Federal Court of Australia
Australian Competition and Consumer Commission v Secure Parking Pty Ltd [2024] FCA 884
ORDERS
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant | ||
AND: | SECURE PARKING PTY LTD ACN 108 043 689 Respondent | |
DATE OF ORDER: |
BY CONSENT, THE COURT DECLARES THAT:
1. In the period 1 July 2017 to 30 June 2022, Secure Parking Pty Ltd (Secure Parking), in trade or commerce and in connection with the supply or possible supply of services (being Secure-a-Spot) or the promotion of the supply or use of those services in Australia, on the Website (www.secureparking.com.au), in Subscriber emails, in Facebook posts and in YouTube videos:
(a) engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of section 18 of the Australian Consumer Law (the ACL), consisting of Schedule 2 to the Competition and Consumer Act 2010 (Cth);
(b) made false or misleading representations that Secure-a-Spot had a use or benefit which it did not have, being the use or benefit of reserving a parking space at the particular time, date and location nominated by the consumer, in contravention of section 29(1)(g) of the ACL; and
(c) engaged in conduct that was liable to mislead the public as to the nature, characteristics, and/or suitability for purpose of services, being that a Secure-a-Spot booking would reserve a parking space at the particular time, date and Car Park nominated by the consumer, in contravention of section 34 of the ACL;
by representing to consumers that, by using Secure-a-Spot, a consumer would have a parking space reserved for them for the time, date and location specified in the booking they had paid for, when that was not the case.
BY CONSENT, THE COURT ORDERS THAT:
Pecuniary penalty
2. Secure Parking pay the Commonwealth of Australia a pecuniary penalty in the amount of $10,950,000.00 in respect of the contraventions of sections 29(1)(g) and 34 of the ACL, within thirty (30) days of the date of this order.
Injunction
3. Secure Parking be restrained, whether by itself, its officers, employees, agents or otherwise, for a period of 5 years from the date the order is made by the Court, from making any representations in the supply or promotion of its parking services that by making a booking using its services, a consumer would have a parking space reserved for the time, date and location specified in the booking they had paid for, unless that was the case.
Non-punitive orders
Disclosure orders
4. Secure Parking, at its own expense and within 14 days of the date this order is made by the Court, provide a disclosure notice, in the form set out at Annexure 1, describing the Court’s findings of contravention and the effect of the Court’s final orders in these proceedings by sending it by email to all consumers on its subscriber email list.
5. Secure Parking, within 21 days of the date of this the order, file and serve an affidavit verifying its compliance with paragraph 4 above.
Corrective publication orders / adverse publicity orders
6. Secure Parking, at its own expense and within 14 days of the date this order is made by the Court, publish or cause to be published on the homepage or each landing page of its Website a corrective notice in the terms and form set out at Annexure 2 (Notice) ensuring that the Notice complies with the following specifications:
(a) the Notice is viewable by clicking a ‘click-through’ icon (Click-through Icon);
(b) the Click-through Icon:
(i) is located in the top third of each page of the Website on which it appears, and is not obscured, blocked or interfered with by any operation of the Website;
(ii) consists of a black bordered box at least 255 pixels wide by 60 pixels high;
(iii) contains the words “Corrective Notice ordered by the Federal Court of Australia – Breaches of the Australian Consumer Law” and “Click here for further information” in at least 18-point black (or 12-point black for the mobile homepage), bold Arial font, on a white background and centred; and
(iv) operates as a one-click hyperlink to a page containing the Notice;
(c) the Notice:
(i) occupies the entire webpage that is accessible via the Click-through Icon;
(ii) must not be displayed as a ‘pop up’ or ‘pop under’ window;
(iii) must be crawlable (i.e. its contents must be able to be indexed by a search engine); and
(iv) must be maintained for a period of 90 days from the date of publication.
Compliance program
7. Secure Parking, at its own expense, review and maintain, for three years from the date on which it is reviewed, its existing compliance program to ensure compliance by it and its related bodies corporate, employees and agents, with the ACL, and particularly sections 18, 29(1) and 34 of the ACL, in the terms in Annexure 3.
Other orders
8. The Respondent pay $50,000 in respect of the Applicant’s costs of, and incidental to, this proceeding, within thirty (30) days of the date of this order.
THE COURT ORDERS THAT:
9. The parties file a replacement Statement of Agreed Facts within 14 days of the date of this order.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ANNEXURE 1
DISCLOSURE NOTICE BY SECURE PARKING
Disclosure Notice ordered by the Federal Court of Australia Secure Parking made misleading representations about its Secure-a-Spot online booking service |
Following legal action by the Australian Competition and Consumer Commission (ACCC), the Federal Court of Australia has imposed a penalty of $10.95 million on Secure Parking, declaring that it engaged in misleading or deceptive conduct and made false or misleading representations, in contravention of the Australian Consumer Law. Secure Parking represented to consumers that by using its Secure-a-Spot online booking service a consumer would have a parking space reserved for them for the time, date and location specified in the booking they had paid for, when that was not the case. These representations were made on Secure Parking’s website, in subscriber emails, in Facebook posts and in YouTube videos. The Federal Court ordered that this letter be sent by Secure Parking to all subscribers on its customer database. More information in relation to the action taken by the ACCC is available on the ACCC’s website at [ACCC URL]. |
ANNEXURE 2
CORRECTIVE NOTICE ORDERED BY THE FEDERAL COURT OF AUSTRALIA - BREACHES OF THE AUSTRALIAN CONSUMER LAW
CLICK HERE FOR FURTHER INFORMATION
Federal Court found Secure Parking made false or misleading representations about its Secure-a-Spot online booking service |
Following legal action by the Australian Competition and Consumer Commission (ACCC), the Federal Court of Australia has imposed a penalty of $10.95 million on Secure Parking, declaring that it engaged in misleading or deceptive conduct and made false or misleading representations, in contravention of the Australian Consumer Law. Secure Parking represented to consumers that by using its Secure-a-Spot online booking service a consumer would have a parking space reserved for them for the time, date and location specified in the booking they had paid for, when that was not the case. These representations were made on Secure Parking’s website, in subscriber emails, in Facebook posts and in YouTube videos. The Federal Court also ordered Secure Parking to publish this corrective notice. |
ANNEXURE 3
COMPETITION AND CONSUMER COMPLIANCE PROGRAM
Secure Parking Pty Ltd (Secure Parking) will establish or review and maintain its existing competition and consumer compliance program to ensure compliance with the Australian Consumer Law (ACL), being Schedule 2 of the Competition and Consumer Act 2010, and which complies with each of the following requirements:
Appointments:
1 Within 1 month of the date of the order of the Court (Court Order) coming into effect, Secure Parking will appoint a director or senior manager with suitable qualifications or experience in corporate compliance as responsible for ensuring the Compliance Program is effectively designed, implemented and maintained (Compliance Officer).
Compliance Officer Training
2 Within 3 months of the Court Order coming into effect, Secure Parking will ensure that the Compliance Officer attends practical training focusing on the ACL.
3 Secure Parking will ensure that the training is conducted by a suitably qualified compliance professional with expertise in competition and consumer law.
Complaints Handling System
4 Within 3 months of the Court Order coming into effect, Secure Parking will review its internal complaints handling procedure for identifying, classifying, recording, storing and responding to consumer law complaints.
5 Secure Parking will ensure that staff and customers are made aware of the Complaints Handling System.
Staff Training and Induction
6 Secure Parking will ensure that the Compliance Program includes a requirement for regular (at least annual) training for all directors, officers, employees, representatives and agents of Secure Parking (Staff Training), whose duties could result in them being concerned with conduct that may contravene the ACL.
7 Secure Parking will ensure that the Compliance Program includes a requirement that awareness of Secure Parking’s obligations under the ACL forms part of the induction (Induction) of all new directors, officers, employees, representatives and agents whose duties could result in them being concerned with conduct that may contravene the ACL.
8 Secure Parking will ensure that the content of the Staff Training and Induction is reviewed and settled by a suitably qualified compliance professional or lawyer with expertise in competition and consumer law.
Reports to Secure Parking Board/Leadership Team
9 Secure Parking will ensure that the Compliance Officer reports to the Secure Parking Board every 12 months on the continuing effectiveness of the Compliance Program.
Compliance Review
10 Secure Parking will cause an annual review of the Compliance Program (Review) to be carried out in accordance with each of the following requirements:
10.1 Scope of Review – the Review should be broad and rigorous enough to provide Secure Parking with:
10.1.1 a verification that Secure Parking has in place a Compliance Program that complies with each of the requirements detailed in paragraphs [1] to [11] of this Compliance Program; and
10.1.2 the Compliance Reports detailed at paragraph [13] of the Compliance Program.
10.2 Reviewer – Secure Parking will ensure that each Review is carried out by a suitably qualified independent compliance professional with expertise in competition and consumer law (Reviewer). The Reviewer will qualify as independent on the basis that they are not a present or past staff member or director of Secure Parking.
10.3 Evidence – Secure Parking will use its best endeavours to ensure that each Review is conducted on the basis that the Reviewer has access to all relevant sources of information in Secure Parking’s possession or control, including without limitation:
10.3.1 the ability to make enquiries of any officers, employees, representatives and agents of Secure Parking;
10.3.2 documents relating to Secure Parking’s Compliance Program, including documents relevant to Secure Parking’s Compliance Policy, Complaints Handling System, and Staff Training and Induction; and
10.3.3 any reports made by the Compliance Officer to Secure Parking’s Risk Management Committee regarding Secure Parking’s Compliance Program.
10.4 Secure Parking will ensure that a Review is completed within one year of the Court Order coming into effect, and that a subsequent Review is completed annually for 2 years.
Compliance Report
11 Secure Parking will use its best endeavours to ensure that within 21 days of the completion of the Review, the Reviewer includes the following findings of the Review in a report to the Compliance Officer of Secure Parking (Compliance Report):
11.1 whether the Compliance Program of Secure Parking includes all the elements detailed in paragraphs 1 to [11] of the Compliance Program, and if not, what elements need to be included or further developed;
11.2 whether the Staff Training and Induction is effective, and if not, what aspects need to be further developed;
11.3 whether Secure Parking’s Complaints Handling System is effective, and if not, what aspects need to be further developed; and
11.4 whether there are any material deficiencies in Secure Parking’s Compliance Program, or whether there are or have been instances of material non-compliance with the Compliance Program (Material Failure)1, and if so, recommendations for rectifying the Material Failure.
Secure Parking’s Response to Compliance Report
12 Secure Parking will ensure that the Compliance Officer, within 14 days of receiving the Compliance Report:
12.1 provides the Compliance Report to the Secure Parking Board; and
12.2 where a Material Failure has been identified by the Reviewer in the Compliance Report, provides a report to the Secure Parking Board identifying how Secure Parking can implement any recommendations made by the Reviewer in the Compliance Report to rectify the Material Failure.
13 Secure Parking will promptly and fully implement any recommendations made by the Reviewer in the Compliance Report to address a Material Failure.
PERRAM J:
1 The applicant (‘the ACCC’) is the regulator responsible for the enforcement of the Competition and Consumer Act 2010 (Cth) (‘the Act’). The respondent (‘Secure’) operates more than 600 commercial car parks in all capital cities except Darwin and Canberra. At 104 of these car parks it offered a service known as ‘Secure-a-Spot’. The idea behind Secure-a-Spot was that those seeking to park their cars in Secure’s parking stations would be able to reserve a parking space at a particular date, time and location. The parties agree that this idea was conveyed to the public by means of: Secure’s website; the very name of the service, ‘Secure-a-Spot’; Secure’s Facebook page; emails sent to persons who had provided their email addresses to Secure; and certain YouTube videos. They are also in agreement that the representations thereby made were untrue and that, apart from some presently immaterial and limited circumstances, no spot was ever reserved in the manner suggested.
2 In fact, Secure’s system worked on the basis of forecasted vacancy levels and its designers took the gamble that those forecasts would be correct. In other words, no individual spots were ever actually reserved and no limits were ever placed on the number of non-booking customers who might be let into the car parks. Where the gamble worked, there was no problem. But sometimes the forecasts were wrong and, on these occasions, the car parks became filled to an extent which prevented the bookings from being honoured. As might be expected, inconvenience and annoyance was occasioned to some of Secure’s customers in consequence.
3 As it happens, the service could only be booked through Secure’s app or website. On the website, consumers were shown a set of terms and conditions when they made a booking. These did reveal in the fine print that the booking was not in fact guaranteed. However, the parties have approached the matter on the basis that this was not sufficient to dispel the misleading nature of the conduct, a conclusion with which I agree. In the case of the app, such a disclosure did not occur and so no question of the effect of any disclaiming terms arises.
4 This unfortunate state of affairs is agreed between the parties to have been extant between 1 July 2017 and 30 June 2022. The parties agree that Secure’s conduct involved contraventions of the following statutory norms. First, s 18 of the Australian Consumer Law (‘ACL’, being Sch 2 to the Act) which relevantly prohibits a person from engaging in ‘conduct that is misleading or deceptive or is likely to mislead or deceive’. Secondly, s 29(1)(g) of the ACL which relevantly prohibits a person in connection with the supply of services from making a false or misleading representation that the services have performance characteristics or benefits. Thirdly, s 34 of the ACL which relevantly prohibits a person from engaging in ‘conduct that is liable to mislead the public as to the nature, the characteristics [or] the suitability for their purpose … of any services’. The parties are correct to agree this. Each provision was contravened for essentially the same reason. The Secure-a-Spot service did not in fact involve the securing of a spot. In that circumstance, it is appropriate to make the declarations of contravention the parties seek.
5 The parties also agree that a civil penalty of $10,950,000.00 should be imposed on Secure. The parties seek the penalty only in relation to the contraventions of ss 29(1)(g) and 34 (that is, no penalty is sought in relation to the contraventions of s 18). Both s 29(1)(g) and s 34 are contained in Part 3-1 of the ACL. Section 224(1)(a)(ii) confers a power on, inter alia, this Court to order a person contravening a provision of Part 3-1 to pay the Commonwealth such pecuniary penalty as the Court determines appropriate in the case of each contravention. By item 2 of the table in s 224(3) the maximum penalty for a contravention is fixed in the case of a body corporate such as Secure at ‘the greater of the amounts mentioned in subsection (3A)’. At the time of the contraventions, s 224(3A) set those amounts as the sum of $10,000,000, 10% of Secure’s annual turnover ending in the month in which the contravention occurred or three times the benefit which Secure obtained from the conduct.
6 The evidence before the Court does not permit an estimate to be made of the benefit Secure obtained from its conduct. Consequently, the two candidates are $10,000,000 and 10% of Secure’s annual turnover in the 12-month period ending in the month of each contravention. The parties agree, and there is no reason to doubt, that during the period 2018 to 2021 Secure’s annual turnover was in the range of $189,782,000 to $356,751,000. Thus, they also agree that for each contravention this entails that the maximum penalty lies somewhere in a range between $18,978,200 and $35,675,100. I accept this. The parties do not know how many contraventions there were but they do agree that there would have been a sufficient number of them to result in a maximum penalty for all contraventions which would be unrealistically large. For example, there were 10,277,204 bookings made through the website during the relevant period and I would infer that the representations were made on at least that number of occasions. The resulting penalty would be absurdly astronomical and inappropriate.
7 I accept the parties’ joint submission that it would be more sensible to approach the matter on the basis that the contraventions formed part of a course of conduct. It may be possible to see the conduct as a single course of conduct constituted by repetitious instances of the same underlying marketing concept, namely, that of Secure-a-Spot. On the other hand, it may be possible to see the different advertising channels by which the message was disseminated as constituting separate courses of conduct. The parties’ submissions did not seek to draw this distinction (which is not a criticism). It is worth noting, however, the consumer reach of each advertising channel. First, as already noted, 10,277,204 Secure-a-Spot bookings were made through the website (but of course it is likely that the website was viewed by many other consumers as well). Secondly, the YouTube videos containing the representations were viewed about 16,000 times. Thirdly, the evidence can only sustain the conclusion that the representations were made by email on three dates during the relevant period, although the parties joined in the submission that the inference could be drawn that on those occasions the representations had been made to thousands of subscribers (i.e. consumers for whom Secure held email addresses). Fourthly, there was no evidence about how often the Facebook page was accessed.
8 Whilst it would be possible to consider four separate courses of conduct, I do not think that it is useful to do so. The largest channel (website bookings) predominates to such a degree that the effect of considering separate courses of conduct on the ultimate penalty would be modest. When the question for this Court is whether the agreed penalty the parties have arrived at is an appropriate one, the effect of this matter becomes even more diffuse.
9 Having concluded that all of the contraventions should be treated as a single course of conduct and having noted the range of maximum penalties for each contravention (and the problem that presents), it is useful briefly to survey the matters which must be taken into account in determining the penalty. These are set out non-exhaustively in s 224(2). The first is the nature and extent of the act or omission, including any loss or damage: s 224(2)(a). I would emphasise that the conduct occurred even when a booking was not made and that the facts described above also show that the representations were made in excess of ten million times. Insofar as loss and damage is concerned it is convenient to deal with that under the second matter, s 224(2)(b).
10 Section 224(2)(b) mandates consideration of the circumstances in which the act or omission occurred. The key matter here is that the parties do not know on how many occasions consumers who had booked a spot were, in fact, turned away. Thus the complete extent of the inconvenience caused to Secure’s customers is not known. It is known, however, that between 29 October 2021 and 29 April 2022 Secure received more than 1,000 complaints from affected consumers. That was a period of six months. From this I would infer that Secure’s conduct across the whole period of 1 July 2017 to 30 June 2022 – a period of five years – is likely to have resulted in inconvenience, annoyance and frustration to many thousands of people. Further than that it is not possible to go. Returning momentarily to s 224(2)(a), the parties submitted that loss for the purposes of s 224(2)(a) could include non-pecuniary losses. This may be so, but in the absence of argument I would prefer not to endorse the broad proposition that all non-pecuniary losses are recoverable without any focus on what those losses are. What I will do instead is to take these matters into account as a relevant matter under s 224(2) generally rather than under s 224(2)(a) specifically, noting that if they do fall within the ambit of that sub-section they will have been taken into account in any event.
11 I do accept for present purposes that it is inevitable that pecuniary losses were suffered as a result of the conduct, notwithstanding that it remains impossible to put even an imprecise figure on these losses. Some consumers were compensated with an alternative parking spot and some received refunds, although the evidence permits no measurement of these phenomena. I infer that many others will simply have chalked up the wasted fee to experience. The evidence does not therefore permit quantification of these matters. I would also infer that other pecuniary losses were very likely to have been suffered (such as cancelled appointments for which a cancellation fee was payable, wasted theatre tickets and so forth).
12 The third mandatory matter is whether Secure has been found by a court to have engaged in similar conduct before. It has not.
13 In addition to the matters enumerated in ss 224(2)(a)-(c), it is established that the Court can take into account other matters. A collection of the conceivably relevant appears in Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2015] FCA 330; 327 ALR 540 at 544 [8] per Allsop CJ. Under this rubric, I take into account the following matters. First, I take into account the non-pecuniary matters to which reference has already been made. Secondly, I take into account the fact that Secure is the largest provider of paid parking services in Australia. Thirdly, while I accept that Secure did not intend to contravene the law, I take into account that, as the parties correctly submitted, it did what it did deliberately; that is to say, it deliberately marketed a reserved parking space service knowing that the spaces were not reserved. Fourthly, I take into account the fact that the program was approved by Secure’s Digital Marketing Manager. This is a reasonably senior position but it does not locate the conduct at the upper echelons of the business. Fifthly, I take into account the fact that Secure only introduced a compliance program in May 2023. Sixthly, I take into account the fact that once contacted by the ACCC Secure took down most (but not all) of the representations, a process which was only completed in May 2022. Seventhly, I take into account that Secure did nothing about the matter until it was contacted by the ACCC, even in the face of a significant number of complaints. Eighthly, I take into account that since the commencement of this proceeding Secure has fully co-operated with the ACCC, apart from an initial defence which took issue with the allegations.
14 The authorities establish the following propositions. The purpose of a civil penalty is deterrence, both general and specific. A civil penalty should put a price on contravention which is sufficiently high to deter repetition by Secure but also to deter others from being tempted into the same kind of conduct. It ought not to be set at a level which will be seen merely as a cost of doing business. It should nevertheless be proportionate to the wrong. In this case the parties have agreed a penalty. I take that particularly into account. I also take into account the fact that one of the parties is a regulator with knowledge of the degree of co-operation of Secure together with knowledge of what kinds of penalties are necessary to achieve deterrence in particular markets. Finally, I take into account that it is desirable for the Court to accept a proposed penalty of the present kind so as to encourage settlements and provide certainty.
15 The proposed penalty is $10,950,000.00. The formulation of a penalty involves a process of instinctive synthesis in which all of the competing matters are melded into a single penalty by the Court. In light of the matters discussed in these reasons, I accept that the proposed penalty is comfortably within the range of appropriate penalties and is therefore one which ought to be imposed.
16 The parties also sought a number of other orders by consent. None of these are attended by a need for the Court to be properly satisfied of their appropriateness before making them (unlike the declarations and the penalty). Those orders will therefore be made.
17 Finally, Secure sought a suppression order in respect of paragraphs 43 and 44 of the parties’ Statement of Agreed Facts. Those paragraphs contain Secure’s overall net profit and turnover on the Secure-a-Spot product for the period 2017 to 2022. Neither has been used in the parties’ submissions or these reasons (although Secure’s overall turnover has been used). Neither is therefore relevant. The evidence supporting the proposition that this information was commercially sensitive was customarily thin and I would not be minded to make a suppression order on the basis of it. What I will do, however, is to permit the parties to remove the current version of the Statement of Agreed Facts from the Court file and to replace it with a fresh version which does not contain the information in question. Since the information is not relevant there is no need for it to be in the Statement of Agreed Facts and the concerns of Secure are adequately addressed by taking this course. For the sake of clarity, this should be done by altering the document so that the information is simply not included in it rather than, as it presently stands, by way of redaction.
18 I will make orders in accordance with the minute of order provided by the parties. The parties should arrange the replacement of the Statement of Agreed Facts within 14 days. During that period, I will indicate that I will not grant access to that document.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Perram. |
Associate:
