Craven v Ready Flowers Pty Ltd
[2015] FCCA 538
•10 March 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CRAVEN v READY FLOWERS PTY LTD & ANOR | [2015] FCCA 538 |
| Catchwords: TRADE PRACTICES – Misleading or deceptive conduct – Trade Practices Act 1974 (Cth) – internet retail website. CONSUMER LAW – Misleading or deceptive conduct – Australian Consumer Law – Competition and Consumer Act 2010 (Cth). |
| Legislation: Competition and Consumer Act 2010 (Cth) Trade Practices Act 1974 (Cth), ss.52, 53(c), 53(d) |
| Cases cited: ACCC v Chen (2003) 132 FCR 309 Bray v F Hoffman-La Roche Ltd & Ors (2002) 118 FCR 1 Ward Group Pty Ltd v Brodie & Stone & Ors (2005) 215 ALR 716 |
| Applicant: | GORDON CRAVEN |
| First Respondent: | READY FLOWERS PTY LTD |
| Second Respondent: | GARY ERYL ROY OWEN |
| File Number: | BRG 167 of 2009 |
| Judgment of: | Judge Jarrett |
| Hearing dates: | 24, 25, 26 September 2012 |
| Date of Last Submission: | 26 September 2012 |
| Delivered at: | Brisbane |
| Delivered on: | 10 March 2015 |
REPRESENTATION
| The Applicant appeared in person |
| Counsel for the First Respondent: | Ms Muir |
| Solicitors for the First Respondent: | Archibald & Brown |
| Counsel for the Second Respondent: | Ms Muir |
| Solicitors for the Second Respondent: | Archibald & Brown |
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CRAVEN v READY FLOWERS PTY LTD & ANOR | [2015] FCCA 538 |
CORRIGENDUM
In paragraph 11 of the Reasons for Judgment, in the first sentence, the word “Thomas” should be deleted and replaced with “Peter”. The sentence should read “The only witness for the respondent, Mr Peter Hegarty was cross-examined by Mr Craven about his evidence that related to that issue.”
I certify that the preceding one (1) paragraph is a true copy of the reasons for judgment of Judge Jarrett.
Associate:
Date: 13 March 2015
ORDERS:
The application filed on 11 March, 2009 is dismissed;
The applicant pay each respondent’s costs of and incidental to the application including the costs of the application in a case filed on 19 June, 2009 and reserved costs, if any, to be taxed and paid under Part 40 of the Federal Court Rules.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 167 of 2009
| GORDON CRAVEN |
Applicant
And
| ready flowers pty ltd |
First Respondent
| MR GARY ERYL ROY OWEN |
Second Respondent
REASONS FOR JUDGMENT
This application arises from an online internet retailing business whereby fresh flowers are sold to consumers. Mr Craven brings the principal application alleging that the respondents have breached the relevant State and Federal consumer protection laws.
At issue is whether the respondents, or either of them, have engaged in misleading and deceptive conduct for the purposes of s.20 of the Australian Consumer Law. For the reasons that follow, I have concluded that they have not, and the application ought to be dismissed.
Procedural Background
Mr Craven commenced these proceedings on 10 March, 2009. By his application as it was then framed, Mr Craven claimed:
a)declarations that certain alleged conduct by both the first respondent and the second respondent contravened s.52 of the Trade Practices Act 1974 (Cth);
b)declarations that certain alleged conduct by the first respondent contravened s.70 of the Trade Practices Act;
c)declarations that certain alleged conduct by the second respondent contravened s.38, 40(d), 40(e) and/or 40(f) of the Fair Trading Act 1989 (Qld); and
d)permanent injunctions against the first respondent and the second respondent (and their officers, agents, servants, employees, “supplier florists”, lawyers and any other person in act of concert or participation with the first respondent) prohibiting them from carrying out their business in particular ways.
Mr Craven filed an application and an amended statement of claim on 14 May, 2009. He sought to join additional respondents to the proceedings and in particular the directors of the first respondent. However, I refused that application on 29 May, 2009 because Mr Craven’s proposed claim against them was ill-defined.
On 29 May, 2009 I also heard an application by the respondents to strike out the whole of Mr Craven’s amended statement of claim filed on 14 May, 2009. On 23 February, 2012 I ordered that the whole of the amended statement of claim filed on 14 May, 2009 be struck out for the reasons that I delivered on that day. I gave Mr Craven leave to re-plead.
Mr Craven filed a further amended statement of claim on 20 April, 2012 (described in the title to that document as “fresh amended statement of claim”).
Subsequently, the application was fixed for hearing for not more than 9 days commencing on 24 September, 2012. Evidence-in-chief at the trial was directed to be on affidavit and a timetable was directed for the delivery of affidavits of evidence-in-chief by each of the parties.
At a pre-trial directions hearing on 17 August 2012, Mr Craven sought leave to file an amended application to support the fresh amended statement of claim. Although they were unable to deal with it at the time, the first and second respondents ultimately did not object to leave to file the amended application.
When the trial commenced on 24 September, 2012 discussion ensued about the best way to deal with an allegation by the first respondent that it was not liable for any representations or conduct pleaded by Mr Craven that occurred on or after 1 February, 2009 because it had sold the business which was central to Mr Craven’s allegations to another corporate entity that was registered in and traded from Hong Kong.
Mr Craven asked that the respondent’s “reply” as he termed it be dealt with first. The respondent’s agreed and consequently, I ordered that the issues raised by paragraphs 4(c) and 4(e), 7(c) and 7(d), of the respondent’s defence be determined as a preliminary issue.
The only witness for the first respondent, Mr Thomas Hegarty was cross-examined by Mr Craven about his evidence that related to that issue. The parties made submissions about the preliminary matter. I delivered an ex tempore judgment at the conclusion of the argument and determined the preliminary issue against Mr Craven and in favour of the first respondent.
Following my ruling on the preliminary issue, I dealt with some objections by the respondents to the evidence that Mr Craven wished to rely upon at the trial. The evidence to which the respondents took objection was rendered irrelevant to the issues that remained live before the Court. The balance of the trial proceeded. These reasons relate to the balance of the trial.
In the meantime, Mr Craven sought leave to appeal my determination of the preliminary issue. That application was determined by Greenwood J in the Federal Court on 5 December, 2013. His Honour refused leave to appeal. He determined that the proposed appeal enjoyed no prospects of success and so leave ought to be refused.
Some Background Facts
The first respondent is a corporation duly registered in Australia. Its only shareholders are Australians and it has a registered office in Perth, Western Australia. Until February, 2009 it carried on an internet business whereby it procured orders with consumers in Australia, New Zealand and world-wide for fresh flower arrangements for delivery in Australia, New Zealand and world-wide. The business was operated by the first respondent using the website a domain site registered in its name. It fulfilled the orders received from the internet interface by relaying customer orders to independent local supply florists in the appropriate delivery area for the provision and delivery of orders. The margin between the amount charged to the consumer and the amount paid to a local florist to fill the order was the first respondent’s gross profit on the transaction.
With effect from either 31 January, 2009 or 1 February, 2009 the first respondent sold its fresh flower business to Ready Flowers Limited, a Hong Kong registered company. From that point, reference to the first respondent disappeared from the website. The name of the new proprietor Ready Flowers Limited appeared instead.
The effect of my decision on the preliminary issue decided at the commencement to the trial was to confine the applicant’s case to the period up to 31 January, 2009. Anything beyond that date related to Ready Flowers Limited which was not and is not a party to the proceedings.
Relief sought by Mr Craven against the first respondent
I will set out in full the relief sought by Mr Craven against each of the respondents that remains available following the determination of the preliminary matters referred to above. I have done so lest I overlook something by attempting to summarise those claims.
By his amended application dated 15 August, 2012, Mr Craven seeks against the first respondent:
DECLARATIONS REQUESTED AGAINST THE FIRST RESPONDENT
1. At all material times prior to 1 February 2009,… the first respondent is an Australian company :
(a) that can be held responsible and liable for all of the matters alleged against it in the applicant’s Fresh Amended Statement of Claim dated 20th April 2012; and
(b) the first respondent is within the jurisdiction of the Federal Magistrates Court of Australia to make the declarations, orders and injunctions sought against it in this Application.
….
1B. The first respondent is a company that :
(a) is synonymous with; and
(b) does wholly constitute; and
(c) has legal control;
of the Ready Flowers brand business that is carried on in :
(i) Australia; and
(ii) New Zealand;
until such time as there is a proper and legal transfer of it’s member shares and control from the Ready Flowers Pty Ltd data as extracted from the ASIC database on 7 August 2012.
1C. The first respondent’s :
(a) misleading or deceptive conduct; and / or
(b) false or misleading representations;
as may be declared below, to be declared as having been an integral part of its business model.
2. Regarding the matters referred to in paragraphs 2 to 2.3 of the Statement of Claim the first respondent has engaged in misleading or deceptive conduct or conduct likely to mislead or deceive in contravention of:
(i) section 52 of the TPA; and / or
(ii) section 18 of Schedule 2 of the CCA;
and has engaged in the conduct of failing to honour a guarantee or guarantees relating to the supply of goods by description, in contravention of :
(iii) section 56 of Schedule 2 of the CCA.
3. Regarding the matters referred to in paragraphs 3 to 3.3 of the Statement of Claim, the first respondent has engaged in misleading or deceptive conduct or conduct likely to mislead or deceive in contravention of ;
(i) section 52 of the TPA; and / or
(ii) section 18 of Schedule 2 of the CCA.
4. Regarding the matters referred to in paragraphs 4 to 4.2 of the Statement of Claim, the first respondent has engaged in misleading or deceptive conduct or conduct likely to mislead or deceive in contravention of ;
(i) section 52 of the TPA; and / or
(ii) section 18 of Schedule 2 of the CCA.
5. Regarding the matters referred to in paragraphs 5 to 5.2 of the Statement of Claim, the first respondent has engaged in misleading or deceptive conduct or conduct likely to mislead or deceive in contravention of ;
(i) section 52 of the TPA; and / or
(ii) section 18 of Schedule 2 of the CCA;
and has engaged in the conduct of failing to honour a satisfaction guarantee or guarantees provided by the first respondent to consumers, in contravention of :
(iii) sub-section 53(g) and of the TPA; and / or
(iv) sub-section 29(1)(m) of Schedule 2 of the CCA
6. Regarding the matters referred to in paragraphs 6 to 6.3 of the Statement of Claim, the first respondent has engaged in false or misleading or deceptive conduct or conduct likely to mislead or deceive in contravention of ;
(i) section 52 of the TPA; and / or
(ii) section 18 of Schedule 2 of the CCA;
and making false or misleading representations in contravention of ;
(iii) sub-section 53(e) and sub-section 75AZC(g) of the TPA; and / or
(iv) sub-section 29(1)(i) of Schedule 2 of the CCA;
and /or has attempted to engage in any of the above conduct.
7. Regarding the matters referred to in paragraphs 7 to 7.2 of the Statement of Claim:
(a) The first respondent has engaged in misleading or deceptive conduct or conduct likely to mislead of deceive in contravention of ;
(i) section 52 of the TPA; and / or
(ii) section 18 of Schedule 2 of the CCA.
8. Regarding the matters referred to in paragraphs 8 to 8.2 of the Statement of Claim, the first respondent has engaged in misleading or deceptive conduct or conduct likely to mislead or deceive in contravention of ;
(i) section 52 of the TPA; and / or
(ii) section 18 of Schedule 2 of the CCA;
and /or has attempted to engage in any of the above conduct.
9. Regarding the matters referred to in paragraphs 9 to 9.3 of the Statement of Claim, the first respondent has engaged in misleading or deceptive conduct or conduct likely to mislead or deceive in contravention of :
(i) section 52 of the TPA; and / or
(ii) section 18 of Schedule 2 of the CCA;
and making false or misleading representations in contravention of ;
(ii) sub-sections 53(c) and/or 53(d) of the TPA; and / or
(iv) sub-section 29(1)(e) and/or 29(1)(f) of Schedule 2 of the CCA.
10. Regarding the matters referred to in paragraphs 10 to 10.5 of the Statement of Claim the first respondent has engaged in misleading or deceptive conduct or conduct likely to mislead or deceive in contravention of ;
(i) section 18 of Schedule 2 of the Competition and Consumer Act 2010;
and /or has attempted to engage in the above conduct.
11. Regarding the matters referred to in paragraphs 11 to 11.3 of the Statement of Claim the first respondent has engaged in misleading or deceptive conduct or conduct likely to mislead or deceive in contravention of ;
(i) section 52 of of the TPA;
and making false or misleading representations in contravention of ;
(ii) sub-sections 53(c) and/or 53(d) of the TPA.
12. Regarding the matters referred to in paragraphs 12 to 12.5 of the Statement of Claim, the first respondent has engaged in false or misleading or deceptive conduct or conduct likely to mislead or deceive in contravention of ;
(i) section 18 of Schedule 2 of the CCA;
(ii) sub-section 29(1)(e) and/or 29(1)(f) of Schedule 2 of the CCA.
PERMANENT INJUNCTIONS / ORDERS REQUESTED AGAINST THE FIRST RESPONDENT
An order that the first respondent, its officers, agents, servants, employees, contractors, supplier florists, lawyers and any other person in active concert or participation with the first respondent, who receive actual notice of the proposed order by personal service or otherwise, whether acting directly or through any trust, corporation, subsidiary, division or other devise, shall be restrained from engaging in any of the following :
A. carrying on any conduct in trade or commerce, making representations or making testimonials that have been declared :
(a) false, misleading or deceptive;
(b) likely to be misleading or deceptive;
(c) attempting to be false, misleading or deceptive;
(d) a contravention of legislation;
as requested above at paragraphs 1 to 12;
B. providing, or having its supplier florists provide, consumer ordered Ready Flowers brand flower arrangements that do not match the description of the flower arrangements that the first respondent offers to consumers on its websites;
C. publishing that it has a local florist in specific places and locations around Australia, New Zealand and the rest of the world, when it does not have a local florist in those places or locations;
D. causing to be delivered, or having its supplier florists deliver, consumer ordered Ready Flowers brand flower arrangements on any date other than the particular date as offered by the first respondent and chosen by a consumer;
E. publishing that it has a “Customer Satisfaction Guarantee” when no such guarantee exists;
F. making false representations or attempting to make false representations :
(a) to its supplier florists regarding the the price a consumer has paid for a particular order; and
(b) failing to inform consumers that it intends to make such false representations or has made such false representations;
G. publishing the word “Limited” from the words “Ready Flowers Limited” on all of the pages of its Australian and New Zealand websites, its advertising & marketing material and its correspondence material :
H. making false representations or attempting to make false representations regarding the application of GST to its products;
I. making or fabricating or causing the making or fabrication, of false testimonials anywhere on the internet.
And further orders :
J. requiring the first respondent to provide in writing to the applicant within 30 days, a list of names and addresses of its agents, servants, employees, contractors, supplier florists, lawyers and any other person in active concert or participation with the first respondent for the purposes of giving notice of any successful injunctions as requested at A to I;
K. requiring that the first respondent to retract and apologise for its false representations to Fairfax Media that are of and concerning the applicant. The retraction and apology to be in a manner and in terms agreed upon by the applicant, together with an assurance that untrue representations will not be repeated in the future;
L. requiring the first respondent to prominently declare to consumers undertaking a website checkout for the purchase of flowers, the name, address, phone number and email address of the supplier florist (or potential supplier florists) that is to process and deliver the flowers order;
M. requiring the first respondent to declare to consumers undertaking a telephone order for the purchase of flowers, the name, address, phone number and email address of the supplier florist (or potential supplier florists) that is to process and deliver the flowers order, if requested to do so by a consumer;
N. requiring the first respondent to prominently declare to consumers undertaking a website checkout for the purchase of flowers, the percentage of the amount being paid by the consumer for the flowers order, that is to be paid to the supplier florist;
O. requiring the first respondent to declare to consumers undertaking a telephone order for the purchase of flowers, the percentage of the amount being paid by the consumer for the flowers order that is to be paid to the supplier florist, if requested to do so by a consumer;
P. requiring the first respondent to pay civil pecuniary penalties at the discretion of the Court that are deemed appropriate;
Q. other orders deemed appropriate by the Court.
Mr Craven has arranged his fresh amended statement of claim and his evidence so that there is a particular affidavit filed by him that relates to the claims made by him in each of the numbered paragraphs preceded by a whole number. Thus, by way of example, affidavit number 10 filed on 19 July, 2012 relates to the allegations set out in paragraphs 10.1 – 10.5 of the fresh amended statement of claim. However, I have had regard to all of the evidence filed by Mr Craven (excluding that ruled inadmissible on the second day of the hearing) when considering each of the claims made by him. There is some overlap.
Mr Craven sets out each of his claims in a discrete way in his fresh amended statement of claim. As I have just pointed out, he has continued that theme by filing an affidavit that relates to each general area of his claim. Moreover, in submissions the respondents addressed their written submissions to each of the general areas of claim seriatim in a continuation of the approach adopted by Mr Craven in his pleading. I shall do the same in these reasons.
Paragraphs 1 and 1.1
The respondents submit that these paragraphs contain many statements which are difficult to characterise as allegations of fact. They are more in the nature of argument and conclusion. They depend upon findings made in respect of other matters alleged by Mr Craven, and so I will not deal with them separately.
Paragraphs 2 – 2.3
These paragraphs allege that the internet website maintained by the first respondent had images of flower arrangements that could be ordered online. Mr Craven alleges that by reason of the images and the accompanying words “Ordering flowers online has never been this simple! Choose from our original fresh flower bouquets and arrangements. Just click to order and fill in the details.” the first respondent represented that “a purchased flower arrangement will match or closely resemble the image displayed on the website.”
Mr Craven pleads three identifiable orders where he alleges that the product supplied did not match or closely resemble the images on the internet website. However, in the course of argument about the admissibility of evidence on the second day of the trial of this matter, it became apparent that the particularised orders were made after 1 February, 2009 and after ownership and conduct of the relevant business passed to the Hong Kong based company.
There is no evidence that supports the critical allegations of fact in paragraph 2.1 of the fresh amended statement of claim. The conclusions pleaded in paragraphs 2.2 and 2.3 of the fresh amended statement of claim cannot be made out.
In the absence of evidence to make out the factual basis for this claim, this aspect of the case must fail and Mr Craven is not entitled to the relief sought in paragraphs 2 and B of the amended application set out above.
Paragraphs 3 – 3.3
Paragraphs 3.1 – 3.3 of the fresh amended statement of claim allege false representations by the first respondent that it had particular florists at many separate locations around Australia. Mr Craven pleads that the internet website made claims that “Ready Flowers offers a fast efficient Flowers delivery service at a competitive price. We offer same day online delivery arrangement service to almost everywhere in Australia.” and “Our local Australian florist will make sure your special delivery arrives on time anywhere in Australia”.
Further, Mr Craven pleads:
It also publishes dedicated pages on its website to service locations at almost every inhabited location, village, town and suburb of a city in every State of Australia together with the Australian Capital Territory and Northern Territory. As a result, the first respondent has tens of hundreds or thousands of dedicated webpages that represent:
“Send premium Flowers with our local florist...” per the examples below;
“Send premium Flowers with our local florist in Bute, South Australia”
“Send premium Flowers with our local florist in Carters Ridge, Queensland”
“Send premium Flowers with our local florist in Badgerin Rock, Western Australia”
Mr Craven alleges that the allegations are false. He alleges that there are great many more instances of such false representations which “cannot be fully realised until discovery is made or the first respondent makes admissions”.
However, there is no evidence that supports Mr Craven’s allegations. The conclusions that he pleads in paragraph 3.3 of the fresh amended statement of claim cannot be made out. Mr Craven is not entitled to the relief sought in paragraphs 3 and C of the amended application set out above.
Paragraphs 4 – 4.2
By paragraphs 4 – 4.2 of the fresh amended statement of claim, Mr Craven contends that the first respondent has falsely represented that the flower arrangements ordered will be delivered on a particular chosen date when this is not in fact the case. In this respect, Mr Craven pleads:
4. In trade or commerce, in order to induce consumers into entering a contract the first respondent has falsely represented on its website that a flower arrangement ordered by a consumer, will be delivered on a particular chosen date.
PARTICULARS
(i) The false representation is conveyed when the consumer is requested to provide a delivery date for a chosen flower arrangement.
(ii) The purpose of the request is to provide the consumer with an expectation that the flower arrangement will be delivered on the chosen date.
(iii) When the chosen date has a particular inherent importance, such as Valentines Day, a funeral or a birthday, the consumer has a strict expectation that the flower arrangement will be delivered on the chosen date.
(iv) When an online order is made the delivery date is reproduced on the consumer’s Invoice and Order Information provided by the first respondent by email to the consumer.
(ii) The applicant particularises the following order numbers which identify relevant transactions between the first respondent and consumers :
• order number: 1001-205911
• order number: 1001-184038
• order number: 1001-264332
• order number: 1001-25919
• further particulars to be provided prior to trial.
4.1 The particular order numbers are instances where consumers have purchased the first respondent’s flower arrangements and not had them delivered :
(a) on the chosen date;
(b) or not delivered at all.
Again, there is no evidence that supports Mr Craven’s allegations. No further particulars are given in any of the evidence before the Court.
The conclusions that Mr Craven pleads in paragraph 4.2 of the fresh amended statement of claim cannot be made out. Mr Craven is not entitled to the relief sought in paragraphs 4 and D of the amended application set out above.
Paragraphs 5 – 5.2
These paragraphs of the fresh amended statement of claim allege that the first respondent has falsely represented on its internet website that there is a customer satisfaction guarantee provided by the first respondent that has not been honoured. The allegations follow the same pattern as those set out in paragraphs 4 – 4.2 set out above. Mr Craven alleges that the first respondent falsely represented that there is a “Customer Satisfaction Guarantee” that attends purchases from the internet website. He points to seven particular order numbers and alleges:
5.1 The particular order numbers are instances where consumers have purchased the first respondent’s flower arrangements and respondent has failed to honour the Satisfaction Guarantee thereby rendering the guarantee representations false.
But there is no evidence that proves that allegation. This claim must fail. The orders as sought in paragraphs 5 and E of the amended application are not appropriate.
Paragraphs 6 – 6.6
Mr Craven alleges that in seeking to fill orders received by it on its internet website, the first respondent has made false representations to “supplier florists”. Mr Craven explains:
6.1 The false representations have arisen when a consumer has paid the first respondent the particular price for a chosen flower arrangement and the first respondent has then falsely represented to the supplier florist that the consumer has paid a lesser price.
PARTICULARS
(i) The lesser price is in the region of 20 to 21 Australian dollars below the price a consumer has paid as per published on the first respondent’s website.
(ii) The discrepancy is not the commission that the first respondent deducts for its services, as in fact the first respondent deducts its commission out of the lesser price falsely represented to the supplier florists;
(iii) In other words, the first respondent firstly skims 20 to 21 dollars which is identified as the false representation, and then deducts its commission out of the balance;
(iv) The applicant particularises the following order numbers which identify relevant transactions between the first respondent and a supplier florists and a consumer:
• order number : 1001-76369
• order number : 1001-75642-1
• order number : I 001-65698
• order number : 2648-5707
• order number : I 001-78468
• order number: 2648-5633
• further particulars (over one hundred) to be provided prior to trial.
6.2 The particular order numbers are instances where supplier florists have received false representations.
Mr Craven further alleges that:
6.4 ALSO, the conduct is misleading or deceptive or is likely to mislead or deceive consumers as an average consumer :
(a) has an expectation that the first respondent will not make this false representation;
(b) has an expectation that the first respondent should inform the consumer if it intends to devalue the order in excess of a reasonable commission; and
(c) would not consent to such a devaluation if the consumer was made aware that there was to be a devaluation in addition to a reasonable commission.
To the extent that any of the first respondent’s attempts to engage supplier florists was unsuccessful, Mr Craven alleges that the first respondent has contravened the relevant statutes by attempting to engage in proscribed conduct.
In respect of this aspect of his claim, Mr Craven relies upon the evidence in “Affidavit 6” filed on 6 July, 2012. It has exhibited to it a CD-ROM containing a number of electronic files of three general types. The first type are copies of emails received by Mr Craven from the first respondent asking him to fulfil orders for fresh flowers. The emails all take the same form. Between 23 May, 2008 and 2 January, 2009 Mr Craven received 30 such requests (or there are thirty in evidence at least). The email requests were all in the following format:
From: Ready Flowers Order System <[email protected]>
Date: 23 May 2008 9:48:48 AM
To: [email protected]
Subject: 1001-54198 - Ready Flowers Order Received
| New Order Notification | |
| ID: 1001-54198 | |
| Click Here to login to the Ready Flowers Supplier System to view all available orders. | |
| Make sure that you login as soon as possible because this order will become available to other florists if you take too long to accept it. | |
The information contained in this e-mail message and any accompanying files is confidential and not for dissemination. If you are not the intended recipient, any use, dissemination, reliance, forwarding, printing or copying of this e-mail or any attached files is unauthorised. This e-mail is subject to copyright. No part of it should be reproduced, adapted or communicated without the consent of Ready Flowers Pty Ltd. If you have received this e-mail in error please advise the sender immediately by return e-mail, or telephone and delete all copies. Internet communications are not secure, therefore Ready Flowers Pty Ltd. does not accept legal responsibility for the contents of this message or attached files.
The next category of documents are screenshots (the screen images of particular website pages taken by Mr Craven at particular times) of what Mr Craven describes as the “Ready Flowers Supplier System”. Mr Craven says that he went to those pages after clicking on the “Click Here to login to the Ready Flowers Supplier System to view all available orders.” link in some of the emails in the first category of documents. He did that 13 times. Using the file \\EXHIBIT 1-6\AVAILABLE ORDERS\SCREEN SHOT COPIES .tif FORMAT\10.tiff, what he saw was:
Critically, Mr Craven draws attention to the following that appears near the top right hand corner:
Order ID: 1001-78178
Value: AUD $60.00
Delivery: AUD $9.90Amount to charge us: AUD$46.90
Each of the screenshots in the second category of documents relates to a different flower order, but the format and the nature of the information on the page is the same. The particulars I have just set out change from order to order.
The third category of documents are screenshots of what Mr Craven describes as a “Shopping cart”. Those captured website pages appear to be the shopping cart pages that correspond to each of the orders in the second category of documents. Again, using Order 1001-78178 as the example, the corresponding shopping cart page is:
The point Mr Craven wishes to make is this: The consumer ordered flowers from the first respondent’s website. The price for the flowers was stated on the page viewed by the person placing the order. In the case of order 1001-78178, the price to the consumer was $56.00 for flowers, $25.00 for a vase and $9.90 for delivery – a total charge of $90.90.
However, when Mr Craven was offered the opportunity to fill the order, he says that it was represented to him that the value of the flowers for the order was $35.00 plus the cost of the vase - $25.00 flowers and delivery charges of $9.90. Thus, he claims that the order was “devalued” by the first respondent by $21.00 (the difference between $56.00 and $35.00). The first respondent’s commission for providing the order to Mr Craven was then the difference between what the consumer was charged – in this case $90.90 - and what the first respondent would pay to Mr Craven had he filled the order - $46.90 – a gross profit of $44.00.
Mr Craven argues that by “devaluing” the order, the first respondent engaged in misleading and deceptive conduct because it has falsely represented to the supplier invited to fill the order that the price charged to the consumer is the same as the amount stated as the “value” of the order on the Supplier’s page. To use Mr Craven’s words from his pleading:
6.1(iii) In other words, the first respondent firstly skims 20 to 21 dollars which is identified as the false representation, and then deducts its commission out of the balance.
But in my view, there is no such representation, let alone a misrepresentation. The amount charged to the consumer is the price for which the first respondent is willing to sell to the consumer the particular product described on the webpage. There are no warranties as to “value”. Whether the consumer accepts the price and places an order is a matter for the consumer. Prices for products commonly vary.
The representation as to “value” on the supplier’s page is not a representation as to the price charged to the consumer who placed the order. At best, in my view it is an indication of the quantity and quality of the product to be supplied at the first respondent’s request. Quantity and quality are concepts more closely aligned with “value”. In my view, there is nothing in the nature of a misrepresentation by the first respondent by requesting that the supplier florist supply a product at a particular value, which it has already agreed with its own customer to sell to that customer at a higher price.
Further, there is no misrepresentation to the consumer as Mr Craven alleges. Again the distinction between price and value is important. A consumer might choose to accept the first respondent’s offer to sell to the consumer particular fresh flowers at a particular price. The consumer might reject such an offer. Provided the product supplied met any contractual warranties, express or implied, the consumer cannot complain that the price paid was not equivalent to the products “value”. But there is no implied representation that the order would not be “devalued” as Mr Craven suggests.
In an earlier judgment between these parties, I said:
It is a novel proposition that a retailer of products is obliged to reveal to consumers (and its commercial competitors) the underlying costs of the products sold and the profit margin included in the price to the purchaser. Certainly that information is sometimes made available and in certain circumstances there is a statutory warrant for it to be provided, but a failure to provide it in the absence of any legal duty to do so is not actionable. The question here is whether the failure to provide that information is likely to mislead or deceive a consumer purchasing product from Ready Flowers. That begs the question ‘mislead or deceive about what’. The answer Mr Craven would give is ‘mislead or deceived about the underlying cost of the product to Ready Flowers and how much profit Ready Flowers is making on the transaction and how much profit the actual supplier of the flowers is missing out on’ but there is no pleading that an average consumer of florist products would have any preconceived idea of the underlying cost of the product or the profit margin of Ready Flowers. Indeed, every consumer expects that a retailer of products does so to make a profit of some measure.
In my view, this aspect of Mr Craven’s claim fails and he is not entitled to the orders sought in paragraphs 6 and F of the amended application.
Paragraphs 7 – 7.2
The claims made in these paragraphs depended upon the proposition that the first respondent continued to carry on the Ready Flowers business after 1 February, 2009 but did so by using the name Ready Flowers Limited. The allegation in paragraph 7.1 of the fresh amended statement of claim is that the “publication of the name ‘Ready Flowers Limited’ in replacement, falsely represents or implies that the first respondent is an Australian public company when it is not and Australian public company.”
Leaving aside the difficulties with Mr Craven’s argument that the use of the name Ready Flowers Limited carries with it the representations for which he contends, this aspect of his claim is answered by the findings that I made on the preliminary issue that was disposed of at the commencement of the trial.
I agree with the first respondent’s submissions that there is no basis for the orders sought in paragraphs 7 and G of the amended application.
Paragraphs 8 – 8.3
The claims in these paragraphs of the fresh amended statement of claim also depend upon Mr Craven’s claim that the first respondent continued to carry on the Ready Flower business after 1 February, 2009. But it did not, as I found at the commencement of the trial of these proceedings. Accordingly, these claims cannot succeed and there is no basis for the Court to make the orders set out in paragraphs 8 or H of the amended application.
Paragraphs 9 – 9.3
Paragraphs 9 – 9.3 of the fresh amended statement of claim deal with what are alleged to be false customer testimonials on the Ready Flowers internet website. The core allegation is expressed as follows:
In trade or commerce, in order to induce consumers into entering a contract the first respondent has falsely represented consumer testimonials on its website.
PARTICULARS
The particulars of the false testimonials are as follows :
• I would just like to say thank you so much for organising flowers for my partner’s birthday today on ridiculously short notice. THANK YOU so much! The flowers made his day, he was so excited he said it has been the best birthday he ever had. I am really, really grateful.
Alix Ziebell - Vietnam
• Dear Ready Flowers,
Thanks for the delivery of flowers to my wife. She was absolutely delighted with them. Your service is excellent and very efficient. Many thanks again.
Bob Pearce - Brisbane, Australia
• I would like to thank you so much for your prompt delivery of the flowers I ordered. Your service is excellent. You don’t know how much it meant to our daughter who had no family with her and was taken into hospital on her birthday. We were here in england, not being able to do much except send flowers to say we were thinking of her, you made her day. I will recommend you to anyone here in the UK who wants to send flowers to relatives etc in Australia.
Debra Corbett - UK
Mr Craven does not plead that the testimonials were published at any particular times, although does allege that breaches of the various sections of the Competition and Consumer Act 2010 depending upon whether the testimonials were published before or after 1 January, 2011.
The falsity alleged is not revealed in the pleading. Is it alleged that the people purporting to make the testimonials do not exist? If not, is it alleged that they do exist, but did not make the testimonials? Neither of those questions is answered by the pleading.
Having regard to the ruling on the preliminary issue, only testimonials published on the Ready Flowers internet website before 1 February, 2009 will be relevant.
There is evidence that on the Ready Flowers internet site published on 16 January, 2009, the three testimonials set out above appeared. Thus, I can and do conclude that the first respondent caused them to be published to the public on the internet website on that day.
However, there is no evidence that they are false. There is evidence that two of the testimonials appear on the Ready Flowers internet website as it was published on the internet as at 1 July, 2012. However, that does not demonstrate that the testimonials are false. Although they appeared on the internet website used for the business operated by Ready Flowers Hong Kong after 1 February, 2009, that does not mean that the first respondent has falsely represented consumer testimonials on “its website” as alleged in paragraph 9 of the fresh amended statement of claim.
Mr Craven points out that as at 26 June, 2012 he searched for the identity of the organisation or person that maintained the readyflowers.com.au domain and determined that it was the first respondent. He argues that the first respondent is responsible for the publications of the testimonials. However, on the hearing of the preliminary issue Mr Peter Hegarty, a director of Ready Flowers Pty Ltd, gave evidence that the domain name had not been transferred into the name of the Hong Kong registered company because that was an obligation on that company under the sale agreement and it appeared that the Hong Kong registered company had not attended to the transfer.
The evidence does not establish that the first respondent is responsible for the publication of the testimonials on the Ready Flowers internet website after 1 February, 2009. Moreover, the evidence does not establish that they are, in any event, false.
There is no basis for the Court to make the orders set out in paragraphs 9 or I of the amended application.
Paragraphs 10 – 10.5
In these paragraphs Mr Craven alleges that the first respondent, by its General Manager and CEO, Thomas Ross Hegarty has made false representations to the Fairfax Media. Thomas Ross Hegarty is not a party to these proceedings.
The false representations pleaded against the first respondent are as follows:
10.2
…
PARTICULARS
…
(iv) By way of emails and telephone conversations in the latter half of February 2012 to Fairfax Media, the first respondent has made the following false representations by way of Thomas Ross Hegarty, General Manager and CEO of the first respondent :
• We clearly stated on the website we would use our “best efforts” to deliver on the day [Valentines Day], but there was no guarantees that it would be possible.
• Anyone that happens to have an issue with an order, we [Ready Flowers] do everything we can to service them, whether it be a re-delivery or a free bouquet;
• The applicant’s Fair-Trading.com website is bogus;
• The applicant is responsible for a 24 hour DDoS attack on the first respondent’s website on Valentines Day causing the problems that were published in the Fairfax Media article;
• A complaint had been made to the Police accusing the applicant;
• The applicant has advised our lawyers that he would “go away” if we paid him;
• He claims to have been paid by Sunshine City Council a sum of AUD $60,000;
• He has stolen and re-produced without permission numerous personal Facebook Images;
• He now hosts his [Fair-Trading.com] site out of Romania to avoid any court rulings in Australia;
• The applicant is posting fake negative reviews around the internet and trying to delete our Wikipedia pages;
• He told our lawyers that the Sunshine Coast City Council paid him off;
• He has also run slander campaigns against Malcolm Turnbull who somehow got rid of him;
• Multiple frivolous legal suits that we have successfully quashed in Federal Court, however we are still waiting a judgement in regards to an injunction in relation to his bogus fair-trading site and multiple other fake “review” sites;
• He has nothing better to do with his time than to create websites attacking brands and government agencies so he can achieve a nice little payday for himself;
• The Applicant invents names and complaints under a range of names and publishers. These names do not match any orders - so what you see is inflated.
• Ready Flowers and numerous other companies and individuals have had issues with this guy spewing out his bogus information and lies all over the internet. This guy trolls our Facebook pages, tries to rank on our SEO terms, runs Google Ad words campaigns against us on Brand
terms, posts bogus complaints across the internet and continually destroys business relationships ... unless you pay him of course (which I have evidence of).
The evidence, principally set out in “Affidavit 10” deposed by Mr Craven and filed by him on 19 July, 2012, establishes that in February, 2012, Thomas Hegarty sent an email to Mr Asher Moses of Fairfax Media. In the email, Mr Hegarty made some claims not unlike those set out in the extract from paragraph 10.2 of the fresh amended statement of claim. Mr Craven swears that the claims are all false.
At the time of the relevant publication, Mr Thomas Hegarty was the sole shareholder of Ready Flowers Limited. He was not, according to the searches conducted by Mr Craven and to be found on the CD-ROM exhibited to Mr Craven’s affidavit (\\EXHIBIT 1-10\ASIC\4-RF_PtyLtd_search.pdf) a director of the first respondent, although he had been in 2009 ((\\EXHIBIT 1-10\ASIC\5-RF_PtyLtd_search.pdf).
The evidence establishes that in 2012 the Hong Kong based company was carrying on the business of Ready Flowers. In the email to Fairfax, it is the Ready Flower business that is defended by Thomas Hegarty, not the business of Ready Flowers Pty Ltd, the nature of which had changed after the sale in February, 2009. The evidence from Peter Hegarty on the hearing of the preliminary issue was that since February, 2009 the first respondent has been receiving licence fees. The licence agreement which is exhibit 2 in the proceedings supports that view.
There is no evidence that Thomas Hegarty was the general manager or the CEO of the first respondent at the time the relevant representations were made, or that even if he was, the representations were made on the part of the first respondent. Peter Hegarty was cross-examined about Thomas Hegarty’s involvement in Ready Flowers Pty Ltd. He said:
Ready Flowers Pty Limited has been always managed by Thomas Hegarty, your son, and he’s also the chief, always been the chief ..... secondary officer?‑‑‑Yes, I would say on the whole, yes.
Has your son Thomas Ross Hegarty had the authority of Ready Flowers Pty Limited to make public and media comments about the company?‑‑‑I believe he had board sanction to do that, yes.
Later in the cross-examination, after drawing a distinction between Ready Flowers Pty Ltd and the “Ready Flowers brand business”, Mr Craven asked of Peter Hegarty:
So let’s just go over a couple of things here. The Ready Flowers brand business: that’s not the company, that’s the Ready Flowers brand business. You understand what I say about brand business?‑‑‑I think I do, yes.
Has always had Thomas Ross Hegarty as its CEO or manager?‑‑‑Hasn’t had anyone else. Yes.
The context of the first questions set out above was such that it was clear that Mr Hegarty was referring to the period prior to the sale of the business by Ready Flowers Pty Ltd to Ready Flowers Limited. The second questions referring to the “Ready Flowers brand business” make it clear that Thomas Hegarty was always the CEO or manager of that business. In 2012 that business was conducted by Ready Flowers Limited.
It is clear, in my view, that in the emails to Fairfax, Thomas Hegarty was attempting to respond to Mr Craven’s claims about the business of Ready Flowers Limited, which Mr Craven wrongly attributed in these proceedings to Ready Flowers Pty Ltd.
Further, as the first respondent points out, the truth of the content of the emails has not been proved. Asher Moses has not given any evidence nor upon a review of the emails is it apparent that Thomas Hegarty has forwarded the email to Asher Moses.
I accept the first respondent’s submissions that there is no basis in the evidence to conclude that the representations complained of by Mr Craven, were indeed made, if made were false or were made on behalf of the first respondent.
Mr Craven’s claim in paragraph 10 of the fresh amended statement of claim has not been proved on the balance of probabilities, or at all.
Paragraphs 11 – 11.3
By these paragraphs Mr Craven claims that the second respondent has engaged in conduct on behalf of the first respondent. The conduct is alleged to offend s.52, 53(c) and/or 53(d) of the Trade Practices Act 1974. The allegations are confused and confusing. I set them out in full so that I do not misstate them in summary:
11. In trade or commerce the second respondent has engaged in conduct on behalf of the first respondent.
11.1 The conduct arises by way of :
(a) The second respondent publishing websites at and being the registrant for those domains.
(b) The first respondent contracting with the second respondent to pay commissions to the second respondent for referrals to the first respondent’s website from the websites, that result in a contract arising between a consumer and the first respondent, as set out at paragraphs 1 and 1 .1 above.
(c) By reason of (b), the first respondent provides actual authority for the second respondent to be its:
(i) agent or periodic agent for procuring flower arrangement orders; and
(ii) making representations for this purpose.
(d) The second respondent’s apparent authority of the first respondent, is by way of having made the following representations on his websites :
on or before 2 February 2009, that include :
(i) Our friendly and reliable service includes same day delivery of flowers to all regions of Australia including Noosa.
(ii) We are the Noosa flower shop that never shuts!
(iii) Order flowers online 24 hours a day and brighten someone’s day.
(iv) We have a team of quality Florists in Noosa ready and waiting to take your order.
(v) Fresh flowers ready to be delivered by local Noosa Florists.
(vi) With over 100 flower arrangements to choose from, we’ve got you covered no matter what your taste or budget.
(vii) Feedback at :
FT - 1 ............... ...... “Beautiful flowers delivered on time, at a reasonable price. What more could anyone want?” Michael - Brisbane
(viii) Feedback at :
FT - 2 ............... ....... “The flowers were simply wonderful. First class service and a great price too.” Beth - Sydney
(ix) Feedback at :
FT - 3 ..... .. .. .. ....... .... “Professional, punctual and perfect! I will definitely be using and recommending you as my on/ine florist.” Elizabeth - Adelaide
NOTE : FT - 1 = False Testimonal example 1, FT - 2 = False Testimonal example 2, FT - 3 = False Testimonal example 3.
(e) By following an “Order Now” or similar instruction, a consumer arrives at the first respondent’s website at As the consumer has reached the first respondent’s website, the representations were made exclusively for and on behalf of the first respondent.
(g) In the event of a contract arising between the first respondent and a consumer, the first respondent ratifies the apparent authority by performing the contract.
11.2 Pursuant to sub-section 84(2) of the Trade Practices Act 197 4, the representations of the second respondent became that of the first respondent.
11.3 The Feedback representation at 11 .1 ( d)(vii), (viii) and (ix) were false testimonials. In consideration of the Australian websites being altered to remove the proscribed conduct at some time after the originating Application being filed on 11 March 2009, insofar as the conduct occurred prior to 1 January 2011, the false testimonials were in contravention of :
(a) sub-sections 53(c) and/or 53(d) of the Trade Practices Act 1974; and
(b) were also misleading or deceptive in contravention of section 52 of that Act.
To support these claims, Mr Craven relies upon the evidence specifically found in “Affidavit 11” deposed by him and filed on 19 July, 2012.
However, there is no evidence that the testimonials upon which he relies are false. There are no particulars of the falsity given. It is not clear what is alleged – whether the people alleged to have made the testimonials do not exist, or whether they do exist but did not say the things attributed to them. The onus of proving the facts upon which his claim is based falls upon Mr Craven. He does not discharge that onus.
Indeed, his evidence only establishes the first of the testimonials relied upon and then only that it was published in March, 2009 by the second respondent at a time after the first respondent ceased operating the Ready Flowers business.
Even having regard to the use of testimonials worded in exactly the same way (as is alleged directly against the second respondent and with which I deal below) on multiple occasions, the falsity of these representations are not proved on the balance of probabilities. The testimonial proved might be a genuine testimonial from a person who has used the relevant website pleaded by Mr Craven. There is no evidence to suggest that it is not. I am not prepared to infer that it is not simply because testimonials in the same terms appear on other websites (as discussed below). Moreover, the fact that it has been removed from the websites identified by Mr Craven, is equally consistent with an innocent reason for its removal, as it is with one that is consistent with it being false.
In my view, these claims must fail.
Paragraphs 12 – 12.5
These paragraphs make similar claims to the allegations in paragraphs 11 – 11.3 of the fresh amended statement of claim although the offending conduct is alleged to have been and to be “currently” engaged in by the first and second respondents. No further particulars of the dates of the offending conduct are given. The pleading alleges that acting on behalf of the first respondent, the second respondent published on two websites certain testimonials. The testimonials are in the same terms as two of those pleaded in paragraph 11.1. They are alleged to be made by different people. Further, Mr Craven alleges that the testimonials have been repeated on approximately 445 website pages.
Again, Mr Craven has filed an affidavit (“Affidavit 12”) in support of these claims. It identifies the allegedly offending conduct as occurring after 1 February, 2009.
However, this claim must fail because:
a)given that the first respondent was no longer carrying on the business that it sold to Ready Flowers Limited after 1 February, 2009, the offending conduct, even if proved, was not carried on for the first respondent; and
b)despite the similarity with the testimonials pleaded in paragraph 11.1 of the fresh amended statement of claim, there is no evidence to prove on the balance of probabilities that the testimonials were false.
Relief sought by Mr Craven against the second respondent
Paragraph 13
The claims against the second respondent set out in paragraphs 13 and 14 of the fresh amended statement of claim are made against him independently of the claims against the first respondent. They have no connection with the first respondent.
The allegation in paragraph 13 of the fresh amended statement of claim is as follows:
13. With regard to paragraphs 11 to 12.5, in the event that the representations of the second respondent do not become that of the first respondent (or in other words the second respondent is not speaking on behalf of the first respondent), the overall impression provided by the images and text on the pages (to be presented in evidence) is misleading or deceptive or likely to mislead or deceive in contravention of the TPA or CCA (as applicable) in that the second respondent falsely represents an impression that is created in the mind of a reasonable consumer that the pages are that of a florist when they are not of a florist.
The images and text relied upon by the second respondent to support this allegation are found on the CD-ROMs that are exhibited to Mr Craven’s affidavits described as “Affidavit 11” and “Affidavit 12”. The relevant document from “Affidavit 11” relates to a webpage identified as “Zoomblooms”. The others from “Affidavit 12” relate to a webpage “FloristNZ.org.nz”. Both pages, on their face have images of flowers and a deliveryman holding a clipboard and a bunch of flowers. But the text of each page makes it clear, in my view, that the website is not that of a florist. Both pages contain the following statement (and using the New Zealand site as an example):
A combination of the freshest flowers, quality independent florists and beautiful floral arrangements make us your number one choice for online flowers in New Zealand.
(my emphasis)
In my view, the emphasised words make it clear that the consumer is utilising an online retailer who in turn sources its products from independent florists for supply to the consumer.
Whilst the overall get up of the webpages might convey an overall impression that it is the webpage of a floristry business, the text dispels that impression.
To the extent that paragraph 13 of the fresh amended statement of claim seeks to set up a cause of action against the second respondent, that claim must fail.
Paragraph 14
The allegations in these paragraphs are a combination of allegations previously made in paragraphs 11.1 and 12.1 and new allegations. The allegations concern the publication of false testimonials.
As I have indicated above, I am not satisfied on the evidence that the testimonials pleaded in paragraphs 11.1 or 12.1 are false. There is no direct evidence of falsity. I am asked to infer falsity from the repetitious nature of the testimonials, but I am not prepared to do that.
The allegations relying upon the facts pleaded in paragraph 11.1 must fail for the reasons set out above.
The allegations set out in paragraph 12.1 must also fail for the reasons set out above.
The balance of the allegations in paragraph 14 of the fresh amended statement of claim relate to alleged false testimonials published on websites directed to locations not within Australia. The total number of website pages is said to be in the region of 4,976. They relate to locations in New Zealand, South Africa, the United States of America (including the states of New York and Texas and the city of Los Angeles) and the United Kingdom; specifically London and Birmingham.
Given the nature of the product sought to be sold on each of the relevant websites (as revealed in the extensive documents contained on the CD-ROM exhibited to Mr Craven’s “Affidavit 14” filed on 19 July, 2012) it is clearly the case that the websites are directed to trade or commerce within those localities. That is to say, the websites seek to elicit sales of flowers in the areas to which the websites relate. They are directed to consumers in the relevant jurisdiction and not in Australia. On each webpage is a statement to the effect that the service relates to delivery in the locally identified area.
The only allegation in the fresh amended statement of claim that purports to give any particulars about falsity is the allegation that some of the offending statements have been removed from Australian and UK websites after these proceedings were commenced. But that action does not prove the falsity of the statements on the balance of probabilities.
Further, the second respondent points out that the operation of s.52 of the Trade Practices Act and s.29 of the Australian Consumer Law is, by s.6 of the former Act and s. 4 of the latter Act, confined to trade or commerce “between Australia and places outside of Australia”. Thus, to fall within the operation of the Trade Practices Act and the Australian Consumer Law it must be shown that the statements on the websites were specifically targeted or directed at, or were specifically intended to be acted upon by consumers in Australia: Ward Group Pty Ltd v Brodie & Stone & Ors (2005) 215 ALR 716 at 37-40 per Merkel J.: ACCC v Chen (2003) 132 FCR 309 at [14] – [16] and [32] per Sackville J.: Bray v F Hoffman-La Roche Ltd & Ors (2002) 118 FCR 1 at [145] – [147] per Merkel J. For the reasons I have expressed in paragraph 96 above, I am not satisfied that they were.
Mr Craven also argues that to the extent the representations are made after 1 January, 2011 s.29(2) of schedule 2 of the Competition and Consumer Act applies. That section is in the following terms:
29 False or misleading representations about goods or services
(1) [False or misleading representations prohibited] A person must not, in trade or commerce in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:
…
(e) make a false or misleading representation that purports to be a testimonial by any person relating to goods or services; or
(f) make a false or misleading representation concerning:
(i) a testimonial by any person; or
(ii) a representation that purports to be such a testimonial;
relating to goods or services; or
…
(2) [Accused must adduce evidence that representation is not misleading] For the purposes of applying subsection (1) in relation to a proceeding concerning a representation of a kind referred to in subsection (1)(e) or (f), the representation is taken to be misleading unless evidence is adduced to the contrary.
(3) [Effect of s.29(2)] To avoid doubt, subsection 92) does not:
(a) have the effect that, merely because such evidence to the contrary is adduced, the representation is not misleading; or
(b) have the effect of placing on any person an onus of proving that the representation is not misleading.”
However, by reason of item 7 of schedule 7 to the Trade Practices Amendment (Australian Consumer Law) Act (No 2) 2010 that section has no application in these proceedings. By item 7 of schedule 7 of the Amendment Act the Trade Practices Act as in force immediately before the commencement of that item continues to apply to any proceedings, under or in relation to that Act that were commenced, but not concluded, before that commencement.
In my view, therefore, the claims against the second respondent must fail for the reasons given above.
Conclusion
Mr Craven has not made out any of his grounds for relief. His application must be dismissed with costs.
There is an outstanding issue of costs following the respondents’ successful application to strike out Mr Craven’s first statement of claim. Those costs should follow both the respondents’ success on that application and their success on the application as a whole.
I make the orders set out at the commencement of these reasons.
I certify that the preceding one hundred and four (104) paragraphs are a true copy of the reasons for judgment of Judge Jarrett delivered 10 March, 2015.
Associate:
Date: 10 March 2015
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