Selby v Expedia Australia Pty Ltd

[2018] ACAT 124

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

SELBY v EXPEDIA AUSTRALIA PTY LTD & ANOR (Civil Dispute) [2018] ACAT 124

XD 584/2018

Catchwords:               CIVIL DISPUTE — mere puff — misleading and deceptive conduct — mere purveyor of advertising — exclusion clauses

Legislation cited:        Australian Consumer Law s 18

Trade Practices Act 1974 (Cth) s 52

Cases cited:Byers v Dorotea Pty Ltd (1987) ATPR 40-760

Collier Constructions Pty Ltd v Foskett Pty Ltd [1990] FCA 562
Collins v Stayz Pty Ltd [2018] NSWCAT (27 July 2018)
Google Inc v Australian Competition and Consumer Commission [2013] HCA 1
Keehn v Medical Benefits Fund of Australia Ltd (1977) ATFR 40-047
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191

List of

Texts/Papers cited:     Donald W Greig and Jim L R Davis, The Law of Contract (Sydney Law Book Co, 1987)

List of

Other sources cited:    Australian Competition & Consumer Commission, False or misleading statements < align="left">Tribunal:                  Senior Member J Lennard

Date of Orders:  7 December 2018

Date of Reasons for Decision:         7 December 2018

AUSTRALIAN CAPITAL TERRITORY  )

CIVIL & ADMINISTRATIVE TRIBUNAL           ) XD 584 of 2018

BETWEEN:

HUGH SELBY

Applicant

AND:

EXPEDIA AUSTRALIA PTY LTD

First Respondent

EXPEDIA INC

Second Respondent

TRIBUNAL:  Senior Member J Lennard

DATE:6 December 2018

ORDER

The Tribunal orders that:

1. The respondent shall pay to the applicant on or before 20 December 2018 the amount of $709.34, being damages in the amount of $628.34, the ACAT filing fee of $72, and the ASIC search fee of $9.

………………………………..

Senior Member J Lennard

REASONS FOR DECISION

Background

1.At all material times the first respondent, Expedia Australia Pty Ltd, owned and operated Wotif – a holiday travel site through which members of the public could make bookings for travel and accommodation.

2.On or about 31 January 2018 the applicant booked accommodation at Rocky Point Beachfront/Paradise in Haleiwa, Hawaii for the period from 17 to 19 April 2018. The booking was made through the Wotif website and paid for by credit card transaction to Wotif. The cost of the accommodation booked was $628.34.

3.On 31 January 2018 the applicant received an email from Wotif which stated “Thanks! Your reservation is confirmed. No need to call to reconfirm.” The email included a link to the Rocky Point Beachfront accommodation and noted that the total amount of $628.34 had been “collected by Wotif”.

4.On 17 April 2018 the applicant and his family arrived at the Rocky Point Beachfront accommodation but declined to stay at that accommodation. There were several reasons given by the applicant for the decision not to stay at the accommodation:

(a)No room was ready for them as the room that had been allocated to them was still occupied by other persons. It is, however, noted that they arrived prior to the designated check-in time.

(b)The building was of a generally poor standard.

(c)The outlook and facilities were not what was expected, in particular, the room allocated to the applicant was a basement room and had no view to the beach.

(d)The applicant was not able to contact the owner of the Rocky Point Beachfront accommodation to resolve the issues.

5.On 17 April 2018 the applicant complained to Wotif and demanded a refund of the full amount paid for the holiday accommodation. Wotif replied that they had contacted the owner of the Rocky Point accommodation and a refund had been refused. After further correspondence between the parties, Wotif offered a $150 credit coupon to the applicant. This was refused. Wotif then offered a 15% or $95 refund “for the inconvenience”. This was refused. After further correspondence between the parties Wotif offered an increased refund of $125.67 “for the inconvenience”. This was refused.

The application

6.On 15 May 2018 the applicant filed an application claiming a refund of the $628.34 paid for the accommodation.

7.The applicant filed written submissions summarising his evidence and contentions. This evidence included copies of correspondence between the parties, photographs of the accommodation taken on 17 April 2018, and copies of pages from the respondents’ website.

8.The respondent provided written submissions which included a screenshot of the page displaying the Rocky Point accommodation, a screenshot of the page displaying the booking option for the accommodation on Wotif.com, copy of the terms of use of the Wotif booking website at the relevant time, a copy of the screenshot of the “Create an Account” page on Wotif.com and a copy of the decision in Collins v Stayz Pty Ltd [2018] NSWCAT (27 July 2018).

9.Mr Selby was self-represented, Ms Doyle, solicitor, appeared by phone for the respondents.

10.The applicant contended that the respondents, by the content and management of its Wotif website, have engaged in misleading or deceptive conduct in breach of the Australian Consumer Law (ACL). The misleading and deceptive conduct is said to arise from statements and representations made by Wotif on their website. The applicant contends that Wotif is more than a mere purveyor of advertising on behalf of third parties, and that it is not analogous to newspaper advertisements or advertisements available on the Google[1] website where the reader would understand that the information contained in the paid advertisements was provided by the third-party customer of the advertising platform and that the advertising platform makes no promises or warranties as to the truth or accuracy of the information contained in the advertising material. The Tribunal accepts that assertion. Wotif is not analogous to the classified section of the newspaper where it is obvious to any reasonable reader that the newspaper is not endorsing or guaranteeing the information contained in those advertisements. The respondents did not cavil with this and asserted that Wotif was an online travel company.

[1]Google Inc v Australian Competition and Consumer Commission [2013] HCA 1  — where it was held that Google did not engage in misleading and deceptive conduct in circumstances where sponsored links were supplied by advertisers, and Google was not a party to any contract between the advertisers and potential or actual customers

11.The applicant contends that he relied upon the assurances and statements made on the Wotif webpage in making a booking. A copy of the Wotif webpage was in evidence before the Tribunal. The webpage is reproduced below with the representations the applicant states that he relied upon in making the booking. The applicant submits that when taken together these statements convey the message that Wotif is a specialist travel company website, that Wotif seeks out good deals for travellers and these good deals are based on local knowledge. The opening page of the Wotif website states, next to a red tick:

Book with confidence. Stay with peace of mind. With access to millions of reviews by Aussie and Kiwi travellers it’s easy to find the right hotel for you.

12.

The Wotif webpage in evidence before the Tribunal read (emphasis added):

13.The respondents, in written submissions asserted that the respondents were not liable for either the nature of the advertisement of the accommodation displayed on the website or the quality of the accommodation. At the hearing the respondent submitted that the contract was the one that had been reduced to writing and was between the applicant as a user of the Wotif website and the respondents: and that the written contract is wholly contained in the terms of use available on the Wotif website. The respondents relied upon the terms included in the website’s terms of use, a copy of which was supplied to the Tribunal. Those terms are available to customers on the Wotif website. The terms of use may be found by scrolling to the bottom of the opened website and reading across from the heading Wotif to the subheading ‘Terms of Use’. The respondents drew the Tribunal’s attention to the following particular terms:

(a)that customers agreed that the Terms of Use apply (presumably to the relationship between the customer and Wotif); and

(b)The information displayed on this Website concerning specific travel products and services is provided to us by the relevant travel suppliers (such as airlines or hotels) or their agents (“Third Party Suppliers”). This includes, but it is not limited to, information about airfare and hotel prices, rules and availability in the description of hotels and their amenities. The Expedia Companies are not responsible for such information and we rely on the accuracy of the information supplied by the relevant Third Party Suppliers. … The Expedia Companies do not operate or control the travel-related products and services displayed on the Website. Nor do the Expedia Companies act as co-vendors with the Third Party Suppliers with whom our customers book travel products or services.

14.The respondents stated that they relied on those exclusion clauses contained within their terms of use to avoid liability.

15.In response to the claim that the respondents had engaged in misleading and deceptive conduct, the respondents stated, in relation to the statement contained on the website that you could “book with confidence”, that it is puffery — a sales pitch.[2]

[2]Transcript of proceedings 12 October 2018 page 11, line 13

16.The Tribunal put the following question to the respondents:

So what you essentially say is there's no contractual liability because of the exclusion clauses and that the phrase "Book with confidence" and all the other stuff there about we're pretty good at all of this and we're different from all the other websites … and we've got lots of happy campers and honeymooners and end of year, gap yearers, all of that is mere puff, you say. It's a marketing ploy. We don't actually expect people to believe the promises that we put there. And they need to accept that they're hyperbole?[3]

[3] Ibid pages 12–13

17.The respondents’ answer is reproduced below:

Yes, with the one addition to that, I agree with the tribunal on that, with the addition that you know, being puff, it's what does the reasonable consumer take from that. A reasonable consumer does think that the website is great, does think that they'll get value for money, does think that the properties will be as described.  I think that's what a reasonable consumer would take from it, and I think that's what most consumers do get. And as is the reality with anything, there will be a bad experience here and there. There will be a better than expected experience and at the end of the day, you know Wotif has provided their services.[4]

[4]Ibid page 13

18.The respondents relied upon the decision in Collins v Stayz Pty Ltd [2018] NSWCAT (27 July 2018). That case is distinguished upon the following grounds:

(a)The NSW Tribunal found that it was not satisfied that there was a contract between the applicant and the respondent for the provision of services, as there was no consideration paid by the applicant to the respondent.[5] The respondents before this Tribunal asserted that the applicant had given consideration to the respondents and that that consideration from users of the website provided to Expedia is “really just the traffic on the website which would attract accommodation providers to advertise on it”.[6]

(b)The misleading and deceptive conduct alleged was in relation to a peculiar circumstance of construction work nearby to the house being rented – and not in relation to any claims or representations made by Stayz Pty Ltd on their website. The misrepresentation was said to arise by silence and the NSW Tribunal found that that misrepresentation was made by the owner of the premises and not the respondent in their website.[7]

[5] Collins v Stayz Pty Ltd [2018] NSWCAT (27 July 2018) [15]

[6]Transcript of proceedings 12 October 2018 page 8, lines 35–42

[7][2018] NSWCAT (27 July 2018) [22]

19.The ACL at section 18 provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

20.Each of the following must be established:

(a)a person has engaged in conduct - a company is a legal person;

(b)the conduct is in trade or commerce;

(c)the conduct must be misleading or deceptive or likely to mislead to deceive.

21.The parties did not disagree with the proposition that Wotif was engaged in conduct that took place in trade and commerce.

22.The issue to be determined by the Tribunal is whether the making of the statements and representations on the website was misleading or deceptive or was likely to mislead or deceive. Conduct is misleading and deceptive if any reasonable member of the class of persons at whom the conduct is directed would be led into error. If conduct seeks to attract public attention by the use of unqualified assertion as to fact, such assertion should be true as a matter of fact.[8]

[8]Keehn v Medical Benefits Fund of Australia Ltd (1977) ATFR 40-047

23.In Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 the court set out the following aspects of misleading and deceptive conduct:

(a)The test for misleading and deceptive is an objective one: what must be considered is the effect of the conduct on reasonable ordinary members of the subject audience.

(b)The members of the subject audience may be of a wide range of people including the astute and the gullible.

(c)Section 18 is not meant to protect persons who fail to look to their own interests and the court will not take into account extreme or fanciful reactions to the conduct.

(d)It is not necessary to show that any member of the subject audience was actually misled or deceived it is enough to show that the conduct is likely to mislead or deceive.

(e)If a statement has two or more possible meanings, one misleading and one not, then the conduct is likely to mislead or deceive.

24.The statements contained on the Wotif website – “We’re an online travel company – we have heaps of local knowledge. We use it to track down fantastic travel deals so you can find awesome deals every day. – Book with confidence. Stay with peace of mind.”[9] – must be assessed by their effect on the reasonable member of the subject audience. The implication is that Wotif have local knowledge and use it to ensure fantastic travel deals. It is not unreasonable for the applicant to feel confident that the accommodation would meet the statements set out in relation to it and that if the accommodation should for any reason fall short then Wotif would be liable for any loss.

[9] Above [11]–[12]

25.The respondents submitted that it was reasonable for a consumer, reading their webpage, to form the view that Wotif’s experience and expertise would result in a good deal and that the consumer could be confident in Wotif’s statements. However, the respondents also submitted that those statements giving rise to that view were puff. The Tribunal does not accept these submissions. One might ask, what is the point of the statements if it is not to encourage visitors to the Wotif webpage to book with confidence?

26.Could these statements and representations be properly characterised as ‘mere puff’? Mere puff may be defined as statements or representations which are exaggerated, ‘over the top’ or fanciful and not intended to be taken seriously to be taken seriously by any reasonable person. For example, that a detergent would clean like a white tornado. The classification of any representation as mere puff does not automatically exclude it from being misleading and deceptive or likely to mislead and deceive.

27.In Collier Constructions Pty Ltd v Foskett Pty Ltd [1990] FCA 562, reference was made to various authorities in which certain types of commendation were classified quite differently from statements of fact or promissory statements and treated as "mere puffs".[10] In my view, it would not be correct to translate the learning in those authorities immediately into the construction of section 52 of the Trade Practices Act 1974 (Cth) (TP Act), so as to decide that if a statement was first classified as a ‘mere puff’ at general law, it necessarily did not have the character of conduct that was misleading or deceptive, or likely to mislead or deceive. The circumstances of each case must be assessed and measured against the terms of the legislation itself. Thus, in particular circumstances, a representation that new home units are to be ‘bigger and better’ than in an existing building may be likely to mislead or deceive within the meaning of section 52.[11]

[10]Collier Constructions Pty Ltd v Foskett Pty Ltd [1990] FCA 562 [48]; Greig and Davis, The Law of Contract, pp 488-489

[11]Byers v Dorotea Pty Ltd (1987) ATPR 40-760

28.Wotif seeks to rely on the exclusion clauses contained in their terms of use: those exclusion clauses are in conflict with the representations made clearly and boldly on the website. Businesses cannot rely on small print and disclaimers as an excuse for a misleading overall message.[12] Again one might ask, why make a statement designed to assure customers, and then elsewhere on the webpage, in the fine print, seek to prevent the customer from relying on the promises conveyed?

[12] Australian Competition & Consumer Commission, False or misleading statements < the circumstances of this particular case, it was not unreasonable for the applicant to form the view, based on the representations that the respondents had ‘heaps of local knowledge’ and that you could ‘book with confidence’, that Wotif was promising that the applicant could rely on the information provided about Rocky Point Beachfront in Haleiwa, Hawaii and that the applicant could enter into the contract with Rocky Point Beachfront with confidence. This has not proved to be true. The accommodation was, as a matter of fact, not as described on the website but in a dilapidated and rundown condition, and with no sea views. As a consequence, the applicant paid to Wotif the accommodation costs of $628.34.

30.I am satisfied on the evidence before me that the applicant was induced by the statements contained on the Wotif website to enter into the contract for accommodation with the Rocky Point Beachfront. I am further satisfied on the evidence before me that the respondents engaged in misleading and deceptive conduct and that the statements on its website caused the applicant to form an erroneous view and he was led into error. As a result of this he has suffered damage by the loss of the $628.34 paid to the Rocky Point Beachfront for accommodation that did not correspond to the description on the website.

………………………………..

Senior Member J Lennard

HEARING DETAILS

FILE NUMBER:	XD 584 / 2018
PARTIES, APPLICANT:	Hugh Selby
PARTIES, RESPONDENT:	Expedia Australia Pty Ltd & Expedia Inc
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	N/A
SOLICITORS FOR RESPONDENT	Dentons
TRIBUNAL MEMBERS:	Senior Member J Lennard
DATES OF HEARING:	12 October 2018