FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission & Another v Commonwealth Bank of Australia [2003] FCA 1129 TRADE PRACTICES – consumer protection – misleading and deceptive conduct – television advertising stated 'no establishment fee' payable for grant of home loans – 'paying no establishment fees' stated on in-branch posters – less than usual establishment fee charged for most loans conditional upon borrowers' acquisition of certain bank products – whether misleading and deceptive conduct in relation to prospective home loan borrowers – implications of advertising to competitive marketplace irrespective of establishment fees charged occasioned to home loan borrowers – nature and extent of corrective advertising ordered. Australian Securities and Investments Commission Act 2001 (Cth), ss 12DA, 12DB, 12GD Trade Practices Act 1974 (Cth), ss 51AF, 52, 53(c), (e) and (g), 80, 86C Federal Court of Australia Act 1976 (Cth), s 21 Thompson Australian Holdings Pty Limited v Trade Practices Commission and Others (1981) 148 CLR 150 Hornsby Information Centre Pty Ltd and Another v Sydney Building Centre Pty Ltd (1978) 140 CLR 216 Parkdale Custom Built Furniture Pty Limited v Puxu Pty Limited (1982) 149 CLR 191 Yorke and Another v Lucas (1985) 158 CLR 661 Taco Co of Australia Inc v Taco Bell Pty Limited (1982) 42 ALR 177 Siddons Pty Ltd v The Stanley Works Pty Ltd (1991) 29 FCR 14 Nationwide News Pty Limited v Australian Competition and Consumer Commission (1996) 142 ALR 212 CRW Pty Ltd v Sneddon (1972) AR 17 Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 111 ALR 61 Campomar Sociedad, Limitada and Another v Nike International Limited and Another (2000) 202 CLR 45 Trade Practices Commission v Optus Communications Pty Ltdand Another (1996) 64 FCR 326 TEC & Thomas (Australia) Pty Ltd v Matsumiya Computer Co Pty Ltd (1984) 1 FCR 28 Australian Competition and Consumer Commission v Target Australia Pty Ltd [2001] FCA 1326 St Lukes Health Insurance v Medical Benefits Fund of Australia Ltd (1995) ATPR 41-428 Australian Competition and Consumer Commission v Wizard Mortgage Corporation Limited (2002) ATPR 41-903 Australian Competition and Consumer Commission v Dell Computer Pty Limited (2003) ATPR 41-910 SAP Australia Ltd v Sapient Australia Pty Ltd (1999) 48 IPR 593 Australian Competition and Consumer Commission v Maritime Union of Australia and Others (2001) 187 ALR 487 Medibank Private Ltd v Cassidy (2002) ATPR 41-895 Cassidy v Medical Benefits Fund of Australia No 2 (2003) 12 ANZ Ins Cas 61-549 AUSTRALIAN COMPETITION AND CONSUMER COMMISSION AND AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v COMMONWEALTH BANK OF AUSTRALIA N 1002 OF 2002 CONTI J 17 OCTOBER 2003 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1002 OF 2002 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION FIRST APPLICANT AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION SECOND APPLICANT AND: COMMONWEALTH BANK OF AUSTRALIA RESPONDENT JUDGE: CONTI J DATE OF ORDER: 17 OCTOBER 2003 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Within fourteen days from the date hereof the parties bring into Court short minutes as to declaratory and injunctive relief, and directions as to corrective advertising, in conformity with the reasons for judgment. 2. To the extent that the parties are at issue as to the content of the declaratory and injunctive relief and the nature and form of corrective advertising, the parties provide their respective written submissions and draft declaration and orders within twenty-eight days. 3. The respondent pay the applicants' costs of the proceedings, except as to any reserved costs relating to amendments to pleadings in relation to which there should also be liberty to apply. 4. Each party have liberty to apply generally on seven days notice to the other in relation to the relief to be ordered. 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 N 1002 OF 2002 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION FIRST APPLICANT AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION SECOND APPLICANT AND: COMMONWEALTH BANK OF AUSTRALIA RESPONDENT JUDGE: CONTI J DATE: 17 OCTOBER 2003 PLACE: SYDNEY REASONS FOR JUDGMENT Nature of the complaints made by ACCC 1 These proceedings have been brought by Australian Competition and Consumer Commission ('ACCC') and Australian Securities and Investments Commission ('ASIC') for injunctions, declarations and orders pursuant to ss 80 and 86C of the Trade Practices Act 1974 (Cth) ('TP Act'), s 12GD of the Australian Securities and Investments Commission Act 2001 (Cth) ('ASIC Act') and s 21 of the Federal Court of Australia Act 1976 (Cth), arising out of certain conduct of the Commonwealth Bank of Australia ('the Bank') involving the promotion of financial products to the public allegedly in contravention of ss 52 and 53 of the TP Act. The particular paragraphs of s 53 relied upon by ACCC are (c), (e) and (g). The proceedings were commenced on 25 September 2002 by ACCC alone. Although the conduct of the Bank the subject of complaint occurred prior to 11 March 2002, ASIC was added as an applicant in consequence of the introduction on that date of s 51AF of the TP Act, which stipulates that Part V of the TP Act, which relates to 'Consumer Protection', does not apply to the supply, or possible supply, of services that are financial services. At least for the reason that injunctive relief, inter alia,is sought in the proceedings in relation to future conduct of the Bank based upon ss 12DA, 12DB and 12GD of the ASIC Act, ASIC became a necessary party (cf Thompson Australian Holdings Pty Ltd v Trade Practices Commission and Others (1981) 148 CLR 150 at 159). 2 The first complaint of ACCC the subject of the proceedings is that during the period from 22 November 2001 to 27 January 2002, the Bank caused three different television advertisements to be screened in Australia on Channel 9, during that television station's coverage of international cricket matches, named respectively as follows: (i) the 'Blood Nut' advertisement; (ii) the 'Where's the Action' advertisement; and (iii) the 'Sick Boy' advertisement. 3 The first segment of each of the television advertisements, having a duration of approximately eighteen seconds, and the third or final segment of each of the same, having a duration of approximately three seconds, included the depiction of the following humorous incidents, and involved no commercial matter: (i) in the case of the 'Blood Nut' advertisement, a male spectator at a cricket match declining an offer of sunscreen and then regretting it as he became more sunburnt; (ii) in the case of the 'Sick Boy' advertisement, a male spectator at a cricket match regretting being spotted on television by his boss as he had called in sick; and (iii) in the case of the 'Where's the Action' advertisement, a television cameraman at a cricket match regretting the focus of the camera on a female spectator because in so doing he failed to film a catch. 4 The second and intervening segment of each of those television advertisements, involved commercial matter and comprised approximately nine seconds, included three components of direct relevance in the proceedings, namely a voiceover, bold text captions and smaller print at the bottom of the screen. The smaller print was said by ACCC to be approximately 28 percent of the size of the bold text captions. 5 The written and spoken text of the second (or intervening) segment of both the 'Blood Nut' and the 'Where's the Action' advertisements comprises Annexure 'A' to the ACCC's Further Amended Statement of Claim ('FASC'), and also to these reasons, and the written and spoken text of the second (or intervening) segment of the 'Sick Boy' advertisement, comprises Annexure 'B' thereto and also to these reasons. The alteration in the interest rate cited in Annexure 'A' to what appears in Annexure 'B' reflected one of the changes in the televised cited interest rate which occurred during the television period, which, as above stated, lasted altogether for about two months. 6 These television advertisements were broadcast by Channel 9 on the following number of occasions in and from the following places in Australia: (i) 39 occasions in Sydney; (ii) 43 occasions in Melbourne; (iii) 38 occasions in Brisbane; (iv) 16 occasions in Adelaide; (v) 35 occasions in Perth; (vi) 26 aggregated occasions in northern New South Wales; (vii) 22 aggregated occasions in southern New South Wales; (viii) 22 aggregated occasions in Victoria; and (ix) 21 aggregated occasions in Queensland. The duration of each of the television advertisements was approximately 30 seconds, comprising the respective eighteen, three and nine second segments which I have above identified. In addition to the television advertisements, corresponding issues arise in the proceedings in relation to the poster and card display material which were set up or provided in the Bank's branches, or most of them, throughout Australia. The latter advertising material is referred to in the proceedings as the 'in-branch' advertising material of the Bank. The advertising of more critical significance was that which was televised. 7 The further facts and circumstances involved in the proceedings, and the issues raised in respect thereof, are so complex, that it is appropriate I take the initial course of partly summarising and partly extracting the FASC, and thereafter the Bank's Amended Defence, in order to provide the precision needed for presenting the complex legal and factual issues arising. The cases respectively propounded by the parties did not materially vary from the pleadings during the course of the lengthy written and oral submissions which were provided by both parties. 8 ACCC pleaded by the FASC that by means of the television advertisements complained of, the Bank represented to members of the public, including customers and potential customers of the Bank, that no establishment fee was payable in respect of the Bank's home loans, that representation taking the form of bold text captions appearing in each of the television advertisements containing the words 'no establishment fee', whereas in respect of applications made to the Bank for home loans made during the televised advertising period from 22 November 2001 to 27 January 2002, not every type of home loan granted by the Bank was made available upon the basis that no establishment fee was payable to the Bank. Consequently it was asserted by ACCC that the representation was false, misleading and deceptive. 9 The Bank's 'no establishment fee' representation contained in the three television advertisements was further pleaded by ACCC to be false, misleading and deceptive, in that within the categories of home loans to be offered by the Bank per medium of television advertisements, namely its '1 Year Guaranteed Home Rate and Investment Home Loan', and its '3 Year Fixed Rate Home and Investment Home Loan', and its 'Viridian Line of Credit', and in respect of applications to the Bank for such home loans made during the period 22 November 2001 to 27 January 2002, not every home loan provided was made available from the Bank upon the basis that no establishment fee was payable. 10 The televised representation that no establishment fee was payable in respect of the Bank's home loans was further pleaded by ACCC to be false, misleading and deceptive, in that each of the television advertisements failed to disclose that in order to obtain the Bank's home loans without the payment of an establishment fee, an applicant would need to either already hold, or to obtain, two or three additional products of the Bank, depending on the size of the loan. 11 There was a measure of ambiguity in the pleading of what I have reproduced in [8-10] above, by reason of the presence of the words 'not every type of home loan granted, by the Bank' and 'not every home loan provided' in [8-9] above; moreover what appears in [10] above was not complete; those matters will be shortly clarified. However the case was litigated at the hearing upon the basis that the television representations (and also the so-called in-branch representations) were simply that 'no establishment fee was payable with respect to the respondent's home loans' and the hearing before me was fought upon that unambiguous basis. By way of particulars as to the false, misleading or deceptive nature of the televised (and in-branch) representations, it was stated by particulars contained in the FASC as follows (the foreshadowed ambiguity is clarified by those particulars): (i) during the period 22 November 2001 to 27 January 2002, certain of the Bank's home loans, namely its abovementioned '1 Year Guaranteed Home Rate and Investment Home Loan', its '3 Year Fixed Rate Home and Investment Home Loan', and its 'Viridian Line of Credit', were offered upon the basis that the Bank's normal (or so-called 'standard') establishment fee of $600.00 for such loans was in certain cases discounted; (ii) the level of discount of the establishment fee depended upon the amount of the loan, and whether one or more of the following so-called 'products' were already held or obtained by a customer: · A Commonwealth Bank credit card; · A Commonwealth Bank deposit account with direct salary credit, and where loan repayments were to be made automatically; · An insurance combined home and contents policy offered by Commonwealth Insurance Limited; and · A mortgage protection insurance policy offered by Commonwealth Life Limited, or Colonial personal insurance portfolio products offered by Colonial Mutual Life Assurance Society Limited. (iii) the discount operated in the following way: 'Value of Home Loan Additional Commonwealth Establishment Fee Payable Bank Products $200,000 or above nil $300 $200,000 or above one product $150 $200,000 or above two products nil $80,000 - $199,999 nil $300 $80,000 - $199,999 one product $200 $80,000 - $199,999 two products $100 $80,000 - $199,999 three products nil under $80,000 nil $600 under $80,000 one product $500 under $80,000 two products $400 under $80,000 three products $300' What is set out in subpar (iii) above is of critical importance to an understanding of the complexity of the complaint, and is to be understood in the light of subpars (i) and (ii) above. 12 Further matters pleaded by ACCC in relation to the television advertisements were as follows: (i) the following words appeared in each 'Blood Nut Advertisement' and each 'Where's the Action Advertisement' at the bottom thereof for approximately four seconds in print, being approximately 28% of the size of the print of the bold text caption 'No Establishment Fee': 'Limited offer for selected Home Loans. Other fees and charges are payable . Minimum loan amount and conditions apply.' (ii) the following words appeared in each 'Sick Boy Advertisement' at the bottom thereof for the same time and same approximate size of print: 'Limited offer. Other fees and charges are payable. Minimum loan amount and conditions apply.' 13 It was next pleaded by ACCC that the addition of the texts respectively set out in the two preceding paragraphs of these reasons did not remove the false, misleading or deceptive nature of the televised representations as to 'no establishment fee' because: '(i) the television advertisement conditions were in a print size that was so small compared to the print size of the bold text caption 'No Establishment Fee' that customers were unlikely to read the television advertisement conditions at all; (ii) the television advertisement conditions were in a location at the bottom of the advertisement so removed from the location of the bold text caption 'No Establishment Fee' that customers were unlikely to read the television advertisement conditions at all; (iii) the television advertisement conditions appeared for such a short period of time that there was insufficient time for customers to read the television advertisement conditions at all; (iv) the television advertisement conditions were so lacking in any other form of prominence or emphasis that customers were unlikely to read the television advertisement conditions at all; (v) insofar as the television advertisement conditions were able to be read and understood at all by a customer, by failing to indicate that in order to obtain home loans without the payment of an establishment fee customers would have to either already hold or obtain two or three additional products of the [Bank] (depending upon the size of the loan), customers were unlikely to have associated the television advertisement conditions with such a requirement; (vi) insofar as the television advertisement conditions were able to be read and understood at all by a customer, the words 'Limited offer', 'Limited offer for selected Home Loans' and 'Minimum loan amount' conveyed only that the offer was not available with respect to all home loans; (vii) insofar as the television advertisement conditions were able to be read and understood at all by a customer, the words 'Other fees and charges are payable' conveyed only that fees and charges (other than establishment fees) were payable in relation to the home loan in respect of which the application was being made, and not that a customer would have to either already hold or obtain two or three additional products of the [Bank]; and (viii) insofar as the television advertisement conditions were able to be read and understood at all by a customer, the words 'conditions apply' conveyed only that not every customer was eligible for a home loan due to, inter alia, the prudential and credit requirements of the [Bank].' As matters unfolded, the issues arising in [12] above and in this paragraph became relatively insignificant in the proceedings. 14 The context of the second area or field of complaint made by ACCC's FASC was that during the same period of time from 22 November 2001 to 27 January 2002, the Bank displayed inside its banking branches in Australia various forms of advertisements, to which I have been referring as 'in-branch' advertising, which included: (i) a poster known as the Jumbo Poster, being 690 x 990 millimetres in size, and containing the following words in bold captions: 'Paying no establishment fees.' (ii) a poster known as the Standard Poster, being 490 x 750 millimetres in size, and containing the following words in bold captions: 'Paying no establishment fees.' (iii) a wall mount, being 570 x 630 millimetres in size, and containing the following words in bold captions: 'Paying no establishment fees.' (iv) a counter card, being A4 in size, and containing the following words in bold captions: 'Paying no establishment fees.' These four displays, reduced relatively to their respective sizes, have been reproduced in their original colours by way of Annexure 'C' to these reasons for judgment. They are collectively described in these reasons as the 'in-branch advertising'. 15 It was pleaded by ACCC that by means of the in-branch advertising, the Bank represented to members of the public, including its customers, that no establishment fee was payable in respect of the Bank's home loans, being a representation said to have been false, misleading and deceptive, in that in respect of applications to the Bank for home loans made during the period 22 November 2001 to 27 January 2002, which was the entire period of the television advertising, not every type of home loan from the Bank was available upon the basis that no establishment fee was payable. It appears that the in-branch advertising probably ceased to be used shortly after completion of the television advertising. Those in-branch displays also contained the words 'Switching to another home loan without paying a fee', but as in the case of the 'Blood Nut' and 'Where's the Action' television advertisements, no case was pleaded by ACCC in respect of the Bank's so-called 'switching fees', as distinct from 'establishment fees'. 'Switching fees' referred to the monetary implications of transfer of an existing Bank mortgage home loan borrowing to any one of the three forms of Bank home loans referred to in [9] above, and are not material to any issue arising in the proceedings. 16 It was further pleaded by ACCC that the in-branch advertising was false, misleading and deceptive, in that within those three categories of home loans which were offered by the Bank through in-branch advertising, and in respect of applications made to the Bank for any such home loans during the period 22 November 2001 to 27 January 2002, not every home loan was available upon the basis that no establishment fee was payable, and moreover that the in-branch advertising failed to disclose that in order to obtain the Bank's home loans without the payment of an establishment fee, a customer would be required to either already hold or obtain two or three additional products of the Bank, depending upon the size of the loan. The same degree of ambiguity in ACCC's pleading was thus present, as was also the case in relation to the pleading of the television advertising. As in the case of the television advertising, and explained already at the beginning of [11] above, the case put in relation to the in-branch advertising was simply that what was represented thereby was that 'no establishment fee was payable with respect to the Respondent's home loans'. 17 Moreover it was thereafter pleaded by ACCC, in the context of the complaint as to the Bank's in-branch advertising, that although the same contained the words 'Fees and charges are payable. Conditions apply', those words appearing at the bottom of each form of the in-branch advertising, and being approximately 10% of the size of the print of the bold text caption 'Paying no establishment fees', did not remove the false, misleading or deceptive nature of the representation complained of, for the following reasons: '(i) the in-branch advertising conditions were in a print size that was so small compared to the print size of the bold text captions "Paying no establishment fees" that customers were unlikely to read the in-branch advertising conditions at all; (ii) the in-branch advertising conditions were in a location at the bottom of the advertisement so removed from the location of the bold text captions "Paying no establishment fees" that customers were unlikely to read the in-branch advertising conditions at all; (iii) the in-branch advertising conditions were so lacking in any other form of prominence or emphasis that customers were unlikely to read the in-branch advertising conditions at all; (iv) insofar as the in-branch advertising conditions were able to be read and understood at all by a customer, by failing to indicate that in order to obtain home loans without the payment of an establishment fee customers would have to either already hold or obtain two or three additional products of the [Bank] (depending upon the size of the loan), customers were unlikely to have associated the in-branch advertising conditions with such a requirement; (v) insofar as the in-branch advertising conditions were able to be read and understood at all by a customer, the words 'fees and charges are payable' conveyed only that fees and charges (other than establishment fees) were payable in relation to the home loan in respect of which the application was being made, and not that a customer would have to either already hold or obtain two or three additional products of the [Bank]; and (vi) insofar as the in-branch advertising conditions were able to be read and understood at all by a customer, the words "conditions apply" conveyed only that not every applicant for a home loan was eligible for that home loan due to, inter alia, the prudential and credit requirements of the [Bank].' Again as matters unfolded, the issues arising in this paragraph became relatively insignificant in the proceedings. 18 ACCC pleaded by way of conclusion that by its conduct in broadcasting the television advertisements and presenting in-branch advertising, the Bank committed the following contraventions of the TP Act: (i) the Bank engaged in conduct which was misleading or deceptive, and likely to mislead or deceive, in contravention of s 52; (ii) the Bank made representations as to benefits associated with its home loans which its home loans did not have, namely that no establishment fee was payable in respect thereof, in contravention of s 53(c) of the TP Act; (iii) the Bank made representations with respect to the price of its home loans, namely that the same did not include an establishment fee, in contravention of s 53(e) of the TP Act; (iv) the Bank made representations that its home loans were, subject to its prudential and credit requirements, in all cases available upon the basis that no establishment fee was payable in respect thereof, yet conditions applied to or were associated with the obtaining of its home loans without the payment of an establishment fee, in contravention of s 53(g) of the TP Act; and (v) the Bank made representations that conditions applicable to obtaining its home loans concerning the effect of conditions associated therewith, in that the Bank's use of the advertised words 'other fees and charges are payable', or 'conditions apply', did not convey that in order to obtain a home loan without payment of an establishment fee, other products of the Bank must be held or obtained, in further contravention of s 53(g) of the TP Act. 19 ACCC also pleaded contraventions of s 51A of the TP Act, but did not advance submissions upon the basis thereof. The Bank's defences 20 The Bank's pleaded defences may be summarised as follows: (i) denied any representation by the television advertisements and in-branch displays that no establishment fee was payable in relation to its home loans, which presented the most critical issue; (ii) admitted that during the period from 22 November 2001 to 27 January 2002, certain of its home loans were offered on television broadly upon the basis described in [11] above of these reasons for judgment, save that 'with respect to Commonwealth Mortgage Protection Insurance and Colonial Personal Insurance Portfolio products, the discount was available, once the customer agreed to meet with a Personal Investment Consultant, even if no product was ultimately purchased by the customer', and save further that 'with respect to Commonwealth Insurance Combined Home and Contents policies, the discount was available where the customer's circumstances prevented the customer from taking out a combined policy and the customer took out a contents-only policy'; (iii) further admitted that not every type of home loan from the Bank was available during the period 22 November 2001 to 27 January 2002 upon the basis that no establishment fee was payable; (iv) admitted that the words 'other fees and charges are payable' appearing in each of the television advertisements did not convey the meaning that 'a customer either would already have to hold or would have to obtain two or three additional products of the [Bank]', but denied that those conditions were in a print size that was so small, compared to the print size of the bold text caption 'no establishment fee', or so removed from the location thereof, that customers were unlikely to read the television advertisement conditions at all; (v) repeated sub-paragraph (ii) above in relation to what appeared in and by the in-branch advertising; (vi) repeated (iv) above in relation to what appeared in and by the in-branch advertising, save that the precise text thereof was 'Fees and charges are payable. Conditions apply.'; and (vii) as to the whole of the FASC, asserted additionally or alternatively as follows: '… (a) the words, "limited offer", "limited offer for selected home loans", "minimum loan amount", "conditions apply", "other fees and charges are payable" and "fees and charges are payable" as variously broadcast or appearing on the in-branch advertising made clear the limited and qualified nature of the benefits being advertised; (b) customers and potential customers of the [Bank] and members of the public were aware that the loans which were the subject of the television advertisements and the in-branch advertising were subject to any or all of: (A) the [Bank's] formal application process; (B) the [Bank's] eligibility, prudential and legal requirements; (C) a credit assessment; (D) provision or arrangement of adequate security; (E) insurance; (F) a written contract containing terms and conditions too detailed to disclose at length or in detail on television or on the in-branch advertising itself; (c) customers and potential customers of the [Bank] and members of the public were aware that detailed information about those matters was available from the [Bank] at its bank branches, by telephone and by internet; (d) such that the [Bank] did not by the television advertisements or the in-branch advertising: (A) engage in conduct or convey representations which were misleading or deceptive or likely to mislead or deceive; (B) represent that the [Bank's] home loans had benefits which they did not have; (C) make false or misleading representations with respect to the price of the [Bank's] home loans; (D) make false or misleading representations as to the existence of conditions associated with its home loans; or (E) make false or misleading representations as to the effect of conditions associated with its home loan.' The first of those summarised defences, namely the denial of the Bank of any representation, by television or in-branch advertising, that no establishment fee was payable in respect of its home loans, raised the critical issue in the proceedings. The other issues joined in the pleadings involved no independent matters critical to the resolution of the proceedings, but rather concerned matters bearing upon or peripheral to the 'no establishment fee' issue. Because so much debate occurred, both directly and indirectly upon matters bearing upon the 'no establishment fee' theme, I have found it appropriate to summarise what were lengthy and complex pleadings to the extent set out above. Evidence adduced by ACCC 21 Doubtless in the light of judicial dictum to the effect that testimony from consumers claiming to have been misled by representations contained in advertising or promotional material may be admissible for the purpose of establishing objectively that representations were misleading, albeit that the giving of any such evidence would be neither essential to nor determinative of the issues raised, ACCC adduced affidavit evidence from three members of the public as to their alleged deception. Each of those persons testified to viewing the television advertisements, and thereafter to communicating with the Bank, and ultimately to complaining to ACCC. One of those persons also spoke of seeing the in-branch advertising. Each was extensively cross-examined on behalf of the Bank, and it may be said that their respective memories of collateral and contemporary events had faded or become confused. I bear in mind of course that ultimately the Court must determine the existence of misleading and deceptive conduct from the objective circumstances. My objective assessment of the misleading and deceptive conduct alleged must be geared, not to the exceptionally intelligent or exceptionally gullible, but rather to a range of hypothetical persons somewhere in the middle of those categories. 22 The first complainant was Mr de Jong, a longstanding and financially active customer of the Bank, who operated a private transport company and sheet metal company in rural New South Wales, and who had purchased with the assistance of the Bank a number of residential properties located in country towns in New South Wales. He said in his affidavit that after seeing what he described as the Bank's advertisement for availability of a 'no establishment fee' home loan, and thereupon enquiring of the Bank by telephone as to the availability thereof, he was informed that if he had a bank card, a deposit account, or other products, in each case conducted with the Bank, he could get the home loan he was seeking for an establishment fee reduced to zero, and further that when he stated to the Bank's officer, to whom he was speaking on the telephone, that he had already 'got all that', he was then informed that he was in any event 'not eligible'. 23 Cross-examined at length as to the reliability of his testimony, which did not appear to dovetail, at least to a substantial extent, particularly in a temporal sense, with the Bank's internal records, Mr de Jong adhered nevertheless to the essence of his complaint claimed by him to have been made to the Bank, in the following context of his cross-examination: '… The evidence that is in your affidavit is completely wrong, isn't it?--- Well all the evidence in that affidavit is two years ago, I'm talking about 2 to 2-2 years ago when I complained about it. When I rang up and all I rang up was to say that: they had misled me because when I [had] seen the non-establishment fee and I thought, well, that will save me 750 bucks, that is what is in the affidavit as well – and that is 2 years ago. Two years ago?--- Well that's what I thought, yes. Or is it longer or shorter – I don't know, when was it? I mean, you are dragging stuff into it, what has happened in that last 2 years. Yes that is right. Are you sure you even saw a television advertisement Mr De Jong?--- Pretty sure of that, yes.' 24 Mr de Jong's testimony, despite significant areas of confusion, left me in no doubt that he did speak to an officer of the Bank, after his viewing the television advertisement, and thereafter did complain to ACCC because of what he considered to be a personal affront. He struck me as a genuine country orientated character, who simply wanted to make the point to his banker of his annoyance in relation to his unsuccessful response to the television advertising of the Bank, being an unsuccessful response which on his account of the events may well have involved misunderstandings between himself and the Bank. Mr De Jong continued thereafter his longstanding, and financially active relationship with the Bank. In short, he sought to 'make a point' with the Bank, whilst nevertheless adhering to his longstanding relationship with the Bank. 25 The second complainant to give evidence, Ms Williams, was engaged in a small business practice in country New South Wales, and conducted a small bank account with the Bank. After earlier seeing the Bank's large in-branch poster at its Moruya Branch containing the 'no establishment fee' theme, and apparently smaller 'in-branch' posters containing the same theme, she said in her affidavit that she later saw one of the Bank's subject television advertisements in the evening of the same day 'at some time between 6.30 pm and 8.30 pm'. She recalled in particular that the 'no establishment fee' message was displayed diagonally across the screen, along with the telephone number 13 22 24. 26 Upon telephoning the Bank the following day, Ms Williams testified of a telephone conversation with a male Bank officer, whose name she could not recall, which included the following questions and assertions on her part (prefixed Q), and the following responses which she said she received from that officer (prefixed A): 'Q Could you explain the no establishment fee offer to me? A Well, its not quite like that – there are some conditions attached to that offer. Q I didn't notice any conditions in your advertisements. A Which advertising have you seen? Q I saw posters in the branch and advertising on the TV. A The loan may be able to be rased without an establishment fee if you have other products with the bank, such as a credit card, home insurance, term deposit account (she interpolated here that he then mentioned further products which she could not remember)… do you have other products with the Bank? Q No, I don't. A Well, if you have even one of these products, we can bring the establishment fee down by a certain amount, and in the event that you had all, it would in effect negate the establishment fee. Q But that's not what your advertising says. A Well, I don't deal with the advertising.' Thereafter by letter dated 30 December 2001, Ms Williams made a complaint to ACCC, which she initially admitted to contain an error, but which she subsequently appeared to re-affirm in its entirety. Her complaint was the only written complaint made to ACCC. 27 The Bank's response to Ms Williams' letter of complaint was written by Mr Blinkhorn, the Executive, New Business, Personal Financing of the Bank, though it was tendered by ACCC and not the Bank. The content of that letter, omitting what may be described as formal parts, was as follows: 'We note your claim that our current "no regret" home loan advertising "misrepresents the Bank's policy in relation to obtaining a home loan". While we are unable to verify the actual information provided by the loans officer you contacted, all forms of the home loan advertising in question clearly state that conditions apply in respect of the offers (eg no loan establishment fees). In particular, the Television advertisements contain the following statement: "Limited offer for selected Home Loans. Other fees and charges are payable. Minimum loan amount and conditions apply." Further, Internet and in Branch brochure material includes the following statement: "Applications are subject to the Bank's normal credit approval. Offers are only available for a limited time and only on selected loans. Full terms and conditions will be included in our loan offer. Other fees and charges are payable. Minimum loan amount and conditions apply. Commonwealth Bank of Australia ABN 48 123 123 124." We also note that all lending staff receive detailed policy instructions and, in the ordinary course of discussions with prospective customers, any conditions applying to special offers must be clearly explained. Of course, following a successful loan application a formal offer to customers is issued via a detailed loan contact which also includes the Bank's Usual Terms and Conditions.' I have already extracted the televised and in-branch terms and conditions to which the latter appears to have purportedly referred. At the hearing, the Bank placed little or no reliance of significance upon what I would describe for convenience as the 'small print' defences (which I have already extracted). 28 Some insight can be obtained as to the trend of cross-examination of Ms Williams extracted below: 'But in your research down to November, banks had made it clear that there were conditions that you would have to satisfy in order to get the home loan from them right?--- Yes. Sadly for whatever reasons, in fact your application for a loan had been rejected by a number of banks because you didn't fulfil those conditions. Would you agree?--- Yes. All right. Indeed, your concern at this time was whether or not you could get a loan at all, isn't that right? Do you agree?--- Yes. … … I want to suggest to you that in fact you had been to a number of the major banks by that time, do you agree, all of whom had rejected you because you didn't fulfil their qualifications?--- Well, National, Westpac, I hadn't actually applied to Commonwealth, I hadn't been to ANZ, I don't think, but I think National and Westpac had. You had also been rejected by Aussie Home Loans, is that right?--- I didn't get rejected by them but they told me that they would up the establishment fee and also charge me a higher interest rate if I took it out because I was a risk to them… because of my low income (Ms Williams indicated that at the time of her application to the Bank, she was 'in a broken relationship', being the reason which was compelling her, reluctantly, to obtain a bank borrowing, which ultimately she succeeded in achieving, from National Bank of Australia Limited). … Can I suggest to you, for your comment, that the take-home message that was really emphasised in the advertisements was the rate of 4.89 per cent?--- Certainly it was part of the take-home message, but for me that no establishment fee was there as well.' I encountered no reason to believe other than that I should accept Ms Williams' evidence as truthfully given. I would not accept the Bank's contention to the effect that if she was in fact led into error, that was because '… she did not bother to read an important part of the legible writing on the posters', namely the invitation therein to pick up a brochure to find out about the advertised offer, and this, does not I think, come to issue with her complaint as to being initially misled by the Bank's in-branch advertising. 29 The third member of the public to give evidence was Mr Humphries. He was the national account manager of a business entity, and had experience in what may be described as senior corporate administration. In his affidavit, he said that he had viewed the Bank's controversial televised advertising in early 2002, and that he recalled, and was 'struck by', the words 'no establishment fee' and the advertised 'low rate of 4.99%'. He also said that he noticed the Bank's billboard advertising standing alongside a road where he was driving his motor vehicle, which appears to have been an erroneous reconstruction on his part. He further testified that he understood there to have been 'no other conditions attached to the offer', and did not recall any display of the words such as 'conditions apply'. His affidavit evidence continued thereafter as follows: 'On 15 January 2002, I went to the Bank's internet site, and after clicking through approximately 3 screens, found out that in order to qualify for the no establishment fee offer, I would have to take out three other Bank products. These could be chosen from a credit card, insurance product, a term deposit account and some other products which I cannot now recall. My understanding, after I read the material on the Bank's internet site, was that if you did not take out these three products, you would have to pay the establishment fee. It was not apparent to me from the first screen that this was the offer. I was annoyed because it appeared to me that the offer as detailed on the third screen contradicted the offer made in the television advertisements. I did not have any products with the Bank.' In the result, Mr Humphries emailed ACCC on 15 January 2002 as follows: 'The current Commonwealth Bank home loan special rates stated "Special Offer - $0 Establishment Fee" when in fact that is not the case is (sic) is condition. This is communicated without the condition in print media and does detail the conditions after stating $0, then informing that it is in fact $300 establishment fee only to further read on that it is $0 if you take 3 additional products. I found this to be misleading in the first instance.' 30 Mr Humphries was cross-examined upon his recollection of the circumstances under which he came to visit the Bank's website. He agreed at the outset that he had 'reasonably recent' experience with home loans prior to seeing the Bank's advertising in issue, and that his most recent experience had involved the waiver of an initial establishment fee. Though he had not been 'necessarily wanting to refinance' his existing home loan, he had been prompted to do so by the Bank's televised advertising which he had seen, and by the downward trend in interest rates which had been occurring since the time of taking-up of his then existing bank borrowing. Mr Humphries reiterated that it was 'the television commercials that led me to look at the internet site'. He appreciated that he would have to satisfy the Bank's requirements as to 'credit risk worthiness'. 31 Other evidence given by Mr Humphries in the course of a lengthy cross-examination included the following: 'So what the television commercial did in your mind… prompted you to make inquiry to find out more about the product…? On the basis that it said paying no establishment fees, yes.' '… what I felt sure about was that there were no establishment fees, end of story.' '… I remember three products and one of those being a credit card and an insurance product and a deposit account.' 'You were prompted to go to the internet to make an inquiry to see what were the features of the home loan?--- Prompted to go to the website as a result of the words "paying no establishment fees".' 'As a result of seeing the television commercial you were prompted to go to the internet to find out about the home loan product?--- Well, yes.' I have no reason to doubt the credibility of the theme of that evidence. As in the case of the earlier two complainants, his motivation in complaining to ACCC was perhaps his pique, if not anger, because of what he considered to be misleading advertising. Again I think that his testimony was truthful and that he was predominantly accurate in his recall of events. 32 An assistant director in ACCC's Compliance Branch (Ms Watson) testified that apart from Mr de Jong, Ms Williams and Mr Humphries, the only other complainant to ACCC in respect of the Bank's advertising campaign in issue was anonymous. Ms Watson also tendered into evidence a letter of 16 May 2002 sent by ACCC to the Bank, purportedly in response to a complaint received in relation to the Bank's television advertising, together with the reply of the Bank's Solicitor of 1 July 2002. Evidence adduced by the Bank 33 The Bank tendered affidavit evidence from a Bank officer, Mr Blinkhorn, an executive manager responsible for home lending. I should formally record that Mr Blinkhorn's first affidavit (sworn 28 February 2003) was read without objection, subject to three qualifications which I need not mention, and his second affidavit was admitted into evidence without objection. Mr Blinkhorn was not cross-examined. Mr Blinkhorn described in his first affidavit '[o]ne component' of the Bank's advertising campaign the subject of the proceedings as consisting of 'an offer of establishment fee discounts based on the customer's total relationship with the Bank', and that the amount of the discount was calculated upon 'the principal sum sought' and whether the customer held, or wished to obtain, one, two or three other products offered by the Bank'. He added that '[t]he requirement to have or acquire additional products was purportedly qualified', in that: · where Colonial Personal Insurance Portfolio products were involved, the applicable discount on the establishment fee was available to a home loan applicant, provided the applicant agreed to a meeting with a personal investment consultants; ie, it was not a requirement that the customer actually acquire a product; and · where a Commonwealth Insurance Combined Home and Contents Policy was involved, if an applicant's circumstances prevented him or her from taking out a combined policy, the discount would be available upon the customers taking out a contents-only policy. Mr Blinkhorn thus crystallised the intended effect of the Bank's defences described in [20] above. 34 Mr Blinkhorn also spoke in his first affidavit of the volume of home loan approvals made at times material to the proceedings, after mentioning that the Bank does not keep statistics of the numbers of people who apply for home loans in any given month. He added that for the six months period prior to the 'cricket' home loan campaign, namely from June 2001 to November 2001, the Bank's average monthly home loan, investment home loan and so-called Viridian approvals were 19,870, whereas for the six month period following the cricket home loan campaign (February 2002 to July 2002), the Bank's average monthly approvals were 19,571. However, monthly approvals during the 'Cricket home loan campaign', namely December 2001 to January 2002, were 17,486. Those figures were said to include loans approved and funded in the same month. Mr Blinkhorn produced the following statistics of home and investment home loan approvals for the one year guaranteed and three year fixed rate home loan products made during the cricket home loan period: '1 Year Guaranteed 3 Year Fixed Rate Rate Home Home Loan/ Loan/Investment Investment Home Loan Home Loan Total Total From 22 November 2001 Total approved 4726 273 Total entitled to $0 establishment fee 3321 158 Total with all or part establishment fee payable 1405 115 December 2001 Total approved 7673 1447 Total entitled to $0 establishment fee 5032 887 Total with all or part establishment fee 2641 560 To 27 January 2002 Total approved 6964 1806 Total entitled to $0 establishment fee 4367 1179 Total with all or part establishment fee payable 2597 627' 35 In relation to those statistics, Mr Blinkhorn stated in his first affidavit that '[d]ue to system limitations these figures exclude loans approved and funded in the same month, estimated to be up to 30% of all approvals and Viridian loans. In addition average monthly loan approvals [ie those referred to in the proceeding paragraph] are total approvals and so are greater in number than the figures to which the above table refers'. He further there stated that '[l]oans which are "approved" are not necessarily accepted by the applicants to whom they are offered, or, even where accepted, do not necessarily proceed because applicants may receive credit offers from other credit providers and decide to accept those offers'. Other reasons for approved loans not proceeding were said to include an inability of the applicant to satisfy other conditions for the loan (including security valuation) or simply deciding not to proceed. Mr Blinkhorn said that the Bank did not have statistics indicating the number of customers who enquired about, or made application for, a home loan in response to the 'no establishment fee' televised or in-branch advertising, nor was the Bank able to verify the accuracy of any individual customer's claim that he or she made an application on the basis of the 'cricket campaign'. My observation is that Mr Blinkhorn's statistical evidence, to the extent that it may be said to provide some indication of the extent of the customer or potential customer response to the Bank's advertising complained of, does not reflect any apparent upsurge in the Bank's home loan approvals which occurred in the context thereof. I should add that in the Bank's letter of 1 July 2002 to ACCC, it was stated (and not challenged) that '[the] Bank does not know and has no way of knowing which borrowers took out loans in response to the 'Cricket Home Loan Campaign advertisements'. 36 Mr Blinkhorn explained in his first affidavit the loan approval process which the Bank put in place to accommodate the three likely avenues of enquiry in response to the Bank's home loan advertising, namely enquiry at a branch of the Bank in person, or by telephone, or through the internet. In the case of enquiry in person, a brochure would be made available which described the facets of the three kinds of home loans referred to in [9] above. That brochure (Exhibit R7) is in evidence and contains none of the controversial representations. In the case of enquiry by telephone, the call centre operator was provided with a reference card (Exhibit R8) headed boldly on one side as follows: 'Special Offer $0 establishment fee' and which contained on that side, under a sub-heading in smaller size 'we can show you a way to pay no establishment fee', four examples of the scheme set out in[11(iii)] above, and an identification of the four Bank products described in [11(ii)] above. In the case of enquiry on the internet, a more detailed version of the call centre operator's reference card was provided. On the other side of the reference card appeared features of the three kinds of home loans identified in [9] above. 37 Mr Blinkhorn next stated in his affidavit that any complaints from customers about the terms of the advertised loan offers, or about the advertising campaign, irrespective of where initially made to the Bank, would in the usual course have been directed to his attention, yet the only complaint as to being misled by the Bank's so-called 'cricket campaign', that is, the subject advertising promotion complained of, which came to his attention, emanated from the abovementioned Ms Williams. 38 In his second affidavit, Mr Blinkhorn attached the instructions given to the Bank's branches concerning the in-house advertising the subject of the proceedings, together with copies of the various posters. He also provided estimates of the cost of the television commercials the subject of the corrective advertising orders sought by ACCC, which varied from $197,925.62 for one week to $3,166,810.00 for two months, with a cost of production of the television advertisement model of $24,530.00. Mr Blinkhorn's calculations were predicated upon the corrections foreshadowed by ACCC and involving a televised duration model of sixty seconds, which was twice the duration of the televised advertisements the subject of complaint. Moreover as explained in [4] above, that segment of the televised advertisements complained of was of a duration of only nine seconds. Mr Blinkhorn estimated the cost of corrective in-branch display posters etc in the sum of $94,500.00. 39 The Bank further tendered an affidavit of Lavinia Jeanne Strachan sworn 30 May 2003, the totality whereof was the subject of objection by ACCC, not on the ground of inadequacy of her expertise as a marketing psychologist, but on the basis that for her to purport to speak of the perceptions of ordinary consumers was to intrude upon essentially a 'jury question' or the ultimate issue for the Court to determine, and was therefore of no probative value. I allowed the material to be read upon the footing that the parties would make submissions as to the relevance thereof in final address. A concluding point which she made in her affidavit, and which I thought to be unexceptional, was that '… television advertising works in a cumulative way. Consumers cannot hope to absorb all of the information contained in a television commercial the first time they see that commercial'. As I have accepted elsewhere in these reasons, whilst evidence of actual deception is admissible, ultimately I must endeavour to determine the objective assessment of a person in the middle of the range of hypothetical television viewers and readers of posters etc, in terms of intelligence, perception and likely reaction. I have later cited longstanding authority for that principle. Consequently expert testimony provided by marketing psychologists is at best of limited or marginal value to my resolution of the issues arising in these proceedings. One of the Bank's emphatic submissions was that its television advertising merely caused the viewer to take the next responsive step which, in the case of a Bank home loan, would involve further inquiry, first by telephone, and thereafter in the course of interview with a Bank officer, and ultimately the signing of documents prepared internally by Bank officers, and by the time that process had run its course, an intending borrower would have disabused his or her mind from any initial impressions of the Bank's advertising. As will later be seen, whilst those propositions may well have a sound circumstantial basis, the same do not answer in law ACCC's case for misleading and deceptive conduct. 40 The Bank lastly tendered an affidavit of David Ronald Hedgecoe sworn 2 June 2003, to which no objection was raised by ACCC. He was the chief manager of the Banking Practice and Compliance section of the Bank. He testified as to the Bank's 'structured and up-to-date compliance programme for the Trade Practices Act', which included the provision of a 30 page handbook, which is 'updated as necessary', to every member of staff, together with the periodic distribution of a brochure, and the provision of a computer-based training module. Part of the emphasis of that material is the personal exposure of Bank employees to liability for misrepresentation. He said that the Banking Practice and Compliance, Businesses Services, Division of the Bank provides in-house services, and has access to the Bank's Legal Department. He also testified to a sign-off process for Bank personnel engaged in the production of advertising and promotional material for the Bank. Based on that unchallenged testimony, it is apparent that the Bank has addressed at all material times its obligations arising under the TP Act, but whether the Bank's judgment or decision-making was adequate and appropriate in relation to the subject television and in-branch advertising complained of, and its administration of the processes of enquiry and implementation pursuant thereto, is of course another matter. It was in the latter context that Mr Hodgecoe claimed that '[i]t never occurred to me, nor was it suggested to me by any other person to whom I spoke at the time, that the disclaimer included in the Bank's advertisements would not be displayed for sufficient duration to be read by the average person'. 41 Following upon internal enquiries made in respect of the subject 'no regrets' campaign, Mr Hedgecoe recorded that the Bank has revised its compliance guidelines in conjunction with its Legal Department, Marketing Communication and the so-called 360 agency, and changes to guidelines have been made, further staff training has been provided, and disclaimers for television commercials have been introduced to include the words 'conditions apply' as a voice-over, as well as being displayed as before in text form. Since its experience in relation to the subject 'no regrets' campaign, the Bank's Business Practice and Compliance division has introduced the following procedures for relevant employees: · viewing the completed video of all television advertisements to ensure that the disclaimers are of a satisfactory size and duration and are included in voice-over; · viewing press advertisements in their laid out form; · viewing all posters as they will be seen by customers to ensure disclaimers are legible from a reasonable distance (for example while customers are standing in a queue at the branch); and · listening to the audio tape of all radio commercials to ensure compliance. Mr Hedgecoe's evidence summarised in the last paragraph above relates essentially to the issue of penalty. ACCC's submissions and some preliminary observations thereon 42 The essence of ACCC's complaint, as formulated in final address, is that the Bank's television and in-branch advertising represented that persons could obtain home loans from the Bank upon the basis of 'no establishment fee' being payable to the Bank. That representation is asserted by ACCC to have been false, misleading and deceptive, within s 52 of the TP Act, in three separate or distinct ways, as follows: (i) not every type of home loan from the Bank was available upon the basis that no establishment fee was payable; (ii) even within those categories of home loans which were offered by the Bank through television and in-branch advertising the subject of the proceedings, not every home loan was available on the basis that no establishment fee was payable; and (iii) the Bank failed to disclose in the advertising material that except in only two instances, in order to obtain any of its three categories of home loans in return for a reduction (though not waiver) of the Bank's standard establishment fee of $600.00 (see [11(i)] above), a customer would either need to already hold, or to take out, depending upon the amount to be borrowed, one, two or three so-called products of the Bank as a condition of approval of the home loan. Those two instances of nil establishment fees appear in the third column of the table set out in [11(iii)] above. Put another way in short summary, ACCC's case was that the 'no establishment fee' the subject of the Bank's television and in-branch advertising did not reflect the Bank's loan establishment fee scheme set out in the tabular form in [11(iii)] above. 43 Subject to the qualifications described in [20(ii)] above in relation to two insurance policy requirements, said by ACCC not to affect the substance of its complaint, ACCC contended that the Bank had effectively admitted to making the 'no establishment fee' representation to its existing customers and other members of the public generally, in the context of its imposition nevertheless of the above three qualifications or conditions. In oral submissions in reply, ACCC acknowledged that as would be the case with any home financier, there would have been in force or operation 'normal conditions which would apply to whether or not you can get the loan, prudential conditions'. 44 ACCC invoked the following threshold principles as applicable to the Bank's conduct for the purpose of imputing contravention by the Bank of s 52 (and also s 53) of the TP Act: (i) ACCC was not required to establish the existence of an intent of the Bank to mislead or deceive, or of negligence on the Bank's part, and a contravention of s 52 may have occurred, even though the Bank may have acted honestly and reasonably: Hornsby Information Centre Pty Ltd and Another v Sydney Building Centre Pty Ltd (1978) 140 CLR 216 at 228; Parkdale Custom Built Furniture Pty Limited v Puxu Pty Limited (1982) 149 CLR 191 at 197; Yorke and Another v Lucas (1985) 158 CLR 661 at 666. (ii) Where, as was said to be the case here, a representation is made to the general public, albeit that existing customers of the Bank might be anticipated to provide more responses than the customers of other banks, a determination whether conduct is actionable as misleading or deceptive involves the following steps or considerations: · the relevant section of the public must be identified – here the persons involved would be existing or potential owners of homes in Australia, largely but not entirely located in metropolitan areas. · The issue as to the likelihood or otherwise of such persons being misled or deceived, or being likely to be misled or deceived, by the advertising, falls to be considered by reference to all people who come within that section of the public, including the astute and the gullible, the intelligent and the not so intelligent, the well educated and the poorly educated. · It is irrelevant to liability that there is no evidence of any member of the public having been actually misled or deceived, so long as the Court can conclude that the conduct was likely to mislead or deceive; however evidence that a particular person has in fact formed an erroneous conclusion, though not conclusive of the fact that the conduct is misleading or deceptive, may be persuasive: Taco Co of Australia Inc v Taco Bell Pty Limited (1982) 42 ALR 177 at 199 (Deane and Fitzgerald JJ). (iii) The Court is not concerned with a search for a single meaning of alleged representation which would be conveyed to all to whom it was directed, and if in a particular case, certain words would be likely to cause an erroneous belief to be adopted by a significant number of persons, then a contravention of s 52 (and s 53) may be established: Siddons Pty Ltd v The Stanley Works Pty Ltd (1991) 29 FCR 14 at 20 (Wilcox and Heerey JJ). (iv) The failure to reveal the existence of conditions is of particular significance where the representation is that something is 'free', and a representation as to 'no establishment fee' is alien to a representation that something is fee; in Nationwide News Pty Limited v Australian Competition and Consumer Commission (1996) 142 ALR 212 at 224, Lindgren J (with whom Spender and Lehane JJ agreed) said as follows: '… the cases to which I have referred demonstrate judicial recognition of the propensity of the word "free" in advertising to mislead or deceive. An advertiser relies on common understandings at its peril. Any respect in which goods or services offered as "free" may not be free should be prominently and clearly spelt out so that the magnetism of the word "free" is appropriately qualified.' ACCC submitted that '… first impressions in respect of an advertisement, that says something is free, leave very strong impressions, and if they are to be qualified, they may need to be clearly qualified'. 45 ACCC further invoked the following principles enunciated in the context of newspaper advertising, which it contended applied with similar or analogous force to television advertising: (i) a published advertisement is not selective as to the perceptibility of its readers; an advertiser may be assumed to know that the readers will include the shrewd and the ingenious, the educated and the uneducated, and the experienced and inexperienced, in relation to commercial transactions; an advertiser is not entitled to assume that the reader will be able to supply for himself or herself omitted facts, or to resolve ambiguities; an advertisement may be misleading, even though it fails to deceive more wary readers: CRW Pty Ltd v Sneddon (1972) AR 17 at 28 (Sheldon and Sheppard JJ presiding as members of the Industrial Commission); and (ii) many readers will not study an advertisement closely, but instead read it fleetingly and absorb its general thrust: Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 111 ALR 61 at 64 (Sheppard J). 46 Emphasis was also accorded by ACCC to the following passage appearing in the unanimous reasons for judgment of the High Court in Campomar Sociedad, Limitada and Another v Nike International Limited and Another (2000) 202 CLR 45 at [105], in the context of conduct involving representations in trade or commerce relating to goods presented for retail sale in contravention of s 52 of the TP Act: 'Nevertheless, in an assessment of the reactions or likely reactions of the "ordinary" or "reasonable" members of the class of prospective purchasers of a mass-marketed product for general use, such as athletic sportswear or perfumery products, the court may well decline to regard as controlling the application of s 52 those assumptions by persons whose reactions are extreme or fanciful… Such assumptions… would not be attributed to the "ordinary" or "reasonable" members of the classes of prospective purchasers… The initial question which must be determined is whether the misconceptions, or deceptions, alleged to arise or to be likely to arise are properly to be attributed to the ordinary or reasonable members of the classes of prospective purchasers.' Of course, care needs to be taken in assessing the application to the circumstances of the present proceedings of judicial dicta enunciated in the context of proceedings involving mass-marketed products acquired by purchase over the counter. A consumer's response to a representation inducing application for the grant by the representor of a home loan, to be secured on realty, may well involve dynamics and implications, particularly in the light of an interval of time for implementation of documentation, at variance with or different to a consumer's response to a representation in the former circumstances. 47 In relation to the Bank's reliance upon the explicit qualifications of the televised advertisements identified by par (a) as extracted in [20(vii)] above, albeit to the limited extent that ultimately occurred, and the pre-contractual discussions normally involved before obtaining a home loan from a lending institution, ACCC referred me to authorities which have involved issues as to whether qualifications and disclaimers made by an advertiser may be sufficient in all the circumstances to subsequently nullify the consequences of an otherwise false, misleading or deceptive representation which induced affirmative consumer responses in the first place. Particular emphasis was given by ACCC to advertising or promotional material which used enticing words such as 'free'. An authority cited by ACCC additionally to Nationwide was Trade Practices Commission v Optus Communications Pty Ltdand Another (1996) 64 FCR 326 at 338-339, where the following dictum of Tamberlin J was said to exemplify at least the caution to be extended in those circumstances: 'The television advertisements must be viewed in the framework of a comprehensive and intensive newspaper and radio promotion, in which great emphasis is laid on the attractiveness of the offer of "free local weekend calls". In the course of this short television broadcast, there are mellifluous voice-overs which refer to and emphasis a free "local call" on three separate occasions. The word "free" is stressed… The word free has a particularly strong attraction and unless adequately qualified, where necessary, it can readily produce a wrong understanding… The viewer is left with the clear and dominant impression that the advertisement means what it says… The reference to "some exclusions" appears at the conclusion of the superscript and appears only once, which may not be reached by the ordinary reader. There is no forewarning of the specific wording of the exclusions. It is a very momentary and fleeting message in small print and plays a very subservient role in the advertisement… I doubt whether a reasonable viewer would appreciate that there was any significant exclusion which flew in the face of the dominant representation of free local calls.' His Honour thereafter spoke of the enticement of viewers into 'the marketing web' by the promotion there under scrutiny, antecedently to the signing of formal documentation, and the significance of the catchword 'free' in determining the point at which contravention of s 52 may have occurred. 48 It was by reference to Nationwide and Optus, and other authorities which have addressed the significance of exclusions, qualifications and disclaimers whether contained in advertising material or later presented to the consumer for signature, that ACCC submitted that '[e]ssentially, the issue becomes one of fact and degree' and further that '[h]ere, the qualifications and disclaimers in the advertising material were said to be so lacking in content and prominence as to be of no assistance to a prospective customer of [the Bank] and they do not dispel the otherwise misleading or deceptive nature of the representations made'. Referring to the Bank's defences which I have reproduced in [20(vii)] above, ACCC further submitted that even if it were the fact that customers became fully aware of the detail of the matters therein set out, that circumstance would not excuse or somehow cure the misleading and deceptive nature of the Bank's advertising in the first place. I was referred additionally in that context to the following passage from TEC & Thomas (Australia) Pty Ltd v Matsumiya Computer Co Pty Ltd (1984) 1 FCR 28 at 38 (Beaumont J): '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.' That dictum was thus an earlier reflection of the Optus notion of enticement into the marketing web as contravening conduct. 49 ACCC further submitted moreover that even if corrected in the same advertising display, or subsequently prior to a customer purchasing the advertised goods or services, that corrected advertising display may still contravene s 52 in two situations. First, if the correction is less prominent than the impugned statement, the overall impression may be such as to nevertheless attract a characterisation as misleading or deceptive. Secondly, since it is of course the function and purpose of advertising to attract the attention of consumers, the circumstance of misleading or deceptive conduct having occurred will not normally be removed as to its consequences by subsequent correction of the advertising by the promoter. Particular emphasis was consequently placed by ACCC on the principle that the conduct of advertisers, when in the nature of 'first contact deception', affords advertisers potentially unfair advantages over other advertisers of the same goods or services, and may also occasion inconvenience to consumers when such conduct is initially, albeit not ultimately, relied upon in the formation of a transaction (such as here in the case of a mortgage of realty) which is not capable of consummation instantaneously following upon an advertiser's representation. As stated by Lee J in Australian Competition and Consumer Commission v Target Australia Pty Ltd [2001] FCA 1326 at [15], '… it is often the case that the first impression will be the lasting impression'. ACCC emphasised, that it was not to be taken as submitting that the Bank's conduct was misleading and deceptive because it involved unfair competition with other banks. It was rather that for instance in determining certain appropriate relief to be granted for the misleading and deceptive conduct of the Bank directed at home loan applicants, an inevitable concomitant of the Bank's conduct was the taking of an unfair competitive advantage over its rivals. In Parkdale, Mason J (as he then was) spoke (at 204) of the statutory policy of Part V of the TP Act, and s 52 thereof in particular, namely '… that the interests of a consumer of goods or services will best be served when manufacturers compete vigorously without adopting restrictive practices and observe prescribed standards of conduct in their dealings with consumers'. 50 It followed, so ACCC continued upon this aspect of its submissions, that any attempt by an advertiser to escape liability under s 52, upon the basis that a misleading or deceptive statement was likely to have been corrected, in the events which subsequently would have happened during the process of finalisation discussions, formal loan application and subsequent legal documentation, should fail. Any purported correction should occur at the same time, and with the same prominence, as the making of the misleading or deceptive statement, ACCC duly added. Any such promptness of correction would be something unlikely to occur in reality, ACCC further submitted, otherwise than in circumstances of a bona fide mistake drawn promptly to the attention of the advertiser. Further authority cited by ACCC in that context included the following dictum of Northrop J in St Lukes Health Insurance v Medical Benefits Fund of Australia Ltd (1995) ATPR 41-428 at 40,823: '[E]ven if I accept – as I do accept – the fact that MBF would explain to persons applying for the cover what were [sic] the effect of the terms of the package that was entered into, that does not overcome any misleading or deceptive conduct which had occurred at any earlier stage when the member of the public seeing the advertisement, or hearing it, goes along to MBF to consider entering into it. The misleading or deceptive conduct occurs at the time of the publication of the television advertisement or of the publication of the newspaper advertisement.' That dictum has been subsequently cited and applied in a number of decisions of this Court. Of course, events subsequent to a representation may also be material to the measure of damage sustained, and in cases such as the present, of any penalty in the nature for instance of corrective advertising which should be imposed. 51 In the course of address, and in the light of some of the authorities which I have reviewed, senior counsel for ACCC fairly conceded that '… it is difficult to imagine that there would be people who got to the point of signing up who had not had the conditions drawn to their attention at this stage… (but) on liability… that makes no difference… misleading advertising… got them in the door'. ACCC submitted moreover that just as it is irrelevant to liability under s 52 that no person was actually misled or deceived, it was equally irrelevant to liability on the Bank's part that any person, who had been misled or deceived, suffered any loss as a result. The question of establishment of any such loss becomes material only where damages or other remedies such as corrective advertising are sought, a matter to which I will later return in the light of the nature and extent of corrective advertising sought by ACCC. Of course, in proceedings where ACCC is not an applicant for relief, the absence of proved loss would be fatal to an entitlement at least to general damages. 52 Nevertheless, as may be seen from the Bank's defences appearing for instance in pars (b), (c) and (d) of [20(vii)] above, the Bank has not, at least primarily, sought to attribute the significance of its formal mortgage lending requirements and other internal procedures only to remedies of injunction and corrective advertising, but has relied on the existence of such requirements and procedures as dismissive of the establishment in the first place of contravention of ss 52 and 53 of the TP Act. The resolution of this litigation has therefore involved considerations not confined to likely or conceivable consumer responses to advertising, and has extended to the significance or otherwise of formal Bank processes of subsequent written loan applications, and thus for instance the provision by consumers of information about their capacity to repay interest bearing borrowings, and the further significance or otherwise thereafter of entry into legal documentation, perhaps in some instances involving the retainer of a consumers' legal representatives. 53 ACCC concluded its initial written submissions on the issue of contravention of s 52 of the TP Act, primarily in relation to the television advertising of the Bank, though not to the exclusion of in-branch advertising, as follows: 'Taking into account the target audience, the prominence and attraction of the representation that home loans were available without payment of an establishment fee, the lack of appropriate disclaimers or qualifications, and the fact that some persons were in fact misled and deceived, namely Ms Williams and Messrs Humphries and De Jong, the ACCC submits that both the TV advertising and in-branch advertising contravened s 52 of the Act.' That submission of ACCC implicitly anticipated what the Bank did seek to characterise as a shortcoming inherent in ACCC's case, namely that the consequences of the alleged misleading and deception of those three abovenamed persons was confined to personal circumstances of annoyance and inconvenience by reason of personal time spent upon making abortive enquiries of the Bank upon the faith of the Bank's television advertising, and in Ms Williams' case, the in-branch advertising as well. 54 As I have already foreshadowed, the same scope of conduct of the Bank as that relied upon for contravention of s 52 of the TP Act was asserted by ACCC to have involved contraventions of pars (c), (e) and (g) of s 53 of the TP Act as well, both in relation to the television and the in-branch advertising. In that context, ACCC emphasised that to succeed in these proceedings, the standard of proof which it must meet is that of the balance of probabilities (Australian Competition and Consumer Commission v The Maritime Union of Australia (2001) 187 ALR 487), in contrast to proceedings brought under s 75AZC of Division 2 of Part VC of the TP Act which are criminal in purport and effect. ACCC emphasised also that no penalties were sought, nor indeed are available in the proceedings as presently structured. I did not understand the Bank to submit to the contrary of the latter proposition. 55 Addressing first par (c) of s 53 specifically, ACCC submitted that for the Bank to represent that no establishment fee was payable in respect of its home loans was to make a representation that its services of the nature of the provision of those loans had a 'benefit' which they did not have, and thus contravened par (c) of s 53. Reliance was placed by ACCC in that particular statutory context upon Australian Competition and Consumer Commission v Wizard Mortgage Corporation Limited (2002) ATPR 41-903, which also related to television advertising by a lending institution. Since the factual circumstances in Wizard bear a closer analogy to those in the present case than the other authorities which were cited by ACCC, and the relief granted in Wizard was based upon ss 53(c), and 53(e) (as well as s 53(aa)) of the TP Act, in addition to s 52 thereof, it is appropriate that I set out in full pars 1 to 4 of the reasons for judgment of Merkel J, which summarised the circumstances giving rise to those proceedings: '1. During June and July 2001 the respondent ("Wizard") caused a television advertisement, which promoted certain features of its loan products and services, to be broadcast in Victoria and Queensland. The advertisement featured the executive chairman of Wizard, Mr Mark Bouris, who made the following statements: "The question borrowers ask me most: What's the secret to paying off my mortgage faster? The secret's in the flexibility of the loan. Access and features such as direct salary crediting and changing from monthly payments to fortnightly or weekly and in not paying ongoing monthly fees. You can pay that saving into extra loan repayments. Of course flexibility and features should be matched by a great variable rate." 2. Following Mr Bouris's statements, there was a still frame on which the interest rate of "5.64% p.a." appeared in large type in the advertisement. Directly underneath, the words "variable rate" appeared and at the foot of the frame, in small print, the words "To approved applicants. Fees, charges and conditions apply" appeared. 3. The advertisement was false and misleading as Wizard's loan products and services did not include a product or service with all of the features offered in the advertisement. The only type of loan offered by Wizard with the features of: direct salary crediting, changing from monthly to fortnightly or weekly repayments and the absence of ongoing monthly fees carried, at the time of the advertisement, a variable interest rate of 6.47% per annum or a fixed interest rate of up to 7.4% per annum. The only loan product or service available from Wizard that was being offered at an interest rate of 5.64% per annum was Wizard's "Rate Breaker" loan, which was available for owner occupied residential property purchases but which did not provide for direct salary crediting or changing from monthly to fortnightly or weekly repayments. Any borrower who wished to obtain those features in respect of a "Rate Breaker" loan was required to pay an additional $1,000. 4. On 13 July 2001, after several Wizard branches had expressed their concern that the advertisement could be confusing, Wizard withdrew the advertisement.' The circumstance here the subject of an alleged misrepresentation of a benefit is of course the absence of any imposition of an establishment fee for the grant of a home loan. That bears an analogy to the misrepresentation in Wizard as to savings in interest. 56 As to its application to the circumstances of the present case of par (e) of s 53 of the TP Act, ACCC contended that the misrepresentation of the Bank related to 'the price' of its services, since an establishment fee for a home loan would constitute part of the price thereof to be paid by the borrower for the service constituted by each loan. The definition of 'price' contained in s 4(1) of the TP Act includes 'a charge of any description'. I was referred by ACCC to Australian Competition and Consumer Commission v Dell Computer Pty Limited (2003) ATPR 41-910, where it was held by majority (Branson and Stone JJ, Emmett J dissenting and agreeing with the primary judge Jacobson J) that since what was sold (ie computers) was a 'delivered product', ACCC was correct in its contention that the price of goods included, in the particular circumstances of that case, the cost of delivery thereof, with the consequence that a contravention of s 53(e) (in addition to s 52) had taken place. The minority view was to the effect that the 'sale' and 'delivery' constituted separate aspects of the seller's obligations. ACCC submitted, by way of analogy to the majority view, that in order to have obtained a home loan from the Bank, a customer was required to meet various fees and charges, which might otherwise include an establishment fee, and therefore the representation as to absence of an establishment fee related to the price of a home loan. 57 As to the further application of par (g) of s 53 of the TP Act, which relates to representations concerning 'the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy', ACCC submitted first, that a prospective customer of the Bank would not have been made aware by the Bank's advertising of the existence and effect of the 'condition' comprising the qualifications to 'no establishment fee'. It was said that each of Mr de Jong, Ms Williams and Mr Humphries claimed in their affidavit evidence not to have seen in the television advertisements any conditions relating in particular to any qualification of the Bank's 'no establishment fee', and Ms Williams said likewise in relation to what she saw of the in-branch advertising upon entering a branch of the Bank's premises. 58 Moreover it was submitted by ACCC that even if some persons had been able to read the purported qualifications and disclaimers in relation to the television advertising and the in-branch advertising, the contents thereof would not have conveyed to a reasonable viewer or reader that in order to obtain a home loan from the Bank without paying an establishment fee, other products of the Bank were required to be held or obtained, and that it could 'hardly be said' that such qualifications and disclaimers upon the Bank's offer were such that a reasonable viewer or reader would associate the same with that offer. Accordingly, so ACCC's submission continued, it became incumbent upon the Bank to bring that significant aspect of the Bank's television and in-branch advertising to television and in-branch viewers 'in some meaningful way', words such as 'conditions apply' being said to be 'grossly insufficient' for that purpose. The alleged failure of the Bank so to do was thus said to constitute contravention of the 'effect of any condition' within par (g) of s 53 of the TP Act. The Bank's submissions and some preliminary observations thereon 59 Addressing first the issues arising as to the Bank's televised advertising, the Bank said that it was 'content to accept' that the televised advertising 'generally' represented to existing and prospective customers that they could obtain from the Bank, in the sense that 'it was possible to obtain' or 'within the power or capacity of customers to obtain', home loans without paying an establishment fee. The Bank thereafter advanced the following contentions upon that basis, to which I have appended some preliminary observations: (i) the television commercials did not represent, explicitly or implicitly, that the Bank's offer was unconditional, or that 'every customer who wants a home loan will get one on this basis' that is, without payment of an establishment fee, or that there were no conditions or qualifications on an entitlement to obtain a home loan without payment of an establishment fee; (ii) any reasonable or ordinary viewer of the advertisements would assume or infer that the offer would be subject to some conditions, and that in order to find out about those conditions, it would be necessary to make contact with the Bank by telephoning the advertised number; (iii) each television commercial merely conveyed to the consumer that the Bank had a range of home loans to suit almost every consumer's needs, and invited the consumer to find out more about the range of home loans offered by the Bank; moreover each commercial invited the consumer to contact the Bank and find out which home loan might suit that consumer's 'changing needs, then and in the future'; (iv) in the case of the 'Blood Nut' and 'Where's the Action' televised commercials, the same 'merely tells the consumer/viewer that the Bank has a range of home loans starting from 4.89% per annum', and further that '[s]ome of those loans might also attract no establishment fee' and '[o]thers may attract no switching fee'; it was said further that the reasonable viewer would understand that some loans may have higher interest rates, whereas others may have a lower interest rate', and 'the viewer is left to speculate as to which loans attract a higher interest rate and which a lower interest rate'; (v) similarly in the case of the second or 'Sick Boy' commercial, it was submitted by the Bank that the consumer would understand therefrom that the Bank had available a home loan with the feature indicated in the commercial, and that the viewer was invited to contact the Bank to find out all of the features of that home loan, and to see whether that home loan was available to that viewer; those features were described as what conditions were on offer, and whether the viewer would qualify for a loan in accordance with the offer; and (vi) every reasonable consumer would further understand that banks and other financial institutions do not simply hand out loans to any person who applies for the same, and that he or she would need to meet various criteria relating to, inter alia, income, commitments and assets, and further that all such criteria could never be included in a 30 second television commercial, and further again that it would be during the course of subsequent discussions with the Bank when those details would be revealed; moreover the 'consumer evidence' (ie that of Messrs De Jong and Humphries and of Ms Williams), together with the documentary evidence, established that as soon as an interested person contacted the Bank, whether on the telephone, through the internet, by reading the Bank's brochure, or by attending in person at the Bank, 'the relevant qualifications were made abundantly clear'; upon that footing, it was submitted that the circumstance that the consumers may have been disappointed to have confirmed to them what (supposedly) must have been obvious, does not demonstrate that they were misled or deceived by the Bank. The observation needs to be made at once that the foregoing submissions tend not to confront the emphatic message of the television advertising to the effect that no establishment fees would be payable to the Bank in respect of the advertised home loans. 60 In purported support of the theme of the Bank's submissions, the Bank referred me to the notion of 'transient confusion' discussed in SAP Australia Ltd v Sapient Australia Pty Ltd (1999) 48 IPR 593 (per French, Heerey and Lindgren JJ). At 607, their Honours said that: '… it was rightly to be observed that misleading or deceptive conduct in trade or commerce is not limited to conduct which induces or is likely to induce entry into a transaction. So to propose would be to limit s 52 of the TP Act in a way not justified by its terms. Conduct which misleads a customer so that, under some mistaken impression of a trader's connection or affiliation, he or she opens negotiations or invites approaches may be misleading, even if the true position emerges before the transaction is concluded…' After then referring to authority, including Optus and TEC & Thomas, the Full Court observed (at 607) as follows: 'It is consistent with the general proposition, however, to accept that conduct may not be misleading or deceptive or likely to mislead or deceive, notwithstanding that it may engender temporary and commercial irrelevant error.' Once however the conclusion may rightly be drawn that misleading and deceptive conduct has in fact occurred, for instance as in the case here, by consumers being drawn into the advertiser's marketing web, the inference is open to be drawn that circumstances to the effect first cited from SAP have crystallised, thereby leaving no room for the operation of the kind of qualifying situation secondly cited above from SAP. 61 It is of critical importance to appreciate that in all three televised advertisements, the theme of pre-eminent emphasis was that of 'no establishment fee' being charged, in the event that the Bank would make available the advertised home loans. I observe incidentally that the 'Blood Nut' and 'Where's the Action' television advertisements, though not the 'Sick Boy' television advertisement, purported to qualify references to 'home loans' by the description 'selected'. That purported qualification was not apt to absolve the circumstance of home loans being in fact available by the Bank only upon the basis of any one or more of the establishment fee regimes set out in [11(iii)] above, subject only to the two exceptions where 'nil' appears in the final column, and which two exceptions required the acquisition by the home loan borrower in any event of two or three of the Bank's products respectively, normally at a monetary cost, directly or indirectly. I do not think incidentally that the word 'selected' purported to qualify in any event the expression 'no establishment fee', and the contrary proposition was not submitted by the Bank. 62 As I have therefore foreshadowed, it was no answer for the Bank to rejoin to the thrust of ACCC's complaint to the effect that the mind of misled consumers would most likely have been disabused of the Bank's televised representations as to 'no establishment fee' being payable, prior to commitment to any of the Bank's advertised home loans, given that the same did have the effect of misleading and deceiving television viewers, to the extent of inducing them into the marketing web. Authorities which I have earlier cited, commencing with St Lukes, have addressed the significance of misleading and deceptive conduct at the critical point of occurrence of that conduct. It is conduct to be contrasted with the notion merely of 'transient confusion' described in the second passage I have cited from SAP. 63 I am of the opinion that it must be concluded that even if, in the events which may have happened, the persons who subsequently took up the Bank's home loans, originally upon the inducement of the television advertisements, ultimately did so with knowledge subsequently gained that establishment fees were payable, pursuant to the scheme tabulated in [11(iii)] above, the Bank would have nevertheless remained exposed to the present proceedings brought at the instance of ACCC. The circumstances of this case attract in my view conclusions of the description reached in Nationwide, Optus, TEC & Thomas and St Lukes which I have earlier extracted. Moreover as was earlier pointed out by the High Court, in the course of its discussions of the implications of s 52 of the TP Act (Hornsby Building Information Centre and Parkdale Custom Built Furniture at [44(i)] above), the statutory requirement not to mislead and deceive was designed to create a level playing field by requiring rival entities engaged in trade and commerce to observe prescribed standards of conduct in their dealings with customers. It follows that the concession made by the Bank does not go to the critical point arising in these proceedings. 64 As ACCC rightly submitted, the Bank's 'no establishment fee' theme of advertising had the tendency or capacity to provide the Bank with an unfair advantage over its lending institution rivals, by attracting consumer enquiry per medium of that advertising. That is not to say, as ACCC emphasised, that the Bank's conduct was misleading and deceptive because it involved unfair competition in relation to its rivals in business and commerce. It was misleading and deceptive because it was wrong to assert that no establishment fee was payable in respect of the Bank's home loans, in the light of the circumstances exemplified in [11(iii)] above. Leaving aside the extent of the monetary significance appertaining to requirements for acquisition of the Bank's products, the Bank's advertised home loans thus involved the requirement for payment of an establishment fee, albeit in varying amounts, in all but two of the eleven circumstances described in [11(iii)] above. The Bank's representation as to 'no establishment fee' had the capacity to entice or induce into the Bank's marketing web, viewers of the television advertisements interested in acquiring home loans, and that is the critical point of the case. That the televised advertisements had the capacity to achieve that commercial advantage for the Bank is reflected in the initial reactions of the three members of the public who provided affidavit and viva voce testimony in the proceedings. Although it was only those three persons, together with one anonymous person, who took the trouble to register complaint with ACCC, it cannot be assumed that other television viewers might have been annoyed or inconvenienced, without bothering to register a complaint with ACCC. It appears incidentally that the Bank did not have in place a system for recording all telephone responses to its media advertisements. 65 The Bank further submitted that ACCC's case '… overstates the ability of a television commercial to convey the entirety of the facts regarding a home loan'. So much may be accepted. That circumstance renders all the more important the obligation of television advertisers to be careful not to misstate, in the course of televised advertising, the benefits and advantages of their goods and services. The Bank further submitted in that context '[a]ll that is conveyed by the [Bank's] television commercials… is that the [Bank] has a range of home loan products with a variety of features', and that each of the television commercials amounted to '… nothing more than an invitation to consumers to contact the Bank and find out all of the terms, conditions and features which apply in the case of each of the home loans'. That further submission tends to understate the promotional impact of the dominant theme or 'pull' of the 'no establishment fee' representation. 66 The Bank contended nevertheless that the circumstances of the case were to be distinguished from those in Optus, an authority upon which ACCC relied, where the impugned advertising as to 'free weekend local calls', up to a specified limit of $52 per month, did not disclose that a written contract would be required by Optus to be signed and would exclude mobile telephone calls from the advertised benefit. Tamberlin J found as follows (at 340): 'I am not persuaded that any or all of the post-broadcast steps leading to the signing of the contract would dispel the impression generated by the misleading message in the television broadcast in all or most cases.' As his Honour thereafter pointed out, once the viewer is enticed into 'the marketing web' by an advertisement, the end result is not predicable for all cases and in all circumstances. The proposition of the Bank that every (my emphasis) home loan borrower would have come to an appreciation, prior to ultimate commitment to borrowing by legal formalities, of the full implications of the 'no establishment fee' representation earlier made by the Bank's advertising on television, cannot be regarded as unexceptionable, notwithstanding, as senior counsel for ACCC frankly appeared to concede, that an ultimate appreciation to that effect on the part of borrowers generally would have been a likely outcome. In any event, there remains, in contexts such as the present, the factor of conceivably adverse consequences to a competitive market by misleading advertising on the part of one participant therein. 67 On a related theme, the Bank acknowledged that in the case of television commercials, the initial impression conveyed thereby may be critical, but submitted that initial impressions here must be appraised in the context of, and having regard to, the nature of the Bank's so-called products the subject of the television commercials. Every consumer would understand, so the Bank's submission continued, that the subject commercials were 'about a complicated and expensive product', which for most consumers may be 'one of the most important decisions they would make in their lifetime'. It was submitted to be inherently improbable that a consumer would form the impression, from a television advertisement of thirty seconds duration, twenty-one seconds whereof were devoted to a humorous incident, yet only nine seconds to the 'product', that the Bank was thereby communicating everything that was to be known about the Bank's home loans, including the conditions to which they would be subject if granted. Rather, so the submission continued, the overwhelming impression conveyed by the television advertisements was that the Bank had a range of home loan products available, having varying features including a 'no establishment fee' feature, and that it was necessary to contact the Bank to find out more, including any relevant conditions of that feature. That submission again fails to understand adequately the pre-eminence and impact of the unqualified 'no establishment fee' message of the television advertising, and the likelihood of consumers being thereby drawn into the marketing auspices of the Bank's consultants. 68 The Bank also contended that eligibility to qualify for its 'no establishment fee' home loan, in particular in relation to the only two cases of a 'nil' establishment fee appearing in [11(iii)] above), by obtaining two or three of the Bank's products (as the case may be), was 'not exactly onerous'. For example, the Bank's submission continued, Mr De Jong said that he was required by the bank officer to whom he spoke to first open an account with the Bank from which the loan repayments could be made, and secondly, either to obtain a credit card, for which he was not required to pay a fee on application, and which he was not required thereafter to use, and to attend an interview with an insurance consultant. (I should interpolate that after the first year, the Bank's credit card fees were to apply to home loan borrowers, and with all other credit card users, irrespective of use). Similar requirements were said to have been mentioned by the Bank to Mr Humphries. Other conditions, namely effecting home insurance and taking out mortgage protection insurance, were characterised by the Bank as matters that any borrower would ordinarily expect to be imposed in any lending transaction with a bank. There was no evidence however as to at least mortgage protection insurance being a usual lending institution requirement, and moreover the Bank's so-called 'product' requirements extended beyond home fabric insurance to home contents insurance, and to opening a current bank account with the Bank into which the borrower's net wage would be required to be deposited in order to meet at least home loan mortgage repayments. All of those requirements involved a cost to putative home loan borrowers. ACCC at least implicitly categorised the Bank's so-called products as involving a cost in the nature of an establishment fee. 69 The Bank next submitted on an analogous theme that to acquire a Commonwealth Bank credit card, which the borrower would not be required to thereafter actually use, would have been a relatively simple 'product' for a borrower to take up. However a home loan borrower might well think it to be important to his or her ongoing relationship with the Bank to use that facility to the exclusion of any of his or her prior credit card arrangements, and thus in any event to avoid the duplication of payment of credit card fees. To open a Commonwealth Bank deposit account for the borrower's 'direct salary credit' would presumably, for many borrowers, require as a practical matter the discontinuance of an existing bank (or credit union) account, and thus of an existing relationship of potentially ongoing significance with another financial institution, in order for the borrower to avoid incurring unnecessary fees and complication involved in the maintenance of two concurrent bank accounts. To change insurers of both home and contents risks to the Bank's nominated insurers could be conceivably onerous, or at least inconvenient, in its implications to some borrowers, for instance those with longstanding insurance associations with other insurers carrying accrued benefits of 'no claim' rebates, and other benefits of an intangible kind arising out of perhaps long established associations. The requirement to undertake mortgage protection insurance would also add to the cost of borrowing. Once again, the thrust of the Bank's submission involved the postulation that the expense of these further Bank products was in the nature of an establishment fee. It may be readily inferred, incidentally, that the Bank's nominated insurers in both instances, to whom reference has already been made, are corporately related to the Bank, and hence the financial benefit at least indirectly to the Bank in imposing those insurance requirements. 70 As to the Bank's in-branch advertising, the invitations to consumers thereby made were said by the Bank to be 'even clearer' in support of the Bank's contention as to an absence of breach of the TP Act. Each poster was described by the Bank as a statement or testimonial by an unidentified person disclaiming 'regret', consequentially upon taking out a home loan with (or 'switching' a home loan to) the Bank, and paying the advertised interest rate. The consumer was further told, so the contention continued, that this notional person also did not 'regret' non-payment of establishment fees. Thus, so the Bank submitted, the message the subject of its in-branch 'poster' representations was that the Bank was offering its customers a means of obtaining a home loan, at the nominated interest rate, without having to pay an establishment fee (or for that matter a switching fee), and that to find out more about all that, the in-branch advertising material invited customers to pick up a brochure. The in-branch advertising gave emphasis to the word 'no' in the prominently featured phrase 'paying no establishment fees', as may be seen from the copies of the in-branch advertising incorporated by way of annexure to these reasons. 71 What was presented by the Bank's in-branch promotional material to prospective home loan customers, so the Bank further contended, was simply a list of features of which a reasonable consumer could expect to be informed by the Bank. It was said moreover that the in-branch posters and other advertising material did not suggest that all of those features would be simultaneously acquired by the putative home loan borrower, or that they would be all available irrespective of the borrower's circumstances. So much was said to be 'clear' from the fact that 'a range' of interest rates was identified in the various advertisements over the period of the promotion (assuming of course that interested readers would have seen all of those differing interest rates, or most of them, at the successive times of publication thereof, prior to making any final commitment to the Bank), and further that the posters did not purport to describe any single home loan as available from the Bank. The reasonable consumer, so it was contended by the Bank, would have understood that the Bank's home loans had advantages which included one or more of the listed features, and further that the list was not exhaustive. Moreover it was contended by the Bank that the invitation 'Pick up a brochure. You won't regret it', appearing at the foot of the in-branch advertising material, invited the consumer to take the trouble to find out which particular features applied to which home loans, and for which home loans the customer might qualify. Even if all of those contentions are correct, what is of critical importance, as I have emphasised, was the prominence of the advertised theme 'paying no establishment fees', with the word 'no' appearing in larger letters than the other words of that theme. I would repeat here what I have already said as to the likely inducement of customers into the Bank's marketing web, in the context of my review of the Bank's submissions on television advertising. My conclusions upon the Bank's television advertisements 72 My conclusion upon the Bank's television advertisements is that for the Bank to have caused to be advertised on television that 'no establishment fee' was payable in relation to 'selected home loans' (that expression being the subject of the 'Blood Nut' and 'Where's the Action' television advertisements), and of 'a great home loan' (that expression being the subject of the 'Sick Boy' advertisement), rendered the Bank's television advertisements misleading and deceptive within the scope of operation of s 52 of the TP Act. It is a conclusion which I am comfortably satisfied should be reached in accordance with the Briginshaw test (Australian Competition and Consumer Commission v Maritime Union of Australia (2001) 187 ALR 487 at [52-54]), given that such authority applies to proceedings brought by ACCC for contravention of s 52, notwithstanding that it specifically related to contravention of the coercion provisions of s 60 of Part V of the TP Act. 73 That conclusion should at least principally follow, because as appears from the conditions of the Bank's home loan scheme reproduced by the evidence in the proceedings (see [11(iii)] above): (i) the Bank's then usual establishment fee of $600 was still to be payable in respect of home loans under $80,000, in circumstances where the borrower did not acquire any of the Bank's products; and (ii) an establishment fee varying in amount from $100 to $500, was to be payable, conditionally upon the amount to be borrowed, and the number of the Bank's products to be acquired, varying from one to three in number, in the case of eight further categories of home loans. 74 The circumstance that no establishment fee was to be payable at all in respect of the remaining two (ie out of the total of eleven) categories of the Bank's home loans, one relating to loans exceeding $200,000 where two of the Bank's products were to be in any event acquired, and the other being for loans between $80,000 to $199,999, where three of the Bank's products had to be in any event acquired, did not legitimise or sustain the 'no establishment fee' representation of the television advertising. Leaving aside for the moment the cost implications of fulfilment of conditions as to acquisition of products of the Bank in those two particular situations (as indeed also in the case of six of the other categories), it was not correct or sustainable to represent the Bank's home loan financing scheme as involving or featuring 'no establishment fee'. Establishment fees were to be paid in cash in nine of the eleven categories (see once again [11(iii)] above). That circumstance sufficed in my opinion to demonstrate that the 'no establishment fee' representation of the television and in-branch advertising was false or misleading. 75 In any event as to those two latter loan categories appearing in [11(iii)] above, where no establishment fee was stated therein to be payable, my review of the nature and incidence of the Bank's products indicates that each would have carried, except perhaps in the few exceptional circumstances I have identified, a financial cost to the putative home borrower, and conversely a financial benefit to the Bank directly or indirectly ('indirectly' by reference to the identity of the Bank's nominated insurers), being a cost additional of course to interest on the home loan. Whether that cost can be said to have fallen within the advertised expression 'establishment fee' raises an issue of some difficulty which is ultimately unnecessary for me to decide. Nevertheless I would add the further observations below, since it appears to have been the contention of ACCC that such was the case. 76 The evidence does not yield any definitive indication of the likely cost of each of the Bank's products, whether in respect of the first year of taking out a home loan, or otherwise, and understandably so, as the same would vary from case to case. It is reasonably open to be inferred that once a prospective home loan borrower responded affirmatively to the Bank's television advertised offers, there would have been presented to the Bank the opportunity to secure his or her patronage of the Bank's products, to the extent of the number of those products nominated for the respective loan segments set out in [11(iii)] above. Of course the Bank might find itself confined to some relatively unrewarding products in particular cases, but the opportunity for gaining financial rewarding outcomes from its products in other situations was presented to the Bank. I would incline to the view that in the context of the representation as to 'no establishment fee', the Bank's scheme for reduction (or in the two cases abovementioned abolition) of establishment fees, based upon the corresponding need for taking up a specified number of Bank products, was more probably than not, susceptible to being characterised as misleading. 77 I conclude that ACCC has established infringement on the part of the Bank of s 52 of the TP Act in relation to the representations of its televised advertising of its home loans. 78 I am further of the opinion that by parity of the reasoning which I have adopted on the s 52 issue, the Bank's televised advertisements also contravened s 53(c) of the TP Act, in that they represented that the Bank's 'services', taking the form of its advertised home loans, had a 'benefit' which they did not have, that is, the absence of imposition of an establishment fee in the case of nine out of the eleven categories thereof, without taking into account the cost involved to borrowers in fulfilment of conditions as to acquisition of the Bank's products in the circumstances I have earlier discussed. I am further of the opinion that the Bank's televised advertisements also contravened s 53(e) of the TP Act, since an establishment fee payable as a condition of the grant of any one of the subject three home loans would have formed part of 'the price' thereof, again quite apart from the implications of borrowers being required to take up any one or more of the Bank's products. I observe incidentally that in Wizard, the lending institution there involved was found to have infringed both pars (c) and (e) of s 53, on account of its misrepresentations as to the benefits or advantages of certain mortgage loans the subject of television advertisements. 79 Moreover I would conclude that there also occurred contravention on the Bank's part of s 53(g) of the TP Act, in that by advertising on television that the Bank's home loans did not attract the imposition of an establishment fee, the Bank thereby made a false or misleading representation concerning the exclusion of a material condition of the majority of those bank loans, quite apart once again from the implications of requirements to take up one or more of the Bank's products. My conclusions upon the Bank's in-branch advertising 80 The conclusions which I have reached in relation to the Bank's television advertising similarly apply to the Bank's in-branch advertising, since at the crux thereof was also the 'paying no establishment fee' representation. A likely lesser scale of responses to the in-branch advertising may be readily inferred, because of the potentially wider audience of television in comparison with the audience of people entering the Bank's branches. The latter persons would of course be more likely to have been already customers of the Bank. 81 Essentially for the reasons I have given for my findings of misrepresentation contained in the television advertisements, constituted by the Bank's assertion as to 'no establishment fee', I therefore conclude that it must follow that the Bank's in-branch advertising also involved contraventions on the Bank's part of s 52 of the TP Act, and additionally of ss 53(c), 53(e) and 53(g) thereof. The in-branch advertising featured incidentally in a visually prominent way an emphasis on the word 'no' within the slogan 'Paying no establishment fees'. My conclusions upon the Bank's case as to limitations and qualifications appearing in both the television and in-branch advertising 82 I have reproduced in [12] above the purported exceptions and qualifications comprising the televised 'small print' conditions of and qualifications to the Bank's home loans. The corresponding material of the in-branch advertising is reproduced at the introduction of [17] above. ACCC's contentions pleaded by the FASC in relation thereto have been extracted in full in [13]. As matters progressed at the hearing of the proceedings, the Bank appeared to place no emphasis, if not to withhold from reliance upon those televised and in-branch 'small print' conditions. I would formally record my conclusion in any event that both the scope and the legibility of those texts and captions of the televised and in-branch advertisements were such as to constitute no effective qualification upon, much less defence to, the otherwise misleading nature and effect of the 'no establishment fee' representation, which of course is the essence of ACCC's complaint. I need not therefore analyse the legibility or 'small print' difficulties presented by those texts and captions, being difficulties exacerbated by the short time of television exposure thereof namely about nine seconds. 83 That is not to say that the advertising slogan 'terms and conditions apply', so frequently used for instance on radio and television by advertisers, may not be effective in some circumstances. It is just that the same or similar expressions would normally be ineffective to qualify or set at nought the implications and consequences of misrepresentations made. In short, nothing pleaded by the Bank in the concluding subpars of par (d) of [20(vii)] above answers ACCC's case for misrepresentations falling within ss 52 and 53(c), (e) and (g) of the TP Act. In any event, what may be described as the 'small print' issues tended to be put aside during the course of the lengthy addresses of the parties, particularly in the context of the frank explanation of senior counsel for ACCC recorded in [51] above. Relief sought by ACCC 84 The relief sought by ACCC is essentially fourfold. The first is declaratory, the content of which ACCC suggested should await my reasons for judgment. The second is injunctive, in relation to which the same course was suggested. ACCC suggested as sufficient the pro forma of a single declaration and a single injunction which was produced during the hearing. The third is a mandatory order for corrective advertising, the extent of which is controversial, and which I will shortly discuss. The fourth area of relief sought by ACCC is also mandatory in terms, namely that the Bank refund all establishment fees paid by applicants for home loans to the Bank during the period from 22 November 2001 to 27 January 2002, authority for that species of relief being said to be conferred by the TP Act. 85 In relation to that fourth category of relief sought, ACCC acknowledged that on the authority of a Full Federal Court in Medibank Private Ltd v Cassidy (2002) ATPR 41-895 (Sunberg, Emmett and myself), the Court is not empowered by s 86C of the TP Act to make an order at the instance of ACCC for payment in favour of a third party, but ACCC nevertheless made a formal submission in principle for the grant of that relief, purportedly to preserve its entitlement thereto in the event that the High Court of Australia might come to a different view on appeal. However special leave to appeal was refused by the High Court on 20 June 2003. 86 In relation to the third category of relief sought, an order for corrective advertising authorised by s 86C(2)(d) of the TP Act. I was referred by ACCC to the Explanatory Memorandum to the Trade Practices Amendment Act (No 1) 2000, where at page 5, the following was stated in relation to the proposed ss 86C and 86D: 'These proposed amendments would enable a Court to make an order directing a contravening party to inform the public of their unlawful conduct, correct the harm that they have inflicted upon the community as a result of their contravention, or engage in activities that are aimed at altering the internal business operations of the contravening parties. Orders of this nature would be regarded as putting in place mechanisms to foster an environment of legislative compliance by changing incorrect business practices and correcting the misallocation of resources brought about by and evident in the breach.' At page 14, speaking in particular about s 86C, the following was further stated: 'A corrective advertising order is directed at redressing the harm caused by the contravention.' In that context, it was submitted by ACCC that s 86C is intended to encompass a concept of 'harm' which is broader than individual persons being misled or out of pocket, and extends to include harm to the competitive process. 87 ACCC submitted that given what it described as the widespread and persistent misleading and deceptive advertising which was undertaken by the Bank, and which is the subject of the proceedings, there should be both televised and in-branch corrective advertising. The fact that the conduct complained of occurred in late 2001 and early 2002 was said by ACCC not to be a factor disqualifying of the grant of relief of that dimension. In Cassidy v Medical Benefits Fund of Australia No 2 (2003) 12 ANZ Ins Cas 61-549, Hill J gave the following reasons at [91] in support of a grant of similar relief which was sought by ACCC in that litigation: 'On the whole I think there is utility in requiring MBF to publish both on television and in newspapers circulating in the area where the television advertising was screened an advertisement which will not merely remind the public that MBF had engaged in conduct which was misleading but also alert consumers to the importance of questioning advertisements and the insurance industry of the importance that their advertising not mislead or deceive consumers. Such advertising will, also, make consumers aware, if they themselves were induced to purchase insurance on reliance of the advertisements, that they might have some remedy. Further, the general complexity of the health insurance products and particularly waiting periods means that even if consumers had forgotten the actual advertisement, a corrective advertisement will assist them to understand the importance of waiting periods in the future and increase the awareness of consumers accordingly.' 88 ACCC initially requested the Court to put in place a very costly process of corrective advertising: see again the detail in [38] above. The following factors seem to me to be relevant to the nature and extent of any order to be made as to corrective advertising: (i) of the 30 seconds duration of each of the Bank's television three advertising segments, a maximum of nine seconds was taken up by the material complained of (see [3-5] above), yet the Bank's original advertising proposal is predicated upon sixty seconds of television time; (ii) the complainants to ACCC were only four in number; as I have earlier recorded, three of those persons gave evidence, none of whom had actually taken up any of the three advertised home loans, and nothing is known about the circumstances of the anonymous fourth person; (iii) the statistics produced by Mr Blinkhorn do not establish that the Bank gained any increase in its home loan patronage from the subject advertising campaign, in comparison with preceding or succeeding times; what might have been the outcome for the Bank in relation to its home loan operations on the hypothesis that the 'no regrets' campaign had never been pursued in the first place can only ever be a matter for 'informed' speculation; (iv) the Bank has subsequently revised its existing compliance based staff training programme, the circumstances whereof were not challenged in cross-examination; (v) there is no evidence of any complaint made on the part of the Bank's competitors; (vi) the Bank has taken active steps to revise its compliance guidelines, in the light of lessons learnt from the promotions the subject of complaint; and (vii) the concession fairly and properly made by ACCC which I have recorded in [51] above. 89 In the context of observations which I had made during the course of the hearing as to the nature and extent of corrective television advertising originally sought by ACCC (see [38] above), ACCC produced to the Court an alternative set of costings based on a duration of thirty seconds of television in lieu of sixty seconds as originally proposed, and a programme of re-broadcasting varying from two months to one month in duration, or alternatively from two weeks to one week. As I previously pointed out, the time taken up by the promotional script of the offending television advertising extended for only nine seconds. The estimated cost of film production of the television advertising remained at $25,000.00. The cost of the corrective in-branch advertising requested by ACCC, being advertising of the same dimension as the largest of the posters, remained in the order of $100,000.00. 90 I have found to be imponderable the task of determination of the appropriate scope of corrective advertising. On the one hand, I would give substantial weight to the aggregate of the factors listed in the preceding paragraph. Those factors must however be balanced against the legislative policy set out in the Explanatory Memorandum to ss 86C and 86D which I have partially extracted above, and the dictum of Hill J in Cassidy cited above. I have reached the conclusion that I should adopt a conservative approach to the nature and extent of corrective advertising, particularly bearing in mind that one of the elements, emphasised in the text of the Explanatory Memorandum, namely '… correct the harm that they have inflicted upon the community as a result of their contravention' has minimal application to the circumstances of the case, in the light for instance of the frank concession made by senior counsel for ACCC to which I have referred in [88(viii)] above. 91 I therefore think that the corrective advertising to be the subject of the Court's directions should be confined in outline to the following modus operandi: (i) a television broadcast comprising thirty seconds for one week, involving a maximum expenditure of broadcasting of $200,000.00 and production of $25,000.00; and (ii) in-branch advertising comprising treble foolscap size of a glass framed notice to be placed adjacently to the main public entrance door of each head office and branch of the Bank, for the duration of the same week. 92 Since neither of those suggestions were made by me to the parties during the course of argument, the liberty to apply which I have granted should extend to any debate which either party might wish to raise in relation to either tentative finding. I certify that the preceding ninety-two (92) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. Associate: Dated: 17 October 2003 Counsel for the Applicant: S J Gageler SC and P J Renehan Solicitor for the Applicant: Phillips Fox Counsel for the Respondent: J S Hilton SC and D Sibtain Solicitor for the Respondent: L E Taylor Date of Hearing: 11 June 2003, 12 June 2003, 13 June 2003 Date of Judgment: 17 October 2003