FEDERAL COURT OF AUSTRALIA

 

eBay International AG v Creative Festival Entertainment Pty Limited

(ACN 098 183 281) [2006] FCA 1768

 

CONTRACT – general contractual principles – construction and interpretation of contracts – offer and acceptance – organiser of major music festival – admission tickets sold through various methods purporting to contain condition providing for cancellation of ticket if resold for profit – where resales of tickets through online market or auction sites sought to be specifically prohibited by condition of purchase - where terms and conditions not drawn to the attention of purchasers in some instances – where terms and conditions of sale differed from those on ticket in some instances - whether condition of no resale for profit incorporated into contract

 

TRADE AND COMMERCE – Trade Practices Act 1974 (Cth) and related legislation – consumer protection – misleading and deceptive conduct or false representations – organiser of major music festival – admission tickets sold through various methods purporting to contain condition providing for cancellation of ticket if resold for profit – where resales of tickets through online market or auction sites sought to be specifically prohibited by condition of purchase - where terms and conditions not drawn to the attention of purchasers in some instances – whether  representation that condition prohibiting resale for profit was enforceable is misleading and deceptive

Held – the relevant condition conveys a misleading representation that Creative is legally entitled to and would detect and cancel any ticket which is resold for profit and the holder of that ticket would be refused entry; applicant entitled to relief in the form of a declaration and injunction.

WORDS & PHRASES – “for profit”

Trade Practices Act 1974 (Cth) s 52

 

 

Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45 applied

Cowell v Rosehill Racecourse Company Ltd (1937) 56 CLR 605 cited

Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500 applied

Gange v Sullivan (1966) 116 CLR 418 cited

Heatley v Tasmanian Racing and Gaming Commission (1977) 137 CLR 487 cited  

Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) 110 FCR 157 applied

Lewis v Daily Telegraph Ltd [1964] AC 234applied

MacRobertson Miller Airline Services v Commissioner of State Taxation (WA) (1975) 133 CLR 125 considered

Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197 applied

Quinn Villages Pty Ltd v Mulherin [2006] QCA 433 cited

RAIA Insurance Brokers Ltd v FAI General Insurance Ltd (1993) 41 FCR 164 cited

Suttor v Gundowda Pty Ltd (1950) 81 CLR 418cited

Sydney Corporation v West  (1965) 114 CLR 481 followed

Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163 cited

Toll (FGCT) Pty Limited v Alphapharm Pty Limited (2004) 219 CLR 165 applied/followed

Zhu v Treasurer of NSW (2004) 218 CLR 530applied/followed

EBAY INTERNATIONAL AG v CREATIVE FESTIVAL ENTERTAINMENT PTY LIMITED (ACN 098 183 281)

NSD 2191 OF 2006

 

RARES J

18 DECEMBER 2006

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 2191 OF 2006

 

BETWEEN:	EBAY INTERNATIONAL AG Applicant
AND:	CREATIVE FESTIVAL ENTERTAINMENT PTY LIMITED (ACN 098 183 281) Respondent

 

JUDGE:	RARES J
DATE OF ORDER:	18 DECEMBER 2006
WHERE MADE:	SYDNEY

 

THE COURT ORDERS THAT IT BE DECLARED THAT:

 

1.         The respondent has contravened s 52 of the Trade Practices Act 1974 (Cth) by engaging in conduct that is misleading or deceptive and/or likely to mislead or deceive by representing in trade or commerce that:

(a)        all tickets to ‘Big Day Out’ festivals to be held in various places in Australia in January 2007 and February 2007 that are resold for profit will be cancelled;

(b)        the holder of any such ticket will be refused entry to the festival;

(c)        the respondent has the means available to it of detecting the tickets which are subject to such resale with sufficient frequency to warrant an assertion of inevitability of such cancellation and refusal of entry;

(d)        the respondent has the means to cancel each and every such ticket so sold and refuse the ticket holder entry to the festival;

(e)        the respondent is entitled to enforce the provisions of cl 6 of the ticket conditions in all cases;

in circumstances where the representations in (a) and (b) are each of them a representation as to a future matter made without reasonable grounds within the meaning of s 51A(1) of the Trade Practices Act 1974 (Cth).

2.         Condition 6 of the conditions of sale as printed on the Big Day Out tickets for the 2007 events (condition 6) only applies in the event of a sale for profit by the original purchaser of the ticket and does not prevent others who have lawfully acquired the ticket from reselling it for profit.

3.         Condition 6 does not apply to any purchaser of Big Day Out tickets who purchased the ticket:

            (a)        through the Ticketmaster website;

            (b)        over the counter at Ticketmaster or;

            (c)        through one of the Big Day Out retail outlets prior to 18 November 2006;

            and in such cases, tickets may not be cancelled and holders may not be refused admission even if such ticket is resold for profit.

4.         In the case of tickets purchased through the Big Day Out website prior to 8 November 2006, condition 6 does not apply, and the following condition is the applicable condition relating to resale of such ticket by the original purchaser:

‘Should this ticket be re-sold or transferred for profit or commercial gain it will become voidable and the holder may be refused entry to, or ejected from the venue.’

5.         The condition applicable to tickets purchased through the Big Day Out website prior to 8 November 2006, as set out in declaration 4 above, only applies in the event of a sale for profit by the original purchaser of the ticket and does not prevent others who have lawfully acquired the ticket from reselling it for profit.

THE COURT ORDERS THAT:

6.         The respondent, by itself, its servants and agents be restrained from representing in trade or commerce in substance that:

(a)                tickets to ‘Big Day Out’ festivals in January 2007 and February 2007 that are resold for profit will be cancelled otherwise than in accordance with the declarations in pars 2-5 hereof.

(b)               the holder of any such ticket will be refused entry to the festival otherwise than in accordance with the declarations in pars 2-5 hereof;

(c)                that such cancellation and/or refusal of entry are inevitable or unavoidable;

(d)               the respondent has the means available to it for detecting the tickets which are subject to such resale at a profit with sufficient frequency to warrant an assertion of inevitability of such cancellation and refusal of entry;

(e)                the respondent has the means available to cancel each and every ticket so resold and refuse admission to the ticket holder;

(f)                 the respondent is legally entitled to enforce condition 6 otherwise than against the original purchaser and in circumstances where the substance of the condition was notified to the original purchaser prior to or upon the sale of the ticket by the respondent,

PROVIDED THAT this order does not preclude or prevent the respondent, its servants and agents from communicating cancellation and/or refusal of entry in any circumstances where the respondent has identified a particular ticket or particular tickets that have been issued before 4pm on 22 December 2006 that have been resold for profit by the original purchaser of the tickets who was notified of the effect of condition 6 before purchase where the respondent elects to cancel such tickets(s) and refuse entry to the holder(s).

7.         The respondent by itself, its servants and agents be restrained from conducting its ticket cancellation practices in relation to the 2007 events in respect of tickets issued prior to 4pm on 22 December 2006 otherwise than in accordance with declarations 2 to 5 above.

8.         The respondent pay the applicant’s costs.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 2191 OF 2006

 

BETWEEN:	EBAY INTERNATIONAL AG Applicant
AND:	CREATIVE FESTIVAL ENTERTAINMENT PTY LIMITED (ACN 098 183 281) Respondent

 

JUDGE:	RARES J
DATE:	18 DECEMBER 2006
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1                     Creative Festival Entertainment Pty Limited has promoted a music festivals known as the ‘Big Day Out’ since 1992.  The Big Day Out has become an established event in late January or early February of each year in venues at the Gold Coast, Sydney, Melbourne, Adelaide and Perth.  Australian and international performing artists appear at each concert.

2                     Tickets for the Big Day Out 2007 festival in all five venues went on sale on 13 October 2006.  They were available for purchase on the Big Day Out and Ticketmaster websites from approximately 9.30am on that morning and by about midday all available tickets for the Sydney concert had been sold.  By 20 October all available tickets to the Gold Coast shows had been sold.  At the time of the hearing all the Melbourne tickets had been sold, as had about half of the Adelaide and Perth tickets.

3                     Creative is also running a weekly ballot over ten weeks on its Big Day Out website for extra tickets to the Gold Coast and Sydney shows.  This allows people who have not been able to purchase a ticket prior to the shows being sold out to buy them at the promoter’s original prices.  The ballot is drawn automatically by computer on each Thursday until the end of December.  The purpose of the ballot is to dissuade people from purchasing tickets at an inflated price from third parties when they still have the opportunity to purchase them from Creative.  It is designed to combat the practice known as ‘scalping’.  That occurs when people buy tickets with no intention of going to the event and then offer them for auction at prices higher than the cost price on sites such as those of eBay International AG. 

4                     eBay is a Swiss corporation which operates a website in Australia as well as other websites in various places in the world.  eBay’s websites are part of an online global market place which the eBay group operates.  Registered users of eBay websites, known as members, are able to buy and sell many types of goods and services online.  eBay charges fees for sellers to advertise and offer items for sale on the eBay website.  No fees are payable by buyers or bidders.  Tickets to concerts and music festivals such as the Big Day Out are offered by eBay’s members to others who wish to purchase on the eBay website.

5                     A member who meets eBay’s requirements for listing items for sale can use one, or a combination, of two different formats for sale, namely an auction format or a fixed price format known as ‘buy it now’.  These formats operate in the following way.  In the auction format listing, the seller offers the relevant item or items, by describing it or them, setting a starting price and identifying the duration of the listing.  Potential buyers or bidders search or browse the eBay website, visit the listing and place bids on the item.  At the expiry of the listing the highest bidder is obliged, in accordance with the terms of eBay’s user agreement, to buy the item from the seller for the price specified in the highest bid.  In the fixed price format listing, the seller offers an item or items by again describing it or them, stating the fixed price and the duration of the listing.  Buyers again search or browse the eBay website.  If someone is interested in buying the item, there is no bidding involved.  The buyer simply clicks on a webpage button ‘buy it now’ to purchase at the fixed price.  The listing then expires.

ISSUE

6                     The central issue in the proceedings is that eBay contends Creative has contravened s 52 of the Trade Practices Act 1974 (Cth).  eBay says that there is a misleading or deceptive representation conveyed by a provision on the back of the ticket for the 2007 Big Day Out events.  It is in what is called a condition of sale, which reads as follows:

‘6.        Should this ticket be re-sold for profit it will be cancelled and the holder will be refused entry.  This condition specifically prohibits ticket re-sale through online market or auction sites.’

7                     In effect, eBay contends that Creative’s use of the provision constitutes misleading or deceptive conduct by conveying one or more of the following representations:

(1)               every ticket that is resold for profit will be cancelled by Creative;

(2)               the holder of any such ticket will be refused entry to the Big Day Out 2007 festival;

(3)               Creative has the means available to it of detecting the tickets which are subject to such resale with sufficient frequency to warrant an assertion of inevitability of such cancellation and refusal of entry;

(4)               Creative has the means to cancel each and every such ticket so sold and to refuse the ticket holder entry to the festival;

(5)               the provision is enforceable as a condition of the ticket in all cases.

8                     eBay says that each representation is incorrect and each of the first two are representations as to a future matter for which Creative did not have reasonable grounds (see s 51A(1) of the Trade Practices Act 1974 (Cth)).

TICKET SALES

9                     There are four principal means by which Big Day Out tickets for 2007 were sold, namely:

(1)               direct sale online from the Big Day Out website;

(2)               direct sale online from the Ticketmaster website;

(3)               direct sale over the counter at Ticketmaster or other ticket agent offices;

(4)               direct sale over the counter by other retail outlets.

10                  It is necessary to analyse each of these methods of sale in turn.  There are other online vendors but nothing in particular turns upon their terms of trading in Big Day Out tickets.  Online sales have resulted in about 60% of all tickets sold for Big Day Out 2007.  About 41% of tickets have been sold through the Big Day Out website.  Ticketmaster, principally, and other ticket agencies have been responsible for the other sales online.  Telephone sales by ticket agents account for another 7% and ticket agent outlets selling over the counter account for approximately 14% of sales.  Other retail outlets account for the balance of sales.

BIG DAY OUT WEBSITE

11                  Creative appointed an agent, Online Fulfilment, for the purpose of processing orders and payment for tickets purchased on Big Day Out’s website.  Online Fulfilment also arranges for the dispatch of tickets to purchasers.  A purchaser would enter the Big Day Out website.  A webpage appeared which offered the facility of buying tickets online by clicking on a link.   The same page of the website also had a link for opening up the terms and conditions of buying the tickets online.  If one clicked on the button to buy tickets, the purchaser was then redirected seamlessly and unnoticeably to Online Fulfilment’s website.  And, it is on the latter website that the transaction which resulted in the despatch of a ticket was completed.  If the purchaser had clicked the terms and conditions link on Big Day Out’s website prior to being redirected to Online Fulfilment’s website, he or she would have seen that, inter alia, the wording of condition 6 of the conditions of sale which I have set out above.  That wording was also printed on all of the tickets issued for Big Day Out 2007 festivals.

12                  However, until 8 November 2006 Online Fulfilment’s website contained the conditions of sale that had been used in the festival held earlier in 2006.  Only condition 6 in those conditions of sale was in different terms to those used for the 2007 festivals.  It read:

‘6.        Should this ticket be re-sold or transferred for profit or commercial gain it will become voidable and the holder may be refused entry to, or ejected from the venue.’

13                  It is convenient to refer to this as the old condition 6.  The old condition 6 was repeated on five successive Online Fulfilment web pages which had to be accessed in order to buy a ticket online after the purchaser was redirected in the purchase of a ticket through the Big Day Out website.  It was only changed after eBay commenced these proceedings and pointed to this anomaly. 

THE CONDITIONS

14                  The wording of the terms and conditions for Big Day Out 2007 tickets on the Big Day Out website (with the exception of the difference in condition 6 of the conditions of sale up to 8 November 2006) has been identical to their wording on the Online Fulfilment website.

15                  There is one further, slight, difference in the wording in the websites and the wording of the tickets themselves.  The tickets have always had the new condition 6 for the Big Day Out 2007.  But immediately before the terms and conditions are set out in small print on the reverse of the ticket appear the words:

‘By purchasing this ticket, you agree to the following:’

 

16                  Each of these terms and conditions for both the Big Day Out and Online Fulfilment websites and ticket have four headings followed by numbered paragraphs.  The first heading ‘Conditions of Sale’ has seven paragraphs underneath it, including the old or new condition 6.  Next is a heading ‘Conditions of Entry’ with nine numbered paragraphs.  The next heading is ‘Safety’ with four numbered paragraphs, and finally there is a heading ‘Some Useful Advice’ with six numbered paragraphs.  At the end of each presentation of the terms and conditions the following appears (even on the websites themselves):

‘CHECK OUT OUR WEBSITE FOR MORE DETAILS:  www.bigdayout.com’

17                  The conditions of sale and conditions of entry as they appear on the ticket are in the following terms:

‘CONDITIONS OF SALE

1.         All conditions shown on this ticket are to be read together with all other statements or directives either shown on this ticket or displayed on the premises.

2.         If the event is cancelled for any reason, only the face value of the ticket will be refunded. If the event is abandoned due to the forces of nature or any other reason, refunds are at the Promoter’s discretion.

3.         Tickets will not be exchanged or replaced nor money refunded after           purchase.

 

4.         The Promoter reserves the right to change the lineup and/or the date of the event without prior notification. In the event of change of the date or lineup, refunds will not be available.

5.         We play rain or shine.

6.         Should this ticket be re-sold for profit it will be cancelled and the holder will be refused entry. This condition specifically prohibits ticket re-sale through online market or auction sites

7.         Tickets can not be purchased for use in unauthorised promotions/competitions. “Big Day Out” is a Registered Trademark and cannot be used without the Promoters’ consent.

CONDITIONS OF ENTRY

1.         Entry is at own risk. The right to refuse entry is reserved

2.         The Promoter and the Venue shall not be held liable for any loss, injury or damages sustained entering or within the premises.

3.         Small still cameras, including small digital cameras, are permitted but no sound or video recorders will be allowed inside the site. Professional cameras of any kind are not allowed on site without authority from the Promoters.

4.         No bottles, cans, weapons, fireworks, umbrellas, illicit drugs or alcohol will be allowed in to the site. All bags/containers are subject to a full search at entry to ensure the safety of patrons. Prohibited items that are confiscated will not be returned.

5.         Ticket holders consent to filming and sound recording as members of the audience.

6.         No pass outs will be issued unless otherwise advised.

7.         The Big Day Out is recommended for Mature Audiences (MA15). We reserve the right to refuse entry to children under the age of 15 years unless accompanied by a parent or guardian. Children under 5 are not permitted. All patrons entering the site must have a valid ticket.

8.         The Promoter reserves the right to refuse entry to any patron without appropriate identification.

9.         Patrons who wish to consume alcohol must have photographic identification (except N.Z.). Anyone found to be supplying or buying alcohol for a minor will be evicted from the event and will possibly face criminal charges.’

18                  The items under the heading ‘Safety’ prohibit among other things dangerous activities at the site and include a prohibition on stage diving and crowd surfing.  These are obviously useful for maintaining order and public safety.  And the items under the heading ‘Some Useful Advice’ are appropriately so described.  They are not contractual:  e.g. ‘4.  Avoid dehydration – don’t forget to drink water.’

PRINCIPLES FOR PURCHASE OF TICKETS WITHOUT SIGNATURE

19                  Where a ticket or other document is intended by the issuer to contain terms of the contract such as an exemption clause or a foreign jurisdiction clause or other special condition, the issuer cannot rely on those terms unless, at the time of contract, it did all that was reasonably necessary to bring the terms to the other party’s attention:  Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197 at 228-229 per Brennan J;  MacRobertson Miller Airline Services v Commissioner of State Taxation (WA) (1975) 133 CLR 125 at 137 per Stephen J, 143 per Jacobs J;  Sydney Corporation v West  (1965) 114 CLR 481 at 485 per Barwick CJ and Taylor J;  see too at 503 per Windeyer J.

20                  In Fay 165 CLRat 228 Brennan J (with whom Gaudron J agreed on this contractual issue at 165 CLR at 261) considered arrangements which had been made for passengers to pay the fare in Australia for a cruise in Grecian waters.  They received an exchange order in Australia that would be handed over in Greece for the actual ticket.  The exchange order was expressed in contractual language and reserved to the carrier the right to cancel any cruise.  Brennan J considered that the contract was made when the fare was paid and that nothing in the wording of the ticket could affect the terms of the antecedent contract (165 CLR at 227).  As he said, if no contract came into existence until the ticket was issued and accepted in Greece, there would be no consideration to support the carrier’s right asserted in the exchange order to refuse to refund the passage money if the passenger cancelled.  Brennan J referred to the consequence of forfeiture of the fare as a reason to find that (165 CLR at 228):

‘The better analysis of the transaction is that the defendant was bound to issue a ticket in exchange for the exchange order in performance of a contract of carriage already made, but the defendant was given no right to introduce new conditions of carriage by printing them on the ticket. The payment of the fare may rightly be regarded as the price of an option to acquire a ticket, but the option was not to acquire a mere piece of paper. It was an option to acquire a voucher or certificate of entitlement to be carried on terms already agreed -- not on terms which the parties had yet to agree on.

It was too late after the original contract was made to add conditions which were not incorporated in it.’

21                  And Wilson and Toohey JJ (with whom Deane J agreed on this issue at 165 CLR at 256) said (165 CLR at 206):

‘If a contract of carriage was not concluded before the respondent left Australia then it must follow that, notwithstanding that the entire passage money had been paid and that a particular cabin on a particular vessel had been allocated to him for a specified cruise and that although nothing remained for him to do except to present himself in Athens with the exchange order, the appellant came under no obligation to carry him until he did so. Such a construction of the circumstances flies in the face of common sense and cannot be accepted. When he left Australia the respondent had a contractual right to receive from the appellant on presentation of the exchange order in Athens a passage ticket which enabled him to board the vessel and occupy the specified cabin for the duration of the cruise subject only to such conditions as are found to form part of the contract.’

22                  Here, new condition 6 imposed, if it were contractual and enforceable, substantial limitations on the ability of an original purchaser or a holder of a ticket in dealing with it.  Many online purchasers were given no notice of this;  indeed all online purchasers of the Sydney and Gold Coast concerts knew nothing of it;  and those purchasing from the Big Day Out website were informed only of old condition 6, but later received tickets with the new one.  It is necessary to look at each of the 4 methods of sale to appreciate their potentially differing legal consequences.

SALES ONLINE FROM BIG DAY OUT WEBSITE

23                  The mechanism for purchase on the Big Day Out website involved the following steps after the seamless and unnoticeable redirection to the Online Fulfilment website.  The purchaser was presented with a webpage with a subheading ‘Tickets and Shopping Cart Contents’.  One could place an order by clicking on a box next to the words ‘I have read and agreed to the following terms and conditions’ (being those set out above with the exception that the old condition 6 appeared until 8 November 2006).  A pop up dialogue box then appeared with a message ‘Please agree the terms and conditions before you proceed’ and the option ‘OK’ appeared in that box.  The purchaser would next have to click the word ‘OK’ and the pop up box then disappeared from the webpage.  The purchaser then clicked on to the box next to the words “I have read and agreed to the following terms and conditions’ and a green tick appeared in the box.  The purchaser then clicked on the words ‘Place an order’.  A new web page was opened with the subheading ‘Tickets’ and the words ‘Order details’.  After completing that, a dialogue box appeared and the purchaser then entered credit card and other details.  Thereafter a webpage opened with the subheading ‘Tickets’ and the words ‘You are about to order these items from the Big Day Out website’ directly beneath them.  Another full set of the conditions was set out on that webpage.  Having clicked on the ‘Send this Order’ button, a new webpage opened stating that the order had been confirmed.  It recorded that the purchaser would be receiving a confirmation email stating everything that would be needed to facilitate the payment process.  The purchaser was told that once the email was read and all the steps carefully followed, he or she would receive the ticket(s) as quickly as possible.  The webpage indicated that the order had been confirmed for the relevant ticket(s), the price had been successfully charged to the nominated credit card account and the ticket(s) would be mailed to the address given by the purchaser.  An email was sent immediately following this which confirmed that the order had been successfully charged to the credit card and would now be processed and tickets mailed to the purchaser.

24                  eBay contends that a contract in writing was made on the terms displayed on the Online Fulfilment  website.  eBay argues the contract was, in effect, signed electronically by the purchaser through his or her clicking on the relevant buttons agreeing to the terms and conditions, making payment and receiving the webpage and email confirmations of the order.  On this analysis the contract was signed and completed after the payment and nominated purchaser details were accepted.  The terms of the signed contract were those set out in the webpages detailing the terms and conditions in accordance with Toll (FGCT) Pty Limited v Alphapharm Pty Limited (2004) 219 CLR 165.

25                  eBay argues that, objectively, a reasonable person in the position of the parties would have concluded that terms and conditions upon which the ticket was sold to the purchaser were those repeated five times throughout the process on the different webpages.  These incorporated old condition 6.  The ticket that was delivered in consequence of a transaction occurring online before 8 November 2006, however, contained new condition 6 which eBay says can have no contractual force or effect because it had been added without agreement after the contract was made. Thus, eBay says, in addition to the other inaccuracies it claims, the ticket in such cases is misleading because of its different terms and it conveys a false representation that new condition 6 is a part of the contract. 

26                  Creative contends that new condition 6 is merely a statement in different language to the same force and effect of old condition 6 and has no difference in substance. 

27                    I find that the contract for purchase of tickets made on the Big Day Out website before the wording of old condition 6 was changed, occurred on terms that included the old condition 6 and did not include new condition 6.  Since all the tickets for the Sydney and Gold Coast concerts were sold prior to the change in wording, it must follow that the 30,000 sold in this way from the Sydney concert and the 20,000 tickets sold for the Gold Coast concert contained terms which included old condition 6 and not new condition 6.

28                  By sending a ticket with new condition 6, Creative represented that that was part of the contract under which the tickets were purchased and that the condition was effective as a condition of sale.  That representation was in trade or commerce and was false.  In particular, the ticket had the statement, which was false for online purchases from the Big Day Out website, that ‘by purchasing this ticket you agree to’ the inclusion of new condition 6.  None of the tickets sold online by using the Big Day Out website prior to 8 November 2006 contained new condition 6.  Creative was not entitled to represent to purchasers or to other persons into whose hands these tickets might come that new condition 6 had any contractual force or was at all relevant to the contract upon which the ticket had been acquired.  Yet the very face of the ticket contradicted the contract which Creative had made on its website (or that of its agent, Online Fulfilment) with the purchaser.

29                  Old condition 6 operated to confer upon Creative an election to avoid a ticket, if it were resold or transferred for profit or commercial gain.  The ticket remained valid unless and until Creative acted by making its election:  Suttor v Gundowda Pty Ltd (1950) 81 CLR 418.  Moreover, old condition 6 indicated that the holder ‘may be refused entry or rejected’, again suggesting that Creative had first to exercise its election before that consequence would be asserted by it.

30                  In contrast, new condition 6 is worded to operate upon the happening of an event, namely a resale for profit.  On the occurrence of the event the ticket ‘will be cancelled and the holder will be refused entry’.  Creative says that the same contractual principles of construction apply and that the cancellation of the ticket, despite the imperative wording, is not a contractually automatic consequence of the occurrence of the event of resale for profit.  That is because the purchaser is not entitled to rely upon his or her own default in adhering to the contractual requirements, but the innocent party, Creative, is entitled to elect whether to keep the contract alive and, if this is the true construction of the contract, it says that there is nothing misleading or deceptive about its use of words in new condition 6 to convey that meaning.

31                  In Suttor 81 CLR at 441 Latham CJ, Williams and Fullagar JJ said that where the event in question was one which could not occur without default on the part of one party to the contract, the position was clear:

‘The provision is then construed as making the contract not void but voidable:  only the party who is not in default can avoid it, and he may please himself whether he does so or not.’

The context of the principle which their Honours were discussing was one in which the party in default would be advantaged if termination occurred automatically.  The principle to be applied in such a case is that a party should not be entitled to rely upon his or her own default in respect of the occurrence which the contract provides will bring about its end.

32                  In the present situation the intention of the parties is that new condition 6 is to benefit only Creative.  The purchaser gains nothing from a termination arising from his or her being in default.  Thus the purchaser has no relevant motivation to be in default under new condition 6 so as to render the ticket void.  This is quite different from the situation in, say, a conveyancing contract which provides for the contract to be avoided on happening of an event which one or other party or both can bring about.  In such a case the implication of a term which denies to the party in default the facility of engineering the end of his or her contractual obligation is necessary.  The innocent party should not be put into the position that the party in default can escape from his or her obligation by breaching, rather than adhering to, the contract.  

33                  The purchaser of a ticket to Big Day Out 2007 has no relevant obligation the breach of which will benefit him or her in a way that it would be to his or her advantage for an automatic cancellation of the ticket to occur.  Quite the contrary, the purchaser wishes no such thing to occur by his or her default.  The natural and ordinary meaning of new condition 6 suggests that the evident purpose of it is to prevent the purchaser selling the ticket for profit on pain of it being cancelled if he or she did.  In that context, the purchaser could not rely on his or her own default in making such a sale so as to escape from an obligation under the contract and thereby render that which he or she seeks to resell valueless. 

34                  In Gange v Sullivan (1966) 116 CLR 418 at 441, Taylor, Menzies and Owen JJ noted that the first step to deciding the question of construction in the case like the present was to understand the condition and its significance to the parties.  They continued:

‘Suttor v. Gundowda Pty. Ltd. ((1950) 81 CLR 418), together with other cases, was relied upon to support the conclusion that non-fulfilment of the condition did not of itself bring the contract to an end but did no more than render the contract voidable at the instance of a party not responsible for the non-fulfilment of the condition. Whilst the effect of a condition must in every case depend upon the language in which it is expressed and a decision upon the meaning of one condition cannot determine the meaning of a different condition, the authorities cited do show a disposition on the part of courts to treat non-fulfilment of a condition such as that here under consideration as rendering a contract voidable rather than void in order to forestall a party to a contract from gaining some advantage from his own conduct in securing, or contributing to, the non-fulfilment of a condition bringing the contract to an end.’

35                  In Quinn Villages Pty Ltd v Mulherin [2006] QCA 433 at [44] Cullinane J (with whom McMurdo P and Holmes JA agreed) said that a court would give effect to a clause bringing a contract to an end in the eventualities for which it provides if the language was sufficiently explicit.  Nonetheless, he noted that there was a plain disposition to treat such a clause as rendering the contract voidable not void:  see also Havenbar Pty Ltd v Butterfield (1974) 133 CLR 449 at 456 per Menzies, Stephen and Jacobs JJ.  Here, new condition 6, is designed to bring about automatic termination because of the breach by the purchaser.  Such a breach is not rationally capable of being taken advantage of by the purchaser so as to call for the implication that the innocent party may elect to avoid the contract, because he or she has paid the money, obtained a ticket which is sought to be passed on, and then ceases to have any real interest in the subject matter.  Rather, the clause is directed to preventing the purchaser in engaging in that very activity.  There is no benefit to the vendor, Creative, in giving it an election in such circumstances as to whether to treat the contract as at an end.  The wording of this new condition 6 suggests that it should operate to avoid tickets automatically.   It was not suggested by Creative in argument how the application of the principle that a party is not entitled to rely upon his or her own default, should enliven the construction of new condition 6 that it be voidable rather than void.

36                  The ticket gave a right of admission to a Big Day Out 2007 festival, subject to the conditions of entry.  Obviously, new condition 6 forms part of the conditions of entry, because it is directed to the right to enter of a holder of a cancelled ticket.  The wording of new condition 6 is capable of being construed, as Hill and Finkelstein JJ said of a similar condition in Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) 110 FCR 157 at 183 [98] (Emmett J agreeing on this point at 197 [164]), as one of:

·                       a contractual promise not to sell for profit, breach of which gives rise to a claim for damages but might or might not justify rescission;

·                       a condition precedent to performance by Creative of its obligation to procure admission to the festival, which it could waive;

·                       a delimitation of the licence granted by the ticket so that a failure to comply with it extinguishes the licence.

Hill and Finkelstein JJ found that contract there involved a promise in the form of a condition of the contract by the original purchaser not to resell the ticket at a premium (Hospitality 110 FCR at 184 [104]-[105]).

37                  The language of new condition 6 is quite different to that of the condition considered by the Full Court.  I am of opinion that it is a delimitation of the licence.  This is because it provides, in imperative language, that the ticket will be cancelled if the proscribed event occurs.  The contractual intention is that the licence which presentation of the ticket at the door or place of entry into the Big Day Out 2007 festival would be given ordinarily will not be available if the ticket has been resold for profit.  Even if I am wrong so to construe new condition 6, I am of opinion that an ordinary reasonable member of the class of holders and intending purchasers or holders of tickets would understand new condition 6 in this way.

38                  It is common ground that an assignee or donee of a ticket who became a holder otherwise than through a resale for profit by the original purchaser, is not bound by new condition 6 and that such a holder is free to resell for profit.  There is an ambiguity in the words ‘re-sold for profit’.  An original purchaser could resell and realise a profit without having been motivated to make a profit.  The choice for construction of the expression is between the subjective motivation of the seller as opposed to the objective fact of a resale at a price greater than $120.  (The cost may vary depending on the nature of the transaction including any applicable booking fee or postage costs.  In these reasons I will refer to $120 as an illustration of the approximate cost to purchase a ticket.)  The second sentence of new condition 6 prohibits two methods of sale, but must be read with the first sentence.  The commercial purpose of new condition 6 is to prevent ‘scalping’ – that is the purpose which reasonable persons in the position of Creative and original purchasers would have had in mind at the time of sale (Zhu v Treasurer of NSW (2004) 218 CLR 530 at 559 [82]).

39                  It is necessary to construe new condition 6 so as to avoid it making commercial nonsense or working commercial inconvenience (Zhu 218 CLR at 559 [82]).  If the subjective intention of a vendor on eBay were relevant, new condition 6 would not operate automatically.  There would be no readily ascertainable way of enforcing it without enquiry by Creative as to the subjective motivations of an original purchaser who resold.  Accordingly, I am of opinion that the proper construction of ‘re-sold for profit’ is that it operates on the objective fact of the price realised on resale being greater than $120.

SALES ONLINE FROM TICKETMASTER WEBSITE

40                  When a purchaser wished to buy a ticket to Big Day Out from Ticketmaster online, he or she would go to a Ticketmaster webpage with a subheading ‘Hot Tickets’ on which the words ‘Big Day Out 2007’ appeared.  Each webpage had a clause stating that by continuing past it the user agreed to abide by Ticketmaster’s terms of use which included its purchase policy.  At the top of that page it was stated that the tickets would be mailed in late November 2006.  By clicking on ‘Big Day Out 2007’ the purchaser was then taken to a Ticketmaster webpage headed ‘Big Day Out 2007’ with the venues and dates marketed by Ticketmaster on it (being Sydney, Melbourne and Perth).  This page was mainly a publicity or general information page.  The purchaser then clicked on the ‘Buy Tickets’ button and an events search results page opened showing the three venues being marketed.  Each had a button for ‘Find Tickets’.  By clicking on the button for the relevant event, a new webpage opened containing event information and indicating that the box office was open.

41                  The purchaser was told that if they were already a Ticketmaster member and had their billing information pre-registered they could log in on the log in button.  If not, they were then directed to complete the information needed to become such a member.  It was a condition of establishing such a membership that the user of Ticketmaster’s website accepted the terms of use on the website as governing the relationship.  That provided that the purchase policy would govern the order or purchase of any tickets through the site.  The purchaser had to agree by using the site to abide by the terms of that policy.  The purchase policy contained the following terms and conditions:

‘This Purchase Policy is subject to, and incorporates by this reference, the Terms of Use.  Each ticket that you purchase is a licence to attend a particular event and is subject to the additional terms set forth on that ticket.

…

 

Unlawful Resale of Tickets – Commercial Purposes

Unlawful resale of tickets (or attempt) is grounds for seizure and cancellation without compensation.  A ticket shall not be used for advertising, promotions, contests, or sweepstakes unless formal written authorisation is given by the Event Provider, provided that even if such consent is obtained, use of Ticketmaster’s trademarks and other intellectual properties are subject to Ticketmaster’s consent.’

42                  Ticketmasters’ terms and conditions of sale included one which provided that the ticket was sold subject to the promoter’s, or presenter’s, conditions of sale ‘a copy of which is available for inspection at the time of purchase and/or collection of this ticket …’ (cl 2). 

43                  Once a person became accredited as a member, they were able to move to the next stage of the Ticketmaster website for a purchase.  It took them to a page indicating that their billing information was as set out on the page and invited the purchaser to check its correctness.  If correct, they were invited to click on the ‘Continue Purchase’ button.  The next webpage that came up noted that for Big Day Out 2007 all tickets would be sent by registered post.  Lost, stolen, undelivered or misplaced tickets would not be replaced.  It noted that children aged 5-15 must be accompanied by a parent or legal guardian with a ticket and that conditions of purchase applied.   The purchaser was then told to take three steps.

44                  First, the number of tickets had to be selected, secondly, the relevant pricing and ticket locations had to be selected and thirdly, a choice of delivery method was offered.  The purchaser was told that they had five minutes after hitting the ‘Look for Tickets’ button to complete the purchase.  They were again invited to click on a link to review the purchase policy.  The webpage told the purchaser that for best performance and to prevent transaction failures, tickets should be requested by using only one web browser.  Orders were said to be subject to credit card approval and billing address verification.  The reader was then invited to click on buttons for ‘Look for Tickets’, ‘Cancel Order’ or ‘Check my Order’.  By clicking on the first of those three buttons the purchaser was taken to the next webpage.  It indicated the number and price of the tickets, the handling charge, the billing information, the name and address of the purchaser and contained a ‘Continue Booking’, ‘Cancel Booking’ and ‘Check my Order’ set of buttons.  By clicking on the ‘Continue Booking’ button the next webpage opened.  It was headed ‘Important’ and told the purchaser that to complete the transaction and to confirm their tickets they had review and confirm the information set out on that page, and then, and then click the ‘Purchase Tickets’ button at the bottom of the page.  It was emphasized on that page that the tickets would not be confirmed until the ‘Purchase Tickets’ button had been clicked.  After clicking on that button, a new webpage opened headed ‘Ticket Purchase Confirmation’ which thanked the purchaser by their Christian name for the order and stated ‘This is your transaction confirmation page.  Please print this page and store it as safely as confirmation of the transaction you have just completed’ (emphasis added).  It noted that the purchaser would also receive a confirmation email to reiterate the same information.  A purchase confirmation number was given and the relevant venue details and price were set out.  At the foot of the page there was a notation that all orders were subject to credit card approval and billing address verification.  The confirmation email was then sent which commenced, under the heading of its nature ‘Thank you for purchasing tickets at Ticketmaster.com.au.  We have received your order:  BIG DAY OUT’.  A confirmation number for this ‘purchase’ was then given.

45                  It is common ground that during the whole of the process a purchaser from Ticketmaster online could not access any information which set out any conditions at all on the ticket or on the Big Day Out website. Thus, new condition 6 together with all the other provisions on the ticket were not communicated to the potential purchaser in the Ticketmaster online transaction.  Nor was the potential purchaser given any opportunity to review or see those conditions.  Nonetheless, the form of the transaction appeared to be one of a contract for purchase of the ticket which was recognised by the last two steps as having been ‘just completed’.  Tickets were not to be sent until late November, as the first page of the Ticketmaster online purchasing webpages stated.  Thus, in the case of the Sydney concert which sold out on the day of its being first offered for sale on 13 October 2006, a purchaser would not even see the conditions sought to be imposed in the ticket itself until over six weeks after ‘the transaction you have just completed’ as noted on the final webpage in the series of purchase webpages.  The question then arises as to whether anything on the ticket could, in those circumstances, constitute a term of the contract.

46                  eBay said that the Ticketmaster online purchase was concluded when the final confirmation webpage came up, subject to the credit card and address details being valid.  A purchaser could not replace or exchange the ticket or seek a refund after such a purchase.  eBay’s argument said that the only contract in this transaction was the one made using the online method of communication.  Once that occurred, a purchaser was free to deal with the ticket as he or she saw fit.  There was no notification to the purchaser that a sale by him or her in any circumstances was not permitted or would have a consequence of potential cancellation.  There was no communication on Ticketmaster’s website to draw to a purchaser’s attention the existence of any condition such as new condition 6, nor was there any link provided for the purchaser to go to the Big Day Out webpage or any other source to find what conditions were sought to be imposed on the Big Day Out ticket that had been purchased in the transaction.

47                  Creative, on the other hand, argued that because the purchaser already had agreed to membership of Ticketmaster online and to the terms and conditions of use, the purchase policy bound the purchaser to the terms of Big Day Out’s ticket.  The purchase policy was said to be ‘subject to, and incorporate[s] by this reference, the Terms of Use’.  Thus, Creative argues that the purchaser was on notice that there will be terms on the ticket.

48                  Creative argued that there was in fact no contract formed until the ticket arrived and the purchaser had a reasonable opportunity to consider it.  I am of opinion that that analysis ought not be accepted.  The parties were contracting on Ticketmaster online in writing.  They had to sign, albeit electronically, the terms of the purchase.  They did so.  The terms did not include any reference to, or ability to view, conditions now sought to be imposed on the ticket.

49                  The Ticketmaster online purchase was a contract in writing signed by the parties.  By clicking on the relevant buttons and, by the computer bringing up all terms needed to purchase a ticket, on behalf of Ticketmaster as agent for Creative, the whole transaction was in writing, signed and agreed by the parties.  A reasonable person in the position of the parties would have regarded the transaction completed on Ticketmasters’ webpage as the contract:  Toll (FCGT) Pty Limited v Alphapharm Pty Limited (2004) 219 CLR 165.

50                  When the purchaser received the ticket, the terms themselves precluded any opportunity to seek a refund (see condition of sale 3) because he or she was informed that tickets would not be exchanged or replaced, nor money refunded ‘after purchase’.  That is, the very transaction which had been confirmed by the series of webpages and the confirmation email generated by a Ticketmaster online transaction, could not be undone if the conditions of sale were part of the transaction.  Creative’s argument is similar to that rejected by Wilson, Toohey, Brennan  and Gaudron JJ in Fay 165 CLR at 206, 228, 261.   I reject it.

51                  Because these conditions were not brought to the attention of the purchaser and were not available to the purchaser, perhaps for more than six weeks after the transaction was effected and the purchaser paid the price, I am of opinion that it is quite unrealistic to regard this ordinary consumer transaction as one in which the purchaser would have been free to return the ticket thereafter and receive a refund.  The ordinary reasonable member of the public would be confronted with a representation on the reverse side of the ticket that the contract denied him or her the ability to return the ticket or get a refund on ascertaining that the conditions were unsatisfactory.

52                  I am of opinion that condition of sale 3 is calculated to convey to a person who bought online from Ticketmaster that the transaction was completed online at the time of the webpage transactions.  It follows that it did not contain any terms on the ticket.  The vague and general reference in Ticketmaster’s purchaser policy to terms being on tickets, cannot substitute for the necessity to draw specifically to someone’s attention unusual or significant terms affecting the proposed relationship, if it is sought to claim that the contract contains those terms.  This is the more so when a term like new condition 6 is not otherwise available to a purchaser and their attention is not directed to it clearly or, as in this case, at all.

53                  In Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163 at 170D, Lord Denning MR gave his well known example of the need for a prominent prompt such as a red hand pointing to an exemption clause, which would draw a purchaser’s attention to it.  If the Ticketmaster online contract was entered into in writing on the webpages, it is impossible to incorporate the terms on the ticket by reference because the purchasers are told that the ticket would be sent to them some time later.  Thus, in the case of the many thousands of people who purchased tickets through Ticketmaster online on 13 October 2006 for the Sydney concert, the tickets would only be sent to them over six weeks later in circumstances where there was no suggestion on Ticketmaster’s webpages that there would be any contractual restriction on the capacity of a purchaser to sell the ticket. 

54                  Creative argued that the purchaser could somehow return the ticket if, when it was ultimately received, it contained terms that were not to the purchaser’s satisfaction.  I am of opinion that this is unrealistic.  Creative for its own commercial purposes offered facilities to the public for instantaneous online ticket sales including through the Ticketmaster web facility.  If Creative wanted to impose a condition of contract in the Ticketmaster online sales such as is in the old or new condition 6, it had to bring notice of such a condition to the attention of the purchaser online at the time of the purchase (Fay 165 CLR at 206, 228, 261).

55                  Creative intends to sell over 220,000 tickets at $120 each, thereby generating revenue in the order of about $26 million.  It is not unreasonable to expect it to get its contractual documents (including those online) right if it wants to rely on terms that have strict and perhaps drastic consequences for freedom of contract of purchasers from it .  I am of opinion that a reasonable person considering the steps to purchase from Ticketmaster online would have considered them to amount to a contract between the purchaser and Creative, through the agency of Ticketmaster on the terms and conditions that were then and there available online.  There was no incorporation by reference of provisions on the ticket.

DIRECT SALE OVER THE COUNTER AT TICKETMASTER

56                  When a purchaser approached a Ticketmaster over the counter office, the employee would begin entering details on a computer behind the counter.  A purchaser would have to supply his or her name, work phone number, work address or some other phone number and address for the employee to continue.  There were some conditions posted on a notice on the back wall of Ticketmaster offices behind the counter which may have been too small to read.  Another notice entitled ‘Conditions’ was available for perusal.  That notice stated that Ticketmaster was an agent of the seller and that all complaints were the seller’s responsibility.  It said that tickets were subject to the seller’s conditions of sale ‘a copy of which is available at the time of collection of the ticket’.  Here, this must be a reference to the actual provisions printed on the back of the ticket, because it is common ground that Ticketmaster had no other material available at its direct booking offices which set out terms of the contract which Creative proposed to enter with an intending over the counter purchaser.

57                  The Ticketmaster employee would cause the computer to print an account number and receipt for the purchaser.  The employee would then ask for the payment of the price of $120.  The employee handed over those documents together with what was described as a ‘souvenir ticket’.  The purchaser was advised to bring the receipt and souvenir ticket to the festival to gain admission.  There was no material in Ticketmaster’s offices or attempt by Ticketmaster employees to direct any attention to special provisions of the contracting ticket, including the presence of new condition 6.

58                  Creative argued that when the purchaser was handed the ticket at the end of the over the counter sale he or she could review it and, if dissatisfied return it claiming a refund.   The reality of the transaction is that the customer will have paid cash or had his or her credit card debited prior to the ticket being handed to him or her.  The ticket itself contains a provision stating that no refunds would be made after purchase (condition of sale 3).  And, there was nothing to draw particular attention to the operation of new condition 6 in the posited contractual relation created by the transaction over the counter.  Condition of sale 3 is calculated to convey a representation that if a contract has been entered into, unless the purchaser at the Ticketmaster counter has the astuteness of an experienced commercial lawyer dealing with ticket cases, and can recognise the ability to return the ticket and demand a refund, and then persuade Ticketmaster to give them a refund, the ordinary person would consider that the transaction was closed. 

59                  Again, whatever be the precise contractual analysis of the position, the very terms of the conditions of sale are calculated to convey to an ordinary reasonable person reading them that they cannot get out of the conditions.  Ironically, it is Creative that has argued that the purchaser can eschew the conditions it wrote and imposed on the ticket telling the purchaser that they could not get a refund.  This unattractive argument has no commercial morality about it.  These are consumer transactions, mainly effected with young people who are not experienced in the commercial world.  Creative used its own drafting of contractual terms and the representations they convey as to the efficacy of those contractual terms to assert that the purchaser cannot get a refund.  It then had senior counsel argue that, applying classical contractual analysis, the purchaser could ignore its own ticket wording because the customer in fact had a right to a refund.  The argument is less than meritorious.  Creative’s argument makes the very words condition of sale 3 commercial nonsense (Zhu 218 CLR at 559 [82]).  I reject the argument.

DIRECT SALE OVER THE COUNTER BY OTHER RETAIL OUTLETS

60                  Before 16 November 2006, if a person went to a retailer, other than Ticketmaster, seeking to buy tickets over the counter, there was no material at the retailer’s premises to indicate what conditions were sought to be imposed on the ticket other than those contained on the back of the ticket itself.  I am of opinion that a similar analysis to that which applies to Ticketmaster’s over the counter sales applies here.

61                  After 16 November 2006, following complaints brought by eBay in these proceedings, Creative sought to have all its selling agents at retail premises other than Ticketmaster, display a notice which, among other things, set out either on A4 or A3 pages the conditions of sale which were on the back of the ticket.  There, new condition 6 was printed in red type, mindful of what Lord Denning MR had said in Thornton[1971] 2 QB at 170D.  This device was effective for tickets purchased after 16 November 2006, as a matter of contractual analysis, to bring to a purchaser’s attention the existence of the limitation in the condition of sale which was sought to be imposed as a contractual term.  There is no evidence as to how many people since 16 November 2006 bought tickets over the counter at retailers in circumstances where the notice will have been effective to make the seven conditions of sale actual conditions of the contract of purchase of the ticket. 

HOW DOES NEW CONDITION 6 OPERATE?

62                  It is, however, still a feature of Creative’s argument, that new condition 6 bound only the actual purchaser, not the person or persons who may have had tickets bought for them by that purchaser, unless the purchaser could be characterised as an agent of the others for the purchaser. 

63                  The four different principal methods of sale involved the creation of a number of different types of contract, with different incidents at different times.  In the example just given of an over the counter sale by a retailer, a sale on 15 November may have brought about a different contract to one which was made on 16 November.  Nonetheless, the ticket that is purchased in either transaction will look exactly the same to third parties into whose hands it may come.  

64                  Creative used the various methods of sale described above to sell tickets for admission of the holders to concerts at the respective venues.  As Mr Lees, one of Creative’s directors, said tickets ‘went on sale on 13 October 2006’, and by midday on that date ‘all available tickets for the Sydney concert had been sold’.  He was speaking as an experienced promoter of concerts when he gave that evidence.  Ordinary reasonable people in the position of Creative and each of the persons who had dealings online on the morning of 13 October 2006 and afterwards to obtain those tickets would have regarded a contract of sale to have been concluded when they logged off the relevant website, whether or not the physical ticket had been delivered to online purchasers.

65                  Confirmation of orders, online and by email, served the purpose of enabling both parties to individual transactions to know each other’s identity, the number of tickets, the price and the terms of their agreement.  Any one purchaser was permitted to buy up to four tickets.  It must necessarily have been a term of the sale that the tickets themselves were assignable and that persons other than the original purchaser would be entitled to use the tickets in order to gain entry at the venue.

66                  Again, ordinary reasonable people in the position of Creative and the purchasers would have appreciated that a variety of possible circumstances could surround each sale.  The purchaser may have bought the ticket for his or her own use;  or for a gift for a spouse, partner, child, friend, colleague or in anticipation of inviting someone else, as yet not identified, to go with them.  In addition, often for convenience, one person will buy tickets for a number of others and obtain reimbursement.  And, as Creative proved, others will buy tickets for the purpose of ‘scalping’.

67                  Both old and new conditions 6 were directed at the discouragement of scalping.  Creative argued that new condition 6 bound only, and applied only to, the actual purchaser.  It accepted that a donee of the ticket or person who bought a ticket from an original purchaser (i.e. who contracted with Creative or its selling agents) was free to act as a ‘scalper’ and seek to resell that ticket at a profit.  The language of new condition 6 does not convey to an ordinary reasonable member of the public the subtlety of Creative’s legal analysis.  Rather it uses the bold, direct and unqualified language of certainty – if the ticket is resold for profit ‘it will be cancelled and the holder will be refused entry’.

68                  Creative argued that ordinary reasonable people would know that cancellation would only be possible if, first, it found out that resale for profit had occurred and, secondly, that the resale was by an original purchaser.  It argued that therefore one should imply words like ‘if we catch you’ into new condition 6.  eBay, on the other hand, argued that the wording conveyed a representation that Creative could and would catch all transactions.

69                  These conundra are overlaid with the uncertainty as to whether old or new condition 6 formed part of a contract at all.  The variety of contracts made by Creative with its purchasers shows that the status of the ticket as a contract will vary depending on how it was acquired.  Yet, there was no doubt that tickets would change hands for any number of reasons and on any number of occasions.  How, as a matter of reality, ordinary, reasonable consumers seeking to obtain tickets on eBay would know whether or not the ticket was susceptible to cancellation, if Creative’s contractual analysis is correct, is impossible to envisage.  Rather they would not engage in that analysis but would act as Creative’s senior executives, Mr Lees and Ms McBeath, did by treating new condition 6 as applying regardless of whether the original purchaser was the vendor on eBay.  All they did, when they identified a ticket number on eBay’s website, was to cancel the ticket without enquiring whether the eBay vendor was the person who had originally bought the ticket from Creative (or its agents).

70                  The hollowness of Creative’s legal argument was exposed by this evidence of Ms McBeath concerning her and Mr Lees’ cancellation of the ticket of a Ms Row, who had sold it on eBay for more than $120.

‘Right.  And you would have been conscious that the person who was selling this ticket on eBay could have been a person who had received the ticket from the original purchaser.  Is that correct? … Correct.

And knowing that, you were quite content to send a letter cancelling the ticket because you understood that it didn't matter who was selling the ticket, as long as a ticket was being sold for a profit.  Correct? … It wasn't a concern for me, no.

...

So is this the circumstance: you went to Mr Lees and told him that there had been a sale of a ticket on eBay and it had been originally sold to Ms Row; correct? ... Correct.

And he said in those circumstances, you should send a letter to Ms Rowe, cancelling the ticket.  Is that basically what happened? … I believe so.  Basically, that's what happened.’

 

Creative was not interested in the arcane legal niceties it raised in argument.  As Ms McBeath said in her evidence (T 76.27-.28 ):

‘… it is my intention at this stage to cancel every ticket that I can identify that is sold for a profit.’

 

71                  I find that ordinary reasonable numbers of the public would read new condition 6 in conformity with Ms McBeath’s intention.  That is a natural and ordinary meaning.  Even if, the true contractual construction were as Creative’s counsel submitted, the way in which new condition 6 is expressed leaves it open to other reasonable constructions:  Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45 at 85 [103].  As Lord Devlin said about conveying meanings, albeit in the case of a defamatory publication, (Lewis v Daily Telegraph Ltd [1964] AC 234 at 285):

‘… it is the broad impression conveyed by the libel that has to be considered and not the meaning of each word under analysis. A man who wants to talk at large about smoke may have to pick his words very carefully if he wants to exclude the suggestion that there is also a fire; but it can be done. One always gets back to the fundamental question: what is the meaning that the words convey to the ordinary man: you cannot make a rule about that.’

 

72                  Creative asserted that the ordinary reasonable person would read new condition 6 as simply meaning that it would be applied if the purchaser who sought to sell on eBay or otherwise was caught.  It may be that, as a matter of practicality, that is how the condition operates.  But the threat which new condition 6 conveys on an ordinary reasonable reading by a member of the public is that the person who sells a ticket having obtained it from Creative, whether by direct purchase or donation or otherwise, will be discovered:  RAIA Insurance Brokers Ltd v FAI General Insurance Ltd (1993) 41 FCR 164 at 172-175 per Beaumont and Spender JJ.  The implication conveyed by new condition 6 is quite clear.  It is that Creative has the means of detecting a sale, will discover it, and will cancel the relevant ticket.  Moreover, that is just what Ms McBeath and Mr Lees did with Ms Row’s ticket, without the slightest enquiry as to whether she fell within what Creative’s senior counsel later submitted was the proper construction of this condition.  I am satisfied that the way in which Creative, through Ms McBeath and Mr Lees, interpreted new condition 6 is the natural and ordinary meaning of that condition which an ordinary reasonable member of the public would understand.  Moreover, it was the construction on which Creative has acted.

73                  Here, Creative has purported to use new condition 6 in a way it says ordinary reasonable members of the public would not understand it to operate.  I reject Creative’s argument.  It is seeking to have its cake and eat it too.  By its conduct in choosing the wording and distributing new condition 6 on the tickets for the Big Day Out 2007, Creative has conveyed, in substance, a representation that Creative is legally entitled to and will detect and cancel any ticket for any Big Day Out 2007 festival which is resold by anyone for profit.  And the effect of that conduct is also to convey a representation that the holder of any ticket which is resold for profit will be refused entry to the Big Day Out 2007 festival for which it was issued.

74                  Creative accepted, by its ‘if we catch you’ argument, that it could not detect all resales at a profit.  Indeed, Ms McBeath’s evidence was that Creative could not cancel tickets which had been sold on eBay unless it could identify the ticket number.  She said that was ‘… because we can’t trace every ticket’.  It follows that Creative did not have reasonable grounds, to make the representation that every ticket resold for profit would be cancelled.

CONTRACT UPON PRESENTATION OF TICKET

75                  Once a person attends at the venue for the Big Day Out next year, they will have a ticket to present at the gate.  Upon the acceptance of the ticket as entitling the person presenting it to entry into the event, a new contract will come into existence between the person presenting it and Creative on the terms of the conditions of entry endorsed on the ticket.  This is necessarily so because the consideration for Creative admitting a ticket holder into the venue is that they agree to be bound by, among other things, directions that Creative may give for the purpose of ensuring their or other members of the public’s safety.  A ticket holder may not have had any contract with Creative for the purchase of the ticket.

76                  The admission into the venue is the consideration Creative gives for a return promise that Creative will have power to revoke the licence (condition of entry 1).  Creative argued that condition of entry 1 entitled it to revoke the licence for no reason, or any reason including, if it had the view that the ticket had been the subject of sale for profit in contravention of new condition 6.  I am of opinion that properly construed, the conditions of entry should not be so read.  Condition of entry 8 entitles the promoter to refuse entry to a ticket holder who presents themselves without appropriate identification. Other conditions of entry, likewise, give content to appropriate grounds for the refusal of entry, such as the carrying of video cameras or sound recording equipment which are capable of leading to a breach of copyright enjoyed by performers who play at the festival.  Likewise, other conditions of entry (e.g. 4 and 8) ensure the ability of Creative to exclude ticket holders who reasonably could be seen as potentially disruptive.

77                  I am of opinion that the condition of entry 1 read together with the other conditions of entry in light of the terms of the ticket as a whole, and having regard to the objective circumstances in which the contract for entry to the venue is entered into, does not give an unlimited right to Creative to refuse a person entry regardless of whether the original purchaser from Creative breached new condition 6 (Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500 at 510-511).

78                  Next, Creative argued that the ticket constituted an offer of a licence on conditions of entry which included the right, in condition of entry 1, to refuse entry to the holder for any reason.  The ticket gave no proprietary right to a ticket holder to attend the venue.  Since Cowell v Rosehill Racecourse Company Ltd (1937) 56 CLR 605, it is clear that a ticket to attend an event such as Big Day Out 2007 simply gives the holder a licence which is revocable by the licensor.  Revocation of the licence so given may be effective, even if the licensor is in breach of the contract by the act of revocation:  Heatley v Tasmanian Racing and Gaming Commission (1977) 137 CLR 487 at 506 per Aickin J.  The position may be different under the s 87 of Trade Practices Act 1974 (Cth) which is not confined to common law or equitable remedies.  And, consideration may need to be given to the effect of terms implied by s 74 of Trade Practices Act 1974 (Cth).  It is not necessary for the determination of these proceedings to enter into that field.

79                  eBay responded that if Creative’s argument that the unlimited scope of its power to refuse entry under condition of entry 1 were correct, then the arrangement entered into between Creative and a ‘purchaser’ could not, in law, amount to a contract because there was no consideration at all.  eBay said that this would show that Creative was free to perform or not without having any liability or obligation if it refused entry for no reason whatsoever, referring to MacRobertson 133 CLR 125.  eBay argued that, on this premise, there was no contract unless and until the ticket was presented for entry to the venue and Creative acted on the presentation to admit the presenter to the event.  At that point a contract was entered into on the analysis above for the admission into the venue and for the governing of the relationship between the relevant ticket holder and Creative while the event was in progress.  It is unnecessary to determine the correctness of these contentions

CONCLUSION

80                  I am of opinion that the existence of the numerous potential contractual relationships between Creative and its purchasers overlaid with the uncertainty as to the application and operation of new or old condition 6 in the circumstances I have described demonstrates that by seeking to claim that new condition 6 is enforceable, Creative has engaged in conduct which is, or is likely to be misleading and deceptive conduct towards members of the public.  Moreover, for the reasons I have given new condition 6 conveys a representation that falsely asserts that tickets resold for profit will invariably be cancelled.

81                  I am of opinion that eBay is entitled to a declaration, and an injunction to prevent Creative from engaging in the contraventions of s 52 of the Act which I have found.  The parties asked for the opportunity to address on the form of relief.  I will hear them and then make final orders.

82                  The result at which I have arrived is unfortunate.  I am satisfied that Creative intended new condition 6 to protect the market from cynical exploitation by scalpers who created an artificial scarcity of tickets.  The scalpers then use sites such as eBay’s web pages to make large profits for themselves.  eBay itself profits from this practice.  While there may be cases in which purchasers of tickets who bought intending to attend a Big Day Out festival subsequently find themselves unable to attend and need to sell, the evidence suggests that most sales on eBay are by scalpers preying on the desire of music fans to attend an event which was sold out early to scalpers.  For this reason, I am not minded to grant eBay any orders for corrective advertising which might have the effect of encouraging it and scalpers to create distortions in the market which would adversely affect persons acquiring tickets to events who genuinely intend to attend the events at the time of acquisition.

COUNSEL ADDRESSED ON COSTS

83                  Creative has sought to rely on a offer made in its solicitors’ letter of 28 November 2006 to eBay’s solicitors in support of the submission that it ought not to have to pay the costs of the proceedings.  In that without prejudice letter Creative proposed that new condition 6 be amended by, in effect, identifying the purchaser alone as the reseller, saying that if the resale came to Creative's attention the ticket would become voidable and that the original purchaser or a purchaser from him or her may be refused entry.

84                  The proposal suggested that any tickets issued in the future would be overprinted or have a sticker applied to replace new condition 6 with the proposed condition and that an A4 flyer notifying the change of condition would be delivered with any ticket sent by mail that had been purchased through the Big Day Out or Ticketmaster websites or across the counter at any Ticketmaster or other ticketing agency;  and that the change to the condition be flagged prominently on the Big Day Out website.

85                  On 1 December 2006 eBay’s solicitors asked for more time and suggested that they would need to consider Creative's affidavit evidence in chief.  They sought an extension to Thursday 7 December.  But on 4 December, Creative's solicitors wrote withdrawing the offer and indicating that the proceedings would be contested.

86                  I am of opinion that the offer was insufficient to resolve the proceedings in a way that would have produced an outcome as favourable to eBay as the orders that I have decided to make.

87                  The conduct which I have decided to enjoin included conduct in relation to Ms Row the subject of my findings above (at pars [70]-[74]) which occurred virtually contemporaneously with the dispatch of the letter of offer of 28 November 2006.

88                  Moreover the offer did not address one of the factual scenarios that eBay's evidence in chief had established, namely that no notice of any conditions had been given to purchasers online from Ticketmaster's website.

89                  There was no proposal to notify prior purchasers of any change to the condition or indeed any contractual way in which such a condition could have been changed.  In the offer Creative was not indicating that it would apply the change or interpretation retrospectively, or that it would use any particular mechanism to bring such a change to public notice.  But, more importantly, its own conduct in relation to Ms Row indicated that it was very committed to a course of action which was inconsistent with the offer it was making in respect of past sales.

90                  There is no evidence before me as to the stage at which the dispatch of tickets purchased online had reached as at the time of the sending of the letter of 28 November 2006, nor is there any indication in that letter that, if the tickets had not been sent, Creative would hold off dispatching them until proposals for settlement had been fully explored or at least until the response had been received to its offer of 28 November, 2006.

91                  I am of opinion that the relief that I have decided to grant to eBay is more extensive than would have been afforded by a settlement along the lines proposed in the letter of 28 November 2006 and that therefore eBay was not unreasonable to have failed to accept that offer.  It is, of course, unfortunate that there was no attempt to negotiate between the parties earlier on to resolve matters but that is not a matter which I can take further in determining who would bear the costs.

92                  I am of opinion that eBay has succeeded in substance and is entitled to an order for costs.

 

I certify that the preceding ninety-two (92) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.

Associate:

Dated:         18 December 2006

Counsel for the Applicant:	Mr N Hutley SC and Mr J Thomson
Solicitor for the Applicant:	Deacons
Counsel for the Respondent:	Mr M Shand QC and Mr M Settle (Mr M Settle on 18 December 2006)
Solicitor for the Respondent:	Charlesworth Josem Partners
Date of Hearing:	13 December 2006 (and 18 December 2006 as to form of orders and costs)
Date of Judgment:	18 December 2006