In Selby v Expedia Australia Pty Ltd and Anor (Civil Dispute) [2018] ACAT 124 travel service Expedia (Expedia Pty Ltd and Expedia Inc) has been ordered to pay Hugh Selby $709.34 (inc damages) over misleading and deceptive conduct under the ACL.
Selby had booked accommodation at Rocky Point Beachfront/Paradise in Hawaii for three days in April this year through the Wotif website (owned and operated by Expedia). He paid Wotif for the accommodation by credit card transaction. In January 2018 he received an email from Wotif that stated “Thanks! Your reservation is confirmed. No need to call to reconfirm.” The email included a link to the accommodation and noted that the total amount of $628.34 had been “collected by Wotif”. Fast forward to disappointment!
On arrival in April Selby found that the "outlook and facilities were not what was expected", in particular the allocated room was in basement without a view of the beach. Selby was unable to contact the owner of the accommodation to resolve the issues. He complained to Wotif that day, seeking a refund. Wotif responded that the owner had refused a refund. Wotif subsequently offered a $150 credit coupon and then a 15% or $95 refund “for the inconvenience”, later increased to $125.67 “for the inconvenience”.
Selby was offered no joy when he visited Expedia's office in Sydney, reportedly being fobbed off with a referral to an international number.
Many consumers would probably have gritted their teeth, damned Wotif and walked away. Others might have been disheartened by Mallet v Expedia Australia Pty Ltd (Civil Claims) [2017] VCAT 1911.
Selby - as a legal practitioner and law academic - persevered. Mid-May he filed an application with ACAT claiming a refund of the $628.34, including written submissions, photographs of the accommodation and copies of pages from the Wotif site. Importantly, the money had been paid to Wotif, not direct to the accommodation provider.
Selby argued that Expedia, by the content and management of its Wotif site, engaged in misleading or deceptive conduct in breach of the ACL. Saliently, his submission was that Wotif is more than a mere purveyor of advertising on behalf of third parties, thus - in the words of the Tribunal -
not analogous to newspaper advertisements or advertisements available on the Google website where the reader would understand that the information contained in the paid advertisements was provided by the third-party customer of the advertising platform and that the advertising platform makes no promises or warranties as to the truth or accuracy of the information contained in the advertising material. ...
Wotif is not analogous to the classified section of the newspaper where it is obvious to any reasonable reader that the newspaper is not endorsing or guaranteeing the information contained in those advertisements.Selby contended that he relied upon the assurances and statements made on the Wotif site in making a booking, arguing that when taken together the statements convey the message that Wotif is a specialist travel company website, that Wotif seeks out good deals for travellers and these good deals are based on local knowledge.
The opening page of the Wotif site states, next to a red tick:
Book with confidence. Stay with peace of mind. With access to millions of reviews by Aussie and Kiwi travellers it’s easy to find the right hotel for you. Australia's First Online Booking Site For Travel What (or wot) is Wotif? The universe is full of questions. What is the meaning of life? Where do socks go when they disappear from the dryer? But the most important question right now is: What in the world is Wotif? Well, we’re not a bird, we’re not a plane, and we’re fairly certain we’re not Superman. Instead, we’re an online travel company dedicated to getting you from here to there without throwing your wallet to the wolves. And we’re pretty good at it, too! That’s why 1 in 2 Aussies have travelled with us since 2000. That’s a lot of happy campers! And jetsetters... and honeymooners... and road trippers... and gap year-ers...
The Wotif story is different to those of other hotel booking sites. We were founded in a Brisbane garage (seriously) and have heaps of local knowledge. We use it to track down fantastic travel deals so you can find awesome deals every day. And we’re not just talking about accommodation. With Wotif, you can book everything in one place: flights, hotels, packages, and activities. Talk about a time saver! ...Expedia argued that it was not liable for either the nature of the advertisement of the accommodation displayed on the site or the quality of the accommodation. It submitted that the contract was the one that had been reduced to writing. That contract was between Selby as a user of the Wotif site and Expedia. Expedia also submitted that the written contract is wholly contained in the terms of use available on that site, including
(a) that customers agreed that the Terms of Use apply; and
(b) The information displayed on this Website concerning specific travel products and services is provided to us by the relevant travel suppliers (such as airlines or hotels) or their agents (“Third Party Suppliers”). This includes, but it is not limited to, information about airfare and hotel prices, rules and availability in the description of hotels and their amenities. The Expedia Companies are not responsible for such information and we rely on the accuracy of the information supplied by the relevant Third Party Suppliers. ... The Expedia Companies do not operate or control the travel-related products and services displayed on the Website. Nor do the Expedia Companies act as co-vendors with the Third Party Suppliers with whom our customers book travel products or services.Expedia relied on those exclusion clauses in seeking to avoid liability, responding to the claim of misleading and deceptive conduct by stating that “book with confidence” is puffery.
ACAT states
The Tribunal put the following question to the respondents: So what you essentially say is there's no contractual liability because of the exclusion clauses and that the phrase "Book with confidence" and all the other stuff there about we're pretty good at all of this and we're different from all the other websites ... and we've got lots of happy campers and honeymooners and end of year, gap yearers, all of that is mere puff, you say. It's a marketing ploy. We don't actually expect people to believe the promises that we put there. And they need to accept that they're hyperbole?
The respondents’ answer is reproduced below:
Yes, with the one addition to that, I agree with the tribunal on that, with the addition that you know, being puff, it's what does the reasonable consumer take from that. A reasonable consumer does think that the website is great, does think that they'll get value for money, does think that the properties will be as described. I think that's what a reasonable consumer would take from it, and I think that's what most consumers do get. And as is the reality with anything, there will be a bad experience here and there. There will be a better than expected experience and at the end of the day, you know Wotif has provided their services. ...The Tribunal in referring to Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191 went on to state
The ACL at section 18 provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. Each of the following must be established: (a) a person has engaged in conduct - a company is a legal person; (b) the conduct is in trade or commerce; (c) the conduct must be misleading or deceptive or likely to mislead to deceive. The parties did not disagree with the proposition that Wotif was engaged in conduct that took place in trade and commerce. The issue to be determined by the Tribunal is whether the making of the statements and representations on the website was misleading or deceptive or was likely to mislead or deceive. Conduct is misleading and deceptive if any reasonable member of the class of persons at whom the conduct is directed would be led into error. If conduct seeks to attract public attention by the use of unqualified assertion as to fact, such assertion should be true as a matter of fact.Accordingly
... The statements contained on the Wotif website – “We’re an online travel company – we have heaps of local knowledge. We use it to track down fantastic travel deals so you can find awesome deals every day. – Book with confidence. Stay with peace of mind.”– must be assessed by their effect on the reasonable member of the subject audience. The implication is that Wotif have local knowledge and use it to ensure fantastic travel deals. It is not unreasonable for the applicant to feel confident that the accommodation would meet the statements set out in relation to it and that if the accommodation should for any reason fall short then Wotif would be liable for any loss.
The respondents submitted that it was reasonable for a consumer, reading their webpage, to form the view that Wotif’s experience and expertise would result in a good deal and that the consumer could be confident in Wotif’s statements. However, the respondents also submitted that those statements giving rise to that view were puff.The Tribunal sensibly commented that it did not accept the exclusions.
One might ask, what is the point of the statements if it is not to encourage visitors to the Wotif webpage to book with confidence? Could these statements and representations be properly characterised as ‘mere puff’? Mere puff may be defined as statements or representations which are exaggerated, ‘over the top’ or fanciful and not intended to be taken seriously to be taken seriously by any reasonable person. For example, that a detergent would clean like a white tornado. The classification of any representation as mere puff does not automatically exclude it from being misleading and deceptive or likely to mislead and deceive. ....
Wotif seeks to rely on the exclusion clauses contained in their terms of use: those exclusion clauses are in conflict with the representations made clearly and boldly on the website. Businesses cannot rely on small print and disclaimers as an excuse for a misleading overall message. Again one might ask, why make a statement designed to assure customers, and then elsewhere on the webpage, in the fine print, seek to prevent the customer from relying on the promises conveyed?
In the circumstances of this particular case, it was not unreasonable for the applicant to form the view, based on the representations that the respondents had ‘heaps of local knowledge’ and that you could ‘book with confidence’, that Wotif was promising that the applicant could rely on the information provided about Rocky Point Beachfront in Haleiwa, Hawaii and that the applicant could enter into the contract with Rocky Point Beachfront with confidence. This has not proved to be true. The accommodation was, as a matter of fact, not as described on the website but in a dilapidated and rundown condition, and with no sea views. As a consequence, the applicant paid to Wotif the accommodation costs of $628.34.ACAT was accordingly persuaded by Selby. We may look forward to more agency by consumers, more care by travel/other services alongside a statement by the ACCC alerting both consumers and those services.
