“This case is the landmark case brought by National Trading Standards (NTS) against the directors of BZZ Ltd (formerly Ticket Wiz Ltd) (‘BZZ’) through which it was alleged that the practice of secondary ticket seller (STS) businesses – buying tickets from primary ticket sellers (PTSs) and selling them on secondary ticket websites (STWs) - was fraudulent. The commercial sale of tickets by commercial STSs via the “big four”
“Restrictions on Ticket Resale 9. Event organisers may restrict the resale market for tickets in a number of ways. Firstly, typical terms and conditions on ticket sales will prevent the purchaser reselling the ticket, by stating expressly that a ticket must not be resold. Breaching this term risks the ticket being cancelled if the organiser can identify the vendor or the ticket. How successful this policy is will depend on the effort the organiser is willing to make (including checking identities at the door of the venue). Adele’s management, for example, made a big effort to restrict resales for her recent UK tour by cancelling purchases from duplicate web, IP or postal addresses on tickets they controlled. 10. Secondly, although event organisers may allow for “returns”, offering to resell purchasers’ tickets to other customers, there will be no guarantee of a sale and there may be an administrative charge. There are risks for the organisers that this will undermine total sales, because they may have other tickets unsold that are inferior to those being returned. This is not, therefore, commonly available. 11. Thirdly, organisers can restrict the volume of tickets that can be purchased. This might mean restricting sales to four or fewer tickets. However, it requires significant effort to identify and stop people buying multiple batches of four tickets and it is almost impossible if there is more than one primary agent. 12. The downside for the consumer facing these scenarios is that they may not be refunded by the event organiser in the event of a change of circumstances and may not be able to “transfer” the ticket to another individual, so they will therefore lose their money if the ticket can no longer be used. However, informal resale at ticket face value to an acquaintance may often be overlooked and accepted by event organisers.”
“Ticket Brokers (“traders”) 5. 13 Fifth, there are persons who act as ticket brokers, buying and selling tickets, and utilising the anonymity offered by the internet not to declare themselves as traders. The scale and motive behind their activity is different from individual purchasers selling tickets they can no longer use. They range from so called “bedroom touts” to sophisticated businesses. The secondary ticketing platforms make it easier for brokers to operate and may reward “power sellers” (those who sell tickets in large volumes with better terms, for example, early payment. UK consumer law requires that traders provide consumers with information about their identity, as well as certain other information as discussed in Chapter 2. This is because consumers have rights against traders that extend beyond the secondary ticketing provisions of the CRA e.g. under the CCRs and CPRs). The existence of the platform does not change this, but I found very little evidence of this information being supplied. This is in notable contrast with goods platforms such as Amazon and eBay. This makes it impossible for a consumer to avoid a reseller they have had a bad experience with and who may be offering tickets on a number of different platforms. In my view, the existence of guarantees on the platforms (see below) does not obviate the obligations on “traders” and the platforms should seek to display the details of volume sellers who it is reasonable to presume are acting as “traders” in the consumer law sense.”
“How do “Bots” and “Botnets” work? 2. 17 A “bot” (derived from the word robot) is a computer programme that automates the process that a human would go through when buying a ticket, completing it much more quickly than a human. A bot can search for tickets, fill in identity details and payment information and select “purchase”
“Before I consider these terms, I like to mention what the Waterson Review had to say at Paragraph 4.11: “I suspect a personal revocable licence is not the public’s understanding of a ticket and so it is therefore incumbent on those who consider “tickets” to have this status to make this clear when issuing them, including in what circumstances the licence is revocable. Fairness to the consumer is important here, as I suspect that the public’s understanding is that ticket, whether paper or electronic, is something that guarantees the holder (not necessarily the original purchaser) of the ticket entrance to the event in question”
“What is the contractual position between a seller and a STW and between a buyer and the STW through whom a ticket is purchased? Having regard to the terms and conditions of the STWs, other than the “User Agreement” referred to above, there is no contract between a seller and a STW under which the title to the goods passes from D company to a STW. Similarly, in so far as a buyer is concerned, there is no such contract for the purchase of a ticket between him and a STW. STWs are marketplaces or platforms facilitating sales and purchases between the users of the websites. STWs never own the property that is being sold through them—that much is explicit in their terms and conditions, and also the RFU case (see below)”
“…I shall now consider whether or not there were any breaches of the Ts &Cs which affects the contract to purchase tickets. It is accepted that the Ds and the employees of the D company were using credit / debit cards in their possession, in the names of family and friends and their own, to purchase event tickets. They also used spider bots and Insomniac Browser for the purposes of acquiring tickets. The D company deliberately used these cards and names to acquire these tickets to overcome the difficulty of not being able to buy more than the maximum number permitted per credit card, per individual or per household. It is also the case that at no time, it was indicated to any of the PTSs that these tickets were being purchased on behalf of the D company, nor that the intention was to re-sell these tickets immediately for profit. Clear it is, had that been the case, some if not all the promoters / PTSs would have refused to sell these tickets to the D company. Common sense dictates that they would have not permitted it because promoters could, had that been their intention, have sold those tickets themselves at the higher price rather than setting a lower face value, and make a profit for themselves. We know in the case of Ed Sheeran tickets, that the same were being resold by the Ds within hours of the same coming into the market. The prosecution case is that these tickets were fraudulently obtained by the D company. The question arises was there a fraud, or fraudulent representation made in the acquisition of the tickets. The requirements of the offence of fraud pursuant tosection 2 of the Fraud Act 2006 are: i) Dishonestly, making a false representation, ii) Intending, by making the representation to make gain for himself or another iii) And representation is false if it is untrue or misleading and the person making it knows it is or might be untrue or misleading iv) Representation may be express or implied. In this case the prosecution rely upon the following false representation made on behalf the D company, having regard to the Ts &Cs: a) Purchasing tickets with the intention to resell b) Purchasing tickets in excess of the maximum permitted per individual per event by use of multiple credit cards in different names and thereby concealing the identity of the D company as the purchaser c) Making use of the bots and other automatic devices to process the tickets acquisition. It is clear that, that these representations arise from the acceptance of the Ts &Cs of the PTSs upon the purchase of the tickets. It is also clear that these implied representations were plainly false. The “gain”, prosecution say is the obtaining of the tickets which were going to be sold at a price far above the face value of the tickets at which they were bought. This was clearly a systematic and well thought out plan pursuant to which tickets were purchased and re-sold on an industrial scale to make large profits. This, as mentioned at the outset, was the only business the D company conducted through the other two Ds and its employees. Subject to proof of dishonesty, which is a matter for the jury, it fulfils the requirement of the offence of fraud. It may be said, that thus far in this narrative, no one is actually losing out or that there is no victim. However, there are many frauds where there may be no obvious victims; the best example I can think of is the “mortgage fraud”
“It may well be the case that the jury decides that there was no dishonesty, in which case notwithstanding the false representations, there will not be a finding of fraudulent representations having been made”
“28. The appellants contended (1) that conduct formerly chargeable as the crime of public nuisance had now become the subject of express statutory provision, (2) that where conduct was the subject of express statutory provision it should be charged under the appropriate statutory provision and not as public nuisance, and (3) that accordingly the crime of public nuisance had ceased to have any practical application or legal existence.”
“While it cannot be confidently asserted that there is no conduct which might formerly have been properly prosecuted as public nuisance which is not now the subject of express statutory provision, the appellants are in my opinion correct that the most typical and obvious causes of public nuisance are now the subject of express statutory prohibition.”
“30. There is in my opinion considerable force in the appellants' second contention under this head. Where Parliament has defined the ingredients of an offence, perhaps stipulating what shall and shall not be a defence and has prescribed a mode of trial and a maximum penalty, it must ordinarily be proper that conduct falling within that definition should be prosecuted for the statutory offence and not for a common law offence which may or may not provide the same defences and for which the potential penalty is unlimited. … It cannot in the ordinary way be a reason for resorting to the common law offence that the prosecutor is freed from mandatory time limits or restrictions on penalty. It must rather be assumed that Parliament imposed the restrictions which it did having considered and weighed up what the protection of the public reasonably demanded. I would not go to the length of holding that conduct may never be lawfully prosecuted as a generally expressed common law crime where it falls within the terms of a specific statutory provision, but good practice and respect for the primacy of statute do in my judgment require that conduct falling within the terms of a specific statutory provision should be prosecuted under that provision unless there is good reason for doing otherwise.”
“31 It follows from the conclusions already expressed in paras 29 to 30 above that the circumstances in which, in future, there can properly be resort to the common law crime of public nuisance will be relatively rare. It may very well be, as suggested by JR Spencer in his article cited in para 6 above, at p 83, that "There is surely a strong case for abolishing the crime of public nuisance". But as the courts have no power to create new offences (see para 33 below), so they have no power to abolish existing offences. That is a task for Parliament, following careful consideration (perhaps undertaken, in the first instance, by the Law Commission) whether there are aspects of the public interest which the crime of public nuisance has a continuing role to protect. It is not in my view open to the House in resolving these appeals to conclude that the common law crime of causing a public nuisance no longer exists.”
"It is the judges (as we have seen) that make the common law. Do you know how they make it? Just as a man makes laws for his dog. When your dog does anything you want to break him of, you wait till he does it, and then beat him for it. This is the way you make laws for your dog: and this is the way the judges make law for you and me. They won't tell a man beforehand what it is he should not do - they won't so much as allow of his being told: they lie by till he has done something which they say he should not have done, and then they hang him for it."
“It may be that, by analogy with cases of conspiracy to defraud, fraudulent trading under this limb is trading with intent to injure, by dishonesty, some proprietary right of another.”
“30. The asserted need for there to be a proprietary right in this particular context seems to found itself on the propositions of Viscount Dilhorne in R v Scott[1975] AC 819 at 840, a case in which, so it would appear, no one was in fact actually deceived. What Viscount Dilhorne said in the relevant passage was this: “… it is clearly the law that an agreement by two or more by dishonesty to deprive a person of something which is his or to which he is or would be or might be entitled and an agreement by two or more by dishonesty to injure some proprietary right of his, suffices to constitute the offence of conspiracy to defraud.” 31. It may be noted, however, that matters were put on an altogether wider basis in cases such as Welham v DPP[1961] AC 103 , and in particular in the speech Lord Denning; and in Wai Yu-Tsang v The Queen[1992] 1 AC 269 . In the latter case, reference is made by Lord Goff at page 276 to “an intention to act to the prejudice of another man's rights”
“The term appears to have survived as a result of two things: legal habit, and the fact that in most cases it is not in issue that the targeted right or interest is proprietary – the conspirators intend to relieve the victim of his money or such other property that he owns – and the only issue is dishonesty.” 38. So relieving a victim of money is plainly accepted by Hickinbottom J as falling within the ambit of a “proprietary right”. 39. We should add, however, that in so far as Hickinbottom J went on to make some further observations with regard to what was connoted by the phrase “proprietary right”, we think that may require further analysis; and we should not be taken as necessarily agreeing with the relatively narrow view of the meaning of that phrase as (perhaps) indicated by Hickinbottom J. But for the purposes of this case, we need not say more. We add also that a further clear distinguishing factor from the Evans case is that in that case the rights of the relevant public bodies were to a very pronounced degree more contingent than was the case here.”
“(1) If any business of a company is carried on with intent to defraud creditors of the company or creditors of any other person, or for any fraudulent purpose, every person who is knowingly a party to the carrying on of the business in that manner commits an offence.”
“If any business of a company is carried on … for any fraudulent purpose, every person who is knowingly a party to the carrying on of the business in that manner commits an offence.”
“... for any fraudulent purpose”
"94. It is not, in my judgment, a pre-condition of finding the relevant intent to defraud creditors or other fraudulent purpose, that there has been an incurring of credit. The relevant detriment, as in Kemp, may not involve the incurring of credit and indeed the relevant intent may not, in a given case, succeed. The obtaining of credit can be relevant intent to defraud or relevant fraudulent purpose but it would be wrong to elevate the obtaining of credit to a requirement of liability under s 213 [of theInsolvency Act 1986 ]."
“... the defendant is knowingly party to that carrying on for a fraudulent purpose”
“I hope it is clear from what has been said already that the contract between the Ds and the end user was not subject to the consumer protection legislation”
“Providing those steps are taken, then the term may not be unfair. Generally speaking, even when one looks at the literature and the guidance from the CMA, it emphasises the point that it is a matter for courts, rather than for them to say whether it is unfair outright, or not. It all depends on the circumstances what the aim of the term is. In this context what you will need to consider, if you need to, is was it a legitimate term to impose when they are trying not to sell these tickets to secondary ticket sellers, but to consumers, and in order to ensure that consumers get the tickets at the face value they have imposed that term. Was that a legitimate aim in order to achieve the objective; in other words, keeping the price down for the ordinary consumer to use the ticket? That's what it depends on at the end of the day, whether the term is fair or unfair. The ultimate aim, what is the aim and what steps have been taken, and if it is right then it's fair, if it's not then it's unfair. It's as simple as that, all right. That is what he really confirmed in the course of his evidence, that it has to be fair to the consumer; they are only concerned about the consumer. They don't care how the consumer gets the ticket, if he has paid then he should get what he has paid for, that’s what they are concerned about, the CMA.”
“… when a bona fide purchaser for value obtains the ticket through a STW, he obtains it with all the benefits and the burdens of the licence… Ts & Cs continue to apply.”
“A 'chose in action' is a known legal expression used to describe all personal rights of property which can only be claimed or enforced by action, and not by taking physical possession." (See Talkington -v- Magee(1902) 2KB 427 per Channell at 230). On the issuing of an underground ticket a contract is created between London Underground and the purchaser. Under that contract each party has rights and obligations. Theoretically those rights are enforceable by action. Therefore it is arguable, we suppose, that by the transaction each party has acquired a chose in action. On the side of the purchaser it is represented by a right to use the ticket to the extent which it allows travel on the underground system. On the side of London Underground it encompasses the right to insist that the ticket is used by no one other than the purchaser. It is that right which is disregarded when the ticket is acquired by the appellant and sold on. But here the charges were in relation to the tickets and travel cards themselves and a ticket form or travel card and, dare we say, a cheque form is not a chose in action. The fact that the ticket form or travel card may find its way back into the possession of London Underground, albeit with its usefulness or 'virtue' exhausted, is nothing to the point.”
“… if there are a multiple number of sellers doing the same thing, just imagine how many tickets are removed from circulation insofar as the consumer is concerned. This case is not simply about making money on tickets purchased from primary ticket sellers. Just imagine you want to celebrate an event with your family, perhaps your grandmother's birthday or a parent's birthday and you want to take her out to a concert or theatre, something like that, but you want to go there as a family, combine a meal with it. And you look forward to it, you choose an event which she would enjoy, or your parents would enjoy. You prepare yourself to get up in the morning when the tickets are going to go on sale; you are going to buy them. And you do, you sit at your desk, open your computer, log into the website at the right time. And then, whilst you are looking at which seats to buy and looking at prices, and by the time you get around, within say 20 minutes, to actually selecting the right sort of seats which are within your price range, as well as give a decent view of the performance, you realise that the tickets have gone, they are no longer there, you can't buy them. Then you say to yourself, being enterprising, I know what, I haven't got them here, but I'll pay slightly more, I'll go to the secondary website and buy them from there. And you do go to the secondary ticketing website and what do you find? The same tickets that you were trying to buy from the primary ticket website are now on sale on the secondary ticketing website, but out of your range. For four you could pay£80 times four, plus the administration fee, but if it's doubled in price, it's£160 times four plus the administration price, which you can't afford. And then you say, right, hard luck. But, then you read in the paper, or you hear from someone, that actually you know when you were on the website trying 3 to buy from the primary ticket seller, there were others whose business it is to buy these tickets in bulk and then sell them at profit. And, what's more, they might have used bots and other things to buy 10 tickets in one go in order to save time, so they can buy as much as they possibly can. So, just imagine. So, we are not simply concerned with a purchaser buying from a secondary ticketing website -- and the defence are absolutely right, a purchaser who buys from the secondary ticketing website, paying whatever price the ticket is listed for, to him that ticket is worth that price and he's prepared to pay for it. But, to someone, the example I have mentioned, it's not; they can't afford it, it has been taken away, that person can't buy it at face value. So, please bear that in mind when you are considering the respective arguments in this case.”