(e) Position of Bet365GL
128 The ACCC has contended that the representations made by the FREE BETS and DEPOSIT BONUS Offers were also made by Bet365GL. It is said that they were made by Hillside Australia and Hillside UK on behalf of, and as agent for, Bet365GL. In other words, the ACCC contends that Bet365GL is liable as a principal contravener. The ACCC does not put a case based upon accessorial liability.
129 The ACCC emphasises the following matters.
130 First, Bet365GL is the parent company of a global group of companies (the bet365 Group) which trades under the name "bet365" and uses the website "bet365.com" and local derivations of that domain name. The bet365 Group promotes itself in Australia as "THE WORLD'S BIGGEST ONLINE BETTING COMPANY. NOW IN AUSTRALIA". The bet365 Group serves customers in 200 countries.
131 Second, the bet365 Group tries to ensure that the architecture and look and feel of its websites are as common and consistent as possible throughout the world.
132 Third, in the majority of those countries in which the bet365 Group offers its services, open account incentives are offered via its websites. The terms and conditions of the open account incentives published on the bet365 Group's webpages "are materially the same across the world and, when introduced in a new jurisdiction, the only changes made to the local website are those required by local law". For example, "Free Bets" offers for new customers were made in the UK and other countries in 2011. Mr Davenport also confirmed that the group's open account incentives were usually offered via its websites and that the architecture and look of such websites were common and consistent throughout the world and that the terms and conditions of open account incentives were similar. He also accepted that the group adopted a similar look and feel in the way it presented "free bet" offers.
133 Fourth, Bet365GL is and has at all material times been licensing and authorising Hillside Australia's use of the "bet365" trade mark and the "bet365.com.au" domain name.
134 Fifth, Bet365GL is the ultimate parent and controlling entity of Hillside Australia and has been providing ongoing financial support to Hillside Australia, including by way of an intercompany loan payment to a common controlled company of at least $48,974,000, which will not be required to be repaid until such time as there are sufficient cash flows generated by Hillside Australia. Further, Hillside Australia does not have any contractual arrangement directly with affiliates. Rather, such matters are dealt with between Bet365GL and the affiliates, with affiliate relationships being managed by Hillside UK.
135 Sixth, the representations made by the FREE BETS and DEPOSIT BONUS Offers were made in the name of "bet365" which was promoted as "THE WORLD'S BIGGEST ONLINE SPORTS BETTING COMPANY. NOW IN AUSTRALIA". The "bet365" logo appeared on the website. The name "bet365" appeared numerous times on the website. There was no mention of the name of the local subsidiary. The ACCC contends that a consumer looking at the website would be entitled to assume, and would most likely assume, that the offer was made by the parent company of the bet365 Group, being the company with bet365 in its name, rather than by an unnamed local subsidiary. The ACCC contends that the website seems designed to lead to that assumption. It is said that this is no doubt to assist in attracting the consumer's custom. Customers in Australia were directed by advertising for bet365 to the bet365.com website, and were automatically redirected to the bet365.com.au website.
136 It is said that this is not a situation where a trade mark has been licensed to a third party which is at arms' length. Rather, Bet365GL licensed and authorised its subsidiaries to use the trade mark and domain name in circumstances where the bet365 Group operates as a group, promotes itself as a single entity and offers open account incentives all round the world under the "bet365" name and with a similar look and feel.
137 Seventh, the ACCC also says that it is to be inferred that Bet365GL was aware of the fact that the bet365 Group promoted itself as the world's biggest online sports betting company and that the group offered open account incentives under the "bet365" name on websites around the world.
138 Eighth, the ACCC points to the fact that at all relevant times, Hillside UK and Bet365GL shared an identical board of four directors: Denise Coates, John Coates, Peter Coates and William Roseff. Further, at all relevant times, Stephen Sweeney, the General Counsel for Hillside UK was also General Counsel or In-house Solicitor for Bet365GL. He was notified from 18 April 2013 of Australian regulatory complaints about the advertising of FREE BETS Offers.
139 Ninth, the ACCC contends that the respondents have adduced no evidence from Mr Sweeney, from any of the four board members of Hillside UK and Bet365GL or from any other officer of Bet365GL addressing the question of Bet365GL's responsibility for the publication of the FREE BETS and DEPOSIT BONUS Offers in Australia. The unexplained failure by Bet365GL to call any evidence allows an inference that the uncalled evidence would not have assisted Bet365GL's case.
140 In my opinion, the ACCC has not made out its case against Bet365GL that it was a principal contravener.
141 First, the fact that Bet365GL was the parent company of a global group or that it was the ultimate parent and controlling entity of Hillside Australia does not establish Bet365GL's liability. That is to confuse share ownership and conduct. The proposition is inconsistent with the principle in Salomon v A Salomon & Co Ltd [1897] AC 22. Hillside Australia is a separate legal entity which is not merely a proxy for its shareholders. A similar point can be made concerning Hillside UK.
142 Further, the various annual reports and accounts for the financial year ending 30 March 2014 (not 31 March) for Hillside UK and Bet365GL do not support the ACCC's case.
143 The Directors' Report and Strategic Report for Hillside UK indicates that it is the main operating entity for the group and provides shared services to the rest of the group. For example, the following appeared in the Strategic Report:
The Company continued to invest in IT infrastructures and technology, to ensure it has both the flexibility and scalability to evolve with internal and external developments. Marketing expenditure again increased, helping ensure the "bet365" brand continues to be class-leading. Staff numbers grew by 11% during the period, ensuring the business is suitably resourced to manage business growth, with 2,329 staff employed within the Company's betting operations at the end of the financial period.
144 The nature of Hillside UK's cash flows, turnover, creditors, debtors, expenses and the like demonstrate its status as the main operating entity.
145 Further, the Directors' Report describes Hillside UK's principal activities as being "the provision of internet, mobile and telephone sports betting". It is also stated that Hillside UK trades under the name of "bet365".
146 One can contrast such statements in the Directors' Report and Strategic Report for Hillside UK with those contained in similar documents for Bet365GL and the consolidated group. Although the Directors' Report contains similar statements as to the provision of services, they describe the group. Similarly, in the Strategic Report, statements are made for the group. When one reviews the consolidated accounts for the group and the separate figures for Bet365GL, they are consistent with Bet365GL not being the main operating entity as such; for example, its trade debtors and trade creditors were each nil at the balance date.
147 Second, there is no direct evidence of any day to day control or direction by Bet365GL of the conduct of Hillside UK and Hillside Australia.
148 The ACCC has referred to emails passing between Hillside Australia and individuals who have a function both within Hillside UK and Bet365GL. But this does not establish any direct control or direction from Bet365GL. Rather, it is consistent with Hillside UK's direction and involvement. There were various emails dealing with bet365 marketing activities in Australia between Hillside Australia and Hillside UK. The detail of some of the emails, including the issue involving the Office of Liquor Gaming and Racing (NSW), is unimportant for present purposes. It is true to say that some of the communications involved individuals who may also have had a role with Bet365GL, but they do not establish that such communications were made in that latter capacity.
149 Further, the ACCC did not tender any minutes of directors' meetings of Bet365GL, Hillside UK or Hillside Australia to make good its contention of relevant control and direction being exercised by Bet365GL of Hillside UK or Hillside Australia.
150 Third, the licensing of trade marks or a domain name without more does not establish Bet365GL's liability as a principal. If an overseas exporter licenses an Australian distributor to use that exporter's trade mark in connection with the retail supply of its goods in Australia, that per se does not make it liable for a misleading advertisement published by the local distributor.
151 Further, there was no evidence suggesting that Bet365GL had given or issued any specific instruction, direction or request to Hillside Australia or Hillside UK during the period 18 March 2013 to 8 August 2014 concerning:
the use of the domain name "bet365.com.au" or the content of that website;
the offers of incentives to new customers to open accounts.
152 There was in evidence a policy or set of guidelines (published in 2011) concerning the brand and logo "bet365" and how it was to be used and presented by all members of the group. The brand was anthropomorphically described as "confident, cutting-edge, honest, direct and likeable"; few of us have all of these attributes. But accepting that the group used this brand, with such a policy or set of guidelines being applied to it, is one thing. But it does not demonstrate that Bet365GL engaged in the impugned conduct the subject of the present proceeding or that Hillside UK or Hillside Australia acted as its agent or on its behalf in that respect. Further, the reference to "our marketing department must approve specific uses of the brand" is unclear as to which entity is being referred to; further, it is dealing more with the use of the brand and logo as such rather than specific content information relevant to the terms of various offers or incentives.
153 Generally, it is true that a substantial part of the group's promotion was to market "bet365.com". It used the name on numerous promotional activities and signs, including at sports stadiums, railway stations and in newspapers. Broader marketing, including that appearing on YouTube and in newspapers, referred to "bet365.com" as "the world's biggest online sports betting company" and that it was now "based" in Australia.
154 The ACCC has made much of the group's global promotional activities and the similarity of such activities. At one level of generality this may be accepted. It is also said that Bet365GL can be taken to have authorised and had knowledge that its subsidiaries were to and did offer open account incentives using the trade mark "bet365" and on websites with domain names incorporating the name "bet365". At a level of generality that may also be accepted, but it does not carry the ACCC far enough.
155 Fourth, the fact that Bet365GL has "bet365" in its name does not establish its involvement in the impugned conduct. Further, the relevant activities are conducted under the name "bet365" rather than under the name "Hillside (Australia New Media) Pty Ltd" because the particular entity engaging in the conduct in question is doing so with the use of a trade mark. It does not mean that its conduct is the conduct of the owner of the trade mark.
156 Fifth, the fact that there are common or overlapping directorships or a common general counsel does not per se establish control in the relevant sense.
157 Sixth, the ACCC has sought to rely upon various admissions constituted by responses to a notice directed to Hillside Australia issued under s 155(1)(a) and (b) of the Act. But as is made plain, the responses (see letters dated 20 February and 20 March 2014) were only from Hillside Australia. If they contain admissions, they are only admissions of Hillside Australia. The evidence does not establish that such admissions were made on behalf of Hillside UK or Bet365GL. In any event, Hillside Australia's response of 20 March 2014 at [1.1] and [1.2] does not take the matter far in terms of establishing the liability of Bet365GL. Those statements refer to group activities in general. At [1.2], it is stated:
The bet365 Group's Open Account Incentives are usually offered via its websites. The bet365 Group tries to ensure that the architecture and look and feel of these websites are as common and consistent as possible throughout the world. The terms and conditions of the Open Account Incentives are materially the same across the world and, when introduced in a new jurisdiction, the only changes made to the local website are those required by local law.
Such a general statement does not establish the principal/agency relationship contended for or that Bet365GL is liable as principal for the activities of its subsidiaries that is the subject matter of the present proceeding.
158 Seventh, at times, the ACCC's argument for attribution of liability to Bet365GL had a resonance with concepts of ostensible authority. So it was said that because of the way the group marketed its activities using "bet365.com" that members of the public, if asked, may have understood such a reference as being to Bet365GL. There was no such direct evidence. But even if there were, that does not establish Bet365GL's liability in the present case. First, no one is contending that the use of such a label or general marketing was in and of itself misleading or deceptive. Second, if questions of authority are to be analysed, it is whether Bet365GL expressly or impliedly authorised its subsidiary(s) to engage in the conduct the subject of the ACCC's allegations, not some more diffuse form of marketing. Third, no case is being put as to conduct causing confusion as to the precise entity that customers in Australia were dealing with.
159 Eighth, Ackers v Austcorp International Ltd [2009] FCA 432 does not assist the ACCC. The position and activities of the holding company in that case, Austcorp International Ltd, were quite different (see at [19], [21], [55], [67], [73] to [77], [99] and [131]). The conclusions drawn by Rares J at [152] to [155] cannot be decontextualised from the direct acts that Austcorp International Ltd engaged in. Further, the present case is not of a type where the holding company communicated to the public or the relevant class that it adopted or endorsed for itself what its subsidiary represented in terms of the specific promotions. Indeed the ACCC did not put such a case in terms.
160 Ninth, I should also note that s 84(2) of the Act is of no assistance on the present question. There is no evidence that any subsidiary was an "agent of the body corporate" under limb (a) and there has been no triggering of limb (b).
161 Finally, I do not consider that the forensic last resort to Jones v Dunkel inferences assists the ACCC. Even applying the approach of Lord Mansfield in Blatch v Archer (1774) 1 Cowp 63 at 65 (98 ER 969 at 970), the fact is that the ACCC has no evidence to the requisite standard (see s 140(2)(c) of the Evidence Act 1995 (Cth)) demonstrating that Bet365GL authorised or directed the impugned conduct of the subsidiaries or that such conduct was done on its behalf. The case is to be decided on what the evidence is, not on speculation of what it might have been. Moreover, negative inferences require a foundation that is absent in this case.