The Commerce Commission, last week, confirmed that it is no longer seeking an interim injunction against controversial ticket selling agent Viagogo.
This follows Viagogo's apparent capitulation regarding the issues that were to be the subject of the injunction application. The decision not to proceed was announced just one day before the parties were due to face each other in court.
The Commerce Commission announced in August 2018 that it was bringing proceedings against Viagogo over representations made by the ticket seller to consumers. In particular the existence of various allegedly misleading and deceptive claims made about the number, price, and “guaranteed" validity of the tickets on Viagogo's online platform.
During 2019, the litigation largely focussed on the application by the Commerce Commission for urgent injunctive relief to prevent Viagogo from continuing to make statements it alleged were misleading prior to the substantive proceedings taking place. A key issue was whether the High Court was able to grant such injunctive relief despite the fact that Viagogo had not yet been properly served. Issues of jurisdiction also arose, as Viagogo (a Swiss-based company) refused to accept and submit to the jurisdiction of the New Zealand courts.
Last February the High Court found that it did not have jurisdiction to grant interim relief against Viagogo because, while the internet sales business was aware of the Court action in New Zealand, the Commission had not yet effected formal service on Viagogo in Switzerland. The High Court's decision was overturned by the Court of Appeal in August. The Court of Appeal found that the overall interests of effective justice require that interim relief be within the Courts jurisdiction – even where the overseas party has not been formally served, and even if unresolved questions of jurisdiction at the substantive level remain. While those are factors that may be taken into account by the court in reaching its decision, interim relief could be justified in those circumstances if sufficient urgency existed. The decision of the Court of Appeal allowed the Commission to go back to the High Court to proceed with its application for interim injunctive relief.
Viagogo accepts the jurisdiction of New Zealand courts
Before the hearing commenced last week, the Commission announced that it would no longer be seeking the interim injunction as it had become unnecessary to do so. Viagogo had agreed to make changes to its website, including addressing the Commission's concerns as to misrepresentations about price, the availability of tickets, and the “guarantees" that were purported to attach to tickets. Viagogo has also given undertakings to the Court that it will not undo the changes it has made, or make new, similar representations.
In addition to making the changes to its website and giving the associated undertakings, Viagogo has withdrawn its protest to the jurisdiction of the New Zealand court. The extent of the reach of the Fair Trading Act beyond New Zealand's borders remains an interesting question for businesses based outside of New Zealand that conduct their business online. In this case, given that Viagogo sells New Zealand event tickets to New Zealand consumers, it may have been difficult for Viagogo to persuade the court that it should not be subject to New Zealand consumer protection laws. The decision to accept the jurisdiction of the New Zealand courts appears to have been a pragmatic one on the part of Viagogo.
While the interim injunction is no longer being sought, the substantive case continues, with the Commerce Commission continuing to take Viagogo to task for the representations it alleges were misleading, and Viagogo defending its practices. The case seems very likely to provide important insight from the Court as to how businesses can conduct themselves online, and how far marketing claims can go.
In the meantime, the Commission has urged consumers to purchase event tickets from official ticket websites, in order to ensure their rights are appropriately protected.
If you would like to discuss any of the matters raised in this article, please contact the authors or your usual Bell Gully advisor.
This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.