IN a potentially significant judgement in relation to the interpretation of section 52 of the Trade Practices Act, the Federal Court has ruled that a Western Australian Internet domain names supplier, Domain Names Australia, and its sole director Chesley Rafferty, engaged in misleading and deceptive conduct in breach of the act after DNA sent notices inviting businesses to register new Internet domain names that were substantially similar to the businesses’ existing domain names.
Proceedings were recommended by the Australian domain name administrator auDA and the Australian Competition and Consumer Commission.
They alleged that by sending notices in June, July, and September 2003, DNA made false or misleading representations to businesses that held a registered Internet domain name.
It was further alleged that Mr Rafferty was knowingly concerned and aided and abetted, the alleged contravening conduct of DNA.
auDA and the ACCC sought declarations that DNA contravened section 52 and that Mr Rafferty was involved in those contraventions.
They also sought injunctions restraining further breaches.
Justice Finkelstein found the notices were not invoices and that DNA had not contravened section 64(2A) of the act by asserting a right to payment for unsolicited services.
Although his honour rejected the ACCC’s claim that the June notice was misleading, the notices sent to businesses in July and September were found to be in breach of section 52.
The decision is of importance in relation to the interpretation of section 52 in that Justice Finkelstein found it was not necessary to establish that significant numbers of the group to whom the notices were sent were misled or deceived in order to find that the notices were misleading.
DNA had argued that there was no evidence that its marketing materials misled significant numbers of people.
However, in a decision given on April 22 in relation to a share offer by National Exchange Pty Ltd, Justices Jacobson and Bennett indicated that they disagreed with Justice Finkelstein’s view that it was not necessary to establish that significant numbers of people were misled.
DNA is appealing the decision.
Darren Pratt, senior associate
9288 6702
Adam Kent, solicitor
9288 6911