Consumers should know when they are entitled to a refund if the good or service purchased wasn’t as advertised. Understanding Australia’s Consumer Law could have benefited attendees at the Above the Harbour event this New Year’s Eve, and prevented buyer’s remorse. Labelled “disastrous”, event goers were left seething after many of the night’s advertised features failed to transpire. Below, we set out the claims consumers can make when a business fails to provide the advertised good or service.
Above the Harbour
Mothership Media organised New Year’s Eve event, ‘Above the Harbour’ where attendees could eat ‘five-star food’ supplied by Shangri-La, have some ‘classy cocktails’ and watch Sydney’s fireworks from an incredible vantage point. Tickets were between $395 and $495. The event boasted a ‘private party paradise’.
However, the event’s execution notably lacked the promised class and luxury with hour-long bathroom queues, questionable food served after 2-hour waiting times, and ‘Sydney’s best DJs’ playing Justin Bieber on repeat. Attendees labelled Above the Harbour a disaster.
Event organisers have since apologised and offered a $100 refund to some complainants. Not all ticketholders, however, have accepted the partial refund claiming that it is not good enough.
The Consumer Guarantees
The Competition and Consumer Act 2010 (CCA) contains the Australian Consumer Law (ACL) in Schedule 2. The ACL includes consumer guarantees that apply to goods or services. Above the Harbour is an event and so attracts the following guarantees:
- Organisers will provide the event with due care and skill (section 60 CCA);
- The event needs to be fit for any specified purpose (express or implied) (section 61 CCA); and
- When no time is set, services need to be provided within a reasonable time (section 62 CCA).
To receive a full refund, attendees will need to show that the event’s organisers, Mothership Media, breached the ACL in failing to meet the above requirements. They may rely on the failure to provide the advertised food, drinks and entertainment, suggesting organisers didn’t exercise due care and skill in providing the event. Long wait times, persistent reports of terrible food and the fact that one tent ran out of cider might support this claim.
Similarly, in its advertisement, Mothership Media expressly stated that internationally renowned five-star hotel, Shangri-La, would cater the event. The event failed to deliver this experience for attendees and could further support a claim alleging breach under section 61 of the ACL. Shangri-La has since commented that they were unable to keep up with the demand that was presented to them that evening. Consumers may also bring a claim against Mothership Media for misleading and deceptive conduct through its advertising for Above the Harbour.
Misleading and Deceptive Conduct
The ACL prohibits businesses from making misleading or deceptive claims in their advertisements that relate to the quality of the goods or services they provide to consumers. The intent is irrelevant, only whether or not the ad’s overall impression created in the consumer’s mind an idea about the value or quality of the good or service.
In this case, the advertisements for Above the Harbour created an overall impression that the New Year’s Eve party would be a relaxed affair, with unrivalled views of Sydney’s fireworks where consumers could indulge in exceptional food, unlimited drinks and great music. It implied the event would be luxurious, fun, stress-free and memorable.
Some of the advertisement’s claims can be interpreted as ‘puffery’, or greatly exaggerated claims that no one could find misleading or take seriously, such as providing “Sydney’s best DJs”. Consumers would reasonably expect, however, the accuracy of other statements. For example, the event’s promise of “five-star food stalls” likely misled party attendees. As Shangri-La catered the event, an internationally renowned five-star hotel, it is unlikely that the statement can be dismissed as an exaggeration.
Consequently, attendees of the event may claim that Mothership Media engaged in misleading or deceptive conduct by enticing consumers to buy tickets to this event, when they couldn’t deliver the event as promised in their ad. It’s apparent from the long queues, running our of some beverages and the quality of the food produced that the event organisers were unable to cope with the event’s demands. If legal action proceeded against Mothership Media in this regard, the court would determine whether their conduct amounted to misleading and deceptive conduct and consider the available remedies.
What are the Available Remedies?
If Mothership Media is found to have breached the consumer guarantees of the ACL, under section 267(3) of the CCA attendees could recover the price paid for their ticket, minus the value of the services they received. The event’s organisers had offered a partial ticket refund of $100, but it would be up the attendees to demonstrate their entitlement to a higher refund.
They may also lodge a complaint with the Australian Competition and Consumer Commission (ACCC) who can investigate the attendees’ claims, and bring compliance or enforcement measures against Mothership Media, including:
- Issuing an infringement notice;
- Requiring undertakings under section 87B of the CCA; or
- Issuing legal proceedings.
If ticketholders proceed with a claim for misleading or deceptive conduct, they can also lodge a complaint with the ACCC, or proceed with legal action against Mothership Media. If the court decides in their favour, it is possible to receive damages to compensate for Mothership Media’s actions that caused them loss or damage in attending the event. This could simply be the amount of the ticket price, or extend further to compensate them other costs of the evening depending on the facts.
Practically, consumers are more likely to lodge a complaint with Fair Trading NSW. Fair Trading then acts as an informal negotiator and assesses the complaint to determine the issues in dispute and available options to help with an expeditious resolution, as well as whether any breach of the law occurred. Fair trading then contacts each party to seek a mutual resolution.
Consumers have rights regarding a business’ supply of goods and services. Businesses need to be then mindful about how they use advertising to promote their products and ensure they can deliver on the consumer’s understanding of what they promise. Consumers view and understand advertisements holistically, so businesses should then think about the overall impression they create.
Whether or not Above the Harbour attendees will receive a full refund of the ticket price is yet to be determined. Ultimately, even if the event’s organisers escape attendees pursuing legal action, they have already begun facing an unforgiving trial on social media.
Questions about whether your ads comply with Australia’s Consumer Law? Get in touch with our consumer lawyers or tag us on Twitter @legalvision_au and let us know.