Commerce Commission v Viagogo AG

[2022] NZHC 3049

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-2659

[2022] NZHC 3049

BETWEEN

COMMERCE COMMISSION

Plaintiff

AND

VIAGOGO AG

Defendant

Hearing:	21 November 2022
Appearances:	N Flanagan, A Luck and C Fleming for Plaintiff S Price, C Hoeft and O de Pontt for Defendant
Judgment:	22 November 2022

JUDGMENT OF LANG J

[on application for adjournment of trial and ancillary orders]

This judgment was delivered by me on 22 November 2022 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

Solicitors:

Meredith Connell, Auckland

Minter Ellison Rudd Watts, Auckland

COMMERCE COMMISSION v VIAGOGO AG [2022] NZHC 3049 [22 November 2022]

[1]                 The defendant, Viagogo AG (Viagogo), is a reseller of tickets to entertainment events. It sells tickets using a website that is accessed by the public.

[2]                 In this proceeding the Commerce Commission (the Commission) alleges that in marketing tickets for sale Viagogo has been guilty of breaches of the Fair Trading Act 1986. It alleges that harm to the public is ongoing and seeks injunctive relief to prevent further harm occurring.

[3]                 The proceeding is scheduled to be the subject of a four week trial commencing on 13 February 2023. Viagogo seeks a variation of existing timetable directions and adjournment of the trial on the basis that it will not be able to serve its briefs of evidence until three outstanding interlocutory applications have been determined by the Court. It also says that six weeks will be required for the trial. The Commission applies for “unless orders” that are to take effect if Viagogo does not serve its briefs of evidence by a date nominated by the Court.

[4]                 For the reasons that follow, I am satisfied the existing fixture should be maintained. I am also satisfied that it is appropriate to make orders providing for the consequences that will follow if Viagogo does not serve its briefs of evidence within the time directed in this judgment.

Applications for variation of timetable directions and adjournment of the trial

[5]                 I deal with these issues together because they are closely interrelated. It will be necessary in any event for the existing timetable to be varied because the time has now passed for Viagogo to serve its briefs of evidence and it has failed to serve any evidence at all.

[6]                 Viagogo relies on three principal grounds in support of its application for an adjournment of the trial.

Length of trial

[7]                 Viagogo contends that a trial of at least six weeks duration will be required because the Court will hear evidence from 20 to 24 witnesses. It will cause difficulties

for both the parties and the Court if it becomes necessary to adjourn the trial on a part- heard basis.

[8]                 The Commission points out that it proposes to call 12 witnesses, of whom only two have provided briefs of evidence exceeding ten pages in length. Eight of the Commission’s witnesses are participants in the events industry who will give limited evidence about their interactions with customers who have encountered issues with tickets purchased from Viagogo. The Commission contends the trial should be able to be completed within the four weeks currently allocated.

[9]                 I accept that it would be unfortunate for all concerned if the trial was to extend beyond the four weeks currently allocated. However, as I advised counsel during the hearing, the reality is that the trial will continue for as long as it takes to complete. Having said that, the trial Judge will undoubtedly note Viagogo’s concern regarding the likely length of the hearing. It may be necessary for the Court to sit extended hours to ensure the trial is concluded within as short a period as possible. I do not regard this issue as justifying an adjournment.

Outstanding interlocutory matters

[10]              The parties are presently awaiting judgment on three interlocutory applications that were heard by Associate Judge Taylor over three days in October 2022. These comprise two applications by Viagogo for further and better discovery, together with an application by Viagogo for orders refining its obligation to answer interrogatories the Commission has served on it.

[11]              As I advised counsel during the hearing, the Associate Judge has advised me that he is likely to deliver his decisions in relation to the discovery applications later this week. At this stage it is not known when the decision on the application relating to the interrogatories will be delivered. However, I do not consider the latter impacts on Viagogo’s ability to prepare its evidence. Rather, it relates to the scope and nature of the responses it is required to provide to the Commission’s interrogatories.

[12]              I accept that the discovery applications may impact to some extent on the evidence Viagogo may wish to adduce. However, I am by no means satisfied that the

discovery applications relate to issues that lie at the heart of the proceeding. By way of example, one of the applications relates to complaints the Commission received from customers who are dissatisfied with their dealings with Viagogo. Viagogo seeks access to unredacted versions of each of the 1382 complaints the Commission received from customers dissatisfied with their dealings with Viagogo. At this stage the names and identifying particulars of the complainants have been redacted, presumably to protect their privacy.

[13]              Viagogo says it needs the names of the complainants to enable it to investigate the validity of the complaints. However, the test under the Act is subjective. Whether or not the complaints have validity has little relevance to the issues the Court will be required to provide. This is reflected in the fact that the complaints are the subject only of passing comment in the Commission’s evidence.

[14]              If discovery is ordered of the unredacted complaints Viagogo will be entitled to investigate them but I do not consider it will be materially prejudiced if it is required to serve its evidence before it has completed that process. I consider in any event that this issue can be addressed by granting Viagogo leave to file supplementary evidence, should it wish to do so, relating strictly to matters arising out of any further discovery it might receive.

Delays in service of the Commission’s evidence

[15]              Under the existing timetable Viagogo was required to serve its evidence in September 2022. This was based on the premise that the Commission would serve its evidence no later than 4 May 2022.

[16]              The Commission served the bulk of its evidence on 6 May 2022, two days after the due date. It then served all but one of the remaining briefs by 12 May 2022. It served the final brief of evidence on 20 May 2022.

[17]              Viagogo acknowledges that these delays were not major and that the Commission agreed to extend the time for service of Viagogo’s briefs by two weeks to reflect the delay that occurred in service of the Commission’s briefs. However, it relies on the fact that, on 12 May 2022, the Commission advised that it was

endeavouring to obtain briefs from two further witnesses. If it could not do so it proposed to serve subpoenas on those witnesses to compel their attendance at trial. The Commission explained that the evidence of these witnesses was minor, and mirrored that given by several other witnesses. The Commission was ultimately not able to obtain briefs from these witnesses and advised Viagogo of that fact on 20 June 2022. Viagogo submits that it should not have been required to respond to the Commission’s evidence until it was in final form.

[18]              I do not accept this submission. Viagogo was in a position from at least 20 May 2022 to know the evidence the Commission proposed to adduce at trial. It was therefore able to begin preparing its evidence in response from that date.

Decision

[19]              I consider Viagogo has had ample time since 20 May 2020 to prepare its evidence. It is likely to be well advanced in this process, as demonstrated by the fact that it is able to estimate the likely number of witnesses who will be called to give evidence at the trial.

[20]              The Commission is concerned that any further delay in receiving Viagogo’s evidence is likely to render the trial impracticable from its perspective. I accept that this is likely to be the case. Given the fact that Viagogo has already had six months to prepare its evidence I consider it ought to be in a position to serve its evidence within the near future.

[21]              I am also satisfied it is not in the interests of justice for the trial to be adjourned. This proceeding commenced in 2018 and has already been the subject of a tortuous interlocutory process. No further delay should be permitted. Furthermore, if the trial is adjourned it is unlikely that a replacement fixture will be available until 2024. That would plainly be unsatisfactory. I therefore dismiss the application for an adjournment of the trial.

[22]I vary the existing timetable directions as follows:

(a)Viagogo is to serve its evidence no later than 12 noon on Monday 12 December 2022.

(b)The Commission is to notify Viagogo of any challenge to the admissibility of any brief, in whole or in part, no later than 13 January 2023.

(c)The Commission is to file and serve no later than 25 January 2023:

(i)its briefs of evidence strictly in reply, if any; and

(ii)its chronology of facts.

(d)A conference of experts is to take place during the week beginning 30 January 2023 and, in any event, not later than 3 February 2023.

(e)The Commission is to file and serve a synopsis of its opening submissions, together with the common bundle, no later than 9 February 2023.

[23]              At this stage I leave open the terms on which Viagogo should be permitted to adduce supplementary evidence following receipt of the Associate Judge’s discovery judgment. I will determine that issue at a telephone conference to be held with counsel on Monday 28 November 2022 at 9.30 am.

Unless orders

[24]Rule 7.48 of the High Court Rules 2016 relevantly provides as follows:

7.48     Enforcement of interlocutory order

(1)If a party (the party in default) fails to comply with an interlocutory order or any requirement imposed by or under subpart 1 of Part 7 (case management), a Judge may, subject to any express provision of these rules, make any order that the Judge thinks just.

(2)The Judge may, for example, order—

(a)that any pleading of the party in default be struck out in whole or in part:

(b)that judgment be sealed:

(c)that the proceeding be stayed in whole or in part:

(d)that the party in default be fined, ordered to do community work, or committed to prison under section 16 of the Contempt of Court Act 2019:

(e)if any property in dispute is in the possession or control of the party in default, that the property be sequestered:

(f)that any fund in dispute be paid into court:

(g)the appointment of a receiver of any property or of any fund in dispute.

…

[25]              The Commission’s primary submission is that the Court should make an order under r 7.48 requiring Viagogo to modify its website so that customers will not be misled in the future. In the alternative, it contends that the Court should make such orders by way of interim relief in the form of an interim injunction.

[26]              Mr Flanagan was unable to refer me to any authority in which orders of the type that the Commission seeks have been made under r 7.48 and I do not consider it appropriate to approach the issue in that way. The purpose of orders made under this rule is to ensure the efficient progress of litigation. They may be made where a defaulting party’s actions have affected the other parties to the proceeding and may waste limited Court resources.1  Ordinarily the Court will make such an order where a party has been found to be in default and sanctions are necessary to ensure the default does not continue. As the wording of r 7.48(2) demonstrates, these will usually take the form of orders that effectively debar the party in default from continuing to prosecute or defend the proceeding, thereby permitting the party not in default to proceed on an undefended basis. However, the rule makes it clear that the Court has a wide discretion to select the remedy that best addresses the prospect of future default.

[27]              The Commission contends Viagogo has adopted an obstructive attitude to the present proceeding and has been in default of virtually every order or direction the

1      Spak (1996) Ltd v Leroy [2021] NZHC 3278 at [11].

Court has made. Viagogo disputes this and contends that all the factors on which the Commission relies are contestable.

[28]              I do not propose to analyse the individual issues on which the Commission relies. Rather, I consider the following factors to be relevant to the exercise of the discretion under r 7.48 in the present case:

(a)The Commission completed its discovery in December 2020. Viagogo then applied for further discovery in February 2022, having corresponded with the Commission during the previous month. I consider the Court and the Commission have been placed in the present predicament by the fact that Viagogo did not seek further discovery for more than 12 months after it received the Commission’s documents. It ought to have raised the issue far sooner.

(b)The existing timetable required Viagogo to serve its evidence in September 2022. This was four months after it received the last of the Commission’s briefs. Despite the passage of two further months Viagogo has not served a single brief of evidence. Nor has it provided any indication as to when it might be in a position to do so. Instead, it has attempted to explain its actions in a manner that I have found to be without merit.

[29]              These factors persuade me it is appropriate to make an unless order but not of a type that would preclude Viagogo from defending the proceeding. Instead, I direct that Viagogo will not be able to adduce evidence at trial unless it has served that evidence on the Commission in accordance with [22](a) of this judgment. For the avoidance of doubt, this order is not intended to trammel or interfere in any way with the discretion of the trial Judge to make directions regarding evidential issues as the trial proceeds.

Lang J