FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Panasonic

Australia Pty Ltd [2010] FCA 856

THE COURT DECLARES THAT:

1.                  The respondent, by publishing television advertisements, printed advertisements and in-store promotional material between 23 November 2008 and 24 December 2008, relating to a promotion that involved the offer of bonus Nintendo Wii gaming consoles (Bonus Wii) with the sale of Panasonic Full HD Viera Plasma televisions (the Viera promotion), which represented that all consumers who purchased a participating model Panasonic Full HD Viera Plasma television between 29 November 2008 and 24 December 2008 would be eligible to receive by redemption a Bonus Wii upon their purchase of the participating television, when in fact, in order to submit a valid redemption claim, consumers required the serial number of the participating television within 14 days of the date of purchase in circumstances where:

1.1              the serial number of the participating television was only able to be obtained upon delivery of the television to the consumer; and

1.2              there was no guarantee that the consumer would receive delivery of the participating television within 14 days of purchase or within sufficient time from the date of purchase to allow submitting of a redemption claim within 14 days of purchase

engaged, in trade or commerce, in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of section 52 of the Trade Practices Act 1974 (Cth).

THE COURT ORDERS THAT:

2.                  The respondent:

2.1              establish the Trade Practices Compliance and Education/Training Program set out in Annexure 1 to these orders for its employees, being a program designed to ensure their awareness of the responsibilities and obligations in relation to the conduct declared by the Court in this proceeding to be in contravention of the Act and any similar or related conduct; and

2.2              maintain and administer at its own expense the Trade Practices Compliance and Education/Training Program set out at Annexure 1 for a period of three years.

3.         The respondent pay to the applicant its costs of the application.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

ANNEXURE 1

TRADE PRACTICES COMPLIANCE AND EDUCATION / TRAINING PROGRAM

Interpretation

1.         In this Annexure:

a.         “Act” means the Trade Practices Act 1974 (Cth);

b.         “Compliance Officer” means the person appointed under paragraph 2 or 3 below;

c.         “Compliance Policy” means the policy defined in paragraph 6 below;

d.         “Compliance Program” means the Trade Practices Compliance and Education/Training Program in this Annexure;

e.         “Consumer” means a person who has bought or wishes to buy a product of Panasonic through a retail outlet;

f.          “Contravening Conduct” means the conduct declared by the Federal Court of Australia in these proceedings to be in contravention of Division 1 of Part V of the Act;

g.         “Order of the Court” means the relevant order(s) of the Federal Court of Australia made in these proceedings;

h.         “Panasonic” means Panasonic Australia Pty Ltd (ACN 001 592 187);

i.          “Relevant Provisions” means section 52 of the Act which was contravened by the Contravening Conduct, and Division 1 of Part V of the Act which deals with similar or related conduct;

j.          “Respondent’s Program” means the steps taken by Panasonic to comply with the Order of the Court in relation to the Compliance Program;

q.         “Training” means the training required by paragraph 13 below.

            Compliance Officer

2.                  Panasonic must, within one month of the date of the Order of the Court, appoint a director or a senior employee with suitable qualifications or experience in corporate compliance as Compliance Officer with responsibility for ensuring that the Compliance Program is effectively established, maintained and administered in accordance with the Order of the Court.

3.                  After the appointment of the Compliance officer in accordance with paragraph 2, Panasonic must take all reasonable steps to ensure that, for the duration of the Order of the Court, there is a director or a senior employee with suitable qualifications or experience in corporate compliance appointed as Compliance Officer with responsibility for ensuring that the Compliance Program is effectively established, maintained and administered in accordance with the Order of the Court.

4.                  Panasonic must take all reasonable steps to ensure that for the duration of the Order of the Court the Compliance officer discharges his or her responsibility of ensuring that the Compliance Program is effectively established, maintained and administered in accordance with the Order of the Court.

5.                  Panasonic must take all reasonable steps to ensure that the Compliance officer reports in writing to Panasonic’s board of directors every six months with respect to the on-going maintenance and administration of the Compliance Program.

Compliance Policy

6.                  Panasonic must through its Compliance Officer within two months of the date of the Order of the Court, establish a policy (Compliance Policy) which is communicated in writing to all employees involved in insofar as it directly concerns the advertising or promotion by Panasonic of Panasonic’s products through retail outlets:

a.       a statement of commitment by Panasonic to comply with the Relevant Provisions;

b.       a direction to all such employees to report any compliance related issues and Act compliance concerns to the Compliance Officer;

c.       a statement guaranteeing that employees or any other person involved in that part of Panasonic’s business making a complaint or report in relation to Panasonic’s compliance with the Relevant Provisions will not be prosecuted or disadvantaged in any way by reason of their complaint or report and that their complaint or report will be kept confidential and secure; and

d.       a statement that Panasonic will take disciplinary action against any persons who are knowingly or recklessly concerned in a contravention of the Relevant Provisions and will not indemnify them.

7.         Panasonic must take all reasonable steps to ensure that the Compliance Program is maintained and administered in a manner that is consistent with the Compliance Policy for the duration of the Order of the Court.

8.         Panasonic will provide a copy of the Compliance Policy to all new staff at the commencement of their employment with Panasonic.

            Complaints Handling System

9.         Panasonic must establish, maintain and administer a trade practices complaints handling system in relation to consumer complaints concerning the advertising or promotion by Panasonic of Panasonic’s products through retail outlets.

10.       Panasonic must take all reasonable steps to ensure that the trade practices complaints handling system is in accordance with AS ISO 10002-2006 Customer satisfaction – Guidelines for complaints handling in organisations, though tailored to its own circumstances (Complaints Handling System).

Training

11.       Panasonic must take all reasonable steps to ensure that all directors, officers, employees, representatives and agents of Panasonic, whose duties could result in them being concerned with conduct that may contravene the Relevant Provisions, receive practical training regarding the Act (Training) no less than once annually.

12.       The Training must be conducted by either a suitably qualified compliance professional or legal practitioner with expertise in the Act (the Compliance Trainer).

13.       Panasonic must instruct the Compliance Trainer to design the Training, and must take all reasonable steps to ensure that the Training is designed, to ensure that the persons at the Training are made aware of:

a.       the responsibilities and obligations in relation to the Relevant Provisions;

b.       the potential consequences of contravening the Relevant Provisions;

c.       the areas of Panasonic’s business where it is at risk of contravening the Relevant Provisions, as identified in the Risk Assessment Report; and

d.       the content of the Compliance Program.

14.       Panasonic must provide to the Compliance Trainer, for the purposes of conducting the Training, a copy of:

a.       the Order of the Court;

b.       the Compliance Policy;

c.       the Complaints Handling System.

15.       Panasonic must take all reasonable steps to ensure that an awareness of the Compliance Program forms part of the induction of all new employees, whose duties could result in them being concerned with conduct that may contravene the Relevant Provisions.

REASONS FOR JUDGMENT

INTRODUCTION

1                     The parties are agreed that this application turns on a question of fact.  Moreover, it is a question of fact to be decided on largely undisputed material.  It is whether certain advertisements published by the respondent in late 2008 were misleading and deceptive, contrary to s 52 of the Trade Practices Act 1974 (Cth) (the TP Act).

THE ADVERTISEMENTS

2                     The respondent carries on business as a manufacturer and supplier of electrical goods, including televisions, to consumers in Australia.

3                     Between 23 November and 24 December 2008, the respondent conducted a national advertising campaign by publishing television advertisements, printed advertisements and in-store promotional material relating to the sale of certain models of Panasonic Full HD Viera Plasma televisions (the televisions).  During the time of the promotion, the televisions ranged in recommended retail price from $2,549 to $11,999 (including GST), depending upon the model and the screen size.  There were three models, or series, promoted: PZ850 Series with three screen sizes including a 50” screen, PZ800 Series with three screen sizes, and PZ80 Series with two screen sizes.

4                     The promotion involved the offer of a bonus Nintendo Wii game console (the Bonus Wii) with the sale of any one of the televisions.  The value of the Bonus Wii was stated in the advertising material to be $399.95.

5                     The television advertising was conducted through Channel 7 in Adelaide, Melbourne, Sydney, Brisbane and Perth, and various regional channels in Newcastle and the Central Coast, Gold Coast, Wollongong and South Coast of New South Wales and Queensland, Canberra, Darwin and Tasmania.  There were two forms of the television advertisement.  One ran for 15 seconds and the other ran for 30 seconds.  They were screened between 23 November and 21 December 2008.  The frequency of the television advertising has not been the subject of evidence.

6                     The 30 second television advertisement first showed children playing in the yard of a house with a large empty cardboard box labelled with the respondent’s name and television model, and then apparently their parents playing a game through a Wii on a television.

7                     It is accompanied by a voiceover as follows:

Here’s a very special offer from Panasonic

Buy any Full High Definition Viera Plasma, and you’ll get a large cardboard box for the kids to play with.  Oh, for a limited time, you’ll also get a bonus Wii for Mum and Dad to enjoy – until the kids find out about it.  Good luck.

8                     The 15 second television advertisement shows a similar first scene.  There is a voiceover as follows:

Buy any Panasonic full HD Viera Plasma and you’ll get a large box for the kids and for a limited time you’ll also get a bonus Wii for Mum and Dad – until the kids find out.

9                     Each, during the latter part of the advertisement, has a printed and legible message across the screen for a few seconds: “Buy any Full HD Viera Plasma and get a Bonus Wii”.  After a few seconds, a further printed and barely legible message appears across the screen for 5 or 6 seconds.  It is as follows:  

“Conditions apply.  Offer available between 29/11/08 – 24/12/09.  Offer via redemption.  For full terms and conditions, go to www.panasonic.com.au/vierabonus.”

I do not consider that it is possible to take in all of that message during one watching of either advertisement.  I could take in only the first few words, and then with difficulty.  The full text was absorbed only after a number of viewings.  It is possible, however, to take in that conditions apply.

10                  The printed advertisements were published between 30 November 2008 and 14 December 2008.  They were also in two forms.  One was a double-sided A4 sized two page printed insert advertisement.  It was placed in one edition each of The Canberra Times, Sydney Morning Herald, Queensland Sunday Mail, South Australian Sunday Mail, Perth Sunday Times, Sunday Tasmanian and Northern Territory News.  The other was an A3 sized one page printed advertisement.  It was published as a full page advertisement between 29 November 2008 and 14 December 2008 in one or two editions of the Gold Coast Bulletin, the Sunday Telegraph and the Sunday Herald Sun.

11                  The newspaper advertisements are headed “Buy any Full HD Viera Plasma*.  Each clearly had the dominant message that buying one of the televisions would enable the buyer to get a Bonus Wii.  Text saying so is on the front page of the two page advertisement and on the one page advertisement in the most prominent print size.  Immediately under the large print “and get a Bonus Wii” in small but legible print are the words “via redemption ^†”.  The large text is accompanied by a large picture of a television screen, apparently with a Wii game on the screen, and separately a depiction of the Wii, and in smaller print text indicating its value at $399.95 including Wii Sports.  Across part of the pictured television screen, there is text which says that the offer is for a limited time only.  At the bottom of the first page of each advertisement in lesser printing, but nevertheless legible, is text saying the televisions (with the promotion) are available from all leading retailers and that the offer ends on 24 December 2008.  On the two page advertisement, there is also legible text as follows: “Visit www.panasonic.com.au/vierabonus for more information”, and on the one page advertisement the text “See claim form or visit www.panasonic.com.au/vierabonus for more information”.

12                  The in-store promotional material was published between 23 November and 24 December 2008 in retail stores across Australia.  They included the major retail stores, including Harvey Norman / Domayne, Betta Stores, Retravision, JB Hi-Fi, David Jones, The Good Guys, Myer, Clive Peeters and Bing Lee.

13                  The in-store promotional brochure was of two pages.  The front page, in prominent print and accompanied by a picture of a television screen apparently displaying a Wii game, is the text “Buy any Full HD Viera Plasma* and get a BONUS”.  The second page continued the text with the prominent word “Wii”, under which also in smaller but legible print were the words “via redemption^†” and separately “See claim form or visit www.panasonic.com.au/vierabonus for more information” and words to indicate the offer ended on 24 December 2008, and was for a limited time only.  The same three lines of barely legible text appear underneath those entries, as are on the two print advertisements.

14                  The bottom of each of the advertisements and the promotional brochure in fine and barely legible print appears three lines as follows:

† Purchases must be made between 29/11/08 and 24/12/08.  All claims must be posted within 14 days of original purchase date.  Dated post stamps will be checked.  All claims must be received no later than 16/01/09.  Claims will be fulfilled by registered post within 30 days from 01/02/09.  Maximum of 3 redemptions per household.  For full terms and conditions go to www.panasonic.com.au/vierabonus”.

15                  In fine print at the bottom of each, adjacent to an asterisk is a reference to the participating model numbers of the televisions. 

16                  The second page of the two page advertisement contains more detail of the televisions the subject of the promotion, identifying the series number, the screen sizes and prices.  All of that is in the top third of the page.  The balance of the page then has graphics and text indicating why a Panasonic Full High Definition Viera Plasma television should be purchased and text under the heading “The Panasonic Advantages”.  The last part of the page repeats that buying any of the televisions will let the purchaser get a Bonus Wii valued at $399.95 “via redemption^†”.  At the bottom of the page in barely legible print is in substance the same text as appears at the bottom of the first page.

17                  It is not suggested that in any relevant respect the terms of the two printed advertisements or the promotional brochure were materially different.

THE ALLEGATIONS

18                  The applicant alleges that each of those publications represented that each purchaser of one of the televisions would get a “Bonus Wii”, that is a brand of electronic game console for playing on a television, “via redemption”.  It alleges that each of the advertisements was misleading and deceptive, contrary to s 52 of the TP Act because the advertisements did not disclose, or did not adequately disclose, certain key conditions of the redemption procedures, but gave the misleading message that a consumer who purchased one of the televisions during the promotion period, and submitted a claim for a Bonus Wii, would receive a Bonus Wii when that was not necessarily the case.

19                  The redemption claim procedures required buying one of the televisions during the promotion period.  They required the lodging of a claim form.  They also required proof of purchase by production of the original invoice.  The applicant does not complain about those matters. 

20                  It is common ground that the key conditions of the redemption claim procedures required the making of a written claim on the appropriate form, which included details of the serial number of the television purchased.  It is also accepted that the serial number could only be obtained by the buyer on delivery of the television.

21                  The applicant says the conduct of the respondent, through the advertisements, was false and misleading because they did not disclose that:

1.                  to complete the claim form, the buyer needed to specify the serial number of the television purchased;

2.                  the serial number of the television purchased was only available to the purchaser when the television purchased had been delivered, as it appeared only on the box or on the television itself;

3.                  the television which had been bought might not be delivered until after the buyer had “bought” the television (the word “bought” is in quotes because the respondent made a submission about when the purchase of a television was effected; the submission is considered below); and

4.                  the claim form had to be submitted within 14 days of the purchase, and before 16 January 2009.

22                  Consequently, the applicant says that the advertisements were misleading and deceptive because they failed to disclose, or adequately to disclose, a fundamental requirement that a consumer had to meet before being eligible for and receiving the Bonus Wii.  The applicant contends that the advertisements gave the misleading impression that all consumers would be entitled to a bonus Wii upon by buying a television during the promotion period and submitting a claim within a reasonable time when that was not the case.

THE EVIDENCE

23                  It is convenient, before turning to the relevant principles, to record my findings on matters addressed in the evidence, including by the statement of agreed facts. 

24                  The claim form to redeem a Bonus Wii was available in hard copy in the retail stores or through the website of the respondent.  The claim form explained that there were three steps to claim a Bonus Wii:

·                    buy one of the televisions;

·                    complete and mail the claim form to the specified address with the original purchase receipt; and

·                    await the confirmatory letter.

The claim form had to be posted within 14 days of the purchase date.  The required information on the claim form included the purchase date, the receipt number, the model number and the serial number.  Reference was made to the website for the full terms and conditions.

25                  The claim form also had to be received by 16 January 2009.

26                  Clearly, the respondent at some point recognised that some televisions might not be able to be delivered, or might not be delivered, within 14 days of being paid for in a retail store.  Then the purchaser could not satisfy the conditions because the claim form could not be completed and sent in within the specified time.  One source of the respondent recognising the difficulty of a consumer being able to secure a Bonus Wii came through a complaint, made on 18 December 2008.  That consumer apparently wanted to buy and have delivered one of the televisions.  She had contacted nine retailers who did not have her chosen model in stock.  She had apparently been told that the respondent would not be shipping stock of that model until late January, after the 16 January 2009 deadline.  That consumer, at least, appreciated the need for delivery by 16 January 2009.  The respondent though its “Customer Care” was initially unresponsive, indicating by email of 19 December 2008 there had been a massive response to the promotion, but the terms of eligibility for the Bonus Wii could not be changed.  That consumer was not put off.  She contacted the respondent by telephone without satisfaction and by email on 22 December 2008 asserting that the advertising was misleading, as she had been trying since the start of December to buy the particular television through nine large retailers; she was by then aware that the conditions required the retailer to deliver the television within 14 days of its purchase, and that delivery was necessary to be able to specify the serial number.  The respondent’s Customer Care responded on 29 December 2008 that it was sorry she was, in the circumstances, ineligible for the Bonus Wii.  The evidence indicates the Customer Care service was subcontracted.  Ultimately, apparently she was able to buy her chosen model and the respondent in April 2009 arranged for her to get a Bonus Wii. 

27                  Generally, the larger retail stores kept a supply of the televisions in stock and used them to meet purchases, as well as having models for display.  I infer that smaller retail stores would not routinely have in stock all the models of the televisions at any one time, or routinely more than one model of any of the televisions.  It depended on the size of the store.  The respondent had a warehouse in each capital city.  If a delivery of further stock was requested from the respondent, delivery to the retailer took only one to two days within a capital city.  The evidence did not indicate the position in relation to retail stores in country centres.  I infer that the respondent’s time frame for delivering stock to country centres was sometimes longer than two days.  In addition, time would be taken whilst a retailer received stock delivered by the respondent, recorded it, and then allocated it to a consumer’s purchase and delivered it.  The respondent’s evidence did not indicate whether its normal delivery processes operated between Christmas and the New Year.  There was no evidence as to how retailers’ inward receipt and delivery processes occurred during that period.

28                  The Marketing Communications Manager of the respondent gave evidence.  The conduct of the promotion was managed by an external marketing and communications company, which then outsourced the development of the website www.panasonic.com.au/vierabonus.  It then established and serviced the telephone contact line.  In turn, that company outsourced the “fulfilment process”, that is claims processing and supply of the Bonus Wii to consumers.  The Marketing Communications Manager spoke regularly with the account director of that external marketing and communications company between November 2008 and February 2009, including receiving information about the number of claims and the number of defective claims.

29                  Recently the respondent has attempted to get from its outsourced contractor copies of the letters passing between it and consumers relating to the promotion, but has been informed that they could not be recalled from the computer records of the contractor.

30                  It is not disclosed how many televisions in the “massive response” were sold during the promotion, and how many claims were made for redemption of a Bonus Wii.  The respondent does not apparently have access to the records to show that.

31                  In the circumstances referred to, I conclude that there were some consumers who, having bought a television during the promotion period, did not get delivery of it until it was too late to make the claim and simply did not do make a claim. 

32                  Not all consumers simply decided to make no claim.  Some made an incomplete or belated claim.  The respondent, following the complaint referred to above, realised that both its retailers and itself did not have available stock to meet purchasers of one of the specified models, and may not be able to give delivery until after 16 January 2009.  It decided to extend the period for claims to be lodged where the television was on “backorder”.  The evidence suggested that eventually “backorder” deliveries extended to April 2009.  The respondent was also faced with the difficulty of identifying claims received after 16 January 2009 which were late because of delayed delivery and those which were simply late even though delivery was made before 16 January 2009.  It had no ready means of distinguishing between them, and so decided to accept all late claims, provided they otherwise complied with the conditions.  The respondent also was made aware by its subcontractor that some claims had been received by 16 January 2009, but were either incomplete because the serial number was missing or were unsatisfactory because the serial number was not fully legible or was incomplete.  It also decided to give those consumers the opportunity to resubmit completed claim forms.  It did not generally publicise those decisions.  It did not change the claim form available in retail stores or on its website.  It did not change the terms and conditions specified on its website. 

33                  As I have indicated, on the basis of the evidence, including the agreed facts, I find there were clearly circumstances where a buyer might not receive delivery of a television purchased within 14 days of the purchase.  Consequently, because the claim form had to be lodged within 14 days of buying a television (and before the specified date of 16 January 2009), it follows that there were circumstances where a buyer was not able to comply with the redemption terms or procedures and was not entitled to receive the Bonus Wii, even though the television was bought within the promotion period.  Those matters are apparent from the inspection of the relevant documents on the respondent’s website including its “Terms and Conditions”, its “Frequently Asked Questions” and its Claim Form.  I also find that some buyers, having purchased one of the televisions but having got delivery too late to make a timely claim, simply did not make one.  There may well have been others who did not make one after contacting the respondent’s Customer Care line and being given the kind of response given to the particular consumer referred to above.

THE ISSUES

34                  The key issues to be decided, as agreed by the parties, are whether the terms and conditions of the promotion relating to the redemption claim procedures were adequately disclosed in the advertisements in all the circumstances, and if not, whether in the circumstances the advertisements were misleading or deceptive.  Obviously, the applicant asserts that the terms and conditions of the promotion were not adequately disclosed, and that the advertisements were misleading or deceptive because a consumer would be left with the overriding impression that the consumer would be able to get the Bonus Wii upon buying one of the televisions within the promotion period and submitting a claim (in a timely manner). 

35                  The respondent, whilst acknowledging the facts recorded above, disputed that any of the advertisements were misleading or deceptive in contravention of s 52 of the TP Act for the following reasons:

1.                  a consumer did not “buy” a television during the promotion period at a retail store merely by ordering one and paying a retailer for it where the retailer had no television in the store to meet the order;

2.                  the advertisements made it clear that, in any event, a buyer of a television, or alternatively a buyer would realise that, there were conditions which had to be fulfilled before being eligible for the Bonus Wii; and

3.                  the advertisements, at worst, made no representation as alleged but went no further than leaving the buyer of a television in an uncertain state of mind as to whether that person was or was not entitled to a Bonus Wii, and that checking the conditions would make the position clear.

36                  In addition, the respondent contends that the advertisements were not misleading or deceptive because the decisions made in January 2009 enabled a consumer who had bought a television in the promotion period to be eligible for a Bonus Wii if the claim form was submitted by the specified date without the serial number or with the serial number incomplete or not sufficiently clear, and the serial number could subsequently be provided on a resubmitted claim form.

37                  The respondent also puts in issue the question as to the appropriateness of the relevant relief claimed by the applicant if a contravention of s 52 of the TP Act is made out.

THE PRINCIPLES

38                  The applicable principles are well settled.  Whether an advertisement is misleading or deceptive is a question of fact to be decided in the particular circumstances of each case.  So much is uncontentious.  See for example the remarks of Gyles J in Australian Competition and Consumer Commission v Telstra Corporation Ltd (2004) 208 ALR 459 at [49].

39                  In deciding that question of fact, it is necessary to identify the relevant section of the public, or target audience, and to determine whether, from the perspective of a hypothetical reasonable member of that target audience, or a significant number of reasonable persons in that class, they would have been misled by the terms of the advertisement: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 199 per Gibbs CJ and at 210-211 per Mason J (Parkdale); Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 at [101]-[103] per Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ (Compomar). 

40                  In Campomar, their Honours, when discussing cases where the alleged representations were made to the public or a large section of the public (as in the present matter), said at [101]-[103]:

… the issue with respect to the sufficiency of the nexus between the conduct or the apprehended conduct and the misleading or deception or likely misleading or deception of prospective purchasers is to be approached at a level of abstraction not present where the case is one involving an express untrue representation allegedly made only to identified individuals.

It is in these cases of representations to the public, … that there enter the “ordinary” or “reasonable” members of the class of prospective purchasers.  Although a class of consumers may be expected to include a wide range of persons, in isolating the “ordinary” or “reasonable” members of that class, there is an objective attribution of certain characteristics.  Thus, in Puxu, Gibbs CJ determined that the legislation did not impose burdens which operated for the benefit of persons “who fail[ed] to take reasonable care of their own interests”.  In the same case, Mason J concluded that, whilst it was unlikely that an ordinary purchaser would notice the very slight differences in the appearance of the two items of furniture in question, nevertheless such a prospective purchaser reasonably could be expected to attempt to ascertain the brand name of the particular type of furniture on offer.

Where the persons in question are not identified individuals to whom a particular misrepresentation has been made or from whom a relevant fact, circumstance or proposal was withheld, but are members of a class to which the conduct in question was directed in a general sense, it is necessary to isolate by some criterion a representative member of that class.  The inquiry thus is to be made with respect to this hypothetical individual why the misconception complained has arisen or is likely to arise if no injunctive relief be granted.  In formulating this inquiry, the courts have had regard to what appears to be the outer limits of the purpose and scope of the statutory norm of conduct fixed by s 52.  Thus, in Puxu, Gibbs CJ observed that conduct not intended to mislead or deceive and which was engaged in “honestly and reasonably” might nevertheless contravene s 52.  Having regard to these “heavy burdens” which the statute created, his Honour concluded that, where the effect of conduct on a class of persons, such as consumers, was in issue, the section must be “regarded as contemplating the effect of the conduct on reasonable members of the class” (references omitted).

41                  In deciding whether the alleged representation has been made, it is necessary to look at the entirety of the words and conduct in their context, and not merely to select some particular words or conduct in isolation: Parkdale per Gibbs CJ at 199 and per Mason J at 210-211.  In the present context, I accept that the televisions were moderately expensive consumer items, so that a reasonable person would be aware that there was a procedure to be followed and some conditions to be met to receive the Bonus Wii.

42                  I also accept that the ordinary or reasonable members of the classes of prospective purchasers of the televisions must have been misled into forming an erroneous belief if the application is to succeed.  It is not sufficient that particular conduct caused mere confusion or wonderment: Campomar at [106]; Parkdale at 198 per Gibbs CJ and at 209-210 per Mason J.  There must be a logical causal connection between the conduct and the erroneous belief, so “assumptions by persons whose reactions are extreme or fanciful” are not of significance: Campomar at [105]. 

CONSIDERATION

43                  I do not accept that the televisions were bought, for the purposes of the advertising promotion, only when a particular television was delivered or alternatively designated to fulfil a particular invoice.  That may be correct as a matter of strict law: Sale of Goods Act 1895 (SA), s 1(3); In re Goldcorp Exchange Ltd (in receivership) (1995) 1 AC 74 at 90.  It is clearly not what was conveyed by the advertisement, nor how the concept of buying a television would have been understood by a consumer.  It is also clearly not how the respondent wanted to convey the meaning of buying a television.

44                  I find that the advertisements each conveyed that buying a television, for the purposes of the promotion, was the selection of a particular model and paying for it, so that the retail store had issued an invoice for it.  That is what a consumer would have thought at the time.  The consumer would have left the retail store saying: I have bought the (model) television.  The delivery of the television would not have been seen as perfecting the purchase, so there was no buying of the television until it was delivered.  The consumer, chasing up delivery, would not have said: I am about to buy a television, and have paid for it.  The consumer in those circumstances would have said: I have bought a television and paid for it; this is the invoice detail; where is my television?

45                  The respondent’s own material confirms that.

46                  The conditions on the advertisements clearly contemplated a time lapse between buying a television and its delivery.  It required “purchases” between certain dates up to 24 December 2008.  Clearly, the televisions were so bulky as to require delivery.  If one allows (say) four business days for delivery of a television in stock in a retail store, that would mean the advertisements required the selection and payment to be made by 20 December 2008 so the purchase was effected (assuming timely delivery) by 24 December 2008.

47                  Moreover, the respondent’s own documents indicate that it recognised that buying a television involved selecting the model and paying the retailer.  In the terms and conditions on the website Condition 1(a) provided:

Purchase and pay in full for a participating Panasonic Viera Full High Definition (“Full-HD”) Plasma listed in paragraph 6 (“Participating Products”) from an authorised Panasonic participating retailer during the promotional period (see clause 5); Participating Panasonic retailers must deliver (if applicable) the Participating Product to the claimant within 14 days from the purchase date of the Participating Product.  The Promoter is not responsible for deliveries of Participating Products that are late, lost or stolen.

Clearly, that distinguishes between the purchase of a television and its delivery.  It does not say the delivery must be within the promotional period.

48                  The requirement for the claim to be made within 14 days of the purchase date, together with the requirement for the original invoice, confirms that.  The invoice date will not specify the delivery date.  The claim form does not require the delivery date to be specified.  If the purchase date were the delivery date, there would be no way of verifying the claim having been submitted within 14 days of the purchase date.  The claim form (whether collected in store or from the website) juxtaposes the original purchase receipt with the purchase date: “Please note that you must post your original purchase receipt within 14 days of your purchase date”.

49                  I accordingly reject that contention made by the respondent.

50                  I also reject the contention that the advertisements were, at worst, merely confusing or merely prompted the buyers of one of the televisions to go to the website to check the conditions.  In my judgment, the advertisements each represented that a consumer, on buying (that is selecting and paying for) one of the televisions from a retailer so that the consumer then had the purchase receipt would be eligible to receive a Bonus Wii by submitting a claim form to secure its redemption.

51                  A consumer would have understood that there were conditions attached to the representation, but not that the conditions were such that, notwithstanding that the consumer acted with reasonable promptness, they could not be met.  In my view, a reasonable consumer would have understood that a claim form would have to be filled out, that the claim form would require details of the purchase, and that the claim form would be required to be submitted within a reasonable time of the purchase.  That was specified at 14 days after the purchase and in any event by 16 January 2009.  The applicant makes no complaint about those conditions.

52                  The agreed facts indicate that that was not the case in a number of instances.  Briefly, that is because it was necessary for the consumer to make a claim on a form which required insertion of the serial number of the purchased television.  The serial number could only be obtained either from the box in which the television was delivered or from the television itself when it had been delivered (putting aside those consumers who somehow managed to carry the television away from the store where it was bought).  The evidence is that, although some retailers had stocks of the range of televisions advertised, on occasions the retailer would sell or agree to sell a television which was not in stock and which the retailer would procure from the respondent to supply onwards to the purchaser.  Within the metropolitan areas of each of the States, generally the supply by the respondent in response to a retailer’s order would be one to two days, although the evidence does not indicate whether that was the case during December 2008, or during the whole of December 2008, or indeed over the Christmas period and early into 2009.  In addition, the evidence indicates that the respondent did not have adequate supplies of one of the models of one of the series of televisions, that which was the cheapest, available within Australia and there was a considerable delay in arranging the delivery of a television which was bought within the promotional period.  The consumer was dependent firstly upon the retailer processing the purchase order within a prompt period of time, including over the Christmas period, and, in the event that the retailer did not have the product in store, as it was accepted by the witness from the respondent who gave evidence is not uncommon in the smaller stores or in remote or regional areas, that a retailer would proceed in a time which the retailer accommodated the forwarding of an order from the respondent, the receipt and processing inwards of the delivered product whenever it was delivered, and then the on-delivery of the purchased product.

53                  However, the representation in my view did not convey that matters outside the control of the purchaser could disqualify the purchaser from receiving a Bonus Wii.  The fact is that they could do so, for the reasons noted above. I do not accept that the reasonable buyer, taking reasonable care in that buyer’s own interests, was told that by the representation or had attention drawn to that.  The contrary is the case.  None of the advertisements said that.  The television advertisements, apart from the small print shown for several seconds did not do so.  I have found that small print was so fleeting and hard to absorb that it conveyed no more than that conditions applied.  The same is true of the newspaper advertisements and the in-store promotion.  But I am of the view that to say that conditions apply is not to cause the buyer to be uncertain about eligibility for a Bonus Wii.  To convey that would be against the entire thrust and message of the advertisements.  They did not say the buyer might get a Bonus Wii.  They said the buyer would get a Bonus Wii.  The reference to conditions was reasonably understood as requiring a buyer to take steps promptly to secure a Bonus Wii, and to do so within the limited time period.  The reference to conditions did not convey that the buyer or some buyers, through no fault of the buyer and beyond the buyer’s control, would not be eligible for a Bonus Wii.

54                  Many buyers of one of the televisions would have purchased the television, including having paid for it, and only then have taken up the claim form.  Some may only later have seen the claim form on the website.  In either event, it would only have been at the point of filling in the claim form and appreciating the need for the serial number, and then the need for delivery, that the ineligibility for a Bonus Wii would have appeared.  Some buyers may then have contacted the Consumer Care service.  The evidence does not suggest they would have got a positive response.

55                  I have referred above to the evidence about the respondent’s decision to accommodate belated or incomplete claim forms.  I do not accept that its decision leads to the conclusion that the representation was not, therefore, misleading or deceptive.

56                  I am satisfied that, by reason of the possible combination of events, particularly in the period leading up to Christmas when (as the evidence shows) sales tended to increase significantly compared to the earlier period of the promotion, a number of consumers purchased televisions covered by the promotion but did not get delivery of them within 14 days of purchase or at least within such a time that, within 14 days of the purchase, the consumer was practically able to make the claim including the details of the serial number of the purchased television within 14 days of the purchase.  It is not possible to know how many consumers may have been affected that way.  There is no information as to the number of televisions purchased during the promotion period, other than the respondent describing the response to the promotion as “massive”.  Nor does the evidence show the number of claims made for the Bonus Wii.  However, I am satisfied that there was a not insignificant number of consumers who bought one of the televisions during the promotion period, but received delivery at about the time of or after the elapse of 14 days from buying the television and then, because they could not satisfy the conditions specified on the claim form, did not make the claim for a Bonus Wii even though they were induced by the promotion to buy the television.  In that group of consumers, there may have been persons who contacted the Customer Care number of the respondent and were told the conditions were inflexible.

57                  It is a fortunate fact of modern life that many, indeed most, in our society accept the adverse vicissitudes of life without reaction (and some unfortunately do not do so).  I am satisfied many consumers, whether or not they contacted Customer Care, would have taken no further the frustration of not being eligible for a Bonus Wii because the television they bought was delivered too late.  In that regard, it is of note that the respondent did not publish any corrective advertising, nor alter the terms and conditions on its website.  Nor, so far as the evidence shows, did it attempt to contact retailers to ask them to convey to purchasers of one of the televisions which had been delivered belatedly that a late claim would be entertained.

58                  For those reasons, I am satisfied that the respondent has contravened s 52 of the TP Act in the manner alleged by the applicant.

59                  I propose to make a declaration as to the contraventions which I have found to have been established.  It is important that the declaration should accurately specify the offending conduct, rather than simply refer to it in general terms.  I have taken into account the respondent’s contentions in expressing the terms of the declaration.  The respondent accepted that an appropriately expressed declaration should be made if I found the contraventions alleged had been established.

60                  It is not necessary to discuss in these reasons in any further detail the terms of the declaration.

61                  The applicant also sought injunctive orders.  There is no doubt as to the Court’s power to make such orders under s 80 of the TP Act.  I do not consider that it is necessary or appropriate to do so in this instance.  I accept that the contravention was accidental, and that the respondent did not intend to mislead or deceive consumers in the way that it did.  Its response, when the problem was brought to its attention, was less than satisfactory; it was uncompromising through its Customer Care section.  However, soon after that it recognised the problem, at least in respect of one of the models of television and then made decisions to accept belated claims in respect of that model because it could not itself meet delivery orders and then belated claims generally because it was hard to identify belated claims due to late delivery of that model only.  It also decided to accommodate incomplete claims where the serial number was missing or incomplete.  However, as I have observed above, it made no effort to inform other buyers of those decisions who might simply have decided they were unable to meet the conditions and did not make a claim.  I do not think that the sanction of contempt of court for disobeying an injunction will add to the motivation of the respondent to avoid such a contravention in respect of any similar promotion it conducts in the future: cf BMW Australia Ltd v Australian Competition and Consumer Commission [2004] FCAFC 167 at [39].  There is nothing to suggest this form of promotion is systematic within the respondent, with the deficiencies I have found, or that such a promotion in the future will include those deficiencies.  I note that there was some evidence that some other manufacturers of televisions and like products periodically engage in similar promotions of giveaways with a purchase of their products.  The declaratory order I propose to make will have a sufficiently salutary effect on those engaging in such promotions to ensure they are not in contravention of s 52 of the TP Act in the same or similar ways to the conduct of the respondent.

62                  The applicant also seeks orders that the respondent undertake newspaper advertising in the newspapers in which the misleading advertising was placed, and publish on its website, notice of a summary of the conclusions of the Court on this application (if it were made) of any injunctive orders.  The proposed publication of the outcome of the application is not directed specifically to those consumers who may have been eligible for a Bonus Wii but for delayed delivery of their television.  It might have been possible to propose orders to that end, albeit difficult given the elapse in time.  The proposed orders in the circumstances, as I have decided not to make any injunctive order, would really do no more than provide a means of publicising the decision of the Court and “announce a ‘win’ for” the applicant; see Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc (1999) 95 FCR 114 at [49] per French J (as he then was).  The applicant contends an order would not merely announce a win but would inform the market of the outcome of the litigation so that they have “at least a broad understanding” of the way in which the Court has applied the norms of conduct prescribed by the TP Act: Australian Competition and Consumer Commission v Boost Tel Pty Ltd [2010] FCA 701 at [117] per Siopis J.  I do not agree in the circumstances of this case.  As noted above at [61], although there is some evidence that some participants in the industry participate in similar promotions, I do not accept that it is such an endemic industry problem that corrective advertising is necessary.  The declaratory order I propose to make will have a sufficiently informative effect on the participants in the industry.

63                  It is important to note that the power to order advertising is protective or corrective or remedial rather than punitive: Australian Competition and Consumer Commission v Signature Security Group Pty Ltd [2003] FCA 3 at [46] per Stone J.  Consequently, as her Honour then said at [46]-[49], with the progressive elapse of time, the utility of such advertising diminishes.

64                  In my view, having regard to the circumstances in which this contravention was committed, including that contravening the conduct was not deliberate, I do not consider there is sufficient utility in requiring the respondent to undertake the proposed advertising to warrant the making of such an order.

65                  Finally, the applicant seeks an order that the respondent establish a Trade Practices Compliance and Education/Training Program, to be maintained at its own expense for a period of three years, and that a copy of any documents generated in the process be provided to the applicant.  That, too, is resisted by the respondent.

66                  The Court clearly has power to make such an order, under ss 80 and 86C(2) of the TP Act; see eg Australian Competition and Consumer Commission v Allergy Pathway Pty Ltd [2009] FCA 960; Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] FCA 682.

67                  Section 86C(4) empowers the making of a probation order to ensure the contravenor does not engage in the contravening conduct, or similar conduct, in the future.  The respondent contends that the applicant’s proposed order is too broad.  The proposed order is to ensure the employees of the respondent are aware of their responsibilities and obligations “in relation to the conduct declared by the Court in this proceeding to be in contravention of the [TP Act] and any similar or related conduct”.

68                  There is no evidence of the respondent having a trade practices compliance program.  Nor is there any explanation as to why any trade practices compliance program it does have allowed the contravening conduct to occur.  Nor is there any evidence to indicate what, if any, steps it has taken to avoid the sort of contravening conduct which has occurred.  It is appropriate in my view in the circumstances to make a probation order of the general kind suggested by the applicant.  The respondent, through its Customer Care section, was unresponsive to a valid concern of one known consumer, and as I have concluded to some other consumers.  That was so, even though in respect of the particular model offered as part of the promotion, neither it nor its retailers had adequate stock to satisfy the demand which the promotion was intended to, and did, generate.  It was only when the matter came to the attention of its more senior management that that problem was addressed.  The evidence shows that other late claims were accepted partly because of the difficulty of identifying which of the late claims were not related to the respondent’s own inability to supply to meet the purchase orders, and partly because of a desire to avoid upsetting the purchasers concerned.  The making of such an order, in the circumstances, would not be punitive: cp Australian Competition and Consumer Commission v 4WD Systems Pty Ltd [2003] FCA 850 at [214].  It will procure a process for a more alert and educated consideration about the nature of the representations contained in such a promotion and to ensure those representations are not misleading and deceptive.

69                  In two respects, I consider the proposed order is too broad.  First, it requires the compliance program to be for “the employees or other persons” involved in the respondent’s business.  I am uncertain about who the “other persons involved in its business” may be.  I do not regard it as appropriate to make an order obliging the respondent to establish and implement a trade practices compliance program which extends to external consultants or contractors, or (as in this case) subcontractors to its contractors, generally.  It is not clear how the respondent could routinely do that.  Nor is there a sufficient basis for knowing whether the respondent, in its advertising campaigns, routinely uses the same contractors or agents or whether they are selected on a case by case basis.  Nor is there a way of knowing whether those contractors or agents have their own trade practices compliance program.

70                  Secondly, in my view, in the particular circumstances, the Trade Practices Compliance and Education/Training Program proposed by the applicant goes beyond what is appropriate.  I have significantly modified its proposal to address more specifically what I regard as the shortcomings in the respondent which led to the contravening conduct.  The program which the orders of the Court require is focused on establishing within the respondent a structure to ensure that its employees know of the relevant provisions of the TP Act and are educated about their significance when developing or managing the advertising and promotion of its products by Panasonic, and also about the respondent’s dealing with consumer complaints about the accuracy of its advertising and promotion of its products.  I do not consider the more sophisticated provisions sometimes included in such a program are necessary or appropriate having regard to the present circumstances, so I have not included the suggested clauses dealing with risk assessment or external review.  Nor have I required the detailed level of upwards reporting within the respondent which it sometimes included, simply as a recognition of the sort of level, on the evidence, at which decisions are taken and approved within the respondent on such promotions as that which led to the contravention of s 52 of the TP Act.

71                  In the circumstances, I also do not consider it is appropriate for the respondent to be required to do other than to confirm to the applicant that it has implemented a program in accordance with the order I propose to make.  It is not necessary that the applicant have the opportunity to comment upon the steps which the respondent has taken.  It is not clear that it seeks that role, or that it can or should be given that role.  The respondent has the responsibility of complying with the order, and by reference to AS ISO 10002-2006 Customer Satisfaction – Guidelines for complaints handling in organisations, there is sufficient precision in what the order expects for the respondent’s compliance to be assessed in the future if that were to become necessary.  It follows also that it is not necessary, in my view, that the respondent should be required to provide to the applicant a copy of any documents it generates in compliance with the order.  It is not apparent to me that there is any particular need for the applicant in the future to oversee the respondent’s conduct of such a compliance program, or indeed that it can or should be given that function by the Court.  If it does not have such a role, it does not need to see the detailed content of the program.

72                  For those reasons, I will make the declaratory orders and probationary orders published with these reasons.  The respondent should also pay the applicant its costs of the application.

Associate:

Dated:         12 August 2010