Craven v Ready Flowers Pty Ltd - [2015] FCCA 538

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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2015] FCCA 538
Decision Date: 10 March 2015

CaseChat Overview and Summary

Mr Craven commenced proceedings in the Federal Magistrates Court of Australia against Ready Flowers Pty Ltd, alleging contraventions of consumer protection legislation. The applicant sought declarations that the first respondent had engaged in misleading or deceptive conduct and made false or misleading representations in contravention of provisions of the *Trade Practices Act 1974* (Cth) and the Australian Consumer Law, specifically section 18 of Schedule 2 of the *Competition and Consumer Act 2010* (Cth) and various sections of the *Trade Practices Act*. The applicant also alleged failures to honour guarantees relating to the supply of goods by description and customer satisfaction guarantees.

The court was required to determine whether Ready Flowers Pty Ltd had engaged in misleading or deceptive conduct, or made false or misleading representations, in relation to its business operations, including its website and advertising. Specifically, the court had to consider allegations concerning the accuracy of product descriptions, the existence of local florists, the timely delivery of flower arrangements, the provision of a customer satisfaction guarantee, representations made to supplier florists, and the application of GST. The applicant also sought declarations regarding the first respondent's liability for the alleged conduct and its jurisdiction to make the requested orders.

The court's reasoning, as evidenced by the applicant's amended application, focused on establishing that Ready Flowers Pty Ltd's conduct constituted misleading or deceptive conduct or false or misleading representations under the relevant legislative provisions. The applicant detailed numerous instances of alleged contraventions across various aspects of the respondent's business model, including its online presence and contractual dealings. The court was asked to declare that such conduct was an integral part of the respondent's business and to grant permanent injunctions restraining the respondent from continuing such conduct, alongside other orders requiring greater transparency and the payment of pecuniary penalties.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

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Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

By his amended application dated 15 August, 2012, Mr Craven seeks against the first respondent:DECLARATIONS REQUESTED AGAINST THE FIRST RESPONDENT1. 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 CCA6. 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 RESPONDENTAn 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.