Australian Competition and Consumer Commission v Prouds Jewellers Pty Ltd ACN 073 053 273

· The publication of the "was" price suggested in a misleading way that this price was the usual price at which [the] item would have been purchased before the sale period ("Usual Price Representations").

· The publication of the "was" price suggested in a misleading way that there had been a substantial volume of sales, before the sale period, of the item at that price. ("Substantial Volume of Sales Price Representations").

· In relation to three items in the Summer of Love catalogue and 11 items in the Love You Mum catalogue, the publication of the "was" price suggested in a misleading way that the items had been sold at that price immediately before the sale period. ("Previous Selling Price Representations").

· The publication of the "was" price suggested in a misleading way that the items had been offered for sale at that price before the sale period ("Advertised Price Representations").'

6 After analysing the ACCC's case in that way, Moore J considered separately, and in order, each of the five representations. His Honour's conclusions on the first two representations have given rise to the appeal by the ACCC and his conclusions on the last two representations have prompted the cross-appeal by Prouds. It is, accordingly, convenient to consider separately and in the same order the five representations identified in the passage quoted at [5] above.

(a) The Level of Savings representations 7 In relation to these representations there was a finding at first instance that, throughout the year preceding the publication of the "Summer of Love" catalogue, Prouds had aggressively conducted promotional "sales" by the use of catalogues or "in store (generic) promotions". His Honour found that, during 2005, discounted prices offered by catalogue had been on offer for 28 weeks and those promoted by in store (generic) campaigns had been on offer for 24 weeks. "During the previous calendar year there had been 15 promotional sales. At no point in the year was there no promotional sale occurring." 8 At [12] of his reasons, the learned primary Judge went on to make these findings; 'Many of the 17 items to which these proceedings relate were, prior to the Summer of Love sale and at various times through 2005 offered for sale at discounted prices, though some were not marketed until well into that year. The periods, in aggregate, for which the items were offered at the regular marked price are set out in a table which follows shortly. Also set out in the table is the last occasion (on or about the nominated date) on which each item was sold at the "was" price before both the Summer of Love sale and the Love You Mum sale as well as when each item was last offered for sale at the "was" price. Also noted is whether the item was affected by a change in the gold price (as Prouds contended) which is an issue discussed later.' 9 Then followed a table indicating, in respect of each of the 17 items, in the first two columns related to the currency of the "Summer of Love" catalogue, the date on which it had been "last offered at 'was' price" and the date of its "last sale at 'was' price". The next three columns indicated, for each of the same items, in relation to the "Love You Mum" catalogue, whether it had been "affected by gold price", the date at which it had been "last offered at 'was' price" and the date of its "last sale at 'was' price". The second last column in the table expressed, for each of the 17 items, the "Approx % of time since January 2005 (or when first retailed in 2005) when the good [sic] were offered at the 'was' price". Those percentages ranged from 48% for item no. 2952471 to 96% for item no. 2894889. The last column indicated in respect of each of seven items, which had not been retailed throughout 2005, the month in that year in which it had first been retailed. 10 His Honour also made these findings of fact, at [14], based on three tables prepared by the ACCC which have been reproduced as Schedules 4, 5 and 6 of his Honour's reasons; 'These tables set out the "was" price for the 17 items in each sale, the percentage of sales at the "was" price, the price at which most sales were made (the mode price) and the percentage of sales at the mode price. In summary, in relation to the period preceding the Summer of Love sale, the table reveals that in all instances less than half of the sales were at the "was" price, mostly the percentage of the sales at the "was" price was comparatively small and that the mode price was, in the majority of cases, less than the "was" price and that the percentage of sales at the mode price was in most cases markedly higher than the percentage of sales at the "was" price. In the two periods preceding the Love You Mum sale, there were, in relation to many items, no sales at the "was" price and no instances where the mode price was the same as the "was" price.' 11 The learned primary Judge then stated the task for the Court as being "first to identify what is a relevant audience and secondly whether it would understand the pricing in the catalogue as conveying the pleaded representation." He noted the leading authority on this question as being Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45 where it was held that, in assessing whether a representation to the public is likely to mislead or deceive, it is necessary to isolate who are the "ordinary" or "reasonable" members of the class of prospective purchasers. The second enquiry is whether such "ordinary" or "reasonable" members of the class would be likely to be misled or deceived by the conduct alleged. 12 His Honour noted that there was no dispute between the parties in the present case about the applicable principles or that the audience for each catalogue was the public at large. However, he went on to record the submission on behalf of the ACCC that one segment of the relevant audience would have been misled or deceived by Prouds' conduct, namely consumers without experience in purchasing jewellery and without knowledge of the Australian jewellery industry or Prouds' pricing or promotion practice which featured discounting, as is common in the jewellery industry. The ACCC's ultimate description of the relevantly qualified member of the material section of the public was; 'a consumer without experience in purchasing jewellery and without knowledge of Australian jewellery industry or Prouds' pricing or promotion practice. It is a consumer who would be quite happy to pay the full "regular market price", and who if unhappy with that price would either go elsewhere or wait for a price promotion of the item in question. In short, it is a consumer who is ignorant that discounts are or would be available below a regular marked price.' 13 His Honour accepted as a matter of fact that there are consumers who answer that description and could be unaware that discounted, or lower, prices than the regular marked prices are or would be available outside the "sale period" delineated in a particular catalogue. It was also acknowledged that, where the relevant audience for a representation may constitute a general and diverse group, it is open to a court to single out from that group a hypothetical individual who is a member of a subclass of the general and diverse group and assess the likely effect of the impugned conduct by asking how it would impinge on that hypothetical individual; see Domain Names Australia Pty Ltd v .au Domain Administration Ltd (2004) 139 FCR 215, at [24]. 14 The learned primary Judge next noted that four out of five of the alleged representations, including the "Level of Savings representations", had been pleaded on the basis that the "Was" price constituted a representation as to the price at which Prouds previously sold the item. Only the fifth representation, the Advertised Price representation, contemplated that the "Was" price referred to a previous offer price. By way of defence, Prouds contended that the "Was" price would have been understood as the price at which the items had been offered and not the price at which they had previously been sold. His Honour then reviewed some of the authorities in this context of consumer protection legislation which have examined "dual pricing", including ACCC v Allans Music Group Pty Ltd [2002] FCA 1552 in which the respondent had pleaded guilty to contravening s 53(e) of the TPA and Tamberlin J described, in these terms, the "gist" of the representation made by the use of "was" and "now" prices in a catalogue of musical instruments; 'The representation as to the savings for members of the public was the amount calculated as the difference between the "WAS" price that had been charged prior to the Christmas sale period and the "NOW" price which would be charged during the Christmas sale period.' 15 Moore J, at [23], regarded it as clear from Tamberlin J's "comments about the agreed facts that he took the view that a false representation had been made because the goods had not been sold at the advertised "Was" prices. His Honour treated the "was" price as a "sale price" (Moore J's emphasis). 16 Other authorities examined by the learned primary Judge included Commissioner of Competition v Sears Canada Inc (2005) 37 CPR (4th) 65, Trade Practices Commission v Cue Design Pty Ltd (1996) 85 A Crim R 500; (1996) ATPR 41-475 and Walker, Commissioner for Fair Trading v Rugs a Million Pty Ltd [2006] WASC 127. Against that background, his Honour summarised, at [29], the competing contentions of the present parties as to how the "Was" price would have been understood by persons who had received the Prouds catalogue; 'In the present case, the position adopted by the parties as to how the "was" and "now" prices would have been understood was to the general following effect. ACCC contended the "was" price in the catalogues would be taken by the hypothetical consumer to indicate the price at which each item had been sold to consumers in the past at least in the context of considering the Level of Savings Representations. Prouds, on the other hand, contended that the "was" price would have been understood to be the price at which each item had been offered for sale. This was said to flow logically from the fact that the "now" price could only be an offer price, and the juxtaposition of the two prices would be viewed as comparing prices of the same character together with particular features of catalogues themselves (various icons and the font sizes).' 17 After reviewing the evidence which had been adduced by Prouds, but mainly relied on by the ACCC, his Honour (at [36]) reached these conclusions; '36 This evidence, which I accept, clearly points to extensive discounting by Prouds which, in any event, is also apparent from the evidence concerning actual sales of the 17 items to which these proceedings relate in the periods preceding the publication of the Summer of Love catalogue and the Love You Mum catalogue. However, this evidence (both the oral evidence and evidence of sales), does not warrant a conclusion that the hypothetical consumer ACCC relied on (see [17] above) would be likely to receive a discount were they to seek to buy an item of jewellery from Prouds in a non-sales period, unaware as they would be, of the practice of discounting in the industry generally or by Prouds in particular. These matters tended to suggest that the "was" price might, for this hypothetical consumer, not be misleading if the "was" price were viewed as the price that would have been paid.

37 It is to be recalled that ACCC invited consideration of a consumer who did not appreciate that discounts were or would be available resulting in a price less than the regular marked price. I accept that this hypothetical consumer would, when seeing a "was" price in juxtaposition with a "now" price in relation to an item of jewellery which the consumer might be interested in purchasing, contemplate what savings he or she might achieve if the item was purchased during the sale. However, I doubt that such a hypothetical consumer would have viewed the "was" price as either a bare sale or a bare offer price as a matter of characterisation. Rather, it is probable, in my opinion, that the hypothetical consumer would have seen the two prices (the "was" and the "now" price) in juxtaposition and, in the context of considering what savings might be achieved, would have understood that before the sale to which the catalogue related, he or she would have bought the item for the "was" price had it been purchased then. But now, during the sale period, he or she would be able to buy the item at the "now" price. The difference between those two prices would be seen by the hypothetical consumer as the savings that would be achieved by him or her by purchasing an item during the sale period. The focus of the hypothetical consumer's consideration of the pricing in the catalogue would, in the context of savings to be made, be on the benefits flowing to him or her by the sale to which the catalogue was directed. Implicit in this analysis is that the "was" price was the price at which the goods were being offered for sale in the period before the promotional sale and thus the price at which they would then have been bought.

38 I doubt that the hypothetical consumer relied on by ACCC would undertake a process of logical analysis by first identifying the "was" price as the offer price and then concluding that he or she might have accepted the offer price and thus have purchased the item at that price. The hypothetical consumer's reaction to the juxtaposition of the "was" price with the "now" price, in my opinion, would more likely be impressionistic rather than analytical. Nonetheless, part of that impression would have involved, at least implicitly, an understanding that the "was" price represented the price at which an item had been offered for sale before the promotional sale period. But in the result, the impression of the hypothetical consumer when considering what savings might be made would be that the "was" price identified the price at which an item would have been bought by that consumer before the sale.

39 ACCC's case concerning at least the Level of Savings Representations, as originally advanced, appeared to involve taking what is now known about the conduct of Prouds dealing with actual consumers (those who have received discounts) who are almost certainly not in the subgroup of consumers from which the present hypothetical consumer is drawn, and treating that knowledge as in some way colouring what should be concluded about how the hypothetical consumer would view the "was" and "now" pricing of items in the catalogue. But the hypothetical consumer ACCC pointed to would not have sought and, more probably than not, would not have been given a discount had they sought to purchase one of the contentious items prior to the Summer of Love or Love You Mum promotional sale periods when the item was being offered at the regular marked price.'

18 In the light of these conclusions and the application to them of Campomar (supra), Taco Co of Australia v Taco Bell Pty Ltd (1982) 42 ALR 177 at 200 and National Exchange Pty Ltd v Australian Securities and Investment Commission (2004) 49 ACSR 369, his Honour observed, at [45]; '… the relevant hypothetical consumer would have made the erroneous assumption that had he or she sought to buy any one of the 17 items in the period immediately before the Summer of Love catalogue sale commenced (viz. 29 January 2006) he or she would have purchased it at the "was" price. That assumption would be erroneous because, notwithstanding that such a consumer would probably have purchased an item at the offer price, none of the items were, at that time, being offered for sale at the "was" price. It is improbable, in my opinion, that the hypothetical consumer would have viewed the "was" price as the price at which the goods would have been purchased by him or her at some indeterminate time before the sale such as the period preceding 25 December 2005 for 15 of the items, or 13 November 2005 or 4 December 2005 when two items had been offered for sale at the "was" price.' 19 His Honour thus redirected attention to the relevant hypothetical consumer, being one "without experience in purchasing jewellery and without knowledge of the Australian jewellery industry or Prouds' pricing or promotion practice". He then rejected the ACCC's contention that the catalogues falsely represented that such a purchaser would achieve a "saving" represented by the difference between the "Now" price and the amount usually paid by consumers in the eight weeks preceding the publication. His Honour justified that rejection in this passage at [47]-[49] of his reasons; '47 … The case advanced by ACCC was based on the actual sales to consumers which, overwhelmingly in relation to most of the 17 items and entirely for the remainder, were at a sale price less than the "was" price. However, in my opinion, this is not the representation conveyed to the relevant hypothetical consumer by the juxtaposition of the "now" and the "was" price as they appeared, in context, in the catalogue. As I indicated earlier, the hypothetical consumer would not, in my opinion, have contemplated that the "was" price concerned what consumers actually paid if contemplating what savings the particular hypothetical consumer would achieve. That is, the hypothetical consumer would not have taken the "was" price as signifying the price actually paid by consumers including consumers who knew that discounting and bargaining was a feature of the jewellery industry and, accordingly, had negotiated or secured a price less than the regular market price. The hypothetical consumer would, when considering what savings might be made by purchasing during the sale, have viewed the "was" price as the price he or she would have paid had they bought the item before the sale period. Though, as I earlier indicated, this would have involved an erroneous assumption, it is not the case ACCC pleaded and presented.

48 Accordingly, the representation as pleaded by ACCC is not established in relation to the Summer of Love catalogue. The case of ACCC was based on the "was" price being treated as a reference to prices actually paid including prices paid by consumers who were aware of discounting and negotiated a price less than the regular market price. It is not, in my opinion, an assumption that should be made.

49 The same analysis leads to the same conclusion in relation to the Love You Mum catalogue.'

(i) Submissions of the ACCC on the Level of Savings representations 20 On the hearing of the appeal, Counsel for the ACCC accepted that the learned primary Judge had correctly identified the relevant hypothetical consumer as one "who would be ignorant that discounted prices are or would be available lower than the regular marked price". However, it was contended that such a consumer "would understand the differences between the 'Was' price and the 'Now' price to be the level of saving to be made by a purchase during the catalogue period compared with Prouds' ordinary price - that is, the price at which Prouds had offered and sold the item of jewellery before the catalogue period (the "Was" price)". In the same context, it was suggested that the analysis of the Level of Savings representation favoured by his Honour was too "fine grained" or sophisticated to be imputed to the relevant hypothetical consumer. 21 In particular, the ACCC argued that the primary Judge had made an error of fact in concluding that the relevant hypothetical consumer would not have understood the Prouds catalogues as meaning that the "Was" price was the price actually paid by other consumers. Mr White SC who appeared with Mr T Brennan for the ACCC suggested that the only reasoning which might be thought to support that conclusion was the statement at [37] of the primary Judge's reasons, reproduced at [17] of these reasons that: 'The focus of the hypothetical consumer's consideration of the pricing of the catalogue would, in the context of the savings to be made, be on the benefits flowing to him or her by the sale' (ACCC's emphasis). 22 It was said to be implicit in that reasoning that the hypothetical consumer would not have been concerned with, or made any assumptions about, the savings to be made by other consumers. Counsel for the ACCC then sought to explain the error attributed to the learned primary Judge by saying that his focus on the individual hypothetical consumer had diverted him from the correct question which was said to have been accurately identified by Mansfield J in these passages from ACCC v Ascot Four Pty Ltd [2008] FCA 1295; '99 I am satisfied beyond reasonable doubt that the defendant made a representation about the price of each of the 11 jewellery items by its publication of the Christmas catalogue. The strike through price had a purpose. It was to convey to the consumer or potential consumer some relationship between the sale price and the strike through price. That is why the two prices appeared in juxtaposition. The presentation was to represent something about the catalogue sale price, that is about the sale price of the 11 jewellery items by reference to the strike through price.

100 The representation, in my judgment, was that by purchasing the several jewellery items in which there was a catalogue sale price and a strike through price, there would be a saving of the difference between the catalogue sale price and the strike through price. It was to encourage the purchase of the 11 jewellery items at the catalogue sale price, by representing to the consumer or potential consumer that during the sale period, the consumer would be saving a difference between the catalogue sale price and the strike through price. … …

103 The appropriate question is whether ordinary or reasonable members of the classes of prospective purchasers of the 11 jewellery items would understand the relevant contents of the Christmas catalogue as conveying the representation which I have found to have been made.

104 Of course, upon the whole of the evidence, clearly not all ordinary or reasonable prospective purchasers of the 11 jewellery items necessarily would have so understood that material. The price range at which the 11 jewellery items had been sold by the defendant prior to and during the sale period demonstrates that. There are obviously ordinary and reasonable members of the public among the potential purchasers of the defendant's jewellery who did not read or understand the Christmas catalogue. That is evident from the sales during the sale period above the sale price. There are also obviously ordinary and reasonable members of the public among the potential purchasers of the defendant's jewellery who are aware that, notwithstanding a ticketed price, they can negotiate a lower price. That may in fact flow from the sales strategy of the defendant on a one-to-one basis with a particular potential purchaser. Even during the sale period, as evidenced by sales below the sale price, there were purchasers of the 11 jewellery items who did not accept the sale price as the price to be paid but as a basis for further negotiation. The defendant described its potential purchasers as having "a discount culture", and that the defendant operated in a "discount jewellery market" where its sales staff are encouraged to offer competitive price discounts "if that is what is required to secure a sale".

105 However, such considerations do not detract from my conclusion that there was a group of ordinary and reasonable members of prospective purchasers of the 11 jewellery items to whom the representations I have found were made about the 11 jewellery items. Not every potential purchaser has "a discount culture" or would understand that the strike through price had no real relevance to the decision to purchase one or more of the 11 jewellery items. There was a significant percentage of sales of each of the 11 jewellery items at the sale price during the sale period, and generally a greater intensity of sales of each of the 11 jewellery items during the sale period (although the short pre-sale period of the Count 1 item does not enable such a picture to be drawn) than in the period from 1 July 2005 leading up to the sale period. The defendant's own acknowledgment was that it encouraged departure from a price if necessary to secure a sale, and obviously its sales personnel would accept a sale at higher than the sale price during the sale period if a potential purchaser was unaware of the sale price.' (ACCC's emphasis)

23 The distinction drawn between the reasoning in the present case and that of Mansfield J in Ascot Four is encapsulated in this paragraph of the written submissions filed on behalf of the ACCC in support of its appeal; '19. As stated by Mansfield J the appropriate question is whether ordinary or reasonable members of the classes of prospective purchasers would understand the catalogue as conveying the representation that there would be a saving of a difference between the catalogue sale price (now price) and the strike through price (was price). Mansfield J answered that question in the affirmative and found the representation to be false because preceding sales were at prices less than the strike through price (was price). Rather than determine the question as found by Mansfield J, the trial judge concerned himself with the wrong question, namely, would the hypothetical purchaser have paid the "was" price?' 24 In response to the primary Judge's conclusion that the Prouds catalogues did not convey the Level of Savings representation, Counsel for the ACCC contended that what the catalogues conveyed was a matter of impression that could be formed as readily by an appellate court as at first instance. In the present case, the ACCC contended, the catalogues should be found to convey that the "Was" price was the price at which Prouds had both offered and sold the particular item before the catalogue period.

(ii) Submissions of Prouds on the Level of Savings representations 25 In supporting the conclusion reached by the primary Judge on the Level of Savings representation, Mr Bannon SC, who appeared with Mr Studdy SC and Ms Beaumont of Counsel for Prouds, pointed out that the "Now" price in the catalogues was simply an offer price, not a statement that the relevant item had previously been sold at that price; see ACCC v Carrerabenz Diamond Industries Pty Ltd (2008) ATPR 42-248, at [6]-[7]. Because a comparison was invited, the "was" price must also have been an offer price in order for the comparison to have been of like with like. The ACCC's analysis was said, by contrast, to be based, first, on a representation that the "Was" price was the only price at which the relevant item had actually been sold to other consumers. Secondly, the ACCC's argument was said to require a finding of a representation that consumers reading the catalogue could "save" by paying the "Now" price compared with the higher price which other consumers had previously paid. 26 Support for the proposition that the use of "Was" and "Now" prices invited a comparison of present and past offer prices was said to be provided by the juxtaposition of the two prices in the catalogue format and the use of the same style and size of font for both words. It was also said that, if the relevant hypothetical consumer had understood the "Was" price to be the price at which items had been sold, that misconception would not have been attributable to any conduct of Prouds. 27 A second and distinct argument advanced on behalf of Prouds was based on a "Single Price Theory" imputed to the ACCC, ie, that there was only ever one "Was" price for an item of jewellery at which it was both offered and sold. That "Single Price Theory" was said to be erected on the making of a number of assumptions which the relevant hypothetical consumer or the "ordinary or reasonable" consumer required by Campomar (supra) would not have made. Unless the Court were to find that the hypothetical consumer would have made those assumptions, the "Single Price Theory" would say nothing about past sales. 28 Counsel for Prouds also advanced the alternative contention that the ACCC bore the onus of showing that the impugned conduct was likely to mislead or deceive. That was not to be discharged by showing that the conduct had merely caused some uncertainty in the minds of relevant members of the public; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) ATPR 40-307 at 43,790. In the present case, the relevant hypothetical consumer would only ever have assumed that, had he or she purchased the item before the catalogue sale, he or she would have paid the "Was" offer price. The ACCC had therefore not discharged the onus of proving misleading or deceptive conduct. 29 In a related way, it was submitted that if, as was not admitted, the relevant hypothetical consumer would have made an erroneous assumption that the "Was" price was that at which all previous purchasers had bought an item, that misconception was not due to any conduct on the part of Prouds; see Lego Australia Pty Ltd v Paul's (Merchants) Pty Ltd (1982) ATPR 40-275 at 43,476 and 43,479. 30 According to Counsel for Prouds, the preponderance of authority on dual pricing in this context favours the view that the statement of the higher of the two prices embodies a representation that the goods have previously been offered for sale at that price. Reference was made to ACCC v Carrerabenz Diamond Industries Pty Ltd (supra), Trade Practices Commission v Cue Design Pty Ltd (supra) , ACCC v Terania Pty Ltd [2008] FCA 732 and Ducret v Chaudhary's Oriental Carpet Palace Pty Ltd (1987) 16 FCR 562. It was also submitted on behalf of Prouds that the Ascot Four case is distinguishable from the present or, if not distinguishable, has been wrongly decided and is the subject of a pending appeal.

(iii) Did the Level of Savings representations contravene the TPA? 31 In our view, it was open to the learned primary Judge to find that the relevant hypothetical consumer who was ignorant that discounted prices lower than the market prices were readily available from Prouds would have focused on the benefits available to him or her during the currency of the sale promoted by one or other of the catalogues. We consider that the juxtaposition of the "Was"/"Now" prices would have primarily suggested to such a hypothetical consumer that a change had occurred in the price of the relevant item coincidentally with, or prompted by, the publication of the catalogue. Such a consumer would further have concentrated on the opportunity which he or she had to take advantage of the change during the currency of the catalogue. 32 In that sense, we agree with the analysis of Mansfield J in Ascot Four (supra) at [100], reproduced at [22] above, that "the representation was that by purchasing the several jewellery items in which there was a catalogue sale price and a strike through price, there would be a saving of the difference between the catalogue sale price and the strike through price." We accept, as Mansfield J did at [105], that the relevant hypothetical consumer would not have had a "discount culture". However, we are unable to agree, in the context of the present case, that the "Was" price had "no real relevance", for such a consumer, to the decision to purchase one or more of the items in issue. It had the relevance indicated at [31] above of signifying a change from the prices on offer immediately before the catalogue was published, of which the relevant consumer could take advantage during the catalogue period. 33 In the Ascot Four case, Mansfield J made the following findings of fact at [15]-[21] of his Honour's reasons; '15 The items advertised for sale were available for sale in each of the defendant's stores with a ticketed price on each item. The ticketed prices were placed on each item in the head office of the defendant before the items were distributed to the stores. Generally, subject to certain unimportant variations apparent from the evidence, the ticketed price, where there was a strike through price, was also the strike through price for that item during the sale period.

16 The Christmas catalogue (page 7) contained a depiction of an item of jewellery described as "Gate Bolt Ring Bracelet" (the Count 1 item). It had a sale price of $675, and a strike through price of $1,350.

17 The Count 1 item was offered for sale by the defendant at its stores from at least 4 November 2005. Prior to 24 November 2005, the ticketed price for the Count 1 item had been $995. It changed to $1,350 from the start of the sale period. Five of the Count 1 items had been sold in that period for prices ranging between $995 and $708.

18 During the sale period, 26 Count 1 items were sold, at various prices. There was only one sale above the strike through price, at $845. All other sales were at $675 (15 sales) or less: six at between $450 and $500, three at $573, and one at $650.

19 In the period of 22 weeks or so after the sale period, the Count 1 item was sold 21 times. All but one of those sales was at a price at or below the sale price, and all but that one sale were at $695 or in a few instances less than that amount. There was only one sale during that period that exceeded the sale price. It was at $995.

20 Although I have made findings as to the price at which the Count 1 item was sold after the sale period, based upon the information in the evidence as to sales subsequent to the sale period and up to about 22 April 2004, the defendant contended that such evidence was not relevant and that I should place no weight upon it. I shall address that contention below. It is convenient, however, in respect of such evidence on each count to record my findings on the matters raised by the prosecutor so that (if appropriate) I can have regard to them later in these reasons for judgment. That comment applies also to my findings in respect of sales subsequent to the sale period and up to about 22 April 2006 in respect of each of the 11 jewellery items.

21 Put shortly, the Count 1 item had only been offered for sale for a short time prior to the sale period. It had been sold five times, the highest price being $975. It had not been offered for sale at the strike through price until the sale period, and had never been sold at the strike through price.'

34 Similar findings of fact were made in respect of the other items, the subject of Counts 2 to 11. The defendant in Ascot Four argued that three inferences or "explanations consistent with innocence" were available from the relevant parts of the Christmas catalogue. They were that the strike out price might have conveyed (1) "the defendant's previous or normal ticketed price" or (2) "a competitor's price", or (3) "the value of the relevant item of jewellery." For the purposes of the present appeal, only the first of those alternative inferences need be considered. Mansfield J rejected that inference, concluding at [110] of his reasons; 'The first of the defendant's three suggested alternative hypotheses, namely the previous or normal ticketed price, as to the meaning of the relevant parts of the Christmas catalogue in any event does not diminish my conclusion. The defendant used the expression its "own previous or normal" price. But if that was the comparator expressed by the strike through price, that is a step which also underlies my view as to the meaning of the relevant parts of the Christmas catalogue. It fortifies, by the two prices in juxtaposition, what I have found the representation to have been. The evidence shows that the defendant's strike through price had never been its actual previous price in respect of any of the items and had never been its normal previous price. The use of the term "ticketed" price also emphasises the contrast between the ticketed price and the sale price, but for the very reason - as I have found - to represent the extent of the available saving if the particular item of jewellery was purchased during the sale period.' 35 On our understanding, his Honour's conclusion that "the evidence shows that the defendant's strike through price had never been its actual previous price in respect of any of the items and had never been its normal previous price" was a reference to the findings made, for example, in respect of the Count 1 item at [17] and [21] of his Honour's reasons which are reproduced at [33] above. Those findings make clear that the Count 1 item had never actually been offered for sale at the strike through price because the "ticketed price" had been changed from $999 to $1350 from the start of the sale period. By contrast, Moore J in the present case appears to have accepted as, we believe, was open on the evidence, that the "Was" price in each instance was the "ticketed price" which had not been changed before the publication of the catalogue. 36 This distinction, for purposes of characterising the "Was" price, between a price at which goods have been offered for sale and the price (or prices) at which they have actually been sold is consistent with the preponderance of authority on "dual pricing" noted at [30]. As a matter of impression, if, as the ACCC contended, we are required to form one, the "Was" price in the present case was likely to have been understood by the relevant hypothetical consumer as referring only to the price at which the item in question had been offered for sale.

(b) The Previous Selling Price representations 37 The way in which the ACCC relied on these representations is illustrated by these paragraphs from its statement of claim; '32 Further, or in the alternative, by each statement of a Was price in proximity to a Now price in the Summer of Love catalogue for each of items 2952471, 4050554, 4050562 Prouds represented that the Was price so stated was the price at which Prouds sold that item of jewellery immediately preceding publication of that catalogue (Previous Selling Price Representations).

33 Contrary to the Previous Selling Price Representations in the Summer of Love catalogue, Prouds sold each of the items 2952471, 4050554 and 4050562 in the period of 8 weeks immediately preceding publication of that catalogue for prices which in every case were less than the Was price contained in the Summer of Love catalogue for that item of jewellery.'

38 As with the Level of Savings representations, to establish the making of these representations, the ACCC had to persuade the Court that the relevant hypothetical consumer would have understood the statement of a single dollar value as the "Was" price as indicating both an offer and a selling price being "Prouds' price" or "Prouds' usual price." The learned primary Judge was not so persuaded. He concluded, at [55] of his reasons; 'ACCC has not established this representation. It entails the "was" price being viewed by the hypothetical consumer as the usual selling price for the item. I do not accept that it would have been viewed this way. Experience suggests sales are often the result of a need to increase turnover. That is often because minimal sales have been achieved at ordinary or regular prices. I do not think a hypothetical consumer would treat a "was" price as saying anything about the price at which actual sales had been achieved before the introduction of the discounted price.'

(i) Submissions of the ACCC on the Previous Selling Price representations 39 The relevant hypothetical consumer, having the attributes found by the primary Judge, so it was contended by the ACCC, would not have understood that there is a distinction between offered prices and selling prices in the mass marketing of jewellery. In particular, such a hypothetical consumer would not have had the experience postulated by his Honour in the passage quoted at [38] above as suggesting that "sales are often the result of a need to increase turnover. That is often because minimal sales have been achieved at ordinary or regular prices." His Honour's attribution of that experience to the relevant hypothetical consumer was said to be inconsistent with his earlier finding that such a consumer would be unaware that discounted prices are, or would be, available at lower than the regular marked prices.

(ii) Submissions of Prouds on the Previous Selling Price representations 40 Counsel for Prouds reiterated their earlier contention that the catalogues did not convey a representation that there had been "actual sales" at the "Was" price. They also denied that the primary Judge had imputed to the relevant hypothetical consumer experience or knowledge which such a consumer would not possess. In support of this denial it was contended in Prouds' written submissions on the appeal; 'The relevant hypothetical consumer was found to be unaware of discounting. However, the hypothetical consumer was not found to be ignorant of the reason why sales occur. Any consumer confronted with a discount catalogue advertising a "sale" would understand that the trader has not been able to move the items at the higher price and would not be surprised to learn that there had been few sales, or no sales of the item at all, in the period immediately preceding the publication of the catalogue. To suggest a hypothetical "reasonable" consumer would believe that immediately prior to the publication of the catalogue the retailer had made sales at the higher "Was" price and was now prepared to offer that same item at a discount ("Now" price), for no good reason, cannot be correct.' 41 In addition, Counsel for Prouds contended that the ACCC's reliance on the Previous Selling Price representation was "unworkable" or absurd. That contention was founded on the proposition that, if the relevant hypothetical consumer does not understand that there is a difference between offered prices and selling prices, every retailer who offers a discount from the "offer" or ticketed price would contravene s 52 and s 53(e) of the TPA. The argument was expressed in these terms at [26(c)] of Prouds' written submissions on the appeal; 'On the ACCC's approach, regardless of the industry, a retailer can only ever sell at the ticketed price. If a retailer does not sell the item at the ticketed price but offers a discount to customers, that retailer will have misled a relevant hypothetical consumer who wishes to buy the item because it will be representing not only the price at which it is offering the item but also (on the ACCC's approach where this consumer does not appreciate that discounts may be available) the only price at which it is (and has been) willing to sell the item. In other words, on the ACCC's approach, by its ticketed price the retailer will have made a Previous Selling Price representation, ie that the retailer previously sold the item at only the advertised price - when this is not the case.'

(iii) Did the Previous Selling Price representations contravene the TPA? 42 We have already concluded at [31] and [36] that the relevant hypothetical consumer would have understood that there is a difference between a "Was" price at which goods have previously been offered for sale and the price (or prices) at which such goods have actually been sold. In the light of that conclusion, it was open to the learned primary Judge to infer that the relevant hypothetical consumer would not have regarded the "Was" price as saying anything about the price at which actual sales of a particular item had been achieved before the introduction of the "Now" price. We do not consider that, by thus inferentially imputing that state of mind to the relevant hypothetical consumer, Moore J had invested that consumer with attributes inconsistent with those found earlier in his Honour's reasons to be possessed by that consumer. It follows that his Honour did not err in declining to find that the Previous Selling Price representations were misleading or deceptive in contravention of s 52 or s 53(e).

(c) The Substantial Volume of Sales Price representations 43 The allegations related to these representations were pleaded in these terms in the ACCC's amended statement of claim: '27 Further or in the alternative, by each statement in the Summer of Love catalogue of a Was price in proximity to a Now price for each of the 17 items of jewellery listed in paragraph 12, Prouds represented that a substantial volume of the sales of each such item of jewellery that occurred in a reasonable period immediately preceding publication of that catalogue were at the Was price (Substantial Volume of Sales Price Representations).

28 Contrary to the Substantial Volume of Sales Price Representations in the Summer of Love catalogue, there was no substantial volume of sales of any of the items of jewellery listed in paragraph 12 in the 8 week period immediately preceding publication of that catalogue other than at prices less than the Was price.'

44 The Substantial Volume of Sales representations were alleged in paragraph 28 of the same pleading to have been false because there had been no substantial volume of sales of any of the relevant items of jewellery in the eight week period immediately preceding publication of the "Summer of Love" catalogue other than at prices less than the "Was" price. Allegations corresponding to those in paragraphs 27 and 28 were made in paragraphs 29 and 30 of the amended statement of claim in relation to the "Love You Mum" catalogue. 45 The learned primary Judge rejected that part of the ACCC's case which depended on the Substantial Volume of Sales representations. He observed, at [53] of his reasons; '… This contention entails the "was" price having been viewed by the hypothetical consumer as saying something about the volume of sales at that price before the publication of the catalogue. I do not accept that it would have been viewed this way. Is it highly unlikely that the hypothetical consumer would have even thought about the volume of sales when observing, in the catalogue, the "was" price in juxtaposition with the "now" price. This representation is not established.' 46 The ACCC did not, in its notice of appeal, contest the correctness of the learned primary judge's rejection of its invocation of the Substantial Volume of Sales Price representations. It is therefore unnecessary for us to give any further consideration to those representations.

(d) The Usual Price representations 47 These representations were pleaded in the following paragraphs of the ACCC's amended statement of claim: '22 Further, or in the alternative, by each statement in the Summer of Love catalogue of a Was price in proximity to a Now price, for each of the 17 items listed in paragraph 12, Prouds represented that the Was price was the usual price for that item of jewellery for a reasonable period immediately preceding publication of that catalogue (Usual Price Representations).

23 Contrary to the Usual Price Representations in the Summer of Love catalogue the Was price in that catalogue for each of the 17 items listed in paragraph 12 was not the usual price for that item of jewellery for the period from 1 December 2005 to 28 January 2006.'

48 The learned primary Judge upheld the ACCC's contention that the Usual Price representations as pleaded entailed that the relevant hypothetical consumer would understand the "was" price as referring to the usual price for the item, either as the offer price or the sale price. He explained this conclusion as follows at [51] of his reasons: '… Counsel for Prouds submitted that the notion of an item having been offered for sale or sold at a "usual" price includes with it the notion of the item having been offered for sale or sold at a lower or higher price. But the notion of a usual price in the context of promotional sales can mean no more than the ordinary or non-sale price. In my view, that is how the pleading should be understood. It is apparent the "was" price did not appear in the Summer of Love catalogue in isolation. It appeared in juxtaposition with a "now" price. Plainly the "now" price identified the discounted price at which the item could be purchased during the sale period. The message conveyed by the "was" price in this context, was that the item, immediately before the sale, was being offered for sale and could be purchased for the "was" price. Senior counsel for Prouds challenged the proposition that the "was" price should be treated as referable to the period immediately before the catalogue was published (and the sale commenced). However the juxtaposition of the two prices was intended to create a contrast. The contrast was between circumstances existing before the sale and those existing during the period of the sale. The period before the sale included the period immediately before the sale. It was misleading to identify in the Summer of Love catalogue a "was" price which did not represent the price at which an item had been offered for sale and would have been purchased by the hypothetical consumer immediately before the sale commenced. This representation is established in relation to both the Summer of Love catalogue and the Love You Mum catalogue.'

(i) Proud's submissions on the Usual Price representations 49 In Ground 1 of its notice of cross-appeal Prouds asserted: 'The primary judge erred in finding at paragraph 51 of the 15 February Judgment that the Usual Price Representations pleaded in paragraphs 22 and 24 of the amended statement of claim had been established and that the cross-appellant had engaged in the misleading conduct.' 50 Counsel for Prouds criticised the concept of a "usual" price on which this part of the ACCC's case had been erected as based on a word with an uncertain, or inherently indeterminate, meaning. This made it impermissible to impute to the relevant hypothetical consumer an understanding that the "Was" price referred to the usual price of an item immediately before the publication of the catalogue. The highest the understanding of such a hypothetical consumer could be put was that the "Was" price was the price at which the item "had been offered for sale at some comparatively proximate point in the past." In this sense, "was", as used in the catalogues, exemplified the "simple past tense" indicating that in the past an event had occurred, but did not have any connotation of a specific point in time when the event had occurred. The relevant hypothetical consumer would infer that sales of the subject item had been slow or non-existent in the period preceding publication of the catalogue. However, he or she would not infer, simply from the use of the "Was" price, that there had been sales immediately before the publication of the catalogue. 51 In addition, Counsel for Prouds contended that there were temporal uncertainties inherent in the phrase "immediately preceding publication of that catalogue." The phrase was capable of referring to a period 24 hours before or a few days or a few weeks before publication.

(ii) Submissions of the ACCC on the Usual Price Representation 52 According to Counsel for the ACCC, the submissions on behalf of Prouds in respect of this representation focused too narrowly on the meaning of the word "was" and failed to recognise the significance of the statement of a "Was" price in juxtaposition with a "Now" price and the presence of the two prices so arranged in the "Summer of Love" catalogue and the "Love You Mum" catalogue, each of which was expressed to remain in force for a short, defined period. In that context, the trial judge was obviously correct when he said that "the notion of a usual price in the context of promotional sales can mean no more than the ordinary or non-sale price." 53 Similarly, the ACCC argued that his Honour had accurately perceived the effect of the representation when he found that; 'the "now" price identified the discounted price at which the item could be purchased during the sale period'

'The message conveyed by the "was" price in this context, was that the item, immediately before the sale, was being offered for sale and could be purchased for the "was" price …'

54 The submissions on behalf of Prouds that the Usual Price representation would have been understood as referring to the price offered at a "comparatively proximate" point in the past were also criticised by the ACCC as ignoring the context provided by the catalogues and well-known trading practices in the jewellery retailing industry. In that context, so it was argued, a consumer would have understood the "Was" price to refer to a price which had been on offer up to the end of the trading day immediately preceding the publication of the catalogue.

(iii) Did the Usual Price Representation contravene the TPA? 55 We have already outlined, at [31] above, our view that the indication of "Was"/"Now" prices in juxtaposition in the Summer of Love catalogue would have suggested, at least to the relevant hypothetical consumer, that a change had occurred in the price of the relevant item coincidentally with, or prompted by, the publication of the catalogue. The learned primary Judge clearly took the same view when he concluded, at [51] of his Honour's reasons that "The message conveyed by the "was" price in this context, was that the item, immediately before the sale, was being offered for sale and could be purchased for the "was" price" (emphasis added). 56 It is true that to speak of an item of merchandise having a "usual" price can give rise to ambiguity. That is because the identification of the "usual" price may involve the attribution of a different price according to the point of time, or period to which the identification relates. However, in the present case, the "Usual Price" was a concept introduced by the pleader of the ACCC's statement of claim. His Honour, as he made clear at [51] of his reasons, was concerned only with the price at which a relevant item had been offered at the end of the last trading day before publication of the catalogue. Having found that the items in question had not then been offered for sale at the "Was" price, it followed that the representation embodied in the catalogue would have misled or deceived the relevant hypothetical consumer. We can therefore discern no error in his Honour's approach to this issue and the ground of cross-appeal directed to it has not been made out.

(e) The Advertised Price representations 57 These representations were pleaded in the following paragraph of the ACCC's statement of claim; '37 Further or in the alternative, by each statement in the Love You Mum catalogue of a Was price in proximity to a Now price, for each of the 17 items listed in paragraph 15, Prouds represented that the price so stated was the price at which Prouds offered that item of jewellery for sale for a reasonable period ending immediately preceding publication of that catalogue (Advertised Price Representations).'

58 The falsity of those representations was pleaded, as to some items of jewellery in paragraph 38 of the statement of claim, and as to other items in paragraph 39. Those paragraphs alleged, in substance, that Prouds had, from 26 December 2005 to 22 April 2006, offered each of the specified items for sale "at prices which in every case were less than the "Was" price in the Love You Mum catalogue." 59 The learned primary Judge noted that these representations were alleged to have been conveyed only by the "Love You Mum" catalogue. Something of a distraction had been introduced into the case by Prouds' having adjusted prices of certain items to take account of an increase in the world price of gold. His Honour explained the effect of that circumstance by reciting at [62]-[65] of his reasons; '62 It is convenient, at this stage, to explain how some of the items had never been offered for sale at the "was" price. Generally, the regular marked price was a price determined, principally, by taking into account costs and gross profit margins. Those costs included the item's labour costs and, in relation to gold items, the cost of gold. Prouds' mark up was also taken into account. The regular marked price was set by Prouds' buyers and usually the items were new items and had no sales history. It was a price which would ordinarily endure for the life of the item. In about August 2005 the price of gold began to increase. That increase eroded Prouds' margin. Towards the end of 2005, discussions took place within Prouds' management about increasing the price of items containing gold. In January 2006, a decision was made to increase the price of items of gold jewellery, principally, to meet the increase in their costs caused by the increase in the international gold price. The decision was made by Mr David Norman who was the Group Managing Director of James Pascoe Ltd which owns Prouds. At times he was described in the evidence also as the Managing Director of Prouds. So too was Mr Mike Russell who no longer works for the company. Mr Russell was held responsible for what transpired, namely the failure to ensure that the Prouds' promotional material was not misleading having regard to changes in the regular marked price.

63 A certain amount of preparation was necessary before the decision to increase the prices could be implemented. It was necessary to reprice between 6000 and 7000 gold items. This involved the generation of a spreadsheet of all the items (over 6000) to be repriced, individually reviewing and adjusting each gold item's new price and setting the new retail price, submitting these prices to Mr Norman for approval and then uploading the new prices into the system. This occurred. All store managers were informed of the increase and were given instructions concerning the re-ticketing and re-pricing of gold items.

64 In the result, new regular marked prices were determined for many gold items which included nine of the contentious 17 items in the Love You Mum catalogue. The increase in the price was effective from 1 March 2006. These new prices were identified in the Love You Mum catalogue as the "was" price even though, before the publication of that catalogue, seven of those items had never been offered for sale at that price.

65 Indeed, as noted earlier, Prouds did not put in issue that seven items of gold jewellery in the "Love You Mum" catalogue bore a "was" price in circumstances when those items had never been offered for sale at those prices. Prouds contended it was a mistake to promote those seven items with a "was" price when they had never been offered for sale at that price. Whether it was a mistake which was an aberration perhaps attributable to mismanagement by one individual (as Prouds contended) or a systemic failure on the part of Prouds because Prouds' management paid little or no regard to obligations under the Act (as ACCC contended) is presently of no real significance. I say that because the evidence, overall, plainly points to Prouds not being concerned about whether items in a promotional sale had been offered for sale at the "was" price immediately before the promotional sale commenced.'

60 Prouds' defence in relation to the allegations based on the Advertised Price representations was essentially the same as that advanced for the Usual Price representations. That was to the effect that the word "was" in the "Was"/"Now" juxtaposition was in the "simple past tense" and did not signify any specific point or period when the event had occurred. In consequence, it was sufficient for the relevant item to have been offered for sale "at some comparatively proximate point in the past." His Honour rejected that defence, concluding at [66] of his reasons; '… As I discussed earlier in relation to the Usual Price Representations, the "was" price did not appear in isolation. It appeared in juxtaposition with a "now" price. Plainly the "now" price identified the price at which the item could be purchased during the sale period. The message conveyed by the "was" price in this context, was that the item, immediately before the sale, would have been offered for sale and purchased for the "was" price. This issue is discussed earlier (see [45] above). It was misleading to identify in the catalogue a "was" price which did not represent the price at which an item had been offered for sale and would have been purchased by the hypothetical consumer immediately before the sale commenced. The degree to which the hypothetical consumer would be misled would vary depending on the period between the time the item was last offered for sale at the regular marked price and the time the catalogue was published (and the sale commenced). In the present case it was quite misleading to identify a "was" price in the Love You Mum catalogue when the items had not been offered for sale at that price since 26 December 2005 (a period of approximately 4 months). But, in my opinion, it was also misleading to identify a "was" price in the Love You Mum catalogue when the item had not been offered for sale at that price since 1 April 2006. Even though there was a period of only approximately 3 weeks preceding the publication of the Love You Mum catalogue when five items (as identified in the pleadings) had last been offered for sale at the "was" price, the hypothetical consumer would have been led to believe that the "was" price was the price at which the items could, for reasons discussed earlier, have been bought immediately before the sale. This was not true and each of the five items could have been bought in those three weeks at reduced prices significantly less than the "was" price. I am satisfied that ACCC has established, in this respect, that Prouds engaged in misleading and deceptive conduct in contravention of the Act.'

(i) Prouds' submissions on the Advertised Price representations 61 In support of its cross-appeal, Prouds advanced substantially the same argument in relation to the Advertised Price representation as it had in relation to the Usual Price representation. It argued that the word "Was" had no specific temporal connotation and pointed to the trial Judge's assertion in the passage extracted at [60] above that; 'The degree to which the hypothetical consumer would be misled would vary depending on the period between the time the item was last offered for sale at the regular marked price and the time the catalogue was published (and the sale commenced).' That passage was said to imply that the word "Was" did not refer to a fixed certain period but to a "relevant period" in the proximate past. Had the word "Was" referred only to a defined period ending immediately before the publication of the catalogue, there would have been no variation in the degree to which the hypothetical consumer would have been misled.

(ii) The ACCC's submission on the Advertised Price representations 62 The ACCC contended that Prouds' arguments in relation to these representations were based on the same flawed linguistic analysis as those referable to the Usual Price representations and should be rejected for the same reasons. The extract from his Honour's reasons reproduced at [60] above had been quoted out of its context, which indicated conclusions by his Honour that; (a) the statement of "Was" prices was a representation as to offer prices in the period immediately preceding publication; (b) it was quite misleading to advertise a "Was" price for an item which had never been offered for sale at that price in the four months immediately preceding the catalogue; (c) it was also misleading (but perhaps not "quite misleading") to identify a "Was" price for an item which had not been offered for sale at that price for a period of three weeks immediately before publication of the catalogue.

(iii) Did the Advertised Price representations contravene the TPA? 63 For the reasons already explained in relation to the Usual Price representation we consider that it was open to the learned primary Judge to find that the "Was" price in conjunction with the "Now" price would have signified to the relevant hypothetical consumer a price on offer immediately before the publication of the catalogue. That is sufficient to justify his Honour's rejection of Prouds' contention that the "Was" price indicated only a price at which the relevant item had been offered "at some comparatively proximate point in the past". 64 In addition, we are not persuaded that the word "Was" was used by Prouds, or understood by the relevant hypothetical consumer, as connoting the "simple past tense" and indicating some identifiable point or period which did not necessarily coincide with, or end on, the eve of publication of the catalogue.

(f) Costs at first instance 65 In supplementary reasons for judgment published on 10 April 2008, the learned primary Judge explained his order made on the same day that Prouds should pay 70% of the ACCC's costs of the proceedings. At [15] of those reasons his Honour observed; 'In my opinion, this is a case where ACCC can be viewed as the successful party, even though it failed to establish that some of the pleaded conduct contravened the Act. However, I do accept that ACCC's case, and certainly its evidentiary case, was based in substantial part on the contention that the "was" price should be viewed as the price at which a particular item had, historically, been sold. The detailed evidence of Dr Ferrier, led by ACCC, was directed, in substance, to establishing what the actual selling prices of the 17 items had been. The notion that the promoted "was" price would be taken by consumers to be reference those prices was at the forefront of ACCC's submissions. The relief it sought was, in many respects, framed on the basis that this was correct. ACCC failed on this significant point and some adjustment should be made to the costs order to reflect this failure. The appropriate order is that Prouds pay 70% of ACCC's costs.' 66 Counsel for the ACCC pointed out in their written submissions in support of the appeal that the trial Judge had discounted the usual order as to costs by reason of the ACCC's failure to make out its case on the Level of Savings representations and Previous Selling Price representations. Accordingly, it was argued, if the ACCC's appeal were to succeed in respect of either representation the costs order at first instance should be appropriately adjusted in the ACCC's favour. 67 On the other hand, Prouds contended that, irrespective of the outcome of its cross-appeal, the apportionment of costs by the primary Judge had not been fair because much of the ACCC's case had revolved around its contention that the "Was" price signified a price at which the relevant item had actually been sold. Because the ACCC had been "largely unsuccessful" on that issue, his Honour's orders as to costs should be set aside and, in lieu thereof, it should be ordered that the ACCC should pay 50% of Prouds' costs. 68 As will be apparent from our examination of the Level of Savings representations and the Previous Selling Price representations, the ACCC's appeal seeking relief in respect of those representations must be dismissed. It therefore follows that no occasion has arisen for increasing the percentage of costs which the primary Judge awarded to the ACCC. 69 Although Prouds' argument for a revision in its favour of the costs order made by the primary Judge did not depend on the cross-appeal being allowed, we have not been persuaded to interfere with his Honour's exercise of discretion to order Prouds' to pay 70% of the ACCC's costs. Moore J expressly recognised that his discretion to award costs had to be exercised judicially and not arbitrarily. We have not been able to discern any mistake of fact or error of principle in his Honour's treatment of costs. Accordingly, we decline to interfere with his exercise of discretion and adopt with respect the approach taken by another Full Court of this Court (Bowen CJ, Morling and Gummow JJ) in Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd (1987) 17 FCR 211, where it was observed, at 222; 'In reaching his decision, his Honour was exercising the discretion as to award of costs vested in him by s 43 of the Federal Court of Australia Act 1976 (Cth). He had had the conduct of the trial and thus had a grasp of the issues as they emerged and an appreciation of the manner in which they were handled by the parties that put him in a special position. In giving his reasons, his Honour referred to the judgment of Toohey J in Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748 at 48,136, which summarises the well-known guidelines within which the discretion as to costs is exercised. The result may have been unusual, but we are not satisfied that his Honour's exercise of discretion miscarried and that there is any case for appellate intervention. In particular, within the sense of House v The King (1936) 55 CLR 499 at 507, there was no case made out for this Court to exercise its own discretion in substitution for that of his Honour.'

Conclusion 70 For the reasons which we have explained, each of the appeal and the cross-appeal will be dismissed. No special apportionment is called for in relation to the costs of the appeal or the cross-appeal, each of which should follow the event. Accordingly, there will be orders that the ACCC pay Prouds' costs of the appeal and that Prouds pay the ACCC's costs of the cross-appeal. I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Black and Justices Ryan and Gordon.

Associate: Dated: 23 December 2008 Counsel for the Appellant: Mr S White SC with Mr T Brennan

Solicitor for the Appellant: Corrs Chambers Westgarth

Counsel for the Respondent: Mr A J L Bannon SC with Mr D B Studdy SC and Ms J M Beaumont

Solicitor for the Respondent: Gilbert & Tobin Lawyers