Australian Competition and Consumer Commission v Trading Post Australia Pty Limited (Corrigendum dated 30 July 2010) [2007] FCA 1419 (10 September 2007)

Last Updated: 30 July 2010

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Trading Post Australia Pty Limited [2007] FCA 1419

CORRIGENDUM

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v TRADING POST AUSTRALIA PTY LIMITED , GOOGLE INC, GOOGLE IRELAND LIMITED AND GOOGLE AUSTRALIA PTY LIMITED

NSD 1323 OF 2007

ALLSOP J
10 SEPTEMBER 2007 (CORRIGENDUM 30 JULY 2010)
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1323 OF 2007

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	TRADING POST AUSTRALIA PTY LIMITED First Respondent GOOGLE INC Second Respondent GOOGLE IRELAND LIMITED Third Respondent GOOGLE AUSTRALIA PTY LIMITED Fourth Respondent

JUDGE:	ALLSOP J
DATE OF ORDER:	10 SEPTEMBER 2007
WHERE MADE:	SYDNEY

CORRIGENDUM

1. This judgment was originally published with the incorrect file number “NSD 2273 of 2007”. The correct file number is “NSD 1323 of 2007”. The judgment has been amended throughout to reflect this.
   

Dated: 30 July 2010

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Trading Post Australia Pty Limited [2007] FCA 1419

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v TRADING POST AUSTRALIA PTY LIMITED , GOOGLE INC, GOOGLE IRELAND LIMITED AND GOOGLE AUSTRALIA PTY LIMITED

NSD 1323 OF 2007

ALLSOP J
10 SEPTEMBER 2007
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1323 OF 2007

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	TRADING POST AUSTRALIA PTY LIMITED First Respondent GOOGLE INC Second Respondent GOOGLE IRELAND LIMITED Third Respondent GOOGLE AUSTRALIA PTY LIMITED Fourth Respondent

JUDGE:	ALLSOP J
DATE OF ORDER:	10 SEPTEMBER 2007
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The proceeding and the notices of motion for leave to serve outside the jurisdiction and to strike out the statement of claim be adjourned to 9:30 am on 4 October 2007 for directions.
   
2. On or before 24 September 2007, the applicant file and serve a document, each entitled “summary outline of case against the [relevant] respondent”.
   
3. Each such summary outline be no longer than 2 pages, double spaced, and be settled by counsel. (The aim of the document in each case be to convey succinctly (though as comprehensively as possible) the asserted complaints against the relevant respondent.)
   
4. In drafting the summaries, the use of definitions should as far as possible be avoided.
   
5. On 4 October 2007 the parties be in a position not only to discuss the need for, or fate of, the motions, but also the issues in the case in the light of the content of the said summary outline.
   
6. Costs be reserved.
   
7. The material on the Court file as at 10 September 2007 be available for inspection by the public (including photocopying, pursuant to any arrangement with the Registry).
   
8. Exhibit A on the motion, tendered by the fourth respondent, be available for inspection by the public (including photocopying, pursuant to any arrangement with the Registry).
   

THE COURT DIRECTS:

9. That the District Registrar create a parallel file for access by the public, such file to contain only material on the main court file to which access has been granted and all orders and judgments of the Court, other than those (if any) in respect of which an order limiting publication or access has been made.
   

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1323 OF 2007

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	TRADING POST AUSTRALIA PTY LIMITED First Respondent GOOGLE INC Second Respondent GOOGLE IRELAND LIMITED Third Respondent GOOGLE AUSTRALIA PTY LIMITED Fourth Respondent

JUDGE:	ALLSOP J
DATE:	10 SEPTEMBER 2007
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. There are two notices of motion before the court. One is that brought by the applicant for service out of the jurisdiction on the second and third respondents, (“Google Inc” and “Google Ireland”). The second is the notice of motion brought by the fourth respondent, (“Google Australia”) for the statement of claim, in its current form (which is an amended statement of claim filed in Court today) to be struck out. I propose to adjourn both notices of motion (in which I am part heard) to a date to be fixed, for the following reasons.
2. I heard Mr Bannon who appears on behalf of the second, third and fourth respondents (the second and third conditionally) as to what he said were the defects in the amended statement of claim. What I am about to say is not said critically of the practitioner or practitioners who drafted the amended statement of claim. No doubt, the structure and form were intended to assist. Nevertheless, it is necessary for me to make some comments about the approach by the pleader to that task.
3. Mr Bannon complains, in the ways identified in his written submissions and in the ways elaborated orally today, about the prolixity of important parts of the statement of claim, brought about by the use of repetitive definitions which seek to define for all purposes the meanings of capitalised phrases. It would appear that this was thought necessary in relation to matters concerning the operation of the aspects of the internet dealt with in the application. One of the particular difficulties is that definitions contained within them definitions, which, sometimes, in turn, contained definitions within them. It becomes very difficult succinctly and precisely to express matters using this technique and, with respect to the pleader, it has caused, in my view, many of the problems identified by Mr Bannon this morning as to lack of clarity.
4. I do not think that the issues in both aspects of the applicant’s case are particularly difficult of expression. I think it might perhaps be one of those cases where difficulty of expression may hint at difficulty of substance. Very often, an inability to express a proposition with clarity reflects something wrong with the proposition. Those comments are not made on the substance of the case, but they are made because of what I perceive to be the opaqueness of some of the pleading.
5. Another difficulty with the pleading, as it currently stands, is that it seeks to assert matters against the Google companies by using the phrase “the Google respondents or any of them”. In correspondence between the applicant’s solicitor and the solicitor for the Google respondents, it is tolerably clear that the case is one made against Google Inc, as the relevant representor, and that the applicant does not presently have material to make assertions that Google Ireland or Google Australia are primarily responsible for any asserted misleading or deceptive conduct.
6. Some of the correspondence contains the expression:

Further particulars of the relationship will be provided after discovery, interrogatories and/or subpoenas, should that be necessary.

7. It does not need more than one statement in these reasons that the purpose of discovery, interrogatories and subpoenas is not to assist a party in ascertaining whether it has a case against someone that it has made a party to proceedings. To do so would be an inappropriate use of those powers. That issue may evaporate, because Mr Bannon has indicated that he will get instructions in relation to the responsibility of Google Inc for any of the conduct that is asserted to be part of the complaint.
8. The claims pleaded fall into two broad categories. The first category is concerned with the ordering of responses to searches made by members of the public. If a member of the public, using the Google search engine, seeks a response to a nominated search request, information is provided on a webpage, or consecutive webpages, depending on the number of responses. There is an assertion that Google tells the public of the superiority of its search engine by reference to its ability to rank the results according to relevance, arising from, or in relationship to, the terms of the inquiry.
9. Notwithstanding this assertion or representation, it is said that results appear on the website high in the order of ranking in circumstances where those entries are paid sponsored links and do not appear in that early order in the search result by reference to the technique of relevance ranking dealt with by the representation. In those particular instances, there is in each case a phrase adjacent to those results, “sponsored link”. In most, if not all, of the same entries, there is a shading of some colour to distinguish it visually from the aspects of the search result which are not sponsored.
10. The applicant’s case is, as I understand it, that the use of the shading and the use of the words “sponsored link” are inadequate to distinguish what is, in effect, said to be a paid advertisement rather than a ranked response by reference to the operation of whatever algorithm there is in the search engine.
11. Returning to the pleading, with respect to the pleader, I think that that case is capable of pleading in a manner far clearer than presently exists. Whether or not that complaint is an aesthetic one or a legal one perhaps need not be decided at the moment.
12. For my part, having attempted to read the pleading at least three times, whilst I have been able to obtain the gist of the complaint, I am not sure that every element is clear to my mind. The mechanism I have used hitherto in seeking to obtain the gist of the complaint is to read the pleading without attempting to track all the definitions. I am able to do that, because the defined terms themselves tend to convey some of the meaning of the content of the definitions. That is, however, an unsatisfactory way to plead a case such as this. For the reasons I will identify in a moment, I will not strike out the pleading yet, because I think there is a more cost-effective way of dealing with this problem.
13. Turning to the second claim, this complaint involves not only the Google respondents but also the first respondent (“Trading Post”). What has occurred here, in general terms, is that through the commercial arrangement entered between Trading Post and, as I understand it, Google Ireland, Trading Post is able to place into the Google search engine and search tool words and phrases, such that when members of the public seek to search for certain words, the Trading Post entry is given as a ranked response.
14. The illustration most easy to understand is the Kloster Ford complaint. Someone who types in the search “Kloster Ford” is given, as a sponsored link, under the name “Kloster Ford” an entry or a link to the Trading Post website. I leave aside the first case in relation to this (that is how high the ranking is) and concentrate on this second case. Kloster Ford is a business conducted under that name by a company. Trading Post, the first respondent, has nothing whatsoever to do and no relationship with Kloster Ford. The only conceivable common element to Kloster Ford and Trading Post is that they are places and businesses (though run differently) where someone who wanted to buy a car might do so.
15. The last few sentences, perhaps, contain some assumptions by me, but I think they are an application of common sense. They are, at least, also what I understand the pleading to be saying. Thus, someone who wished to obtain a result from the search engine from using the words “Kloster Ford” obtained a link to Trading Post. The applicant complains this represents some affiliation or relationship between Kloster Ford and Trading Post.
16. There is less criticism of the pleading by Mr Bannon in this respect. However, there is a linkage, it seems to me, of the pleading of this case with the defects earlier referred to, and I think what I propose to order should cover this aspect of the claim as well. In discussion with Ms Adamson, Senior Counsel for the applicant, there was made plain what is a fairly straightforward case, which some aspects of the amended statement of claim make somewhat opaque and repetitious.
17. What I propose to do is to require the filing of a document by the applicant, settled by counsel, which succinctly and clearly states the nature of the applicant’s case against the first respondent and the second respondent. If there is any case that, on information currently available, can be pleaded under s 52 of the Trade Practices Act 1974 (Cth) against Google Ireland or Google Australia, that should be done individually, in separate documents.
18. Therefore, the orders that I make, or propose to make subject to hearing the parties, are as follow:
    1. The proceeding and the notices of motion for leave to serve outside the jurisdiction and to strike out the statement of claim be adjourned to 9:30 am on 4 October 2007 for directions.
    2. On or before 24 September 2007, the applicant file and serve a document, each entitled “summary outline of case against the [relevant] respondent”.
    3. Each such summary outline be no longer than 2 pages, double spaced, and be settled by counsel. (The aim of the document in each case be to convey succinctly (though as comprehensively as possible) the asserted complaints against the relevant respondent.)
    4. In drafting the summaries, the use of definitions should as far as possible be avoided.
    5. On 4 October 2007 the parties be in a position not only to discuss the need for, or fate of, the motions, but also the issues in the case in the light of the content of the said summary outline.
    6. Costs be reserved.
    7. The material on the Court file as at 10 September 2007 be available for inspection by the public (including photocopying, pursuant to any arrangement with the Registry).
    8. Exhibit A on the motion, tendered by the fourth respondent, be available for inspection by the public (including photocopying, pursuant to any arrangement with the Registry).
    9. The Court directs that the District Registrar create a parallel file for access by the public, such file to contain only material on the main court file to which access has been granted and all orders and judgments of the Court, other than those (if any) in respect of which an order limiting publication or access has been made.
19. I will make the following orders:
    1. The proceeding and the notices of motion for leave to serve outside the jurisdiction and to strike out the statement of claim be adjourned to 9:30 am on 4 October 2007 for directions.
    3. On or before 24 September 2007, the applicant file and serve a document, each entitled “summary outline of case against the [relevant] respondent”.
    3. Each such summary outline be no longer than 2 pages, double spaced, and be settled by counsel. (The aim of the document in each case be to convey succinctly (though as comprehensively as possible) the asserted complaints against the relevant respondent.)
    4. In drafting the summaries, the use of definitions should as far as possible be avoided.
    5. On 4 October 2007 the parties be in a position not only to discuss the need for, or fate of, the motions, but also the issues in the case in the light of the content of the said summary outline.
    6. Costs be reserved.
    7. The material on the Court file as at 10 September 2007 be available for inspection by the public (including photocopying, pursuant to any arrangement with the Registry).
    8. Exhibit A on the motion, tendered by the fourth respondent, be available for inspection by the public (including photocopying, pursuant to any arrangement with the Registry).
    9. The Court directs that the District Registrar create a parallel file for access by the public, such file to contain only material on the main court file to which access has been granted and all orders and judgments of the Court, other than those (if any) in respect of which an order limiting publication or access has been made.
       

I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop.

Associate:

Dated: 17 September 2007

Counsel for the Applicant:	Ms C Adamson SC and Ms A Seward
Solicitor for the Applicant:	Corrs Chambers Westgarth
Counsel for the First Respondent:	Mr P Brereton
Solicitor for the First Respondent:	Mallesons Stephen Jaques
Counsel for the Second, Third and Fourth Respondents	Mr A Bannon SC
Solicitor for the Second, Third and Fourth Respondents	Gilbert and Tobin
Date of Hearing:	10 September 2007
Date of Judgment:	10 September 2007