of words were different and it read “Official viagogo site”. But it does not. Furthermore, it involves the adjective “official” adding nothing to the word “viagogo” unless one considers that there may be an unofficial (or perhaps renegade) viagogo site. Ordinary consumers who (it is accepted) know nothing of viagogo are unlikely to make that assumption.
[130] The words “official site” tend to stamp the advertisement with a certain authority when read in the context of the promotion of tickets for sale. More particularly, in my view an ordinary consumer would understand the words “Buy Now, viagogo Official Site” to convey that if the consumer followed the link, he or she would be taken to a website where tickets for the relevant event could be obtained from the official, or authorised vendor. That naturally conveys that the tickets are not second hand or resold tickets, but tickets obtained from an official source or host.
…
[132] In my view the subsidiary words appearing in the entry of each example set out in Section 3.1 above serve to reinforce the message conveyed by the impugned words. Beneath the “Buy Now, viagogo Official Site” title (and beneath the URL for the viagogo website, which is also listed) are a number of short phrases, including “On Sale Today. Selling Fast. Secure Your Seats. Don’t Miss Out. Prices Rising … Secure Delivery. Fast Checkout … Save online…”. These words do not convey information about viagogo generally. They convey to consumers seeking tickets that viagogo is the place to buy those tickets (and, additionally, the words carry a sense of urgency). Read in context with these phrases about buying tickets, “viagogo Official site” would tend to reassure prospective ticket buyers that this is an authorised seller of tickets.
43 By Ground 1 viagogo contends that the primary judge erred by failing to have regard to the whole of the relevant context necessary to assess whether the Official Site Representation was in fact conveyed by the viagogo advertisement. Below viagogo contended that the relevant context included, first, the whole of the search results on the Google results page which viagogo submitted demonstrated that viagogo was not an authorised ticket seller; and secondly, the viagogo Australian website, which was linked in the viagogo advertisement and which included a description of viagogo as a ticket marketplace. viagogo makes submissions to the same effect on the appeal. The primary judge’s consideration of this aspect of viagogo’s submissions is as follows.
44 The primary judge addressed viagogo’s submission in respect of the context supplied by the whole of the Google search results, that is including both organic (that is, non-sponsored) and sponsored results commencing at LJ [133]. The primary judge recorded viagogo’s submission that consumers were able to take time to study particular web pages and go back and forth between websites should they desire. The primary judge accepted that in assessing the effect of the representation, it was wrong to consider it separately or out of context: LJ [134]. The primary judge accepted that the reference to “Ad” in the viagogo advertisement would signify to most consumers that the reference is an advertisement and that by following the link provided the consumer would be taken to the website promoted in the advertisement. Further, that in many cases the consumer would be aware that organic, non-sponsored links follow the sponsored links. The primary judge emphasised that the context of the searches must be borne in mind and here, the relevant searches were undertaken by consumers who were seeking to locate a suitable online location where they could buy the tickets they wanted (at LJ [134], emphasis in original):
They want to be directed to a site where the tickets can be obtained. The impugned words appear in advertisements placed by viagogo exhorting consumers to go to its website. In this regard, the distinction between sponsored links and organic search results is of less relevance: the consumer is after a merchant who can sell the requisite tickets. That is precisely why an organisation like viagogo would place a sponsored link: in order to persuade a consumer to follow the link to is website and buy tickets.
45 In assessing the relevance of the whole of the results of the Google search, the primary judge noted that the question of whether the headline representation was misleading and deceptive depends on whether any qualifications to the headline representation have been sufficiently drawn to the attention of the relevant consumers and whether that information is sufficiently instructive to nullify the risk that the headline claim might mislead or deceive: citing Australian Competition and Consumer Commission v Jetstar Airways Pty Ltd [2015] FCA 1263; [2016] ATPR 42-523 at [40] (Foster J).
46 In support of its submission based on the context supplied by the whole of the Google search results, viagogo contended before the primary judge that two examples from the evidence adduced by the ACCC demonstrated that further information was available in the listed search results which indicated the true nature of its business as a reseller of tickets. The first was part of a video capture in the results page for a search using the term “viagogo”. In that search, the fourth listed reference (the third organic listing) says, in small print, “viagogo is an online ticket exchange that allows people to buy and sell live event tickets in a safe and guaranteed way”. The second example cited by viagogo was to point to the third listed reference (the first organic listing) in a results page for a search for “Paul McCartney viagogo”, which says in small print “viagogo – world’s largest ticket marketplace”. Both these examples came from searches that incorporated the word “viagogo” as a search term and which were undertaken by ACCC staff witnesses (not by ACCC consumer witnesses).
47 The primary judge found that consumers were likely to look more widely than just at the first listed result on a search page but did not accept that in the relevant context the consumer would focus particularly on organic (as opposed to sponsored) listings and in so doing come to appreciate that viagogo was not engaged in the sale of authorised tickets from the Host but rather its business was to facilitate the resale of such tickets: LJ [134].
48 Further, the primary judge found, and it was not in dispute, that the ordinary consumer was not likely to have been aware of viagogo or that it operates a ticket marketplace for the re-sale of tickets for events: LJ [111]. There was thus a lacuna in the evidence as to whether the organic listings on which viagogo sought to rely as relevant context, in fact, formed part of the search results returned when the word “viagogo” was not included in the search terms. In any event, the primary judge found that even if the organic listings on which viagogo relied had been included in the Google search results when the word “viagogo” was not included as one of the search terms (and there was no evidence to show that they were), the subsequent small print references appearing in the listings below the viagogo advertisement were not sufficient to dispel the Official Site Representation which was displayed in a relatively large text and appeared as the first result on the Google search results page. In addition, the primary judge did not accept that the reference to a “ticket marketplace” of itself conveyed that the only tickets available from viagogo were tickets that were being resold: LJ [138].
49 At LJ [136], the primary judge observed that the content of the organic search results were not within the control of viagogo and the clarifying effect, if any, of information contained in those search results would be fortuitous. By analogy, the primary judge referred to CRW Pty Ltd v Sneddon (1972) AR (NSW) 17 in which it was held that an advertiser was not entitled to assume a reader will supply himself or herself omitted facts or resolve ambiguities. The primary judge found it would be unlikely that separate listings, not self-evidently from the same source as the viagogo advertisement, would provide sufficient qualification to the reader of the viagogo advertisement so as to dispel the Official Site Representation: LJ [137]. In this respect, the primary judge noted that the other listings on which viagogo relied manifested in Google searches which included the word “viagogo” as a search term. The evidence in respect of such searches came from searches performed by the legal advisers for the purpose of the proceedings. It was common ground that the ordinary class of consumers was not likely to have been aware of viagogo. It followed that the term “viagogo” was unlikely to have been used as a search term in searches undertaken by the ordinary consumer.
50 viagogo’s second argument before the primary judge focussed on the viagogo Australian website as part of the relevant context in which the viagogo advertisement appearing on the separate Google website in the Google search results page should be assessed. viagogo submitted that in order to consider the Official Site Representation in context it was necessary to examine the viagogo Australian website because it is possible to click the viagogo advertisement and if clicked, the consumer is linked through to the viagogo Australian website. viagogo contends that the viagogo Australian website makes it clear that viagogo operated an online ticket marketplace: LJ [141].
51 The primary judge rejected this submission on the basis that it conflated the anterior question of whether or not the viagogo advertisement had a tendency to lead consumers into error with the posterior question of whether the consumer suffered loss as a result: citing Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; 250 CLR 640 at [50] (French CJ, Crennan, Bell and Keane JJ):
It has long been recognised that a contravention of s 52 of the TPA may occur, not only when a contract has been concluded under the influence of a misleading advertisement, but also at the point where members of the target audience have been enticed into “the marketing web” by an erroneous belief engendered by an advertiser, even if the consumer may come to appreciate the true position before a transaction is concluded [Trade Practices Commission v Optus Communications Pty Ltd (1996) 64 FCR 326 at 338-339; SAP Australia Pty Ltd v Sapient Australia Pty Ltd (1999) 169 ALR 1 at 14 [51]; Australian Competition and Consumer Commission v Commonwealth Bank of Australia (2003) 133 FCR 149 at 171-172 [47]. See also Bridge Stockbrokers Ltd v Bridges (1984) 4 FCR 460 at 475)]. That those consumers who signed up for TPG's package of services could be expected to understand fully the nature of their obligations to TPG by the time they actually became its customers is no answer to the question whether the advertisements were misleading.
52 The primary judge found that the viagogo advertisement served to draw consumers into a marketing web by engendering the erroneous belief that the tickets being sold were by the Host rather than by a ticket reseller.
53 Accordingly, the primary judge was satisfied that in making the Official Site Representation viagogo had contravened ss 18, 34 and 29(1)(h): LJ [142] – [143]. The primary judge confirmed that he was satisfied to the higher standard with respect to the imposition of a civil penalty under ss 34 and 29(1)(h).
Agreed facts relating to price
54 The next two representations which are challenged on appeal relate to price. Before moving to the primary judge’s findings in relation to the remaining two representations, we note that the following two facts were agreed between the parties in relation to price (at LJ [41] – [42]):
[41] First, during the relevant period, on the Homepage, tickets for different events were advertised with a price "From A$X" (with X being a dollar amount in Australian dollars, where the currency was set to Australian dollars). The ticket prices advertised on the Homepage were prices set by third party sellers, not viagogo. viagogo charged consumers who purchased a ticket on the viagogo Australian website two additional fees:
(a) "VAT and Booking Fee"; and
(b) A "Secure Ticket Handling Fee",
(the viagogo fees).
[42] Second, during the Relevant Period the viagogo fees were calculated as follows:
(a) the Booking Fee component of the "VAT and Booking Fee" was calculated by viagogo as a percentage of the ticket price set by the third party seller;
(b) the VAT Fee component of the "VAT and Booking Fee" was applied depending on the location of the buyer's billing address and, where applicable, calculated by reference to the amount of the Booking Fee; and
(c) the "Secure Ticket Handling Fee" was calculated by reference to the delivery option for the tickets and the buyer's location.
55 The Total Price Representation is the subject of Ground 2 of the appeal.
56 Ground 2 is directed to the findings in respect of the Total Price Representation (at LJ [166] and [171]). By Ground 2, viagogo seeks to demonstrate error by reference to two other matters which viagogo submits were accepted by the primary judge and which cannot be reconciled with the finding that the Total Price Representation was made. The first matter on which viagogo relies in this respect is that the primary judge “accepted (at LJ [166]) that the ordinary consumer would ordinarily expect to pay a small handling fee in addition to the ticket price”: Ground 2(a). The second matter on which viagogo relies is that the primary judge “accepted (at LJ [168(3)]) that the Tickets and Seating Selection Page conveyed that prices are set by sellers and exclude booking and delivery fees”: Ground 2(b). Because Ground 2 is framed in this way, focussing on two particular findings, it is necessary to set out the primary judge’s findings in detail on this aspect. The findings made by the primary judge must be read in full and in context.
57 The Total Price Representation were made on the Tickets and Seating Selection Page of the viagogo Australian website. The representations were to the effect that a consumer could purchase tickets for the amount stated on that webpage, when in fact consumers could not purchase tickets for the amount stated because they had to pay additional fees. The ACCC sought declarations in respect of the making of the Total Price Representation during the relevant period and specifically in respect of the 18 May 2017 tickets, which it will be recalled were for the Book of Mormon musical, a Cat Stevens concert and an Ashes Cricket Test.
58 The primary judge considered the Total Price Representation in the context of a video capture of the Book of Mormon ticket acquisition process, which he was satisfied was suitably representative of the process used for the purchase of all of the 18 May 2017 tickets and of the evidence in respect of the balance of the relevant period (at LJ [164]):
The Tickets and Seating Selection Page invites the consumer to select the number of tickets to be purchased. Before a selection is made, the seating plan is rendered in grey with seat prices displayed and the number of tickets available shown … Once the ticket quantity is selected, the grey wash is removed and options for specific ticket selection and price are displayed … The consumer is then invited by the virtual “Buy” button to select specific tickets, by clicking. As noted above, in the example of the Book of Mormon tickets the price is A$135. It is not in dispute that this is an unequivocal representation as to the price of the ticket. In the Ashes and Cat Stevens examples, several seating options (with different prices for various sections of the venue) were displayed from which the consumer could choose …
59 The primary judge rejected viagogo’s submission that an ordinary consumer would be aware by the time of arriving at the Tickets and Seating Selection Page that the seat being sold was in a ticket marketplace or that accordingly an additional booking fee would be expected: LJ [165]. In doing so, the primary judge found that viagogo had not established the underlying premises for its submission namely, that adequate notice had been provided to the consumer that the viagogo Australian website was only a ticket exchange and that the ordinary consumer would assume, without being told, that a booking fee of approximately 28% would be levied by viagogo as the organiser of the exchange: LJ [165]. The primary judge found that at the point of arrival on the Tickets and Seating Selection Page, the ordinary consumer, being reasonably astute to his or her own interests, is unlikely to be aware that viagogo is operating as ticket marketplace, facilitating the re-sale of tickets held by third parties: LJ [166]. Further, that the web pages that precede the Tickets and Seating Selection Page do not alert the consumer to the fact that there will be a significant further charge levied, over and above the price of the ticket even though the ordinary consumer would typically expect to pay a small handling fee. The evidence indicated that the viagogo “VAT and Booking Fee” was a significant impost, in the order of an additional 28% added to the price of the ticket, and that it was not disclosed at this point. The primary judge found that the combined effect of the “Buy” button and its placement directly beneath the price on the Tickets and Seating Selection Page amounted to a headline representation of the ticket price.
60 The primary judge then considered whether that headline representation was qualified by material which was sufficiently drawn to the attention of the consumer so as to neutralise the effect of the headline representation.
61 At LJ [167], the primary judge noted that the fact that viagogo adds a “VAT and Booking Fee” of A$37.50 to the ticket price of A$135 is not disclosed until the final Review Page. That notification occurs only after the consumer has entered his or her name and credit card details on the Payment Page (which is the page that immediately precedes the Review Page) and is prior to the consumer completing the transaction. Screen captures of an example of the Review Page are reproduced at LJ [73]. The primary judge found, although noting that it was perhaps a close run thing, that an ordinary consumer reasonably astute to his or her interests, is adequately notified of the viagogo fees (comprised of the “Secure Ticket Handling” fee and the “VAT and Booking” Fee) at that final stage. However, the primary judge did not accept that sufficient notice was given to the ordinary consumer that the particular tickets were being offered by a third party, nor that the website adequately notified that viagogo would levy a handsome impost for its own services beyond a handling fee: LJ [168]. In reaching this conclusion the primary judge made a number of specific findings at LJ [168(1)] to [168(3)].
62 First, that the Terms and Conditions were not readily apparent on the website. The Terms and Conditions were available only via a link at the base of each page in the end section. The link is in fine print and not prominent. It was not necessary to scroll to that section of the website to locate and/or acquire tickets. In any event, the Terms and Conditions identify that viagogo is a ticket re-seller, and that the price is fixed by the third party owner of the tickets, but make no mention of the fee that viagogo charges for its involvement in the transaction, or what that fee may be: LJ [168(1)].
63 Secondly, that the reference in the event description on the Event Specific Page to a “ticket marketplace” (which in any event was not included on the Cat Stevens Event Specific Page) and the statement that one can also “sell tickets” did not convey to the ordinary consumer that the particular tickets of interest were being resold by a third party for an additional and sizeable handling fee: LJ [168(2)].
64 Thirdly, that the information contained in the General Notes section on the Tickets and Seating Selection Page which did convey that prices were set by sellers and excluded booking and delivery charges was unlikely to be seen or absorbed by ordinary consumers in the context of the pop-up “hurry up” messages present on the page. The information was in fine print buried in the final bullet point of a drop down menu under the heading General Notes, which heading did not draw attention to the fact that it housed important information relevant to the purchase: LJ [168(3)].
65 The finding at LJ [168(3)] is of particular relevance to Ground 2: see [115] below. The reference to the “hurry up” messages is again a reference to the Quantity Representations.
66 The primary judge found that the fact that viagogo was selling tickets owned by third parties was not sufficiently disclosed and on this basis found viagogo’s reliance on the High Court’s decision in Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; 218 CLR 592 to be misplaced: LJ [169]. Furthermore, the primary judge said that even if he was wrong in respect of disclosure of viagogo’s role as a ticket marketplace, he regarded the material failure on the Tickets and Seating Selection Page to be the failure of viagogo to disclose the additional fee that it intended to charge the consumer in order to facilitate the acquisition of third party tickets.
67 The primary judge found that the relevant headline representation was that the purchase price was the price stated on the Tickets and Seating Selection Page next to the Buy button. In rejecting viagogo’s submission that the context of the Total Price Representation includes the content of subsequent webpages on the viagogo Australian website, which identify the additional fees to be charged and the disclosure on the Review Page of the actual total for the transaction, the primary judge again referred to the distinction between the anterior question of whether conduct is misleading or deceptive from the posterior question of whether harm is in fact suffered, citing TPG Internet at [49] – [50].
68 At LJ [170], the primary judge found that the meagre information supplied concerning viagogo’s operation as a “marketplace” was not sufficient to dispel the headline representation and alert the consumer to the fact or the size of viagogo’s fees. The primary judge noted that viagogo was unable to point to any part of its website other than the Review Page where the size of the booking fee is disclosed.
69 The primary judge, having considered the evidence in relation to the consumer’s experience of navigating the booking process, found that a significant point in time in the transaction was the point before the user clicks the “Buy” button on the Tickets and Seating Selection Page. The primary judge found that by selecting the “Buy” button, the consumer is brought further into, not only the marketing web, but also the transactional web, created by the website, with each subsequent page urging the consumer further (at LJ [171]):
Thereafter, the website urges the consumer onwards and is drawn further into it. Once the “Buy” button is clicked, the consumer is taken to the Quantity Selection Page. On this and subsequent pages (until the end of the process), the countdown timer appears in the top left corner … Under the timer are the words “Please note that these tickets may not be available at this price if you release them”, which indicates that consumers should continue with this booking process or risk paying more for the tickets. That message logically supports the proposition that the consumer should ensure they secure these tickets for the price which they had selected on the Tickets and Seating Selection Page, and therefore that they can expect to pay that price for the tickets.
70 The primary judge rejected viagogo’s submission that the impression created would be transitory and that it would be dispelled by the subsequent pages on the website including the Quantity Selection, Buyer Details and Delivery Pages which viagogo contended provided sufficient correction to the impression created by the headline representation as to price: LJ [172].
71 The primary judge was satisfied that in making the Total Price Representation that viagogo had engaged in conduct in contravention of ss 18(1) and 29(1)(i): LJ [174]. The primary judge regarded the Total Price Representation as seducing the consumer with a misleading impression of the price and inducing consumers to become further committed to a transaction (PJ [70]). Notwithstanding this, the primary judge took into account that the total price of the transaction was ultimately revealed on the Review Page (LJ [173], PJ [71]) and also found that while the Total Price Representation was serious and in clear breach of s 29(1)(i) of the ACL, it was not of the same level of seriousness as the Official Site Representation and the Quantity Representations: PJ [71].
72 The Part Price Representation is the subject of Ground 3 of the appeal.
73 Ground 3 is directed to the primary judge’s findings in respect of the application of s 48 of the ACL in relation to the Part Price Representation (at LJ [188]). The Part Price Representation was made on the Delivery Page in respect of the 18 May 2017 tickets: LJ [175] – [176]. As noted above, the primary judge found that in making the Part Price Representation viagogo contravened s 48 of the ACL but not s 18. By Ground 3, viagogo contends that the primary judge did not engage with the substance of its arguments made below. For this reason, we will set out the primary judge’s analysis of the submissions advanced by viagogo below on this issue.
74 The essential findings of fact made by the primary judge about the Delivery Page were as follows. The Delivery Page of the viagogo Australian website required the consumer to choose the delivery method for the tickets. The price per ticket and the “SUBTOTAL” were displayed in bold on the Delivery Page. Underneath the word “SUBTOTAL” was a reference to booking, handling and VAT fees: LJ [68]. The primary judge found that the inclusion of the word “SUBTOTAL” on the Delivery Page made it sufficiently clear that the price indicated was not likely to be the whole price to be paid.
75 Based on the effect of the heading “SUBTOTAL”, the primary judge found that the alleged conduct did not breach s 18 of the ACL: LJ [191]. The primary judge then moved to consider the allegation of breach based on s 48 of the ACL.
76 The primary judge found that in making the Part Price Representation, viagogo contravened s 48: LJ [188] – [190]. At LJ [179], the primary judge paraphrased the terms of s 48 as follows:
Subsection 48(1) imposes a normative standard that (to paraphrase) a person must not, in trade or commerce, in connection with the supply, possible supply or promotion to another of goods or services for personal use, make a representation with respect to an amount that, if paid, would constitute a part of the consideration for the supply unless the person also specifies in a prominent way and as a single figure, the single price for the goods. Subsection 48(5) gives some clarification by providing that the person is taken not to have specified a single price unless the single price is “at least as prominent as the most prominent of the parts of the consideration for the supply”. Subsection 48(7) defines a “single price” as the minimum quantifiable consideration for the supply at the time of the representation and includes, as listed in (a) – (c) of the subsection (set out above, as noted) certain amounts that are quantifiable at the time.
77 At LJ [180], the primary judge reproduced an example of the top half of the Delivery Page, in the form of a screen capture. The relevant part of the screen capture for present purposes reads as follows:
Price per Ticket | AU$ 135.00 per ticket |
Number of Tickets (Edit) | 1 |
SUBTOTAL | AU$ 135.00 |
+ Booking, Handling and VAT |
78 By reference to this example, the primary judge found that:
[181] At this point in time viagogo, in connection with the supply, possible supply and promotion to a consumer of tickets for an event, makes a representation with respect to an amount ($135) that, if paid, would constitute a part of the consideration (“subtotal”) for the supply of the ticket. Section 48(1) prohibits that conduct unless viagogo specifies, in a prominent way and as a single figure, the single price for the tickets.
[182] The single price must be the minimum quantifiable consideration for the supply concerned at the time of the representation concerned; s 48(7). In the present case three additional amounts are potentially applicable:
(a) the Secure Ticket Handling fee. The ACCC contends that this was quantifiable at the time of the Delivery Page because the only option offered for delivery was E-Ticket, and on the prior Buyer Details Page, the billing address of the consumer is known. Whilst these matters of fact are correct, ss 48(2) provides that a person is not required to include, in the single price for goods, a charge that is payable in relation to sending the goods from the supplier to the other person. Subsection 48(3) provides that if a person knows, at the time of the representation, the minimum amount of a charge in relation to sending the goods, the person must specify that minimum amount. Evidence about exactly how the Secure Ticket Handling fee was calculated was not provided, but I note that it is a different amount in the Paul McCartney transaction and I am not satisfied that s 48(3) applies. Accordingly, the failure to include the Secure Ticket Handling Fee is not relevant to the assessment of breach.
(b) the Booking Fee. The evidence indicates that this is generally in the vicinity of 28% of the ticket price. It is a price set by viagogo. It was 27.77% for each of the 18 May 2017 events, and 27.86% for the Paul McCartney event. The ACCC submits that once the consumer has selected the number of tickets to be purchased, viagogo must know the fee that it intends to charge. By the time that the Delivery Page appears this is a known fee that has not been included. I accept that submission.
(c) the VAT. The ACCC submits that by the time that the address of the consumer is known to be outside Europe, viagogo must be aware that VAT would not be charged. That information is provided on the previous Buyer Details Page. Further, in a letter from the solicitors for viagogo to the ACCC, viagogo admits that at the time that the buyer enters their personal details, VAT charges can be calculated.
[183] Accordingly, the Booking Fee and VAT are amounts that should be included in the single price, being the minimum quantifiable consideration for the supply concerned. As there is no VAT payable, the minimum quantifiable consideration to be included is the Booking Fee.
79 The primary judge rejected viagogo’s submission that the process for the acquisition of tickets should be regarded as a single transaction and that the single price is specified in a prominent way prior to the completion of the transaction: LJ [184]. The primary judge found that the subsequent display of the total price on a page that is displayed later in time on the viagogo Australian website was not sufficient to satisfy the requirements of s 48(1): LJ [185]. The primary judge observed that the language of s 48 indicates that a prohibited representation may be made in the course of a transaction even where at the end of the dealing the single price is revealed: LJ [185]. In this regard the primary judge noted that a consumer may choose to exit the viagogo ticketing process before the process is completed and the single price revealed on the Review Page.
80 The primary judge found (at LJ [188]) that viagogo had not specified the single figure in a prominent way as required by s 48(1) of the ACL:
The Delivery Page forms part of what I have described as the transactional web for the consumer. By the mechanism of the viagogo website a consumer is progressively drawn into a transaction. Even a consumer who is only curious to know the price that he or she may pay for tickets is insistently urged to acquire tickets. By the Delivery Page the consumer has not committed. Payment details are yet to be supplied and confirmation given. The consumer is at one of a series of significant points in the process where he or she may elect to discontinue the process. The apparent purpose of s 48 is to ensure that such a purchaser is apprised of the relevant information as to price in a clear manner when the relevant information becomes available. There is no dispute that the Booking Fee is not displayed at all on the Delivery Page. The consumer must complete the Payment Page, which involves entering credit or debit card details, and come to the Review Page before a single price is displayed. That does not satisfy the requirement that a single price be specified in a prominent way.
81 Having regard to the limited duration of the Part Price Representation, the primary judge found that the contravention of s 48 was on the lesser scale to viagogo’s other contraventions: PJ [72].
82 The primary judge rejected viagogo’s submission that s 48 does not apply because the price of the 18 May 2017 tickets were not fixed by viagogo but by third party vendors and that in circumstances where the representation as to “price” was made by two different parties, namely the third party ticket vendor and viagogo, the section is not engaged: LJ [190]. viagogo did not cite authority to support its contention. The primary judge held that s 48 of the ACL concerns the making of a representation with respect to an amount. The proscription does not confine the scope of operation of s 48 to a party making the representation who also “fixes” the price. viagogo does not challenge this aspect of the LJ on appeal.
CONSIDERATION – GROUNDS 1 TO 3 (LIABILITY)
83 The observations made by the Full Court in Australian Competition and Consumer Commission v Employsure Pty Ltd [2021] FCAFC 142; 392 ALR 205 in respect of the appropriate approach to appellate review in a case involving evaluative decision-making by the primary judge are apposite:
[117] Appeals to this Court from the decision of a single judge of the Court are by way of a rehearing, which involves correction of error. How the primary judge’s reasoning may be shown to be wrong depends on what the reasoning is about, and error is not demonstrated merely because the appellate court disagrees with the primary judge: Branir Pty Ltd v Owston Nominees Pty Ltd (No 2) [2001] FCA 1833; (2001) 117 FCR 424 at [20]-[24] (Allsop J (as his Honour then was) with Drummond and Mansfield JJ agreeing).
[118] As Perram J (with whom Allsop CJ and Markovic J agreed) pellucidly explained in Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93; (2018) 261 FCR 301 at [45]-[54], at one extreme lies a trial judge’s conclusions as to the law, where the appellate court will show no deference at all to such conclusions. If the appeal court considers the trial judge has made an error of law it must substitute its view. At the other extreme lies a trial judge’s findings of fact where the reliability or credit of a witness is involved. In such cases it is accepted that the trial judge enjoys very considerable advantages over an appellate court and the court on appeal will not depart from such findings unless they are shown to be wrong by reference to “incontrovertible fact or uncontested testimony” or otherwise are “contrary to compelling inferences”: Moroccanoil at [46] citing Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [28]-[29].
[119] Between those extremes lies a “grey area” in which the amount of deference shown to a trial judge’s conclusions is a function of the nature of the issues before the trial judge and the relative advantage enjoyed by the trial judge over the appellate court: Moroccanoil at [47]. One type of finding that falls within this grey area is the drawing of inferences by an appellate court from facts already found. Speaking of that question, in Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531 at 551, Gibbs ACJ, Jacobs and Murphy JJ explained:
…[I]n general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge, but, once having reached its own conclusion, will not shrink from giving effect to it.
[120] Other types of findings within this grey area, include conclusions as to whether certain packaging conveyed the alleged representation, whether a word or phrase is capable of distinguishing one trader’s goods from another, and whether the facts show conduct within or outside standards such as unconscionability or oppressive conduct. Such questions and the application of such standards involve an element of evaluation. In such cases the appeal court must be guided not by whether it disagrees with the finding but whether it detects error in it. Error may appear syllogistically where it is apparent that the conclusion reached involves some false step, for example overlooking some relevant matter. Error may, on the other hand, also appear without any explicitly erroneous reasoning as the result may be such as simply to bespeak error. In such cases as Allsop J (as his Honour then was) said in Branir at [29] an error may be manifest where the appellate court has a “sufficiently clear difference of opinion”: Moroccanoil at [49].
[121] Even so, as Allsop CJ (with whom Markovic J agreed) said in Moroccanoil at [7], the Full Court in Optical 88 Ltd v Optical 88 Pty Ltd [2011] FCAFC 130; (2011) 197 FCR 67 at [33] (Cowdroy, Middleton and Jagot JJ) correctly eschewed the use of “sound bites” such as “plainly or [sic: and] obviously wrong” (taken from Eagle Homes Pty Ltd v Austec Homes Pty Ltd [1999] FCA 138; (1999) 87 FCR 415) or “sufficiently clear difference of opinion” (taken from Branir). The Full Court in Optical 88 explained that the task of this appellate Court is complex; it cannot be captured by such sound bites and approved the principles explained in Branir at [28]-[29].
84 It is by the application of the principles in Branir and Moroccanoil, summarised in Employsure, that this appeal falls to be determined.
85 Before turning to the particular grounds of appeal, we note that the primary judge’s reasons are both methodical and detailed. The primary judge made comprehensive findings of fact about the way in which consumers could be channelled from the viagogo advertisement on the Google search results page to the viagogo Australian website and, once so channelled, the manner in which consumers experienced and interacted with the dynamics of the viagogo Australian website. The primary judge accurately captured the consumer’s experience as one of being progressively drawn into a marketing and transactional web. The primary judge’s factual findings are in the main not challenged. These factual findings were significant in forming the primary judge’s findings in respect of the three representations which are the subject of the appeal. In considering viagogo’s grounds of appeal it is critical to consider the findings made by the primary judge in the whole of the relevant context. One difficulty with viagogo’s submissions on the appeal is that viagogo often focusses on discrete findings divorced from the relevant context. This is apt to distort the primary judge’s reasoning with the result that viagogo’s contention of error is based on a false premise. We illustrate this issue in our consideration of the individual grounds of appeal which follows.
Ground 1 – Official Site Representation
86 viagogo submits that the primary judge erred in finding that the phrase “Buy Now, viagogo Official site” in the viagogo advertisement conveyed to consumers that viagogo was an authorised primary seller. The alleged error, viagogo submits, is “evident” in circumstances where the relevant context is said to extend to the whole of the listings on the Google search results page and to information on the viagogo Australian website. viagogo contends that these elements of the context demonstrate that viagogo operates as a ticket marketplace and not as a primary seller. As will be apparent from [43] to [53] above, viagogo advanced, and the primary judge rejected, this argument below.
87 On appeal, viagogo advanced three arguments in support of Ground 1 with which we deal in sequence.
88 First, viagogo submits that the primary judge erred by “dissecting each word” in the phrase “Buy Now, viagogo Official Site” rather than considering the meaning of the general composite phrase. viagogo contends that the natural meaning of the composite phrase “viagogo Official Site” is to denote the official site of viagogo, rather than to denote a site from which consumers could purchase official original (i.e. not resold) tickets and/or that viagogo had the sponsorship of, approval from, or was affiliated with the relevant Host as an official agent to sell original (i.e. not resold) tickets directly to the public. viagogo contends that considered in context, the viagogo advertisement did not make the Official Site Representation and “so did not draw consumers into a marketing web”.
89 viagogo’s first argument is rejected for the following reasons.
90 First, the primary judge gave careful consideration to the meaning of the composite phrase “viagogo Official Site” as a whole and did not engage in a word by word dissection as viagogo contends. That is plain by the primary judge’s reasons at LJ [129] – [132] which are summarised at paragraphs [42] to [52] above. The primary judge acknowledged that there was “perhaps” ambiguity in the phrase “viagogo Official Site” in that the word “official” could denote that the site was viagogo’s official site or alternatively that viagogo was an official site where a consumer could acquire official tickets. To resolve the potential ambiguity the primary judge carefully considered the phrase “viagogo Official Site” in context (at LJ [129], quoted at [42] above).
91 The primary judge’s key conclusion at LJ [130] was that the ordinary consumer would understand the words “Buy Now, viagogo Official Site” to convey that if the consumer clicked the link, he or she would be taken to a website where tickets could be obtained from the official, or authorised vendor. This conclusion was expressly based upon the whole of the phrase “Buy Now, viagogo Official Site”.
92 The primary judge tested his conclusion against the whole of the text of the viagogo advertisement at LJ [132]. The primary judge found that the false representation that viagogo was an authorised seller of tickets was reinforced by the series of short phrases appearing beneath the words “Buy Now, viagogo Official Site”. These phrases included “On Sale Today. Selling Fast. Secure Your Seats. Don’t Miss Out. Prices Rising … Secure Delivery. Fast Checkout … Save online…”. The primary judge found that these phrases would, in context, tend to (falsely) reassure prospective ticket buyers that viagogo was an authorised seller: LJ [132].
93 The primary judge was also fortified in his conclusion by the evidence of the ACCC consumer witnesses, conscious though he was of the limits on the use of such evidence: LJ [139] – [140].
94 Accordingly, viagogo has not demonstrated any error in the primary judge’s conclusion that consumers were led into the marketing web by reason of the Official Site Representation, and that a contravention of ss 18, 34 and 29(1)(h) of the ACL occurred at the point when those representations were made: LJ [141] – [143], TPG Internet at [50].
95 viagogo’s second and third arguments overlap. viagogo’s overarching submission is that the primary judge erred by failing to take into account the whole of the relevant context when assessing whether the Official Site Representation was made. viagogo points to two things — namely, the whole of the listings on the Google search results page and to the content of the viagogo Australian website (which is said to be relevant context because it was linked in the viagogo advertisement if a consumer chose to click on the link). The nub of viagogo’s submission is that if the primary judge had taken into account the broader context to which viagogo points, then the primary judge would have found that the Official Site Representation was not conveyed by the viagogo advertisement because, taken in context, it was clear that viagogo was a ticket reseller. There are a number of reasons why viagogo’s submissions must be rejected.
96 viagogo’s second argument focuses on the whole of the Google search results as part of the relevant context for the viagogo advertisement. viagogo submits that had the primary judge taken this context into account, the primary judge would have concluded that the Official Site Representation was not made because the search results visible on the first page of a Google search were likely to include: first, results that referred to viagogo as a ticket marketplace or exchange; and secondly, results which referred to other ticket sellers as being the source of “official” tickets. viagogo submits that the primary judge gave three reasons for rejecting its argument in respect of the other listings on the Google search results pages: first, the relevant search results were not within viagogo’s control and their presence was “fortuitous” (LJ [136]); secondly, it was unlikely that listings separate to the viagogo advertisement could qualify its content (LJ [137]); and thirdly, that the evidence did not show that the results on which viagogo relied necessarily appeared in relevant consumer Google searches and in any event, were not likely to dispel the Official Site Representation conveyed by the viagogo advertisement (LJ [138]). viagogo submits the primary judge’s conclusions at LJ [136] and LJ [138] as to the first and third reasons were against the weight of the evidence. viagogo contends that the evidence suggested that it was more likely than not that the search results on which it sought to rely appeared in all or most searches likely to be generated by consumers in the relevant period. viagogo submits that in failing to take this aspect of the relevant context into account, the primary judge acted contrary to authority.
97 viagogo’s second argument on Ground 1 must also be rejected for the following reasons.
98 Contrary to viagogo’s submissions, the primary judge’s reasons reveal that, consistently with established principle, the primary judge carefully considered the relevant context in making findings in respect of the Official Site Representation including the submissions made by viagogo as to the effect of the other listings in the Google search results. The primary judge’s conclusions were supported by the evidence. In the context of the viagogo advertisement, no error has been demonstrated with respect to the primary judge’s conclusion that although the ordinary consumer would be likely to look more widely than simply at the first listed return, the ordinary consumer would not focus particularly on the organic listings appearing later in the list of search results: LJ [133], [135]. The primary judge reasoned in making this finding that the consumer was after a merchant who could sell the requisite tickets and thus the distinction between sponsored and organic search results was of less relevance to the relevant class of consumers and therefore less likely to qualify the representation made in the viagogo advertisement: LJ [133].
99 Based on his consideration of the features of the organic listings on which viagogo relied, the primary judge concluded that those features would not in any event inform the ordinary consumer that viagogo was not engaged in the sale of authorised tickets: LJ [135]. It followed that the misleading effect of the Official Site Representation was not dispelled by references in the later listings to viagogo as a ticket marketplace or exchange, or to other ticket sellers as being the source of “official” tickets: LJ [138]. No error has been established in respect of the primary judge’s reasoning or conclusion.
100 As to the primary judge’s finding that the content of organic search results displayed on the Google search results page was “fortuitous” and not a matter over which viagogo had control, that was uncontroversial as a matter of fact. From that uncontroversial fact, the primary judge reasoned at LJ [25] and [136] that viagogo was not entitled to assume that consumers would supply facts or resolve ambiguities for themselves by reference to other listings that may fortuitously appear on the Google search results page. The primary judge’s approach is supported by authority (which was cited by the primary judge at LJ [136]: CRW at 28 per Hill J; cited with approval by Allsop CJ in Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 634; 317 ALR 73, 82 at [46])). The primary judge did not, as viagogo submits, effectively exclude from his consideration of the relevant context, the evidence of the organic search results. To the contrary, having considered viagogo’s submission as to impact of the organic search results, the primary judge concluded that, in context, the ordinary consumer would not be informed by the references on which viagogo relied that viagogo was other than an authorised seller of the relevant tickets. In short, those references did not dispel the misleading effect of the Official Site Representation made in the viagogo advertisement. No error has been established in respect of the primary judge’s reasoning or conclusion.
101 As to the submission that the primary judge’s findings were against the weight of the evidence, the primary judge’s reasoning at LJ [138] is directly responsive to the two examples on which viagogo relied below and also to the evidence below. There was no evidence that references to viagogo being a ticket marketplace or exchange appeared in organic search results other than those generated when the search parameters entered into the Google search included the word “viagogo”: LJ [138]. None of the ACCC consumer witnesses used the term “viagogo” in their searches: LJ [138]. Indeed it was common ground that consumers in the relevant class were unlikely to have been aware of viagogo: LJ [111]. The relevant consumers were therefore unlikely to use the term “viagogo” as one of their search terms. viagogo’s submission on appeal that the evidence indicated that it was more likely than not that particular search results on which it relied would likely appear in all or most searches, does not rise above assertion and must be rejected. In any event, the primary judge found that even if there had been evidence before the Court that such results appeared, or were likely to have appeared, in searches conducted by consumers, the ordinary consumer would not understand by reference to the listings on which viagogo relied that the only tickets sold on viagogo’s website were resold: LJ [138], [150(3)]. The other examples relied upon by viagogo of results referring to Ticketek and Ticketmaster as official ticket sellers were found by the primary judge to indicate to consumers nothing more than that there may be more than one seller of authorised tickets. It was open to the primary judge to conclude that the organic results relied on by viagogo would not cause an ordinary consumer to understand that viagogo was not an official seller of event tickets: LJ [137] – [138]. No error has been established in respect of the primary judge’s reasoning or conclusion.
102 viagogo’s third argument on Ground 1 focuses on the viagogo Australian website as part of the relevant context in which the Official Site Representation on the Google search results webpage is to be considered. viagogo argues that the viagogo Australian website contained representations that viagogo was a ticket reseller and contextually this dispels the Official Site Representation in the viagogo advertisement. The primary judge concluded (at LJ [141] – [142]) that by the time the consumer encountered the material that viagogo contends amounted to a representation that viagogo was a ticket reseller, they had already been drawn into the marketing web. viagogo submits that the primary judge’s finding in respect of the Official Site Representation is not sustainable if it is accepted that the relevant context extended to the viagogo Australian website.
103 viagogo’s third argument on Ground 1 must also be rejected for the reasons which follow.
104 The primary judge considered the Official Site Representation without reference to the content of the viagogo Australian website (which would be accessed only if and when the link in the viagogo advertisement was clicked). The primary judge rejected viagogo’s submission that the content of the viagogo Australian website was part of the relevant context in which to assess whether the viagogo advertisement conveyed the Official Site Representation. In doing so the primary judge held that do this was to confuse the anterior question of whether the viagogo advertisement had a tendency to lead a consumer into error with the posterior question of whether the consumer had suffered loss: TPG Internet at [49] – [50], LJ [141]. The primary judge found that if a consumer clicked through to the viagogo Australian website then by that time, the consumer had been drawn into the marketing web by the Official Site Representation, as set out at LJ [141] – [142]. No error has been established in respect of the primary judge’s reasoning or conclusion.
105 There are additional reasons for rejecting viagogo’s third argument on Ground 1. The primary judge’s further conclusion that the disclosures on the viagogo Australian website on which viagogo relies were unlikely, in any event, to dispel the effect of the Official Site Representation has not been shown to be in error. The primary judge found that consumers were unlikely to read all the information on the pages of the viagogo Australian website for the reasons outlined at [35] – [36] above, particularly given the pressure and distraction created by the copious pop-up messages containing the Quantity Representations: see [33] – [34] above. The “ticket marketplace” reference was unlikely to be read by consumers, being as it was disclosed in small print and a faint font: LJ [150(3)]. Likewise, the “online ticket exchange” reference appeared only in the section of the website containing the Terms and Conditions, which had to be clicked on by consumers to be viewed and would be unlikely to be viewed by many consumers: LJ [168(1)]. None of the ACCC consumer witnesses saw the disclosures on which viagogo relied before purchasing tickets. Even if seen, these disclosures would not dispel the misleading impression otherwise created, for the reasons set out at [49] above.
106 The references to prices being set by third party sellers were contained only in the “General Notes” section, which in many cases only appeared when a consumer clicked on a drop-down menu: LJ [58] – [59]. The primary judge found that it was unlikely that the ordinary consumer would click on that drop-down menu (LJ [150(9)], [168(3)]) and noted that none of the ACCC consumer witnesses saw that information. The primary judge went on to find that even if that text was seen, in the context of the particular transaction, the ordinary consumer would not necessarily understand by that indirect statement that viagogo was facilitating the sale of tickets for third parties: LJ [150(9)], [168(3)]. The only evidence in respect of a reference to “resale” on the website came from Ms Bolding, one of the ACCC’s consumer witnesses. Her evidence was that the reference to “resale” engendered some confusion but did not cause her to understand that viagogo was not selling official tickets. Many consumers were unlikely to have seen or understood the “sell tickets” button in the top right corner of the Homepage: LJ [150(1)]. If seen, that button would not have conveyed to the ordinary consumer that viagogo was not a seller of authorised tickets. No error has been established in respect of the primary judge’s reasoning or conclusion.
107 It follows, none of viagogo’s submissions in respect of Ground 1 having been accepted, that Ground 1 must be dismissed.
Ground 2 – Total Price Representation
108 viagogo submits that the primary judge erred in finding that the Total Price Representation was made. viagogo submits that the primary judge’s error is “evident in circumstances where his Honour accepted (at LJ [166]) that an ordinary consumer expects to pay a small handling fee and (at LJ [168(3)]) that the Tickets and Seating Selection Page stated that prices are set by sellers and exclude fees”.
109 viagogo’s principal submission on this ground is that the primary judge’s reasons demonstrate a focus not on the allegation put by the ACCC, that the relevant page represented, misleadingly, that the price displayed was the total price, but rather on a different matter: whether the size of the booking fee was adequately disclosed.
110 Ground 2 is premised on a misreading of the primary judge’s reasons. On a proper reading, no error is established.
111 The finding that there was an unequivocal representation as to the price for tickets made by viagogo on the Tickets and Seating Selection Page was not controversial: LJ [164]. The first issue was whether, by that unequivocal representation, viagogo made the Total Price Representation, that is, that a consumer could purchase tickets for that amount. The primary judge answered that question in the affirmative, finding that this was a “headline representation of the ticket price”: LJ [166], [169].
112 The second issue was whether the ordinary consumer would have, or would likely have, been led into error by the identified conduct, considered as a whole and in context, because consumers could not purchase tickets for the amounts stated on the Tickets and Seating Selection Page because consumers had to pay additional fees: LJ [14] – [15]. The primary judge was satisfied that the ordinary consumer would, or would likely, be misled. The primary judge’s reasons on this issue are compelling. First, the primary judge found that a significant further charge was in fact levied by viagogo to the total required to be paid to obtain the ticket. This was described as the VAT and Booking Fee. It was in the order of an additional 28% of the ticket price which was displayed on the Tickets and Seating Selection Page. Second, the primary judge found that the website up to and including the Tickets and Seating Selection Page had not alerted the ordinary consumer to the fact that there would be a significant further charge levied: LJ [166]. Rather, the fact that viagogo added the VAT and Booking Fee was not disclosed until the Final Review Page: LJ [167]. By that point in time, the primary judge found that the consumer has been drawn not only into the marketing web, but also a transactional web created by the website, and it was therefore no answer for viagogo to say, as it did, that any mistaken impression was transitory: LJ [171]. No error has been established in the primary judge’s reasoning, or in the primary judge’s conclusion that viagogo’s conduct in making the Total Price Representation was misleading: LJ [174].
113 The primary judge’s conclusion is not undermined by the finding that the ordinary consumer would ordinarily expect to pay a small handling fee: LJ [166]. That finding did not preclude the primary judge from finding that viagogo’s conduct in not disclosing the substantial so called “VAT and Booking Fee” was misleading. The VAT and Booking Fee was not a small handling fee. The viagogo Australian website up to and including the Tickets and Seating Selection Page did not “convey notice that viagogo will levy a handsome impost for its services beyond a handling fee”: LJ [168]. The VAT and Booking Fee which was about 28% of the ticket price set by the third party, was correctly found by the primary judge to be a significant “additional fee” that a consumer had to pay in order to purchase a ticket, which was not relevantly disclosed to consumers on the viagogo website up to and including the point of time when the Total Price Representation was made.
114 Contrary to viagogo’s submissions, the primary judge did not erroneously focus upon “the size of the booking fee”. The primary judge correctly drew a distinction between the small handling fee that the ordinary consumer might ordinarily have expected to pay, and the viagogo Booking Fee which was payable in respect of services provided by viagogo, calculated by viagogo as a significant percentage of the ticket price, and which was a significant impost. That is a distinction of substance between the two fees. A small fee may have been expected, a significant impost was not. The failure to disclose the significant impost was, in the circumstances, misleading notwithstanding the ordinary consumer’s expectation was that a small handling fee might be payable. These findings were consistent with the way in which the ACCC put its case below, in which the gravamen of the conduct complained of was the failure of viagogo to disclose its fees which comprised a significant percentage of the total price charged to consumers. The Booking Fee component of the VAT and Booking Fee charged by viagogo was close to 28% of the ticket price.
115 The second matter viagogo relies on to demonstrate error in respect of the Total Price Representation is the alleged finding by the primary judge that “the Tickets and Seating Selection Page stated that prices are set by sellers and exclude fees”. That finding is said to have been made at LJ [168(3)]. viagogo’s submission is audacious and may be readily disposed of by reference to the actual finding made at LJ [168(3)]:
The information in the General Notes on the Tickets and Seating Selection Page (see [59] above) does convey that prices are set by sellers and exclude booking and delivery fees in what can only be called the fine print buried in the final bullet point. I do not consider that the ordinary user is likely either to click on the drop-down arrow to see those notes or to absorb the details therein. The heading "General Notes" does not draw attention to the fact that important information relevant to the purchase is present. In the context of the pop-up "hurry up" messages present on the page (as to which see [56] above), I find it unlikely that the ordinary consumer would read those notes. In some versions of the Tickets and Seating Selection Page, the General Notes are displayed without the need to click on an arrow. That difference is, in my view, immaterial given the small font size and the position of the bullet point at the end of the list.
116 The finding made by the primary judge was that the reference to prices being set by sellers and excluding fees was made under a bland heading “General Notes” accessible only by clicking on a drop-down menu on the Tickets and Seating Selection Page, and in “what can only be called the fine print buried in the final bullet point”. Critically, the primary judge found that, as such, the fine print, on which viagogo relies, was unlikely to have been seen by the ordinary user. For these reasons, contrary to viagogo’s submission, the finding at LJ [168(3)] does not in any way cut across the finding that the Total Price Representation was conveyed and misleading.
117 Accordingly, Ground 2 must be dismissed.
Ground 3 – Part Price Representation
118 viagogo submits that the primary judge erred in the application of s 48 of the ACL to the Part Price Representation concerning the price displayed on the Delivery Page. viagogo submitted before the primary judge that s 48 did not apply to the Delivery Page because the price on that page was set by the ticket seller and, as such, the primary judge ought to have found that the price specified on the Delivery Page was the whole price for the supply of the ticket. The primary judge rejected that submission and found that the authorities relied upon by viagogo did not support the proposition that a “price” cannot be set by two different parties: LJ [190]. On appeal, viagogo submits that the primary judge failed to engage with the substance of its submission that the “price” that was set by viagogo was for its services as an operator of the marketplace, being the fees and charges added to the price of the ticket set by the seller. viagogo submits that the primary judge ought to have found that the price specified on the Delivery Page was the whole price for the supply of the ticket.
119 Ground 3 must also be dismissed for the reasons which follow.
120 Ground 3 is based on an artificial characterisation of the relevant supply of goods or services to which s 48 of the ACL applies in the present context. The relevant supply of goods or services with which s 48 is concerned cannot be split into the supply to a consumer on the one part, of a ticket by the third party seller, and on the other part, the supply of a marketplace by viagogo, each of which attract a separate price. The relevant supply for the purposes of s 48 in the present context is, as found by the primary judge, the supply of the ticket to a consumer, which must include all fees payable by the consumer as part of the transaction in which the ticket is acquired, including not only the price of the ticket but also the additional fees charged by viagogo to the consumer in connection with its operation of the marketplace and supply of the ticket. It is a single transaction.
121 Section 48 is not concerned with the identity of the person or persons who set the price of particular goods or services. It is concerned with the making of a representation with respect to price (or consideration) in connection with the supply of goods and/or services. It is directed to preventing the making of representations as to price which if paid, would constitute only part of the consideration for that supply, at a time when it is known that the total price will include additional amounts, which amounts are similarly known. viagogo's reliance on the fact that a third party set the price of the ticket is misplaced. viagogo offered the ticket for sale on its website. viagogo made representations as to the price payable which did not state the whole of the price payable. When it did so, the whole of the price payable was either known to it or was ascertainable. It follows that in making the Part Price Representation, viagogo contravened s 48 of the ACL. No error has been established in the primary judge finding accordingly.
122 In this appeal viagogo sought to advance arguments that were in the main considered and rejected by the primary judge. No error of principle is alleged. Notwithstanding that viagogo is not happy with the result, it has failed to establish error on the part of the primary judge in the application of the relevant legal principles or in fact-finding. The appeal on liability (Grounds 1 to 3) must be dismissed.
123 Ground 4 is as follows:
4. The primary judge erred in imposing a penalty of $7 million
a. in circumstances where the penalty took into account (PJ[123] – [125]) the contravention:
i. of s 29(1)(h) and s 34 of the ACL in relation to the Official Site Representation (ground 1 above);
ii. of s 29(1)(i) of the ACL in relation to the Total Price Representation (ground 2 above);
iii. of s 48 of the ACL in relation to the Part Price Representation (ground 3 above); and/or
b. in circumstances where:
i. his Honour found that the profit gained by the contravening conduct was small (at PJ[87]);
ii. profit is an important measure of objective seriousness; and
iii. his Honour did not find that the conduct was in or near the worst category of contravention; and/or
c. by making an assessment of specific and general deterrence that:
i. placed undue weight on revenue as a deterrence factor, instead of profit (at PJ[88] and [89]);
ii. did not place sufficient weight on the effect of the COVID-19 pandemic on viagogo’s ongoing financial circumstances (at PJ[88]); and
iii. rejected any consideration of parity (at PJ[126] – [128]); and/or
d. by calculating the relevant loss to consumers with reference to total ticket sales during the Relevant Period (at PJ[80], [82] and [89]), in circumstances where total ticket sales were not a relevant or accurate measure of loss to consumers.
124 Although viagogo does not in terms refer to the pecuniary penalty being manifestly excessive in Ground 4, in its written submissions in reply viagogo acknowledged that its fundamental submission on penalty is precisely that.
Statutory Provisions
125 Each of ss 29, 34 and 48 is within Part 3-1 of the ACL and accordingly is a pecuniary penalty provision: s 224(1)(a)(ii).
126 At the relevant time, the maximum penalty for a corporate respondent for each contravention of ss 29, 34 and 48 was $1.1 million: s 224(3), item 2.
127 Section 224(2) of the ACL requires that in determining the appropriate pecuniary penalty, the Court has regard to all relevant matters including:
(1) the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission; and
(2) the circumstances in which the act or omission took place; and
(3) whether the person has previously been found by a court in proceedings under Chapter 4 or Part 5-2 to have engaged in any similar conduct.
128 Section 224(4) provides:
(4) If conduct constitutes a contravention of 2 or more provisions referred to in subsection (1)(a):
(a) a proceeding may be instituted under this Schedule against a person in relation to the contravention of any one or more of the provisions; but
(b) a person is not liable to more than one pecuniary penalty under this section in respect of the same conduct.
129 The primary judge summarised the relevant law on penalty at PJ [31] – [47]. It is not necessary to reproduce that summary here. The appeal on penalty does not allege any error of principle but asserts error in the nature of manifest excess. It is therefore convenient to note at the outset that the nature of the court’s task in imposing a civil penalty under s 224(1) of the ACL is to impose such pecuniary penalty as the court determines to be appropriate, having regard to all relevant matters including those set out in s 224(2). Subject to the particular statutory scheme, “the purpose of a civil penalty is primarily, if not solely, the promotion of the public interest in compliance with the provisions of the Act by the deterrence of further contraventions of the Act”: Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 at [9], [15] citing the plurality in Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 at 506 [55], [42], [47] – [48] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ). We pause to note that the High Court’s decision in Pattinson was delivered after argument in the present appeal. Where appropriate we have cited Pattinson as the most recent statement by the High Court on matters of principle relevant to this appeal. In doing so we note that the decision in Pattinson does not alter the outcome of the present appeal.
130 The observations of the plurality in Pattinson in respect of s 546 of the Fair Work Act 2009 (Cth) are apposite (at [39]-[41]):
[39] The proposition for which Veen [No 2] stands in the criminal law is that a sentence that is imposed with a view to protecting the community from a criminal offender must not be disproportionate to the seriousness of the offending for which the offender is being sentenced [(1998) 164 CLR 465 at 472 – 473]. That is because, in the criminal law, the purpose of retribution – that is, imposing a punishment that fits the crime and is proper because it is what the offender deserves – constrains the sentencing discretion [(1998) 164 CLR 465 at 473 – 474]. As noted above, it is well settled that, in the civil penalty regime of the Act, retribution has no part to play.
[40] …The discretion conferred by s 546 is, like any discretionary power conferred by statute on a court, to be exercised judicially, that is, fairly and reasonably [Comcare v Banerji (2019) 267 CLR 373 at 403 [40]] having regard to the subject matter, scope and purpose of the legislation [Oshlack v Richmond River Council (1998) 193 CLR 72 at 81 [22], 96 [65], 120-121 [134]; Northern Territory v Sangare (2019) 265 CLR 164 at 172-173 [24]]. In a civil penalty context, Burchett and Kiefel JJ in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [(1996) 71 FCR 285 at 293] said:
"[I]nsistence upon the deterrent quality of a penalty should be balanced by insistence that it 'not be so high as to be oppressive'. Plainly, if deterrence is the object, the penalty should not be greater than is necessary to achieve this object; severity beyond that would be oppression."
[41] It may therefore be accepted that s 546 requires the court to ensure that the penalty it imposes is "proportionate", where that term is understood to refer to a penalty that strikes a reasonable balance between deterrence and oppressive severity. It is in this sense that the Full Court in Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [(2016) 340 ALR 25 at 62 [152]] used the term "proportionality", when their Honours said:
"If it costs more to obey the law than to breach it, a failure to sanction contraventions adequately de facto punishes all who do the right thing. It is therefore important that those who do comply see that those who do not are dealt with appropriately. This is, in a sense, the other side of deterrence, being a dimension of the general deterrence equation. This is not to give licence to impose a disproportionate or oppressive penalty, which cannot be done, but rather to recognise that proportionality of penalty is measured in the wider context of the demands of effective deterrence and encouraging the corresponding virtue of voluntary compliance." (emphasis added)
131 The consequence of the fact that, subject to the particular statutory scheme, retribution has no part to play in determining the appropriate civil penalty is that the statutory maximum does not implicitly require that contraventions be graded on a scale of increasing seriousness, with the maximum to be reserved exclusively for the worst category of contravening conduct. The statutory discretion is not constrained in this way: Pattinson at [49], [51]. Considerations of deterrence, and the protection of the public interest, may justify the imposition of the maximum penalty where it is apparent that no lesser penalty will be an effective deterrent against further contraventions of a like kind: Pattinson at [50]. At [53]-[55], the plurality observed:
[53] In a civil penalty context, the relevance of a prescribed maximum penalty as a yardstick was explained by the Full Court of the Federal Court in Reckitt Benckiser [(2016) 340 ALR 25 at 63 [155] – [156]], where their Honours, citing Markarian, said:
"The reasoning in Markarian about the need to have regard to the maximum penalty when considering the quantum of a penalty has been accepted to apply to civil penalties in numerous decisions of this Court both at first instance and on appeal. As Markarian makes clear, the maximum penalty, while important, is but one yardstick that ordinarily must be applied.
Care must be taken to ensure that the maximum penalty is not applied mechanically, instead of it being treated as one of a number of relevant factors, albeit an important one. Put another way, a contravention that is objectively in the mid-range of objective seriousness may not, for that reason alone, transpose into a penalty range somewhere in the middle between zero and the maximum penalty. Similarly, just because a contravention is towards either end of the spectrum of contraventions of its kind does not mean that the penalty must be towards the bottom or top of the range respectively. However, ordinarily there must be some reasonable relationship between the theoretical maximum and the final penalty imposed." (citations omitted)
[54] Two aspects of the Full Court's reasoning in this passage from Reckitt Benckiser deserve particular emphasis here. The first is their Honours' recognition that the maximum penalty is "but one yardstick that ordinarily must be applied" and must be treated "as one of a number of relevant factors". As has already been seen, other factors relevant for the purposes of the civil penalty regime include those identified by French J in CSR.
[55] The second point is that the maximum penalty does not constrain the exercise of the discretion under s 546 (or its analogues in other Commonwealth legislation), beyond requiring "some reasonable relationship between the theoretical maximum and the final penalty imposed". This relationship of "reasonableness" may be established by reference to the circumstances of the contravenor as well as by the circumstances of the conduct involved in the contravention. That is so because either set of circumstances may have a bearing upon the extent of the need for deterrence in the penalty to be imposed. And these categories of circumstances may overlap.
132 Concepts such as totality, parity and course of conduct are analytical tools, familiar from criminal sentencing, which may usefully be deployed in the enforcement of the civil penalty regime to assist in the determination of a reasonable application of the law. Although these concepts developed in the context of the punishment of crime, they are not so closely tied to retribution as to be incompatible with a civil penalty regime focussed on deterrence: Pattinson at [45].
133 The principles summarised at [83] above in respect of the nature of this appeal and the requirement for error to be established apply equally in respect of the appeal on penalty and are not repeated here. It is however useful to add the statement of the principles applicable to the appellate review of civil penalties by the Full Court in Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; 340 ALR 25:
[44] Given the range of issues raised in this appeal, it is convenient to restate the governing principles. This is especially so because this is an appeal concerning the imposition of a civil penalty, which has certain features in common with criminal sentencing, but as noted in Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 326 ALR 476; [2015] HCA 46 (the CFMEU civil penalty case) at [51]–[61], there are some important and fundamental differences, especially in relation to the purpose behind imposing a civil penalty. The dominant common feature is that determining both a sentence and a civil penalty usually involves, and in this case did involve, a difficult and complex process of multi-factorial decision-making, where the result is arrived at by a process of “instinctive synthesis”, addressing many conflicting and contradictory considerations (Wong v R (2001) 207 CLR 584; 185 ALR 233; [2001] HCA 64 at [74]–[76]). Those paragraphs were quoted with approval in Markarian v R (2005) 228 CLR 357; 215 ALR 213; [2005] HCA 25 (Markarian) at [37]. This integrated and holistic approach, requiring the weighing up of all relevant factors into a final result, often makes the process of appellate review difficult, particularly for an appellant seeking to identify and establish error in the reasoning process and outcome, or sometimes the outcome alone.
…
[46] In Costa v Public Trustee of New South Wales (2008) 1 ASTLR 56; [2008] NSWCA 223 at [101], Basten JA said:
Decisions with respect to discretionary powers may fall into various categories. One category involves a determination of where, within a range, the result properly lies. In such a case, as with the exercise of the sentencing discretion, the principles in House v R may properly be applied. Examples in the civil jurisdiction include the assessment of damages in personal injury cases and the valuation of property.
[47] The High Court’s statement in House v R (1936) 55 CLR 499 at 504–5 is that:
The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
[48] In Park Trent Properties Group Pty Ltd v Australian Securities and Investments Commission (2016) 116 ACSR 473; [2016] NSWCA 298, Leeming JA, with whom McColl and Gleeson JJA agreed, said:
[51] Two things of present importance emerge from the reasons of Gummow ACJ, Kirby, Hayne and Heydon JJ in Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar (2008) 237 CLR 66; 249 ALR 250; [2008] HCA 42. The first is the proposition accepted at [120] that:
when a court is invited to make a discretionary decision, to which many factors may be relevant, it is incumbent on parties who contend on appeal that attention was not given to particular matters to demonstrate that the primary judge’s attention was drawn to those matters, at least unless they are fundamental and obvious.
[52] The second is the explanation of the nature of the “orthodox approach to appellate intervention in relation to discretionary decisions” described at [137]–[138]. There it was pointed out that the expression “balancing exercise” is one to be employed with care, and that where (as in the present case) no statute mandates that particular weight be given to any one factor:
[T]he question of what weight the relevant factors should be given or what balance should be struck among them is for the person on whom the discretion is conferred, provided no error of law is made, no error of fact is made, all material considerations are taken into account and no irrelevant considerations are taken into account, subject to the possibility of appellate intervention if there is a plain injustice suggesting the existence of one of the four errors just described even though its nature may not be discoverable, or if there is present what has come to be known as ‘Wednesbury unreasonableness.
[53] The same passage confirms that it is wrong to apply the words from House v R in isolation, as if they were not qualified by an absence of reasons explaining how the decision was reached. Park Trent’s selective statement of the principle upon which it relied has a tendency to dilute the test. The entire relevant passage from House v R, which was restated in the passage from Macedonian Orthodox Community Church St [P]etka Inc v His Eminence Petar, was as follows:
It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
Of course, that is not the present case, where the reasons of the primary judge are elaborate.
[49] This is not to say that elaborate reasons are immune from appellate review. In the absence of specific error, the outcome reached either will or will not be one which was reasonably open. If not reasonably open, elaborate reasons will not protect the result from appellate intervention.
[50] Accordingly, error is not involved merely because an appeal court would have reached a different conclusion.
[51] Error may be specific, in the sense of apparent on the face of the reasons given, such as by application of a wrong principle in reaching the result (which may be evident by the primary judge addressing the wrong question), reaching the result by taking into account something that should not have been considered or by failing to take into account something that should have been considered, or by making a determinative error on the facts in the sense that the factual finding was not properly available to be taken into account in a way that affected the outcome.
[52] Alternatively, error may be inferred from a result that cannot have been arrived at without some kind of operative error. The influence of the reasons given for the result arrived at on this process will vary. Reasons are not to be ignored, but nor do they necessarily confine in a rigid or inflexible way the scope of the appellate inquiry. It may be legitimate to have regard to what was said and not said in order to identify how the asserted erroneous result was reached. But for error to be inferred from the result, the result must be one which was not open on the evidence or facts found or agreed.
[53] In all cases of specific error, the error must have either caused or materially contributed to the result. An error which has not in some material way affected the outcome will ordinarily result in the appeal court declining to intervene, at least as to the result.
134 Following delivery of the LJ, the parties agreed on the form of declarations that should be made but disagreed on the quantum of the pecuniary penalty. The parties were also in dispute as to the injunctive and other relief which should follow from the liability finding. The appeal is confined to pecuniary penalty orders which are set out at [6] above.
135 ACCC submitted that the pecuniary penalty to be paid by viagogo pursuant to s 224(1)(a)(ii) of the ACL should be in the range of $12.1 to $13.4 million, broken down as follows: Official Site Representation — $4 to 4.5 million; Quantity Representations — $3.5 to 4 million; Total Price Representation — $2.95 to 3.25 million; and Part Price Representation — $1.65 million: PJ [50].
136 viagogo contended that the penalty should be no more than $3 million: PJ [2], broken down as follows: Official Site Representation — $750,000; Total Price Representation and Part Price Representation — $1.25 million; Quantity Representations — $1 million: PJ [53].
137 The appeal on penalty is in respect of the four categories of contraventions viagogo was found to have engaged in, noting that each of the representations were made numerous times and that a contravention occurred each time a contravening representation was made: PJ [42]. It was common ground that the number of individual contraventions in the present case numbered in the many thousands based on the number of clicks on the viagogo advertisement and on the relevant viagogo Australian website pages. The total number of contraventions was so great that to take it as an approximation of the number of instances a consumer saw each representation and multiply it by the maximum penalty of $1.1 million per offence to arrive at the total maximum penalty would be impractical and wrong: see Reckitt at [157] cited at PJ [42]. The primary judge noted that the totality principle and the course of conduct principle were both relevant as was the principle against double punishment for the commission of multiple offences: PJ [41]. Further, the primary judge expressly noted that s 224(4) of the ACL provides that a person is not liable for more than one pecuniary penalty in respect of the same conduct: PJ [41].
138 For the purpose of the penalty hearing viagogo supplied the ACCC with confidential information providing details of the operation of the viagogo Australian website and in relation to its business over which a suppression order was made by the primary judge. References to that evidence in the published form of the PJ were redacted. At the hearing of the appeal, suppression orders were also made over the confidential information. Accordingly, references to that evidence are similarly redacted in these reasons.
139 The primary judge summarised the evidence in relation to the metrics in the relevant period of the viagogo advertisement (total number of clicks) and the viagogo Australian website (total number of transactions, total number of tickets sold, total value of tickets sold inclusive and exclusive of the viagogo fees) at PJ [24] – [26] and in respect of consumer remediation at PJ [28]. It is not necessary to repeat that detail here.
140 At PJ [27], the primary judge addressed viagogo’s evidence on revenue and profit:
Viagogo’s total revenue from consumer transactions on its Australian website during the relevant period was $[redacted] being the viagogo fees plus shipping charges. Viagogo’s profit from transactions on the website during the relevant period was said in a document dated 8 August 2019 to be about $[redacted]. In a communication dated 21 August 2019 the profit was said to be $[redacted]. This discrepancy was explained by viagogo in a communication dated 9 September 2019 as being as a result of the difference between the viagogo group’s consolidated financials as opposed to viagogo AG’s financials (which the ACCC requested). The larger figure, which is said to be correct, does not include certain expenses which were recharged to the Swiss operating subsidiary. There is no transparency as to the manner in which either profit figure for viagogo has been calculated. Without more information as to the basis for its calculation, I am not satisfied that either figure represents an accurate indication of profit earned.
141 The primary judge noted (at PJ [46]) that viagogo placed considerable emphasis on the parity principle, which requires that persons or corporations guilty of similar contraventions should incur similar penalties and that “there should not be such an inequality as would suggest that the treatment meted out has not been even-handed” (NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; 71 FCR 285 at 295 (Burchett and Kiefel JJ, with whom Carr J agreed at 299)) whereas the ACCC urged caution against a mechanical application of the parity principle having regard to the individual circumstances of the contravention.
142 The primary judge addressed each of the considerations listed in s 224(2): nature, duration and extent of contravening conduct (s 224(2)(a) – PJ [55] to [72]); loss or damage caused (s 224(2)(b) – PJ [73] to [82]); prior similar conduct, noting there was none, (s 224(2)(c) – PJ [83]); and the circumstances of the contraventions (at PJ [84] to [116]).
143 The primary judge’s assessment of penalty is at PJ [117] – [128]. The primary judge began by noting that principal object of imposing a pecuniary penalty in civil proceedings is deterrence, both specific and general (PJ [117]) and noted the admonition given by the Full Court in Reckitt to resist applying a maximum penalty in a way that is mechanical, particularly in a case where, as here, there is no meaningful overall maximum penalty given the very large number of contraventions involved: PJ [119]. We interpolate to note that the Full Court’s statement in Reckitt as to the relevance of a prescribed maximum civil penalty as but one yardstick in assessing the appropriateness of the penalty was endorsed by the plurality in Pattinson at [53]. The primary judge noted the relevance of the course of conduct principle as a mechanism by which proportionality may be achieved in assessing penalty in circumstances where the consideration of the maximum penalty applied to each contravention is of no assistance, citing Australian Securities and Investments Commission v MLC Nominees Pty Ltd [2020] FCA 1306; 147 ACSR 266 at [130] (Yates J): PJ [120] – [121]. The primary judge applied the course of conduct principle in his assessment of penalty and in doing so, identified a separate course of conduct by reference to each of the four representations: PJ [122]. In assessing the condign penalties, the primary judge concluded that (at PJ [123]):
…Viagogo is a substantial worldwide corporation which had significant revenue in Australia in 2017. It generated significant sales in Australia during the relevant period of about $[redacted], which provides some indication of the order of magnitude of harm caused (with the other allowances to which I have referred). Against that is to be balanced the relatively lower revenue to viagogo ($[redacted]). The contravening conduct was deliberate in the manner that I have described in section 5.3.4.2 above. There was no material corporate culture of compliance with the ACL. Indeed, viagogo conducted its operations on the internet via its website in a manner that indicates a disregard for the ACL. A strong need for specific deterrence is required. Furthermore, there is a need for a strong signal to be sent to other corporations which conduct internet based operations that, despite the borderless operation of the internet, they are nonetheless subject to the ACL when they conduct business in Australia.
144 The primary judge addressed totality at PJ [125] noting that he had taken into account the whole of the various orders made against viagogo and concluding that the course of conduct principle properly accounted for the significant overlap in wrongdoing between the four courses of conduct such that the cumulative total of $7 million did not require adjustment.
145 The primary judge then turned to consideration of parity. viagogo contended before the primary judge that although there were no equivalent “co-contravenors” against which to assess parity, the Court should have regard to the range of cases dealing with representations on television and the internet, including those involving price considerations. viagogo referred to eight decisions of this Court and to the penalties imposed in those cases which ranged from $200,000 to $3 million. None of the cases were considered by the primary judge to be closely factually related to the present case and the primary judge expressly stated that he derived little assistance from them: PJ [126]. The primary judge noted (at PJ [128]) that it is the consistent application of principle that is relevant to the assessment of penalty, rather than the range of penalties given in disparate circumstances that cannot be said to be analogous: Flight Centre Limited v Australian Competition and Consumer Commission (No 2) [2018] FCAFC 53; 260 FCR 68 at [63] (Allsop CJ, Davies and Wigney JJ); Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20; 287 ALR 249 at [60] (Keane CJ, Finn and Gilmour JJ) ; NW Frozen Foods at 295 (Burchett and Kiefel JJ, with whom Carr J agreed at 299).
CONSIDERATION – GROUND 4 (PENALTY)
146 Ground 4 is directed to demonstrating error in the imposition of a pecuniary penalty in the total sum of $7 million. viagogo did not allege that any one of the four component parts of the overall pecuniary penalty was affected by error, but rather that in aggregate the total pecuniary penalty imposed was manifestly excessive. As noted at [7], in the orders sought in the amended notice of appeal filed at the end of the hearing, viagogo sought a reduction of the pecuniary penalty in respect of the Quantity Representations contravention from $2.5 million to $1 million.
147 Ground 4 lacks precision. There is considerable overlap of the concepts addressed by it, which will become apparent. It does not in terms allege manifest excess as to the relevant error but viagogo’s overarching submission is one of manifest excess directed to the total aggregate pecuniary penalty.
148 An error of manifest excess is concerned with what can be seen from the final exercise of the penalty discretion and the error must be “plainly apparent”: see Dinsdale v R [2000] HCA 54; 202 CLR 321, 325 at [6] (Gleeson CJ and Hayne J), applied in Volkswagen Aktiengesellschaft v Australian Competition and Consumer Commission [2021] FCAFC 49; 151 ACSR 407 (VW), 441 at [203] – [204] (Wigney, Beach and O’Bryan JJ) and Reckitt, 40 at [55] – [56].
149 Exercise of the penalty discretion involves imposing a penalty which is appropriate to secure specific and general deterrence through a single, evaluative or instinctive, synthesis of all matters relevant to penalty: Markarian v R [2005] HCA 25; 228 CLR 357, 373 at [37] (Gleeson CJ, Gummow, Hayne and Callinan JJ); Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; 254 FCR 68 (ABCC v CFMEU), 88 at [100] (Dowsett, Greenwood and Wigney JJ); Reckitt, 37 - 38 at [44]. The observations of the Full Court in ABCC v CFMEU at [100] neatly summarise the principles:
The fixing of a pecuniary penalty involves the identification and balancing of all the factors relevant to the contravention and the circumstances of the defendant, and making a value judgment as to what is the appropriate penalty in light of the protective and deterrent purpose of a pecuniary penalty. While there may be differences between the criminal sentencing process and the process of fixing a pecuniary penalty (cf Commonwealth v Director, FWBII at [56]-[57]), the fixing of a pecuniary penalty may to an extent be likened to the “instinctive synthesis” involved in criminal sentencing: TPG Internet Pty Ltd v Australian Competition and Consumer Commission (2012) 210 FCR 277 at 294. Instinctive synthesis is the “method of sentencing by which the judge identifies all the factors that are relevant to the sentence, discusses their significance and then makes a value judgment as to what is the appropriate sentence given all the factors of the case”: Markarian v The Queen (2005) 228 CLR 357 (Markarian) at [51] (per McHugh J). Or, as the plurality put it in Markarian (at [37], per Gleeson CJ, Gummow, Hayne and Callinan JJ) “the sentencer is called on to reach a single sentence which … balances many different and conflicting features”. Like the exercise of imposing a sentence for an offence, the process of fixing an appropriate pecuniary penalty should not be approached as a mathematical exercise involving increments to or decrements from a predetermined range of sentences: Wong v The Queen (2001) 207 CLR 584 at [74]-[76].
The resulting penalty will only be manifestly excessive if it is plain, having regard to the single instinctive synthesis of all the relevant factors, that it goes beyond that which is appropriate to secure the object of deterrence.
150 In Pattinson, the plurality observed (at [18]-[19]):
[18] In CSR [[1991] ATPR 41-076 at 52,152-52,153], French J listed several factors which informed the assessment under the Trade Practices Act 1974 (Cth) of a penalty of appropriate deterrent value:
"The assessment of a penalty of appropriate deterrent value will have regard to a number of factors which have been canvassed in the cases. These include the following:
1. The nature and extent of the contravening conduct.
2. The amount of loss or damage caused.
3. The circumstances in which the conduct took place.
4. The size of the contravening company.
5. The degree of power it has, as evidenced by its market share and ease of entry into the market.
6. The deliberateness of the contravention and the period over which it extended.
7. Whether the contravention arose out of the conduct of senior management or at a lower level.
8. Whether the company has a corporate culture conducive to compliance with the Act, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention.
9. Whether the company has shown a disposition to co operate with the authorities responsible for the enforcement of the Act in relation to the contravention."
[19] It may readily be seen that this list of factors includes matters pertaining both to the character of the contravening conduct (such as factors 1 to 3) and to the character of the contravenor (such as factors 4, 5, 8 and 9). It is important, however, not to regard the list of possible relevant considerations as a "rigid catalogue of matters for attention" [Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at 580 [91]] as if it were a legal checklist. The court's task remains to determine what is an "appropriate" penalty in the circumstances of the particular case.
151 Section 224(2) of the ACL requires the court to have regard to all relevant matters including those listed in s 224(2)(a) to (c) in determining the appropriate pecuniary penalty.
152 viagogo’s focus on the primary judge’s consideration of a small subset of the relevant penalty factors mischaracterises the manner in which the primary judge exercised the discretion. That is demonstrated by examining the four challenges to the primary judge’s approach identified by Ground 4.
153 The first challenge (Ground 4(a)) is predicated on the success of Grounds 1, 2 and/or 3 in that it seeks to challenge the total penalty on the basis that the primary judge took into account the contraventions in relation to the representations that are the subject of the appeal on liability. Ground 4(a) falls with Grounds 1 to 3.
154 The second challenge (Ground 4(b)) seeks to demonstrate error by reference to the primary judge’s findings in respect of the small profit viagogo gained by its contravening conduct (at LJ [87]) in circumstances where viagogo contends that profit is an important measure of objective seriousness and submits that the primary judge did not find that the impugned conduct was in or near the worst category of contravention.
155 The third challenge (Ground 4(c)) is viagogo’s contention that the primary judge erred by making an assessment of specific and general deterrence that placed undue weight on revenue as a deterrence factor, instead of profit (at PJ [88] and [89]), did not place sufficient weight on the effect of the COVID-19 pandemic on viagogo’s ongoing financial circumstances (at PJ [88]) and rejected any consideration of parity (at PJ [126] – [128]).
156 The fourth challenge (Ground 4(d)) is directed to demonstrating error in the primary judge’s approach to calculating the relevant loss to consumers by reference to total ticket sales during the relevant period (at PJ [80], [82] and [89]), in circumstances where, according to viagogo, total ticket sales were not a relevant or accurate measure of loss to consumers.
157 The second, third and fourth challenges can be considered together because they relate to the primary judge’s assessment of objective seriousness (Ground 4(b)) and deterrence (Ground 4(c)), by reference to his consideration of the means by which the severity of the contraventions could be judged, namely by reference to profit (Grounds 4(b)(i) and (ii)), revenue (Ground 4(c)(i)) and total ticket sales (Ground 4(d)). Ground 4 also contends that the primary judge failed to place sufficient weight on the impacts of the COVID-19 pandemic (Ground 4(c)(ii)) and failed to consider parity (Ground 4(c)(iii)) when making an assessment of general and specific deterrence.
158 It should immediately be noted that viagogo’s complaints about profit, revenue and the COVID-19 pandemic are complaints about the weight the primary judge attached to those factors, and thereby do not amount to House v The King error. However, those complaints also fail for the reasons that follow.
159 viagogo submitted in relation to Grounds 4(b)(i), (ii) and 4(c), that the primary judge erroneously focussed on revenue in assessing the pecuniary penalty, which could lead to a disproportionate result in a case such as this where turnover was large but profits were small. viagogo contended that the primary judge’s error in this respect is evident from the fact that:
(a) the primary judge assessed the profit earned as small (at PJ [87]) and recognised that pursuing contravening conduct for profit is at the heart of the objective of deterrence;
(b) the primary judge accepted that viagogo’s Australian revenue was a more relevant consideration than its worldwide revenue;
(c) the primary judge accepted that the benefit received by viagogo may be indirectly aligned with revenue;
in circumstances where:
(d) the primary judge should have accepted viagogo’s estimate of profit and its submission as to the relationship between profit and revenue.
For these reasons, viagogo contends that the total pecuniary penalty was so disproportionate relative to the relevant profit as to be manifestly excessive. viagogo relies on manifest excess as a species of House v The King error.
160 viagogo’s submissions must be rejected for the following reasons.
161 First, while there are authorities which, in assessing penalty, relate specific deterrence to the profit derived from contravening conduct, they should not be construed as laying down an immutable principle that the appropriate penalty to secure specific deterrence is necessarily pegged to, or limited by, the amount of profits derived from the contravening conduct. Nor should the authorities be construed as requiring, in point of principle, that there be some linear relationship between the appropriate penalty and profit or that the penalty should only exceed the profit by a certain amount: VW, 431 at [148] – [149]. Profit is merely one factor that may be relevant among many others: ABCC v CFMEU, 89 at [103]. In many cases, including the present, reported profit may not reflect the objective seriousness of the contravention. Objective seriousness is frequently more a function of the character of the conduct, the harms caused (monetary and otherwise) by the conduct, and the deliberateness of the conduct. Indeed, reported profit may not even be the most useful measure of benefits accruing to the contravenor and such benefits may include growth of business, market recognition, advancement over competitors, and savings in compliance costs.
162 Secondly, there will be cases in which the claims of deterrence (general and specific) are so strong as to warrant a penalty that would upset any calculation constrained by profitability. That is because those engaged in trade or commerce should be deterred from conducting themselves according to the cynical cost benefit calculus where the risk of the penalty is weighed against the profits to be made from the contravention: Singtel Optus, 265 at [62] – [64], cited with approval in Pattinson at [17]. A penalty must be sufficient to achieve deterrence. If it is not, the risk is that the deterrent effect is undermined by the penalty being absorbed as a cost of making the profit attendant on the impugned conduct. The ACCC submits, and we accept, that it is a distraction to observe that the authorities often express the cost of doing business principle by reference to “profit”. The word “profit” is not used in the authorities in a limited or technical way to describe the profits reported by the contravenor. Rather, profit describes the wide array of benefits flowing to the contravenor which will inform the risk/benefit calculus undertaken by the contravenor; were it otherwise, the principle would be denuded of effect except in cases where the benefits accruing to the contravenor were limited solely to the profits reported on the contravenor’s balance sheet. That is why the principle is often expressed by reference to “putting a price on contraventions”, or to “benefit”, “gain” or “revenue”: Trade Practices Commission v CSR Ltd [1991] FCA 521; ATPR 41-076, 17 at [40] (French J); NW Frozen Foods, 292 at [F]; Reckitt, 62 at [151]; Australian Securities and Investments Commission v Westpac Banking Corp (No 3) [2018] FCA 1701; (2018) 131 ACSR 585, 609 at [120] (Beach J).
163 Thirdly, the primary judge was not satisfied that the profit said to have been earned by viagogo from the viagogo Australian website was accurate because two conflicting figures were proffered by viagogo and there was no transparency as to how either figure had been calculated: PJ [27]. There is no appeal from this finding.
164 Fourthly, the primary judge made findings as to the limitations of the revenue figures which his Honour then took into account. Those findings correspond with viagogo’s submissions below and on appeal.
165 Fifthly, the primary judge’s reliance on revenue (at PJ [84]-[88]) rose no higher than as a measure of the size of viagogo as the contravening corporation. This is an orthodox approach to assessing the appropriate size of a pecuniary penalty necessary to achieve the objective of specific deterrence: VW, 433 - 434 at [154]. It is one of the factors which emerge from a survey of the cases and which is appropriate to the assessment of a penalty of appropriate deterrent value as identified by French J in CSR at 52,152 – 52,153 (extracted above at [150]) and confirmed by the plurality in Pattinson. The size of the contravening company is a factor that goes to the character of the contravenor which is relevant to the court's task of determining what is an appropriate penalty in the circumstances of the particular case: Pattinson at [18]-[19].
166 viagogo contended by Ground 4(c)(ii) that the primary judge placed insufficient weight on the impacts of the COVID-19 pandemic because, in his statement of taking it into account at PJ [88], the primary judge did not state how it was considered or what, if any, impact it had on the penalty.
167 This appeal ground can be dealt with shortly. viagogo did not lead any evidence of the impact of the pandemic on its Australian business, leaving the primary judge to take judicial notice of it: PJ [88]. As noted at [147] above, the court’s task in assessing a pecuniary penalty involves a difficult and complex process of multi-factorial decision making by a process of instinctive synthesis addressing many conflicting and contradictory considerations. This approach often makes it difficult to identify how a matter is taken into account in the reasoning process and outcome. But to require a judge to precisely identify how and to what extent each matter is taken into account in the final outcome would amount to a mathematical approach or two-stage process that is inconsistent with principle: Markarian, 373 at [37]. The primary judge expressly took the impact of the COVID-19 pandemic into account, taking judicial notice of the fact that the entertainment industry has been devastated by the restrictions brought about by the pandemic: PJ [88]. In any event, the financial affairs of a contravenor cannot be given such weight as would lead a court to impose a penalty that would be inadequate to deter: Australian Competition and Consumer Commission v High Adventure Pty Ltd [2005] FCAFC 247; [2006] ATPR 42-091, 44,564 (Heerey, Finkelstein and Allsop JJ). For this reason, courts regularly impose large penalties even where they may have a significant impact on a contravenor’s financial circumstances: See the examples given in Federal Commissioner of Taxation v Arnold (No 2) [2015] FCA 34; 324 ALR 59, 104 - 105 at [200] - [204] (Edmonds J) and Australian Competition and Consumer Commission v Sensaslim Australia Pty Ltd (in liq) (No 7) [2016] FCA 484 at [20] – [29] (Yates J). Given the overall gravity of the wrongdoing and other circumstances viagogo has not demonstrated that the primary judge erred in not further reducing the penalties by reference to the impact of the pandemic on viagogo.
168 viagogo contended by Ground 4(d), that the primary judge erred by calculating loss to consumers by reference to total ticket sales, where that was not a relevant or accurate measure of consumer harm. viagogo submits that the primary judge purported to apply a discount for consumers that were: not “frustrated in their expectations”; obtained tickets that were otherwise not available; were alert to the fact that viagogo was a marketplace; paid less than the face value of the tickets; or received funds (PJ [81]). viagogo complains that the primary judge in his reasons failed to demonstrate how the discounting method was calculated or applied, or if it was applied. viagogo submits that the size of the penalty reveals that the primary judge erred in not taking into account the following factors:
(a) that the extent of the harm to the consumer was limited to the difference between the price the consumer paid for the ticket and the cheapest alternative available to the consumer, to the extent alternatives were available;
(b) that where consumers obtained tickets to events which were otherwise sold out, they were not harmed even if they paid a higher price than the official ticket price and therefore consumers who obtained such tickets should be eliminated from the penalty calculus; and
(c) that the frequency with which consumers paid more than the official price for tickets acquired on the viagogo Australian website could not be inferred based on the evidence of the ACCC consumer witnesses because their evidence was, as the primary judge recognised, statistically insignificant.
169 viagogo’s submissions are rejected for the following reasons.
170 First, viagogo’s submission that error is demonstrated by the lack of mathematical transparency in the reasons as to the way in which the primary judge applied the relevant discount is inconsistent with Markarian for the same reasons referred to in [167] above. The submission is rejected.
171 Secondly, viagogo’s contention that consumers who obtained tickets to sold-out events suffered no harm even if they paid a price that was higher than the original ticket cannot be accepted. One of the ACCC consumer witnesses, Ms Burke, gave evidence of acquiring a ticket from viagogo to an event that was sold-out and of paying a price higher than the official ticket price. The primary judge’s conclusion (at PJ [77]) that the ACCC consumer witnesses “paid substantially more for their tickets on the basis of those misapprehensions than they would have if they bought tickets from the authorised sellers”, is not displaced by the argument based on the example of Ms Burke’s experience. It is true that Ms Burke bought tickets to a sold-out event. However, she still paid substantially more than the official ticket price and when she did so, she was acting under a misapprehension as to price. The fact that there were no official tickets available does not make the primary judge’s conclusion wrong when considered in context. Had viagogo made it clear that it was operating a ticket resale site, then there would have been no misapprehension by the ACCC consumer witnesses, or consumers in general, and the market price analogy upon which viagogo seeks to rely might be useful, but that was not the case with which the primary judge was faced.
172 Thirdly, viagogo’s contention that the primary judge impermissibly used the evidence of the ACCC consumer witnesses misstates and selectively quotes the primary judge’s findings. At PJ [77], the primary judge begins by stating that it was not possible, on the information available, to quantify the harm to consumers. In the third last sentence of PJ [77], the primary judge’s finding is that, based on the large number of complaints received by viagogo, his review of the website, and the video captures, “a substantial number of consumers were likely to have entered transactions under the misapprehensions engendered by the representations”. This does not amount to a finding that all of these consumers were harmed because they overpaid, but it does support the primary judge’s finding (at PJ [78]) that consumers were harmed by being deprived of the opportunity to buy tickets from another source who did not misrepresent the true position. The primary judge’s treatment of the evidence was not, contrary to viagogo’s characterisation, a simplistic extrapolation of the evidence of ACCC’s consumer witnesses to the experience of consumers in general. A fair reading of the primary judge’s reasons demonstrates that the evidence of the ACCC consumer witnesses merely contributed to the broader inference which the primary judge drew from the totality of the evidence before him.
173 By Grounds 4(b)(iii) and 4(c)(iii), viagogo contends that the primary judge rejected any consideration of parity because the size of the total pecuniary penalty by reference to viagogo’s financial position and profit was so substantial that it was either based on an assessment of the contraventions being of the highest order or it is evident that the primary judge did not take parity into account.
174 These grounds must also be rejected. First, at PJ [128], as the primary judge correctly stated, it is the consistent application of principle that is relevant to the assessment of penalty, rather than the range of penalties given in disparate circumstances that cannot be said to be analogous: Flight Centre, 85 at [63]. As Middleton J said in Australian Competition and Consumer Commission v Telstra Corporation Ltd [2010] FCA 790; 188 FCR 238 at [215]:
It is apparent that there are many difficulties in simply referring to penalties previously imposed for contraventions of legislation in widely differing circumstances or in circumstances where some of the factors are similar but others dissimilar to those of the present proceeding. In each case, the Court must take into account the deterrent effect of the penalty and the fact that the penalties "should reflect the will of Parliament that the commercial standards laid down in the Act must be observed but not be so high as to be oppressive": see Trade Practices Commission v Stihl Chain Saws (Aust) Pty Ltd [1978] ATPR 40-091 at 17,896.
175 Secondly, the primary judge considered the cases to which viagogo referred him and concluded that none of them was closely factually related to the present case. No error has been demonstrated in respect of the primary judge’s conclusion in that regard.
176 As viagogo acknowledged, despite the opacity with which it is expressed, Ground 4 is directed to manifest excess. The criticisms viagogo makes have not been made good. Moreover, even if viagogo’s criticisms had substance, its approach in focussing on a small subset of relevant factors divorced from the overall context distorts the way in which the penalty discretion was exercised by the primary judge. viagogo has not established that an error of manifest excess is plainly apparent in the way in which the primary judge exercised the discretion having regard to his instinctive synthesis of all the relevant factors. Ground 4 is dismissed.
177 For these reasons, the appeal is dismissed with costs.
I certify that the preceding one hundred and seventy-seven (177) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Yates, Abraham and Cheeseman. |
Associate:
