The strength of the ACCC's case
13 It has recently been made clear by the High Court in Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 that, on an application like the present for an interlocutory injunction, a court must conduct two inquiries. The first is into whether, if the evidence remains as it is, it is probable that at trial, the applicant will be held entitled to injunctive relief. The second, is whether the inconvenience or injury which the applicant would be likely to suffer if the injunction were refused outweighs, or is outweighed by, the injury which the respondent would suffer if an interlocutory injunction were granted; see Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618, at 622-3. As Gummow and Hayne JJ pointed out in O'Neill at [65], the two inquiries are not to be conducted with a rigid separation of one from the other. Their Honours there said;
The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd [(1968) 118 CLR 618]. This Court (Kitto, Taylor, Menzies and Owen JJ) said that on such applications the court addresses itself to two main inquiries and continued:
"The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief ... The second inquiry is ... whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted."
By using the phrase "prima facie case", their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. That this was the sense in which the Court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal:
"How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks."
14 I accept that it is necessary in evaluating the tendency of an advertisement to mislead or deceive a reader, viewer or listener, to have regard to the class of consumers likely to be affected by the conduct imputed to the advertiser. Mr Archibald referred to the observations of Gibbs CJ in Parkdale Custombuilt Furniture v Puxu Pty Ltd (1982) 149 CLR 191, at 199, that the relevant class of consumers may include the inexperienced as well as the experienced, and the gullible as well as the astute. For the purposes of the present case, Mr Archibald ventured that the relevant class of consumer is comprised of prospective users of internet services.
15 I also accept that the tendency of an advertisement to mislead or deceive must be evaluated having regard to the complete spectrum represented by the class propounded as likely to be influenced by it. However, as Gibbs CJ went on to point out in the passage from Parkdale v Puxu to which I have already referred, the relevant provisions of the TPA must be;
… regarded as contemplating the effect of the conduct on reasonable members of the class. The heavy burdens which the section creates cannot have been intended to be imposed for the benefit of persons who fail to take reasonable care of their own interests. What is reasonable will of course depend on all the circumstances.
16 In the present case, I consider the inference available from the evidence, mainly constituted by the terms and context of the advertisements themselves, to be that the consumers to whom they are directed would have some familiarity with the market for the provision of broadband internet services to the extent of knowing that ADSL2+ is a product in that market in which products are variously offered for sale "bundled" with other products or on a "stand alone" basis. As I observed in a different context in Specsavers Pty Ltd v The Optical Superstore Pty Ltd [2009] FCA 692, at [9];
It is important in this context to have regard to the nature of the merchandise to which the advertisements are related. The purchase of spectacle frames, with or without lenses, will not ordinarily occur on impulse or more frequently than about once a year. That makes it likely that prospective purchasers will come to The Optical Superstore advertisements with some knowledge of comparative prices in the relevant market or, at least, will have an opportunity to acquaint themselves with those comparative prices or pricing policies. Frequent changes in styles or fashions of spectacle frames also make it unlikely that frames identical to those to which a particular advertisement relates would have been in stock for a significant time before publication of the advertisement.
17 More directly in point are the very recent observations of Nicholas J in Singtel Optus Pty Limited v Vodafone Pty Limited [2010] FCA 1448, at [18]-[19];
18 In my view, there are aspects to the applicant's case which are by no means straightforward and which raise complex and subtle issues concerning the overall effect of the commercials on the ordinary and reasonable consumer that will need to be explored at a final hearing in the light of all the evidence. One such issue concerns the relationship between what might be called the "main message" and the "fine print" and whether the latter might be thought to undermine the "substance and integrity" of the former: see Australian Competition and Consumer Commission v Boost Tel Pty Limited [2010] FCA 701 at [80] per Siopis J.
19 It also needs to be remembered that ordinary and reasonable consumers, who might be expected to take some care of their own interests, are likely to do more than simply rely upon these particular television commercials in deciding whether or not to sign up to the respondent's plan. These types of plans typically involve a contractual commitment of a year or more in duration and are invariably the subject of terms and conditions which relate to matters of detail of the kind that the applicant's complaints focus upon.
18 In the same way, it can be pointed out that any consumer who reaches the point of concluding a contract with TPG for the supply of six months of unlimited ADSL2+ broadband will quickly be disabused of any belief that he or she will obtain that product for $29.99 per month without "bundling" it with a TPG telephone line at a minimum additional or monthly payment of $30 and without paying a minimum fee inclusive of a setup fee and upfront charges of $509 for the whole six months. Mr Archibald sought to meet this point by contending that the vice of the conduct which leads such a consumer to be deceived or misled, however temporarily, is that he or she is "enticed into the marketing web by the advertisement." That quotation was taken from the reasons of Tamberlin J in Trade Practices Commission v Optus Communications Pty Ltd (1996) 64 FCR 326, where his Honour said, at 340;
I am not persuaded that any or all of the post-broadcast steps leading to signing of the contract would dispel the impression generated by the misleading message in the television broadcast in all or most cases. Once the impression is engendered by the advertisement, an interested viewer would normally be led to make further enquiries of Optus or its representatives. If this occurs, the viewer will probably be led to take those actions as the result of the attractive but misleading publicity set out in the television broadcast. The viewer is enticed into the marketing web by the advertisement: cf the comments of Beaumont J in Tec & Thomas (Australia) Pty Ltd v Matsumiya Computer Co Pty Ltd (1984) 1 FCR 28, at 38.
19 However, this is not a case where a consumer is likely to be drawn by the presumptively misleading conduct into dealings or negotiations with the advertiser which continue after the effect of the conduct has dissipated. Such a case was described by Beaumont J in Tec & Thomas (Australia) Pty Ltd v Matsumiya Computer Co Pty Ltd (1984) 1 FCR 28 where his Honour observed, at 38;
… the name "Seiko" has been a "door opener" in marketing terms, indicates that a potential purchaser of computers may well commence to deal with the respondents in circumstances where he would not have done so if the respondents had made no mention of "Seiko" in its trade or business name and in advertising. In my view, to induce the introduction of such a dealing is conduct which contravenes s. 52, even if, ultimately, the consumer becomes aware that the equipment he is purchasing is not that of the Hattori Seiko group, the deception having occurred at an earlier stage: what is relevantly induced is the dealing or the negotiations, as distinct from the subsequent purchase itself. As Taco's case held, there is no reason why s. 52 cannot apply to the earlier inducement, even if, as Puxu's case held, the conduct in respect of the purchase itself does not offend s. 52 because, by then, the consumer knows or ought to have known that he is purchasing a product other than that of the Hattori Seiko group.
20 In the present case, there is no suggestion that any post-advertisement negotiations will occur between TPG and a prospective purchaser of the "Unlimited ADSL2+" broadband plan. The plan is made available on a "take it or leave it" basis with all its attendant fees and charges and "bundled" obligations.
21 There is also, as Mr Hoyne of Counsel for TPG pointed out, an inconsistency between the ACCC's contention that the subject advertisements suggest that the ADSL2+ is offered at a "bare" price of $29.99 per month without any other charges or obligations and its argument that the upfront fees and other charges are "buried" in the small print or the "min charge". In my view, a consumer of the relevant class, reading with reasonable, but not minute, attention an advertisement like that in Schedule 2 to these reasons would readily grasp that a minimum charge of $509 for six months contains fees and charges in addition to the advertised monthly rate of $29.99 which would yield a total charge for the six month plan of only $179.94.
22 I am not persuaded that the ACCC has a strong prospect at trial of proving that any of the revised advertisements contravened s 53C of the TPA. Indeed, a reliance on that section was not pressed by Mr Archibald in the course of his argument in support of an interlocutory injunction. The terms of s 53C(1) are reproduced at [8] above and make it clear, in my view, that it applies to representations about the price of goods or services which do not disclose an additional component such as a delivery charge which additional component increases the actual or net price above that which has been represented. In the present case, both the price of the Unlimited ADSL2+ and the minimum net cost of that service for the six month life of the plan have been disclosed. The only thing left unquantified is the cost of calls made on the TPG telephone line which is included in the "bundle" but is not part of the Unlimited ADSL2+ to which the advertised price of $29.99 is related.