Australian Competition and Consumer Commission v TPG Internet Pty Ltd

[2013] HCATrans 177

[2013] HCATrans 177

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne       No M10 of 2013

B e t w e e n -

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Applicant

and

TPG INTERNET PTY LTD (ACN 068 383 737)

Respondent

Application for special leave to appeal

FRENCH CJ
BELL J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 16 AUGUST 2013, AT 9.32 AM

Copyright in the High Court of Australia

MR J.T. GLEESON, SC, Solicitor-General for the Commonwealth of Australia:   May it please the Court, I appear with MR C.D. GOLVAN, SC and MR E.J.C. HEEREY for the applicant.  (instructed by Australian Government Solicitor)

MR N.J. O’BRYAN, SC:   If the Court pleases, I appear with MR M.J. HOYNE for the respondent.  (instructed by Truman Hoyle Lawyers)

FRENCH CJ:   Yes, Mr Solicitor.

MR GLEESON:   Your Honours will see we have sought to raise questions relating first to liability and then penalty.  I had proposed to deal with them in that order, but if it was convenient, I wish to invite your Honours to go to three pages first which ground the application.  If your Honours would go to page 45 of the application book, that is what the respondent told some of its customers which contained the truth about this offering, namely “You will be offered two combined products.  You will pay $29.99 for one, $30 for the other.  The total you will pay is $59.99 and then you can pay extra if you want to actually use the phone line.”  That is a representation of the truth of the bundle doctrine.

If your Honours were to go over to the next page, page 46, in the course of the second stage of the campaign, internally but not publicly, the respondent contemplated this form of advertisement which would have truthfully reflected the real offering as per the previous page.  One sees the price, the real price, $59.99, and the real bundled offering.  If your Honours were to go back to page 44, just one page before, we have there but two of many examples of the actual advertising which the Full Court has said complies with the statutory norm, and one sees the radical difference between the true offering and the way it was presented.  In effect, on liability, what the Full Court has said is consumers must be expected to work out for themselves through the minute scrutiny of ‑ ‑ ‑

FRENCH CJ:   Did it say that, or did it characterise the conduct as “not misleading and deceptive” because of some assumption about what a consumer interested in this kind of product would know in relation to bundling?

MR GLEESON:   Your Honour is correct.  That is one of two of the key planks.

FRENCH CJ:   The other one is dominant versus the context?

MR GLEESON:   Yes, and so the liability question as we raise it has those two aspects to it.

FRENCH CJ:   Now, the difference between the Full Court and the primary judge on the first point, as I understand it – and correct me if I am wrong – is the primary judge accepted that consumers would know that bundling was one way in which the service would be delivered, but was not prepared to assume for the purposes of characterisation that all consumers would take that as a given.

MR GLEESON:   It is perhaps slightly softer.  What he said was in circumstances where, at least within the ADSL universe, there were three options, and within the larger broadband universe there were a vast range of options, and where some consumers may know more or less about those varying options ‑ ‑ ‑

FRENCH CJ:   But not every member of the relevant public viewing this advertisement, on the primary judge’s view, would think “yes, bundling goes with it.”

MR GLEESON:   Yes, and to take your Honour’s language in one of the earlier cases about, could you in effect find that all but an insignificant proportion of the class would cumber this advertisement with bundling so far at the front of their mind that they would say “Although they are telling me ADSL, I know very probably this is a bundled offer, so I must go and find out what the extra element is.”  That is where the trial judge differed from the Full Court, and on that, the point we have raised is the simple one, that the trial judge acted on evidence.  The Full Court in the critical paragraph, which is on page 149 at paragraph 98, has acted without evidence.  It is not acceptable to overturn a critical finding of fact about the attributes of the reasonable viewer merely by reference to what is said to be a finding in a proceeding for interlocutory relief, and the court identified no other evidence on which to overturn the critical finding.  So that is the first difference between the two courts.

The second difference, as your Honour said, concerns dominant message and why the Commission submits that might have more relevance than just another advertisement, good or bad, is that the approach adopted by the trial judge is consistent with that which many authorities in the Federal Court have adopted which is that, looking at the realities of advertising, what advertisers often, perhaps too often try to do is to get one dominant prominent message into the mind of the consumer, and by doing so, implicitly exclude other messages, and that is what leads people into error ‑ ‑ ‑

FRENCH CJ:   You are characterising the practice of headline advertising as something which supports the proposition this is a special leave issue, is that right?

MR GLEESON:   Yes.  Just to give your Honours one example of a Full Federal Court authority very recently which took exactly the trial judge’s approach, in our authorities the Full Court decision of Global One, which commences at page 71, given on 14 September last year, at pages 99 to 100 between paragraphs 105 and 106 applies exactly the approach the trial judge applied, where again there was headline advertising and a bundled offering.  It is an almost identical form of reasoning where the Full Court approved Justice Bennett at first instance in saying that you can, by the dominance and prominence you give to one key message, lead the consumer into error in terms of believing there is an absence of some other critical feature which the consumer really ought to know about.

In that passage, the Full Court then at 108 in a discussion of the earlier authorities, including – and this was the authority I was referring to from your Honour’s earlier jurisprudence, ConAgra – discussed this use of the dominant message.  You might note that at 109, they drew the correct distinction between a pure advertising case and a product get-up case, Parkdale v Puxu, the famous case.  Parkdale v Puxu seems to have received a lot of attention from the Full Court here, and they said in effect this is a Parkdale case.  You, as the consumer, were expected not just to look at initial impressions but to go and compare each and every part of the advertisement to find out the whole truth.  So our proposition is in terms of headline advertising, it is about much more than just this case, and the trial judge’s approach, consistent with standard Federal Court authority, is now being held to be erroneous.  That is a point your Honours would consider addressing, and it provides a very useful context for it.

FRENCH CJ:   Can you just take us to the trial judge’s encapsulation of the evidence upon which he made his findings in relation to consumer perceptions?

MR GLEESON:   Yes, it appears on page 10.  He started on page 9 by identifying the target audience.  There was some evidence at paragraph 26 on page 9 by the TPG representative and that was discussed as to how far it went in the field.

FRENCH CJ:   There was a concession that he was not expert.

MR GLEESON:   He was not expert.  Then his Honour, commencing at 27 and 28, looked in more detail at the class of target consumers might be.  At 29, he made a critical finding rejecting a TPG submission that the class would include first time as well as more experienced users.  That finding has not been overturned by the Full Court, and it is very hard to see how the Full Court’s conclusion can sit with that finding, because you would think first time users are the classic people who will not know and will not bring to the offering a bundle of assumptions.

FRENCH CJ:   What is the nature of the process by which a primary judge, or for that matter an appeal court, characterises conduct by reference to consumer perceptions – not erroneous assumptions, but consumer perceptions?  Does that always have to be a matter of evidence?

MR GLEESON:   The answer to that is probably no.

FRENCH CJ:   One can think of lots of examples where just ordinary human experience will tell you this misleads.

MR GLEESON:   Yes.  The answer to that is probably no, but once one moves to an area of a particular form of technology and product and offering, we would submit judicial notice does not allow a court to say a finding, which to many minds might be extraordinary in its own right, almost every member of the class of consumers in capital cities in Australia as of 2010 had this degree of knowledge of ADSL2+, its technology and the way it was marketed.

So once one moves to a more specific product offering – both as to its technology, your Honour, because one aspect of this finding that is suppressed within it is that everyone knows that ADSL2+ requires you to have a landline in your premises as opposed to wireless which may not, and cable may not.  That of itself is an element, but then the further element everyone knows, that it is either bundled or the horrible word “naked” or “standalone”.  They are the three ways you can do it.  We would submit that that would not be in the field of judicial notice, and one would require evidence.

One of the odd things, your Honour, about the Full Court relying upon the interlocutory finding of the trial judge – we have included that finding in the authorities book.  It is at page 63, paragraph 16.  It was not even really the interlocutory judge referring to a body of evidence in the ordinary sense.  His Honour Justice Ryan said:

I consider the inference available from the evidence, mainly constituted by the . . . advertisements themselves, to be that the consumers to whom they are directed would have some familiarity with the market . . . to the extent of knowing –

their offer “bundled” or “standalone”.  Your Honours immediately see the problem.  First of all, that is two of the three options – “naked” is not there – but secondly, it is circular.  The interlocutory judge had drawn the finding from looking at the advertisements, that people came to the advertisements with a pre‑existing state of knowledge.  So if that is what the Full Court says, we agree with – it has that circularity attached to it.

Your Honours, could I turn to the question of penalty?  The difference you will have observed between the parties is the respondent does not say that the line of authorities in the Full Federal Court giving primary weight to deterrence is wrong in any way.  The difference is they say that the Full Court here, although not really saying it, must have had regard to those authorities, so the line of authorities, we submit, is correct.  It is a question then, if one looks at the Full Court in dealing with penalty, which your Honours will see from pages 155 to 156.  At 156, the Full Court set out the factors which your Honour had identified in TPC v CSR, but did not set out the critical paragraph earlier in the page where your Honour said the principal object of a civil penalty proceeding is deterrence, and it is through that prism that one assesses these factors.

FRENCH CJ:   There was a lot of subsequent debate about that, I think, in different Full Court decisions in the Federal Court.  I think there was a question whether retribution was in it as well.

MR GLEESON:   As well.

FRENCH CJ:   I am not sure that that held the day, did it?

MR GLEESON:   We would submit that in the two cases that followed, which are NW Frozen Foods and then most recently the Full Court in Singtel Optus, “deterrence” has retained the position as either a, or if not the, principal object of the civil penalty.  It is certainly a principal object.  But the underlying observation which your Honour made and then these Full Courts have taken up is because it is a principal object, the amount of the penalty must be sufficient to really operate as more than a mere cost of business.  You look at the factors, but as an essential part in the exercise, you would have to say is this penalty something which TPG could happily just add to the cost of an otherwise successful advertising campaign?  That critical assessment has never been considered expressly by the Full Court.  You cannot see it on pages 155 to 156.  The most Mr O’Bryan can point to is on 157 at paragraph 143.  He points to the first sentence and says:

A penalty must not be so high as to be oppressive: NW Frozen Foods –

That of course is to say oppression is the upper boundary on a penalty, but the court has not addressed the primary question, is the penalty I am considering one which will adequately deter conduct and be more than a mere cost of business?

At 161, when the court came to its conclusions in the first judgment, you cannot find it there, and then just finally perhaps in the second judgment when they set the amount of $50,000, which even after the adjustments to liability we would respectfully say is derisory as a penalty, at pages 194 and following, you just see no reference to an examination of whether $50,000 in the context of even the smaller case, a national TV advertising campaign for two weeks, would in any way operate as a true deterrent.  The critical finding is on 197, paragraph 15, and you see neither from the reasoning nor from that amount of money, that the court has given central weight to deterrence.

If that is a fair assessment of what the court has done, then it is a marked departure from the earlier authorities and we would submit in general for this Court for the first time to consider the factors in a penalty exercise, the prism through which they are to be assessed would be a significant and important matter.  If your Honours please, they are our submissions.

FRENCH CJ:   Thank you.  Yes, Mr O’Bryan.

MR O’BRYAN:   If the Court pleases.  Your Honours, could I tackle first the complaint that the Full Court overturned what the judge found to be the starting assumptions, because they simply did not do that, your Honours.  That is an incorrect characterisation of what happened, and indeed the Full Court was ad idem with the trial judge in connection with the starting assumptions.

My learned friend did not complete the survey of the findings.  Could I do that please?  My learned friend identified on page 9 of the application book, where the trial judge dealt with this issue – you will see the heading at the top of that page, your Honours, “Knowledge to be Imputed to the Target Audience”.  Down the bottom of that page, his Honour concluded at paragraph 27:

the class did not include people who knew little or nothing about such services.  I accept this –

That is the first finding about characteristics, “did not include people who knew little or nothing” about ADSL2+.

FRENCH CJ:   What does that mean – never heard of it, or something else?

MR O’BRYAN:   It must mean something else, your Honour, because part of the vice with the way in which the Commission has bundled together the starting assumptions is to ignore the most important of them, really, in the world of internet services.  Internet services, as is notoriously well known, your Honours, are either supplied wirelessly or through wires.  Wirelessly, they can come on all sorts of wireless technologies – generally speaking, through the mobile networks of the major telecommunications companies, but there are satellite services, et cetera.  They are either wired or they are unwired, and the wired varieties, of course, are generally two types.  They either come through your home telephone line – that is the ADSL service – or they come through a dedicated broadband cable, such as the Foxtel broadband cable or the Optus one, et cetera.

The universe of possibilities to which the trial judge referred in his reference to the plethora of offerings actually relevantly, for the purposes of this case, narrows down to two.  The ADSL is one of them, and as your Honours probably know, that acronym stands for “Asynchronous Digital Subscriber Line”.  So the “S” and the “L” in the acronym ‑ ‑ ‑

FRENCH CJ:   I read it in these papers, but I do not think I have heard it before.

MR O’BRYAN:   No, I was hoping Justice Gageler might be here today, your Honours, but ‑ ‑ ‑

FRENCH CJ:   I notice also that TPG conceded – there is a reference to a concession at paragraph 27 that we are talking about “most adults in Australia”.

MR O’BRYAN:   We are talking about most of them, your Honour, yes.  We did submit to the Full Court that it is unlikely that very elderly people who have never used the internet and have no intention of surfing the net or obtaining email – and there are such people in Australia, we accept – they are not likely to be interested in an advertisement for ADSL2+ which they would not understand the meaning of.

BELL J:   What about less elderly people who have a home phone with Telstra and who have some dim understanding that ADSL2+ comes through your home phone, but think “I can get my internet from TPG for $29.99 a month using my home phone with Telstra”?

MR O’BRYAN:   Indeed.  That is a possibility, your Honour, but his Honour found – and the finding was one to which my learned friend took you – in paragraph 31 that the consumers are taken to know that the service can be supplied through that home telephone line.  Indeed, it has to be.  The SL is the line, or the “L” is the line, if you like.  It has got to have a home telephone line, and the home telephone line has to be activated at least for the purposes of supplying the broadband.  It is also capable, as we all know – and we can assume everyone knows this – it is also capable of carrying ordinary telephony, the so‑called low end of the spectrum.

So it might be bundled with the low end of the spectrum, with your telephone calls, or it might not be.  You do not have to have the telephone calls running through that telephone if you do not want to.  You can just have your internet services.  That is the standalone or the “naked” version, the standalone version being you are also getting your telephone calls but you are not getting them through that supplier, and the so‑called “naked” version, which my learned friend was nervous to pronounce, is the version where you do not have telephone calls at all.  It is simply not activated at all for telephone calls, so it is just a line that is being used for the purposes of that delivery.

So there is really only two, there is not three.  You have either got it bundled with your telephone calls in one form or another, or you have not, but nevertheless it has to come through a line, and that is why his Honour found – correctly, we submit – that the starting assumption of the consumers who are considering purchasing this kind of offering is that there will be something said by the supplier about the bundling.  That is all that was required, and that is what his Honour found in 31.  Now contrary, and this is a very important ‑ ‑ ‑

BELL J:   Mr O’Bryan, I am sorry to interrupt you, but it is just not clear to me that he did.  I must say, I had understood his Honour in the concluding two sentences of that paragraph to say bundling is one option.  There is an array of available options, so that the:

ordinary or reasonable consumer would not have a starting assumption about the service.

MR O’BRYAN:   Exactly.  They would not have a starting assumption that it either was or was not bundled, because they know it could be one or the other, but it must be one or the other, and therefore they expect to learn in the body of the advertisement which one it is.  That is the key point.  They do not assume it is this or that, but they know it has got to be one or the other.  It either is with your home telephone calls or not, and therefore they will look to the advertisement to learn what it is likely to be.

That finding, we submit, is correct.  It was not challenged on the appeal, and it was not overturned by the Full Court.  It is a very important point, your Honours, because the first ground of appeal and the one that my learned friend focused upon, and you can see this on page 205 of the application book where the error in the Commission’s application and its grounds of appeal are identical is exposed.  You will see that the complaints on the liability issues break up into two parts basically.  Grounds 2.1 and 2.2 at the top of application book page 205 deal with this very point, they say in 2.1 that the Full Court failed:

to identify any appellable error –

in that paragraph 31 finding.  Then in 2.2 – and this is profoundly wrong – they say that the Full Court made a finding –

that was not properly open to the Full Court . . . to the effect that the consumers . . . would have known that the . . . services were bundled –

In other words, they would start with an assumption that the services were bundled.  That is simply wrong.  Could I take your Honours to the paragraphs that are referred to in paragraph 2.2 to make that good?  The first one is paragraph 98 to which my learned friend referred.  That is at the bottom of page 149 of the application book.  Here again, the Full Court was dealing with the attributes of the consumers as determined by the trial judge, and your Honours will note at the top of that page at paragraph 93, their Honours said:

Nor was there any real dispute that his Honour correctly identified the target audience –

Then they repeat a number of the findings that his Honour made in the relevant paragraphs of the judgment below, and then down the bottom of that page, 97 –

consumers must be taken to have a certain degree of background knowledge –

and then key, 98, the one complained about –

What is particularly important is that consumers to whom the advertisements were directed must also be taken to have some familiarity with the market for the provision of broadband services.  In particular, they would know that services such as ADSL2+ are offered for sale as either “bundled” or “stand alone”.

That is to say, with or without the telephone calls – exactly the same finding as was made by the trial judge.  They did not find that there was a starting assumption in anyone’s mind that they would be bundled.  On the contrary, the only starting assumption is, and it is correct and consistent with the trial judge, they have to be one or the other and so we should expect the advertisements somewhere to inform us which they are.

Now, all of the other paragraphs which are referred to in paragraph 2.2 of the application, and it is the same in the notice of appeal – that is to say, paragraphs 105, 106, 111, 114, 116 and 118 – make exactly the same point.  They all say, going to 105 as an example, your Honours, on page 151 in the second sentence:

As we have said, these attributes include knowledge of the “bundling” method of sale commonly employed . . . as well as knowledge that setup charges are often applied.

So no starting assumption that it will be bundled, simply that bundling is commonly employed.  It is one of the two possibilities, and therefore you would expect the advertisement to say something about it, which it did in this case.  There is no error in that reasoning, we submit, your Honours, and the contention that the Full Court overturned any aspect of the attributes which were found by his Honour in his judgment of the consumers is simply wrong.  They did not overturn.

BELL J:   When, at 106 on application book 151, the Full Court says:

This is the prism through which the critical question of the overall impact of the commercials . . . must be considered.  It produces a different answer to that reached by the primary judge –

it is, I must say, open to read that as the Full Court understanding it was taking a different view to that of the trial judge.

MR O’BRYAN:   We would submit only in this respect, your Honour.  There is agreement about the nature of the starting assumption.  It will be one thing or the other.  His Honour the trial judge, as my learned friend pointed out, went on to say in his findings about attribute that because there was what his Honour described as a “plethora” of other offerings in the market dealing with questions such as the download speeds or the times of access or the excess charges that might be payable if you went over your limits and so forth, that that meant for some reason that the fundamental distinction about “bundled” or “not bundled” was somehow overwhelmed in the consumer’s mind because there was such a wide variety of other offerings and services.  That is the only real difference, and it is for that reason, your Honour, that the Full Court disagreed with his Honour’s approach at the level of principle where his Honour focused solely upon the so‑called “dominant message”.

His Honour, as was pointed out by my learned friend, in his analysis of legal principles in the judgment – and this is important to the error that was identified by the Full Court – if your Honours look at application book pages 12 and 13, his Honour addressed the legal principles which were applicable commencing at paragraph 37, and there was no disagreement once again between the trial judge and the Full Court at the matter of legal principle.  The legal principles are set out down that page citing numerous of the key cases, including decisions of this Court like the Nike Case, referred to in paragraph 39.

Then all of a sudden, his Honour on page 13 of the application book in paragraph 41 went on to consider this so‑called “dominant message” principle.  Your Honours can see that in the second sentence of paragraph 41.  No authority was cited for that proposition at all, and we do submit, your Honours, that it is inconsistent with what Sir Harry Gibbs said in his celebrated judgment in Parkdale more than 30 years ago that it is critical to look at the conduct viewed as a whole.  It is wrong, his Honour said, to select some words or acts which ‑ ‑ ‑

FRENCH CJ:   Well, that does not exclude giving weight to the prominence that is accorded to one part of the message, and the lack of prominence to another in the exercise of characterisation.

MR O’BRYAN:   Quite so, your Honour, and we do not submit otherwise, but his Honour the trial judge, having selected his “dominant message” in the way that he did, simply then analysed all of the advertisements by reference to that matter alone without considering the full context of the advertisements, and in particular, your Honours, without having regard to these characteristics of the consumers – the target audience, in this case – which he had correctly identified.  That is the key difference between the approach taken by the Full Court and the approach taken by the trial judge.  It has nothing to do with a new assumption about the attributes of the consumers.

The Full Court was ad idem with the trial judge about those characteristics.  What the Full Court did was to apply the logic of that analysis and the findings that had in fact been made by the trial judge to their logical conclusion, to conclude in circumstances in which there is a starting assumption in the minds of the average consumer that the advertisement will tell me something about bundling, because it is either one thing or the other, and it did so and therefore in its proper context, none of these advertisements was misleading or deceptive.

FRENCH CJ:   Is there not a kind of slippage in the Full Court – I may be wrong, but from what you read at paragraph 98 through to 105 and then later 114, where they seem to be emphasising the consumer’s knowledge of “bundling” rather than “standalone”.

MR O’BRYAN:   Yes, but that is quite consistent, we would submit, your Honour.  Paragraph 98 is quite consistent with 105.  It is quite consistent with 106.  It is again consistent with 111 – these are all the paragraphs in that run of paragraphs.  So at 111, for example, down at the bottom of 151:

Once the attributes . . . are taken into account . . . As we have said, that person is taken to know that the service may –

that is important –

be offered as bundled . . . He or she is also taken to know that setup charges are often made.

Now, 114 is completely consistent with that –

the fact that the ordinary or reasonable viewer knows that services may be offered as a “bundle” –

and not only that of course, your Honour, but they must be one or the other.  They must be either with or without the home telephone line used for telephony, and so the advertisement will tell us which they are.  So we would submit there is no difference there in the analysis, and it is perfectly consistent with those findings.

The only difference, we would submit, is the error correctly identified by the Full Court in respect of the so‑called “dominant message”, because the so‑called “dominant message” ignores the correct finding about the attributes concerning assumption and therefore it inverts the analysis by saying “Put aside the attributes of these consumers.  Forget about the fact that they are expecting to find something, and are indeed looking for something about whether this is or is not a bundled service, and let us just decide whether the headline tends to dominate this advertisement and whether it is sufficiently qualified by other words.”  That is the error.

FRENCH CJ:   It is right to say, is it not, there are two issues you have to deal with, putting aside the penalty issue.  There is the issue of the assumption, and let us assume you are right on that, then there is the issue of the dominant message characterisation.

MR O’BRYAN:   We accept that, your Honour, but all I am seeking to convey is that they are very, very closely connected logically.

FRENCH CJ:   No, I understand.

MR O’BRYAN:   That is all.  We do submit if the Court is with us in respect of the first point, that is to say, there is no special leave ground, there is no ground of appeal dependent upon the erroneous proposition that the Full Court overturned anything in these findings – it did not – then of course it was incumbent on the Full Court to reconsider in the proper context of his Honour’s findings, which they upheld, whether or not the dominant message analysis was or was not correct.

BELL J:   It does seem to me, Mr O’Bryan, when one looks at the primary judge at 31, the available internet option range being such that an:

ordinary or reasonable consumer would not have a starting assumption about the service –

and then one moves to the conclusion of the Full Court at 114, when:

the ordinary or reasonable viewer knows that services may be offered as a “bundle” and that setup charges are often made –

it seems to me the Full Court is proceeding upon an assumption about the characteristic of the target audience different to the assumption of the primary judge.

MR O’BRYAN:   We would submit not, your Honour, but I cannot – particularly in light of the fact that the light is flashing at me, could I turn to the question of penalty, your Honours.  The reference that was made to paragraph 143 of the judgment misses the point that we were seeking to make.  If you would return please to paragraph 143 on application book page 157, we were drawing attention of course to the express reference to the object of general deterrence in the quotation in paragraph 143.  Their Honours were very conscious of the importance of deterrence, and particularly so ‑ ‑ ‑

BELL J:   How is that reflected in a $50,000 penalty, even accepting the different conclusions respecting liability?

MR O’BRYAN:   It is so for these reasons, your Honours.  If you would look at the penalty judgment which our learned friend took you to briefly, particularly page 197, two important matters were under consideration by the Full Court.  The first was that TPG had suffered very considerably – that is dealt with in paragraph 14, where the Full Court set out all of the costs and grief, as it were, which had been caused to TPG including the obligation to withdraw all the ads, to write to all the consumers, to castigate itself publicly, et cetera.  So that was an important factor in the decision, how much deterrence is necessary now in light of the fact that it was a very short campaign?

My learned friend referred to two weeks.  That is erroneous in relation to the TV ads.  Page 196 of the application book tells you that in

paragraph 11.  The TV ads were only on four days – that is (a).  There were other ads found to have infringed 53C which went for two weeks, but that is a different question.  The actual advertisements which breached were four days’ worth of TV ads.  That is all.

The other point, your Honours, is the fact that as you see in paragraph 15 at the bottom of page 197, it was not simply $50,000.  The court said we consider the appropriate penalty for the whole of the conduct would have been $125,000, but we are prepared to discount that by reference to the totality principle, having regard to all of the other costs and grief that TPG has suffered. 

It is not a case in which the court has arrived at a $50,000 penalty, as it were, in a vacuum, and whatever view the court might take of the sufficiency of that, it is, as it were, a discounted penalty by reference to a wide variety of other penalties that TPG had already suffered and they were immutable – those penalties it had already suffered – and that is the reason for the $50,000.  In the circumstances of the characteristics identified in paragraph 11 on page 196 and in paragraph 14 on 197, that is submitted to be well within the proper power of that court, having regard to the discretionary factors.

FRENCH CJ:   Thank you, Mr O’Bryan.

MR O’BRYAN:   If the Court pleases.

FRENCH CJ:   Yes, Mr Solicitor.

MR GLEESON:   Your Honours, Mr O’Bryan and I are reading different judgments.  His two key points on liability were that the trial judge looked at the dominant message and looked at nothing else.  If the trial judge did that, that would have been an error.  Your Honours know from pages 15 to 29 of the application book that having attended to the dominant message, the trial judge then went on to go back to each of the advertisements to ask himself the question, was there sufficient by way of clear and prominent qualification to remove what would otherwise be the misleading message?  So he did not commit that error.

As to the second point which took up most of Mr O’Bryan’s submissions, it is perfectly clear when one compares 31 to 32 of the trial judge with the paragraphs where the Full Court dealt with that topic that the courts are not ad idem.  The Full Court considered it was making a critical change to the base against which the whole question would be considered, and that is what gave the Full Court the prism through which it overturned the trial judge.  They are the matters we wish to put, your Honours.

FRENCH CJ:   There will be a grant of special leave in this matter.  Would that be a day or less, Mr Solicitor?

MR GLEESON:   Yes.

FRENCH CJ:   Mr O’Bryan?

MR O’BRYAN:   Yes.

FRENCH CJ:   I think there is a timetable for filing of submissions which you should have available to you.

MR GLEESON:   If the Court pleases.

FRENCH CJ:   Thank you.

AT 10.11 AM THE MATTER WAS CONCLUDED