Consideration
99 I do not accept Domain's contentions. In my view Domain's conduct in sending out the Notices constitutes misleading or deceptive conduct or, at least, conduct likely to mislead or deceive, in breach of s 18(1) of the ACL.
100 First, I reiterate the matters set out at [82] to [90] above. I consider Domain sought to attribute a higher level of knowledge and perspicacity to the ordinary or reasonable class member than is appropriate in the circumstances. In my view it is likely that many class members will:
(a) not understand the significance of the difference between ".com.au" or ".com" domain names and/or that it is possible to obtain separate registration for very similar domain names by using a ".com.au" or ".com" suffix;
(b) have little knowledge about the role of an accredited registrar for domain name registration or the identity of the registrar in relation to the domain name of the business or organisation in which they work. I note again that Mr Allen did not know the name of the registrar of YarraTri's domain name, and I would be surprised if there were not many people in the class in a similar position; and
(c) not have closely read the Notice. Some, like several of Consumer Affairs' witnesses, are busy small business owners. Some, particularly people in medium to large businesses, will not have read the Notice closely because the cost of registration is insignificant for a business of that size. Some will be accounts staff working through piles of invoices and trying to shift their work as speedily as they can. As Finkelstein J said in .au Domain at [37], where such a document is dealt with by the accounts department there is a greater risk that the reader will have little or no knowledge about the registration of domain names or the fact that it is possible to obtain registration of very similar domain names. A brief reading of the Notice will not necessarily alert the reader to the difference between the ".com" domain name in the Notice and the existing domain name of the business or organisation.
101 Second, while the text of the Notice is central, consideration of the Notice must occur in the context of the whole of the evidence. The Court is not confined to examining the Notice in isolation and it must have regard to all of Domain's conduct in relation to it: Butcher at [109], cited with approval in Campbell at [102].
102 Domain sent out 437,819 unsolicited Notices to 301,083 persons around Australia who were the registrants of a ".com.au" domain name. Domain sought to characterise the Notices as an offer to provide services but businesses that make unsolicited offers usually do so through some form of advertisement, such as a brochure or flyer with features designed to attract and persuade the reader. Domain accepted that the Notices are functionally equivalent to an advertising flyer but they looked nothing like a brochure or flyer. It is quite unusual for a business to make an unsolicited offer by way of a bland document like the Notice with the features of an invoice and none of the usual features of a brochure or flyer. In my view that plays into the tendency of the Notices to mislead.
103 Third, a number of the components of the Notice give rise to the impression that it is an invoice rather than a form of advertising or an offer to provide services. Using the Notice sent to YarraTri as an example (see [36] above), it:
(a) is on Domain letterhead - as would appear on an invoice but would not usually appear on an advertising flyer;
(b) contains a reference number in the body of the document and on the payment slip - which suggests that the Notice refers to an existing registered customer: see .au Domain at [36];
(c) is specifically addressed and directed to YarraTri - unlike most advertising flyers which are not so addressed or personalised;
(d) is for the domain name - "yarratri.com" - a domain name very similar to the existing registered domain name of the business. A person reading the Notice quickly, or perhaps even more studiously, is unlikely to notice that the ".com" domain name offered for registration is different to the existing registered domain name: see au. Domain at [36];
(e) sets out a list of services included with the $249 price, the primary service being two years domain name registration - for many businesses that will be a relatively insignificant amount which may mean the Notice will be given a low level of attention;
(f) provides payment options of direct deposit, credit card or by mail; and
(g) contains a tear-off payment slip towards the bottom of the Notice with the words "Please enclose the payment slip, together with your cheque or money order, made payable to: Domain Register Pty Ltd, Level 3, 480 Collins Street, Melbourne VIC 3000", as well as providing options for online payment by credit card and by direct deposit.
104 With these features, and the absence of any of the usual elements of an advertising brochure or flyer, the ordinary or reasonable class member is likely to be left with the impression that it is an invoice.
105 Fourth, Domain relied on the text of the Notice to support a submission that the Notice is just an "invitation to register". However, the Notice is styled so as to de-emphasise that information. In small and hard to read font just before the tear-off payment slip the Notice stated:
This is an invitation to register, disregard this letter if you are not the proprietor or if you do not wish to register. Terms and conditions of service can be found at www.domainregister.com.au/terms.html.
106 Many class members are likely to have missed that information, to have given it only brief attention, or to have not taken it in sufficiently to understand its significance. Because it was given no prominence this information did not operate to qualify or dispel the misleading impression created by the appearance of the Notice. I am confirmed in this view by the fact that Ms Demetriou, Mr Allen, Ms Archer and Ms Nobs either missed this information in the Notice or did not take in its significance.
107 There was no suggestion in Consumer Affairs' case that Domain acted with an intention to mislead or deceive, and such intention is not an element of the contravention alleged. Domain gave no explanation as to why it de-emphasised this information. It is, however, plain that Domain chose to give that significant information no prominence and that doing so was to its commercial benefit. In such circumstances it may be more readily inferred that the Notice gives or was likely to give the misleading impression that it is an invoice: TPG at [55]-[56].
108 Fifth, it is not determinative but I give some weight to the fact that Mr Allen, Ms Demetriou, Ms Archer and Ms Nobs misunderstood the Notices as invoices for renewal of the registration of their existing ".com.au" domain names rather than offers to supply registration of a ".com" domain name. The gist of their evidence is that each did so because the Notice was addressed to their business or organisation, it contained a reference number, it referred to a two-year period of domain name registration, it referred to a domain name very similar to the domain name of their business or organisation, and it had payment options in relation to the two years of domain name registration.
109 Ms Nobs also said that she did not notice that there was no ".au" at the end of the domain name set out in the Notice (which she thought to be an invoice). The other witnesses did not say whether they noticed that or not. I infer that they either did not notice the absence of the ".au" suffix or they did not understand the significance of its absence.
110 Mr Allen, Ms Demetriou, Ms Archer and Ms Nobs are from apparently different walks of life, of different ages and with different levels of education. Ms Demetriou and Ms Nobs run their own small businesses, Mr Allen is a supervisor at an accounting and consultancy firm and volunteers as the Treasurer at a sporting club, and Ms Archer works as a receptionist and accounts payable clerk in her family's stainless steel business. Each of them was left with the impression that the Notice was an invoice. Domain chose not to challenge their evidence by cross examination and its submissions as to the deficiencies in their evidence are overstated. It was open for Domain to put on its own evidence in regard to the effect of the Notices and it chose not to do so.
111 I do not, though, give much weight to Mr Hopkins' evidence. He knew that Domain was not the accredited registrar for his domain name of his business and his stated reasons for misunderstanding the Notice to be an invoice do not centrally relate to the Notice's appearance.
112 Ms Demetriou, Ms Archer and Ms Nobs did eventually realise that the Notice referred to a ".com" domain name rather than their existing ".com.au" domain name. However, Ms Demetriou did not realise until she received some business advice, Ms Archer did not realise until she received another Notice from Domain only four months after paying (what she thought was) Domain's invoice, and Ms Nobs only realised when she received a renewal notice in relation to her existing domain name. Those circumstances are quite different to the circumstances in which they received the Notice in the first place and paid the specified charge. The question is whether the Notice, in the circumstances in which it was received and considered by the recipient, had a tendency to leave the misleading impression that it was an invoice, not whether the recipient did or was likely to later realise his or her error. By that time Domain's conduct had already drawn the recipient into its marketing web.
113 For similar reasons there is little substance in Domain's contention that the evidence shows that Ms Demetriou, Mr Allen, Ms Archer, Mr Hopkins and Ms Nobs understood the difference between a ".com" and a ".com.au" domain name because, when they became aware of their mistaken impression, it was unnecessary that the difference be explained to them. Mr Allen and Mr Hopkins did not understand that they had mistakenly acquired a ".com" domain name until they spoke to Mr Jacobson. I infer that the difference between the domain names only became apparent to them through that conversation. Ms Demetriou, Ms Archer and Ms Nobs realised that there was a difference between the ".com" domain name on their Notice and their existing ".com.au" domain name but only some months later and after further events had taken place. As I have said, the central question is whether the Notice had a tendency to mislead in the circumstances in which it was received and considered by the recipient, not whether the recipients were likely to later realise the true position.
114 However, I accept Domain's contention that the substantial majority of the persons to whom it sent a Notice did not understand it to be an invoice, because only 21,089 of the 301,083 persons to whom Domain sent a Notice proceeded to register a ".com" domain name through it. I am nevertheless satisfied that Domain's conduct in sending out the unsolicited Notices was likely to mislead or deceive many members of the class. The number of recipients actually misled can only be a subset of the 21,089 persons who acquired a ".com" domain name, comprising a not insignificant number of the class, and I consider the Notice was likely to mislead or deceive a greater number than those actually misled. There is no requirement for Consumer Affairs to demonstrate that class members have actually been misled or deceived in order to establish a contravention: Puxu at 198; Google at [6].
115 I am satisfied that Domain's conduct in sending out the unsolicited Notices was conduct which is misleading or deceptive or likely to mislead or deceive in breach of s 18 of the ACL.