Foxtel's complaints of misleading and deceptive conduct - summary of evidence tendered by Foxtel
32 Foxtel correctly submitted that the evidence disclosed that since the launch of its digital service, Foxtel has enjoyed the advantage of an FBO window of no later than six months (my emphasis), in the case of MGM Worldwide Television based on Licence Agreement dated 15 April 2004, of Paramount Pictures International based on Licence Agreement dated 24 February 2004, of Twentieth Century Fox Film Corporation based on Licence Agreement dated 3 February 2004, of Buena Vista International based on Licence Agreement dated 26 October 2001, and of Roadshow Television based on Licence Agreement dated 7 July 2003. In the case of Warner and Universal, even shorter FBO windows became available in the informal circumstances I have already recorded in these reasons, prior to those informal circumstances taking place, Foxtel had entered into Licence Agreements with Warner and Universal in similar terms to those granted to Foxtel by the five first mentioned movie houses. In each case of the formal movie production agreements entered into by Foxtel, the same were thus in place prior to the launch of Foxtel's digital Pay TV service. The more recent arrangements involving shorter FBO window periods available to Universal and Warner were seemingly made prior to the Foxtel Digital launch, albeit that in the case of Warner, the showing of the earlier identified four movies was agreed by Foxtel to be deferred until September 2004.
33 Foxtel's enjoyment of the benefit of each of the FBO and Showtime windows was further asserted by Foxtel to render untrue AVRA's advertising representations as to a waiting time of 12 MONTHS Minimum for viewing of Foxtel Pay TV movies, for the reason that an ordinary consumer would think that the reference to 'PAY TV' in the AVRA advertisements would include the 'Digital PAY TV' FBO service. In this context, Foxtel emphasised that FBO is integral to the Foxtel digital Pay TV generally, and pay-per-view services in particular, and has been so since its availability to consumers in Australia.
34 Foxtel further contended that at the time of distribution of the AVRA so-called pro-rental kits to video stores, and during the lifespan thereafter of the pro-rental campaign, there was in operation in favour of Foxtel three month FBO windows, or thereabouts, conferred by two of the major studios, namely Universal and Warner (subject to the deferral arrangements made with Warner in relation to the four movies I have earlier identified), and in relation to five of the remaining major studios which I have also already identified, the FBO window was contractually expressed to be 'no later' than six months, or words to similar effect, in contrast to AVRA's advertised reference to '6 MONTHS Minimum. Upon that footing, Foxtel contended that those '6 MONTHS' representations by AVRA were false and misleading. Foxtel tendered in support of that contention a so-called 'Summary of information contained in documents to be tendered on behalf of [Foxtel] in relation to actual local video release dates and FOXTEL BOX OFFICE premiere dates 19 February 2004 to 30 September 2004', which detailed movies supplied to it by Roadshow, Twentieth Century Fox, Buena Vista, Paramount, MGM Warner and Universal (in that sequence), and thereby demonstrated the FBO window enjoyed by Foxtel from the majority of major movie houses from April 2004.
35 Consistently with what I have already also recorded, Foxtel submitted that at no time before or during the AVRA advertising campaign were the AVRA representations as to a '$2000 OR MORE' price accurate; similarly as already recorded, at all times during the AVRA campaign, Foxtel's digital services, inclusive of access to its FBO service, was (and still remains) available on packages costing substantially less than $2000 for two years, apart from Foxtel's Platinum subscription package earlier mentioned. It appears that there was a discussion at the AVRA board level, as early as April 2004, concerning the accuracy of that latter representation, occasioned by a three page email of 2 April 2004 from Mr David Hynes to other AVRA board members, in which the following inter alia appears:
'I have noticed that as a couple more drafts of the POS have been suggested and designed that the wording might be getting "tighter" but we might also be slipping into dangerous LEGAL waters
For example,
"FACT! Spend $2328.78 for PAY TV to see movies 6-12 months after video rental!"
That's the Platinum subscription, the most expensive, and while that might be the full cost, perhaps there are "out clauses" in the contract.
…'
36 The email response of 8 April 2004 from Mr George Kafataris, the President of AVRA, who gave affidavit evidence in the proceedings and was cross-examined by video link, included the following:
'…
New disclaimer to be added
… only 2 movies per month included for Foxtel premium package at over $2000 for 2 years. Other movies will be charged.'
Mr Hynes' further email of 8 April 2004 stated thereafter as follows:
'…
Next I do believe that Keran is right on the money when she says that any references to Pay TV contracts and Prices must go to David Bradley for a legal opinion (none of us have actually seen a Pay TV contract… and maybe there are "OUT" options that mean that the $2328 contract doesn't have to be paid out in full.
More importantly on that, I am heeding the advice of members that quoting the MAXIMUM subscription price might not be the ideal position and in fact, might be seen as being detrimental to our cause. After all, you can get "Box Office" for about $70 a month and we don't know whether there are special, non-advertised deals being done at a cheaper rate (eg "Basic PLUS ONLY Box Office").
…'
The above reference to 'Keran' was to AVRA's board member Ms Wicks, one of AVRA's principal witnesses in the proceedings, whilst the reference to David Bradley is to the solicitor on the record for AVRA in the present proceedings.
37 Foxtel submitted in any event, on the assumption that the ordinary consumer was able to distinguish between references to 'PAY TV', 'Digital PAY TV, Pay-Per-View' and 'digital PAY-TV' per se (those three descriptions being variously appearing in the three advertisements), being an assumption which Foxtel disputed as a general proposition, that the statements relating to movie availability waiting periods of time made by AVRA in those advertisements were not true. Foxtel thus pointed to the statements so made in the first and third AVRA advertisements that subscribers would need to wait '6 MONTHS Minimum' to see movies on Digital PAY TV, Pay-per-view', placing emphasis on the word 'Minimum', which tends to infer the notion of open-ended. In the case of the second AVRA advertisement, Foxtel pointed to the statement that '… digital pay television customers will have to wait up to a year longer than video library members to see the same new release movies' and to the words 'Start counting to 365 - that's how many days you'll have to wait before your favourite movie is out on PAY-TV', appearing immediately following the words 'Thinking of paying for digital PAY-TV?'. To the extent that consumers might not appreciate or readily appreciate the distinction between 'PAY TV', 'digital PAY-TV' and 'Digital PAY TV, Pay-Per-View', Foxtel asserted that those consumers would be misled and deceived by conflating the concepts involved.
38 Apart from the MGM, Paramount, Twentieth Century Fox, Buena Vista and Roadshow agreements, involving no later than six months availability, or virtually equivalent stipulations, Foxtel again pointed to the earlier documented Warner and Universal formal agreements, and to the subsequent correspondence and events in evidence involving Warner and Universal, both as to acceleration or intended acceleration of that availability. Specifically in relation to Warner, Foxtel placed reliance upon the further circumstances that in May 2004, Foxtel screened two Warner movies called A Mighty Wind and White Oleander on the basis of four and five month FBO windows respectively. AVRA's response was that no material significance should be ascribed to those two screenings, since all that was demonstrated thereby was merely that 'prior to August 2004, only those two movies were by that time exhibited within six months of their release date in Australia', and further that such screenings occurred 'without the knowledge of AVRA representatives and in breach of contractual assurances provided by Warner Bros, both at the time the titles were sold to video stores, and in the course of communications between Warner Bros and individual store proprietors… and between Warner Bros and AVRA.' AVRA did not appear to provide evidence as to any earlier release dates in the United States, nor did it appear to point to the basis for the existence of any such contractual assurances, apart from two emails, one from Civic Video Pty Ltd (whereof Mr Kafataris is managing director) to Warner dated 18 May 2004 and another of 22 May 2004 from Warner to AVRA, wholly extracted above, neither of which establish per se the AVRA proposition so put forward.
39 AVRA made no apparent attempt in any event to restrain any such breach of contractual assurances by any court proceedings taken against Warner; instead AVRA submitted that '[h]ad AVRA or individual video store or chain proprietors been aware that it was proposed to allow Warner Bros movies prior to August 2004 within 6 months of their release date in Australia, AVRA would have made contact with Steve Nickerson of Warner Bros and requested that "he pull" the movies (ie A Mighty Wind and White Oleander) from FBO'. However it would be clearly unsafe to give effect to that somewhat hypothetical assertion.
40 In the context which I have outlined, it was therefore submitted by Foxtel that at the time of distribution of the AVRA pro-rental kits, and during what was described as the subsequent lifespan of AVRA's pro-rental advertising campaign, there was in place for its benefit, and thus for its digital Pay TV subscribers, a not later than six month FBO window from five major film studios, and in addition a shorter FBO window of three months or thereabouts with two further major film studios, with the consequence that the '6 MONTHS' representations of AVRA complained of were false, and thus misleading and deceptive. It will be recalled that the first and third advertisements used the words 'wait 6 MONTHS Minimum For Digital PAY TV, Pay-Per-View', in contrast to the Foxtel contractual provisions earlier cited, being not later than six months and expressions similar thereto, and the second advertisement, by similar contrast, used the description 'at least 6 months'.
41 Moreover Foxtel further submitted that at no time before or during the AVRA promotional campaign complained of were the AVRA price representations accurate, since the evidence disclosed that Foxtel's FBO service was available on certain packages, with the sole exception of its Platinum package, costing substantially less than $2000 for two years viewing. The '$2000 OR MORE' representation the subject of the third advertisement was of course unspecific as to contractual duration and the effect of early termination provisions. The same may be said of the 'No $2000-plus contracts' representation the subject of the second advertisement. Framed in words of such generality, Foxtel's complaint has prima facie viability.
42 I should add that Foxtel pointed to evidence, albeit limited in scope, that the capacity of the '$2000 OR MORE' and 'No $2000-plus contracts' representations to mislead and deceive was being openly discussed among AVRA board members by email in or around April 2004. I have already referred to the concerns of Mr Hynes of AVRA, expressed in emails, as to the accuracy of the representations proposed to appear in AVRA's advertising material, and placed before AVRA's board of directors for approval prior to its publication or dissemination.
43 Ms Wicks, an AVRA director since 1996, as well as the managing director of the corporate owner of a video distribution business in Australia, testified that by mid May 2004, she was still not aware that FBO was available to the public for subscription upon payment of a fee of $70 per month. It is apparent however, from the email messages disseminated amongst the AVRA board members, including Ms Wicks, that such information was disclosed to the AVRA board by way of email from Mr Hynes. So much may be inferred from the observation appearing therein that '[a]fter all, you can get "Box Office" for about $70 per month and we don't know whether there are special, non-advertised deals being done at a cheaper rate (eg 'Basic PLUS ONLY Box Office')'. Absence of knowledge of material underlying facts is no answer in principle in any event to misleading and deceptive conduct otherwise objectively established, though it may be relevant to the nature and extent of relief to be ordered. In other words, the issue is whether tested objectively, the conduct complained of is likely to mislead reasonable members of the class of the public to which it is directed; see in that regard the numerous authorities catalogued in Miller's Annotated Trade Practices Act 2004 edition at par 1.52.46.
44 Foxtel next submitted, upon the footing of written material disseminated between AVRA board members, that the issue of price for Foxtel's digital Pay TV service appears to have disappeared after May 2004 from AVRA board email communications, yet the advertised claims disseminated by AVRA as to 'No $2000-plus contracts' in the second advertisement, and '$2000 OR MORE' in the first and third advertisements, were kept in place by AVRA, without any suggestion of withdrawal or qualification. Incidentally in the first and third advertisements, there also appeared, albeit with less prominence, the following 'Notes' at the foot or bottom thereof, consistently with Foxtel's complaint as to wrongful AVRA representations on the subject of FBO price:
'NOTE: Not all movies HERE will be available on Foxtel's or Austar's Box Office channels, even on contracts that cost over $2000 for two years.
NOTE: Only 2 movies per month are included in Foxtel's Platinum Package at over $2000 for two years. Further charges apply for additional Pay-Per-View movies.'
As I have earlier indicated, those footnotes would have been visual to persons passing close by the large first advertisement.
45 Upon the footing of what has been thus far summarised largely from documentary materials produced by AVRA, and of the unavailability as witnesses of key AVRA persons directly involved in the actual drafting of the advertisements complained of, to provide evidence upon which cross-examination could have been undertaken as to the basis or source of information reflected in those materials, Foxtel submitted that '… the Court is severely hampered in having a clear understanding of the way in which the pro-rental campaign was put together, and what facts were and were not checked by AVRA, because despite their availability key persons involved in the preparation of the materials have not given evidence.' That is an observation which is clearly open to be made on Foxtel's part, though AVRA's two senior board members did provide testimony in the proceedings, and were extensively cross-examined. Foxtel pointed out in any event that notwithstanding being stationed in Melbourne and working with Ms Wicks together as board members of AVRA, and being otherwise presumably available to give evidence, Mr David Hynes, the author of earlier emails of relevance which I have identified, did not proffer any testimony in the proceedings. Yet Mr Hynes was apparently the driving force in the compilation of the AVRA advertising complained of. Moreover Foxtel pointed to the absence of any testimony by Mr Walden, the executive director of AVRA and its only full-time staff member, he being involved in the drafting of the advertisements complained of, and in email correspondence with the film production studios earlier identified in these reasons, and in certain related or incidental email correspondence in evidence. Foxtel further submitted, in my opinion rightly, that it 'clearly emerged' from Ms Wicks' cross-examination that despite the unqualified representations of the most definite kind complained of, said to have been made in and by the three AVRA advertisements, there was little or no indication of AVRA having engaged in any, or at least any adequate and proper, process of factual verification of the controversial matters the subject of those advertisements.
46 Foxtel further submitted that AVRA was aware that so-called release windows (both the FBO and Showtime windows) were fluid and subject to circumstances of change. The following testimony under cross-examination given by Ms Wicks on behalf of AVRA was relied upon by Foxtel:
'You have not put into evidence, have you Ms Wicks, any contractual document between your company and any studio about windows?--- No, I haven't.
AVRA was alerted by Warner on 22 March that the question of windows was fluid and up for grabs, was it not?--- The windows in this industry have always been fluid and a moveable feast so that was nothing unusual with what was happening.
But windows have always been fluid and a moveable feast, they change at short notice, do they?--- Not at short notice, no. But distributors are often having discussions with us about windows.
And so you would agree with me wouldn't you that if you are going to make firm representations about windows you would have to be very careful and check your facts carefully?--- And we did. We spoke to every single distributor about their window to pay per view. I personally spoke to every single distributor about that.
HIS HONOUR: How many people would that have been?--- About eight your Honour.'
47 Irrespective of that latter brief response of Ms Wicks to my question, Foxtel submitted that despite making unqualified factual representations of the most definite kind in the context of the AVRA pro-rental campaign, AVRA does not seem to have engaged in any, or any proper, process of first verifying the facts the subject thereof, notwithstanding that AVRA was aware that release windows (both the FBO and Showtime windows) were 'fluid and a moveable feast' (as Ms Wicks stated above). Foxtel relied also upon the concession (such as it was) made by Mr Kafataris, in the course of his cross-examination, that '[i]f highlighting the difference between the windows means that it was meant to convey negativity, then I have to agree with you', though he asserted that 'I wanted [the advertising] to be correct'. Foxtel also placed particular reliance upon the letter of the managing director of Warner (Mr Nickerson) of 22 March 2004, addressed to AVRA, which has been earlier extracted in these reasons, and in particular the words '… could move to within the next 6 months'. Ms Wicks saw that letter 'at the time', and agreed that she understood the reference therein to '[f]uture [w]indows' related to Foxtel's Pay Per Use', thereby inclusively referring to FBO.
48 Foxtel submitted therefore that at the very least, AVRA turned 'a blind eye to a possibility that was quite open on [that] Warner letter, which was that the [FBO] window period would reduce to 3 months early in the 6 month period following 2 March 2004, ie by no later than September 2004.' Shortly afterwards on 1 April 2004, the agreement styled Pay-Per-View Term Sheet, was entered into between Foxtel and Warner Bros (Australia) Pty Ltd (doubtless an Australian Warner subsidiary), which contained the critical FBO window provisions which I have earlier extracted in these reasons. In the meantime Warner did not notify AVRA of any change to its proposals contained in its said letter of 22 March 2004, though in Warner's subsequent email to AVRA of 22 May 2004, it was indicated that '[t]he likelihood of a change in our windows for pay-per-view [ie FBO window] was clearly communicated in my March letter.'
49 Instead of 'stopping the presses' on its campaign, and taking steps to arrest the further distribution of potentially or conceivably misleading material, as Foxtel asserted to have been the appropriate AVRA response under the circumstances whereof, on the evidence, it must have become aware, prior to its pro-rental advertising campaign being put into operation, AVRA's reaction to those Warner communications was to assert that its members had a firm and enforceable agreement with Warner, to the contrary of what Warner was saying, being an assertion said by Foxtel, seemingly correctly, not to have been proved on the basis of any written contractual material subsequently placed before the Court. Foxtel further pointed out that there was no evidence to the effect that AVRA ever proceeded against Warner with claims for compensation for breach of contract, or with any similar cause of action. Though any substantive damages claims for misrepresentation or breach of contract would seemingly have been required to be made by class action of AVRA members, injunctive relief in the first instance on the part of AVRA, at least as a temporary step or preliminary process, would seemingly have been open (see in that regard s 163A of the TP Act later discussed in these reasons). Foxtel submitted in any event that AVRA, by its foregoing response, misrepresented the true position to Warner by its assertion that AVRA had advertised the existence of the six month window to their members in AVRA's April newsletter. The cross-examination of Ms Wicks on that subject included the following support for that Foxtel assertion:
'So it appears that… when Mr Walden says:
"This information was relayed to our members in the in the AVRA newsletter in the April newsletter"
That was inaccurate?--- It appears that way, yes.
…
So its clear… from Warner that from August their window… for some titles would be 90 days?--- Yes.'
50 Returning to the content of the second advertisement, and in particular the assertion 'No $2000-plus contracts', and also to the content of the third advertisement and in particular the very prominent wording of the third advertisement '$2000 OR MORE', and immediately underneath 'Is Digital PAY TV worth it?', Foxtel submitted that it was clear from Mr Hynes' communications placed in evidence (ante), and from Ms Wicks' affidavit and viva voce evidence, that prior to AVRA's finalising the wording of the AVRA advertisements, 'no one did the sums' for AVRA by way of verification of that estimated sum of money across the board, as it were, in relation to digital Pay TV being worth it. There is clear force in those Foxtel submissions, bearing in mind the extent of the Foxtel packages priced below that amount, when priced over the two year term thereof.
51 Foxtel further submitted that despite what it asserted to be the central importance of the FBO windows to the AVRA advertising campaign, there was no evidence as to AVRA causing to be first examined the contents of the regularly published Foxtel magazine or its electronic program guide, or FBO's actual screenings, or any other source including Warner itself, in order to ascertain whether Warner movies were in fact being exhibited by Foxtel within less than a six month FBO window period. Foxtel submitted that '[t]he most rudimentary checking by people with the special knowledge of AVRA, and its video retailer members of Foxtel's materials… would have revealed that A Mighty Wind and White Oleander, were in fact screened with a window of less than six months' (I have of course made reference in these reasons to those two movies screened by Foxtel on FBO in May of 2004, though I have some hesitation concerning the existence of any decisive implications emanating therefrom).
52 Moreover Foxtel submitted that even although on AVRA's own case, AVRA and its directors (for example Ms Wicks) were aware that a three month FBO window would apply to Warner and Universal films from August 2004, '… they simply assumed that the window would be in relation to movies released to video from August 2004; that is, becoming available to pay-per-view on FBO from 1 November 2004'. Foxtel submitted that the reasonable inference open to be drawn from the evidence was that 'from 1 August 2004, any Warner and Universal movie that had been released to video 3 months or more before was available for FBO'. Foxtel pointed out in that regard that Lost in Translation and Love Actually were both released in August and September 2004, which occurred three to four months respectively after their video release. The AVRA campaign was of course well underway by then. Foxtel therefore submitted that largely in the light of Ms Wicks' evidence, AVRA did not trouble itself to verify publicly available facts, which Foxtel characterised critically as 'illustrative of AVRA's approach', being an approach which Foxtel inferred to be cavalier, in the light of the content of its advertising. There is particular force in that submission.
53 Foxtel arrangements made with Warner appear to have been the subject of greater evidentiary contractual clarification than those made by Foxtel with Universal. Foxtel described the Foxtel arrangements with Warner as formalised on 1 April 2004, and contended that the evidence established that relevant Warner films, having been released to video showing from 1 May 2004, became available on FBO from 1 August 2004. Those circumstances were contended by Foxtel to reflect the implementation of what had been foreshadowed by Mr Nickerson of Warner in his email of 22 May 2004 to Mr Walden of AVRA, which I have earlier reproduced, being an email which would have been received by AVRA by the time of commencement of business in Australia on Monday 24 May 2004. That date was emphasised by Foxtel as the time when the first segment of AVRA's pro-rental kit, comprising the first and third advertisements, was leaving the mailing house's distribution centre, as for instance Ms Wicks verified in her affidavit evidence of 14 September 2004. Foxtel thus submitted that AVRA, 'as an entity', knew at the very latest on that day that the principal window message of the pro-rental kit, and in particular of the first advertisement, namely '… wait 12 MONTHS Minimum For PAY TV Or wait 6 MONTHS Minimum for Digital Pay TV, Pay-Per-View', was to a significant extent inaccurate, but that nevertheless, AVRA did nothing to interrupt the distribution of that (or the other) advertisements.
54 Foxtel submitted that it was largely against the evidentiary background which I have summarised and reviewed that AVRA's conduct falls to be judged, and upon the basis whereof any appropriate relief should be framed in favour of Foxtel. There is no doubt that by preparing and distributing the pro-rental kit to so many video stores, containing the first, second and third advertisements, and by causing the first advertisement to be published in its current magazine (or magazines), AVRA caused the representations complained of by Foxtel in the proceedings to be brought to the attention of members of the public, being members of the public likely to be interested in movies. As Mr Kafataris fairly conceded in cross-examination, the provision of the advertising material to AVRA's members 'certainly would encourage them to do that'.
55 At the very least, so Foxtel further submitted, AVRA knew and intended that the materials contained within the pro-rental kit would be put on display or otherwise made available to the public by purchasing video stores, for a period of time from six to ten weeks according to Mr Kafataris, or 30 to 45 days according to Ms Wicks. Indeed the 'strong inference' was submitted by Foxtel to be that the materials would be displayed or otherwise made available in video stores for much longer than either conceded period of time. That last submission was correct. The AVRA advertisements complained of were largely still on display or available to be taken away (as the case may be) in numerous video stores shortly prior to the commencement of the hearing of the proceedings on 15 September 2004, as Foxtel established by comprehensive first hand affidavit evidence.
56 Despite events which had occurred in the meantime, which I have already recorded, the following notice was given by AVRA to its members on 9 July 2004, by way of implicit encouragement to actively participate or continue participation in the pro-rental campaign on an ongoing basis, and notwithstanding also the commencement of the present proceedings by Foxtel on 6 July 2004:
'Notice to AVRA members
As you may be aware, Foxtel is suing AVRA in the Federal Court, alleging that certain statements made by AVRA in its Pro-Rental Campaign Kit are false and misleading or deceptive and contravene the Trade Practices Act. AVRA denies these allegations.
At the heart of the matter is the Pro-Rental Campaign Kit which is a kit of promotional material that AVRA developed and distributed to its members across the country in May and June of this year. The Pro-Rental Campaign Kit consists of pamphlets, case covers, posters and decals. The material in the Kit highlights the advantages of renting over Pay TV (which we all know are significant).
At Court AVRA stated that it will bring a cross claim against Foxtel for making false and misleading or deceptive statements about Foxtel's Digital Pay TV service.
AVRA will stand by its members and will not be gagged by Foxtel. Nor will AVRA be intimidated by the corporate giant. AVRA regards Foxtel's conduct very seriously and will not be taking it lying down.
It is important that you be aware that you do not have to do anything in relation to the Court case. It is a matter between Foxtel and AVRA.
The Court has not yet heard the case to determine the matter - it is merely at the information gathering stage. We will keep you updated on the progress of the matter. It is due back before the Court on Wednesday 14 July.'
(The bold print was that used by AVRA).
As I think Foxtel rightly submitted, that notice constituted an implicit recommendation to AVRA members at least to the effect that the pro-rental kit materials need not be removed from display in the video outlets of its members; I refer in that regard in particular to the expression AVRA… will not be gagged by Foxtel. AVRA's submission that its above direction was merely '… a statement that because stores were not party to the proceedings, they do not have to take any steps in the proceedings' was hardly realistic.
57 In the circumstances I have outlined, the written representations complained of were made by AVRA, both directly and indirectly, from the commencement of the pro-rental campaign in late May 2004, and thereafter for so long as the materials embodying the same remained on display or for collection (as the case may be) in video stores, or remained available for reading in the relevant trade magazine(s), or otherwise remained available for dissemination. Even on the version of events most favourable to it, AVRA was by those times aware of falsity in certain of the representations the subject of each of the three advertisements, yet did nothing to cause the material to be removed from its members' premises, or the premises of non-members to whom it also sold the advertising kit. The video store proprietors who purchased the advertising kit acted as intermediaries, in that they passed on, or permitted their video stores to be vehicles for the passing on, of information provided by AVRA to members of the public, that being the role and function implicitly intended by AVRA to be performed by those video store proprietors.
58 It was submitted by Foxtel that in the events which happened, AVRA's responsibility for the making of the representations complained of exemplified the very antithesis of the principle as to exemption for liability of a mere agent for transmission of information, as enunciated by the High Court in enunciated by the High Court in Yorke v Lucas (1985) 158 CLR 661 at 666. Of course there was no contractual obligation imposed by AVRA upon the purchasers of the material complained of to exhibit the same or pass on the same to members of the public. AVRA correctly submitted that '[t]he AVRA members chose to buy the kit and then chose when and where to display its contents and for how long', and further that '[t]hey were principals in a contract for sale and retain an unfettered discretion as to the manner, if any, in which they would use the pro-rental kits which they had purchased'. However the submission does not reflect the commercial reality, and the implications, of AVRA's role, as well as objective, in producing and distributing (albeit by sale) the pro-rental kits in relation to the operation of s 52 etc of the TP Act. The submission overlooks AVRA's promotional purpose of its sale of the material to AVRA members, and to a lesser extent to non-member retailers, in the first place. With one exception, the persons involved in executive action on AVRA's behalf in relation to the campaign were directly or indirectly DVD/video store proprietors.