Consideration
105 This is an appropriate case for the making of declaratory orders in the terms of the Proposed Declaratory Orders filed by the ACCC and thereby indicating the Court's disapproval of the contravening conduct.
106 First, addressing the requirements identified in Forster v Jododex, I accept the ACCC's submissions that:
(1) the question as to whether the respondents' conduct contravened the ACL is real and not hypothetical or theoretical. The proposed declarations contain sufficient detail as to how and why they relate to conduct that contravenes the ACL;
(2) the ACCC, as the public regulator under the ACL, has a genuine interest in seeking the relief; and
(3) the respondents are the proper contradictors, as the persons who engaged in the contravening conduct, and they have an interest in opposing the grant of declaratory relief.
107 Turning to the points made Mr Bell in his written submissions, the submissions did not address why the declarations ought not to be made on discretionary grounds, but rather they went to contentions to the effect that somehow Mr Bell was not knowingly concerned in misleading conduct and misrepresentations.
108 The grounds on which Mr Bell sought to resist the Proposed Declaratory Orders were entirely contrary and contradictory to the facts and law agreed to by Mr Bell in the Statement.
109 Section 191(2)(b) Evidence Act provides that in a proceeding, evidence may not be adduced to contradict or qualify an agreed fact without leave of the Court. Mr Bell's submissions, as noted by the ACCC, were inconsistent with, or attempt to qualify, agreed facts in the Statement. They are not supported by evidence. In light of s 191(2)(b) of the Evidence Act, they could not be based on evidence. Therefore, whilst detailed above for completeness, I have given no weight to those submissions of Mr Bell. Further, I note:
(1) To the extent Mr Bell submits that there was a clear implication that the Notices offered the registration of an available domain name, not one which was already owned or registered, and that the characteristics of the Notices did not give rise to a reasonable assumption that the Notices referred to an opportunity to renew an existing domain name, this cannot be sustained in light of the facts agreed upon in the Statement and recorded at [9], [10] and [19] of these Reasons.
(2) To the extent Mr Bell submits that the Notices did not have the tendency to lead a reasonable person, giving due attention to the contents of a given notice, into any error as to the intended nature of the Notices as a person who had taken due care would have realised that the payment of the amount stated in the Notice would not result in the renewal or extension of their existing domain name, this cannot be sustained in light of the facts agreed upon in the Statement and recorded at [19]-[21] of these Reasons.
(3) Mr Bell's submission that he did not intend to mislead or deceive the recipients of the Notices and that no false or misleading representations were made in the Notices cannot be sustained in light the facts agreed upon in the Statement and recorded at [19]-[21] of these Reasons.
(4) Mr Bell's submission that the error made by the deponents of the Recipients' Affidavits was not conduct attributable to Mr Bell cannot be sustained in light of the facts agreed upon in the Statement and recorded at [19]-[21], [23] and [24(h)] of these Reasons.
(5) Mr Bell's submission that it was confusion that led to the errors made by the deponents of the Recipients' Affidavits cannot be sustained in light of the facts agreed upon in the Statement and recorded at [9], [10] and [19]- [21], of these Reasons. For the same reason, Mr Bell's submission that these errors were a consequence of an incorrect analysis of the purpose of the notice by the given recipient cannot be accepted.
(6) Mr Bell's submission that the respondents did not convey any need on behalf of a recipient of the Notice to use their services cannot be sustained in light the facts agreed upon in the Statement and recorded at [19]-[21] of these Reasons.
110 Further, having proper regard to the relevant authorities, the evidence filed by the ACCC revealed that DNC and DNA contravened ss 18, 29(1)(g) and 29(1)(l) of ACL, and that Mr Bell was directly knowingly concerned in, or a party to, those contraventions such that it is appropriate to make the Proposed Declaratory Orders sought by the ACCC.
111 Mr Bell's surprising submissions in the face of the content of the Statement are also not open to him as:
(1) Contrary to the parties agreeing to the representations recorded at [19] of these Reasons, Mr Bell submits that 'it could be perceived by a recipient of such a notice that payment of the amount requested therein would result in extension or renewal of their existing registered domain name'. The parties agreed that the Notices 'each conveyed' the representations and it is not open to Mr Bell to now submit that such an interpretation is attributable to an 'incorrect analysis'.
(2) Further, the Statement does not record that the distribution of the Notices 'arose from the conduct' of Mr Bell as he submitted, but that he was 'directly or indirectly knowingly concerned in, or a party to, the conduct of DNC and DNA' in sending out the Notices that conveyed the agreed upon representations.
(3) The Statement does not, as Mr Bell contends, merely record that 'the characteristics of the notices were intentionally designed by [Mr Bell]', but that the 'characteristics of the notices that amounted to the contravening conduct were intentionally designed by [Mr Bell]'.
(4) Mr Bell submits that he does not accept that he 'personally' contravened the relevant sections of the ACL, however the ACCC is not seeking a declaration to that effect, rather a declaration that he 'was directly or indirectly knowingly concerned in, or a party to, the contraventions of the [DNC and DNA]'.
(5) The respondents in the Statement agreed that '[t]he contravening conduct was not insignificant' in light of its duration and, as a consequence, the Proposed Consent Orders were agreed to by the respondents. It is not open to Mr Bell to resist the Proposed Declaratory Orders on the ground that he 'did not engage in any misleading or deceptive conduct'.
112 In written submissions, Mr Bell stated:
It is asserted by the [ACCC] that [DNC and DNA], in issuing notices to Australian businesses and organisations which the [ACCC] asserts had the appearance of invoices or renewal notices for existing domain names held by the given recipient, engaged in misleading and deceptive conduct…
This is not accurate. These matters are not mere assertions by the ACCC, rather they are facts agreed upon in the Statement. Given that the representations conveyed by the Notices were agreed by the parties in the Statement as being false, in addition to all of the other relevant circumstances that have been agreed in the Statement, I found that DNC and DNA engaged in conduct that contravened ss 18, 29(1)(g) and s 29(1)(l) of the ACL. Mr Bell's liability, as a person knowingly concerned in, or a party to, the contraventions, follows.
113 Further, the manner in which Mr Bell applies the principles enunciated by Murphy J in Domain Register to resist a declaration that he was directly knowingly involved in contravening conduct, as the ACCC notes, is misconceived in two material ways and ought be rejected.
114 The first concerns the principle identified by Murphy J in Domain Register that for a contravention to be established, there must be a sufficient causal link between the conduct and the error on the part of persons exposed to it. It does not follow from this that the inquiry is whether the recipients of the Notices took reasonable care in dealing with them.
115 The relevant question is whether the conduct has a tendency to lead into error. That will provide a sufficient causal link. Given the facts agreed upon in the Statement to the effect that the Notices conveyed false representations, I am satisfied that the criterion is satisfied.
116 The evidence deposed to in the recipient affidavits' reinforces this conclusion and is contrary to Mr Bell's submission that 'there is a complete absence of any evidence to support a proposition that any party was actually misled or deceived by any of the notices'. Further, I am not satisfied, as Mr Bell contends, that this evidence reveals a failure on the part of the deponent to take reasonable care.
117 Mr Bell appears to assert that given consumers were merely confused, the necessary contravention cannot be established. Murphy J noted in Domain Register (at [72]), '[c]onfusion or wonderment is not necessarily coextensive with misleading or deceptive conduct'. Whether the conduct caused confusion or wonderment cannot be substituted for the question of whether the Notices had a tendency to mislead in the circumstances in which they were received and considered. Mere confusion or inciting wonderment is insufficient, but being led into error is. In this matter, recipients were not merely confused or caused to wonder. They were led into the error of believing that they were required to pay the sums prescribed in the Notices. I do not consider these to be circumstances of mere confusion.
118 As to the alleged failure on the part of the recipients to take reasonable care, similar arguments were rejected by Murphy J in Domain Register. I accept that attention given to a communication by an ordinary and reasonable person may well be perfunctory, without being equated with a failure on the part of the members of the target audience to take reasonable care of their own interests. In a comparable way to assessment of advertising material, the 'dominant message' conveyed by the material is relevant: ACCC v Coles (at [6]); TPG Internet (at [45]). When considering the dominant message in the present case, the impression created in recipients of the Notices was that they were invoices for the renewal of the registration of existing domain names. It is appropriate, as the ACCC contends, to recognise that recipients might absorb only the general thrust or dominant message of the Notice, without this being a consequence of selective inattention or an unexpected want of sceptical vigilance on their part. I accept, that the Notices contained characteristics which made them misleading, for example, features that created the impression that the Notices were invoices rather than a form of advertising or offers to provide services and a de-emphasis of the text that the Notice was just 'an invitation to register'.
119 The Notices must be examined in the context of the whole of the evidence. In this matter:
(a) the Notices had characteristics that a recipient would ordinarily associate with an invoice;
(b) the recipients of the Notices were likely to be responsible for paying multiple invoices a month in addition to other responsibilities;
(c) a recipient cannot be expected to have given the Notices the focused attention of the Court obliged to scrutinise them in the course of such proceedings;
(d) it is likely that ordinary reasonable members of the target audience would not read the notice closely because the $249 cost of registration does not constitute a significant business expense; and
(e) a brief reading of the Notices would not necessarily alert recipients to the difference between the offered domain names and their existing domain names.
120 I accept that there is sufficient evidence to support the ACCC's contentions that:
(a) the recipients of the Notices included employees who had nothing to do with setting up or registering the domain name of the business or organisation; and
(b) the Notices were sent to a broad cross-section of the public, many of which are unlikely to have read it closely and are likely to have been busy and to have dealt with it speedily.
121 In light of these circumstances, it is not appropriate to find that the recipients failed to take reasonable care of their own interests, so as to indicate that the Notices did not tend to lead them into error. Rather, there is sufficient in this matter to find that a hypothetical ordinary and reasonable member of the class was, or is likely to have been, misled or deceived by the Notices. Mr Bell admitted in the Statement that he intentionally designed the characteristics of the Notices that amounted to the contravening conduct. While intention is not an element of the contraventions, it has long been recognised that, where a representation is made in terms apt to create a particular mental impression, and is intended to do so, it may properly be inferred that it has had that effect: TPG Internet (at [55]).
122 In light of Mr Bell's admission that he intentionally designed the contravening characteristics of the Notices, his contention that the cause of the errors committed by the deponents of the Recipients' Affidavits was 'not any conduct attributable to the [Mr Bell] himself' is not tenable.
123 Finally, in relation to Mr Bell's submission to the effect that it cannot be inferred from the evidence before the Court that a there is insufficient evidence that a significant proportion of the relevant class would likely be misled or deceived, I accept the ACCC's submission that it cannot be inferred that recipients who did not seek a refund understood that they were purchasing a new, available domain name and not paying for the renewal of their existing domain name.
124 All deponents of the Recipients' Affidavits believed that they were paying for the renewal of their existing domain name, had not asked for a refund, and were not aware that this was incorrect until they were contacted by the ACCC. I accept that they would not have paid the invoice had they known that it was an offer to register a '.com' domain name and that it can be inferred from this that a not insignificant number of people who were misled, and paid money as a result, did not ask for refunds.
125 The only discretionary basis put to the Court as a reason for refusing to make the Proposed Declaratory Orders were those raised at the final hearing, where Mr Bell's counsel contended that such orders would effectively be 'quasi-criminal' in nature and thus would affect Mr Bell's rights impermissibly when the purpose of declaratory relief is to identify impermissible conduct to the public.
126 In my view, that is not so as:
(1) it is appropriate for a declaration to be made to mark the Court's disapproval of Mr Bell's contravening conduct, especially in circumstances where the characteristics of the Notices that amounted the contravening conduct were intentionally designed by Mr Bell;
(2) the making by this Court of the Proposed Declaratory Orders will inform the public of the dangers arising from engaging in such contraventions of the ACL, namely liability for the remedial orders which may follow, and have a deterrent effect; and
(3) the 'cooperation' on Mr Bell's part with the Court should not be overstated, for whilst there are Proposed Consent Orders agreed upon, the written submissions filed by Mr Bell did not properly traverse what they could have properly traversed in light of the agreed facts contained in the Statement, namely the discretionary matters. Rather the written submissions sought to belatedly mount a defence going to the contraventions of the ACL despite facts agreed upon in the Statement.
127 This was a case in which Mr Bell was not merely involved in DNC and DNA's contravening conduct, but the sole director of the companies during the Relevant Periods.