Australian Competition & Consumer Commission v IT & T AG [2004] FCA 959 (16 July 2004)

Last Updated: 22 July 2004

FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v IT & T AG [2004] FCA 959

TRADE PRACTICES – misleading or deceptive conduct – website being an internet directory and a CD-ROM directory – representations that each of the companies and persons carrying on business within Australia listed within the internet directory had corresponded with the respondent with a view to becoming a listed member in the internet directory and had each given their authority or consent for their names, addresses and particulars to be entered in the directory – such representations false – making of such representations constituted conduct in trade or commerce that was misleading or deceptive or likely to mislead or deceive – injunctive relief

TRADE PRACTICES – assertion of a right to payment in circumstances in which the respondent asserting the right did not know or did not have reasonable cause to believe that the making of the entry was authorised – dispatch to companies and persons carrying on business within Australia of documents in the form of invoices or demands – invoices representing that payment for entry as a listed member in the internet directory and the CD-ROM directory was due and payable – if payment made within 14 days amount due and payable would be reduced by 3% - assertion that the respondent had a presently existing right to payment – each of the invoices was a bill, invoice or statement of an amount due – failure to state as prominently that no claim is made to the price – documents asserted a right to payment contrary to the Act – injunctive relief

Trade Practices Act 1974 (Cth) ss 52, 55A, 64(2A), 64(3), 64(5)(e)

Federal Court Rules O 8 Div 3














AUSTRALIAN COMPETITION & CONSUMER COMMISSION V IT & T AG
W96 of 2002

RD NICHOLSON
16 JULY 2004
PERTH

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	W96 OF 2002

BETWEEN:	AUSTRALIAN COMPETITION & CONSUMER COMMISSION APPLICANT
AND:	IT & T AG RESPONDENT
JUDGE:	RD NICHOLSON J
DATE OF ORDER:	16 JULY 2004
WHERE MADE:	PERTH

THE COURT ORDERS AS FOLLOWS:

Declarations

1.	A declaration that the respondent, by virtue of the totality of the words, images and statements contained within the respondent’s website, being an International Fax and Business Directory under the style or title ‘it&t International Fax Directory’ and ‘IT&T Directories’ (the ‘Internet Directory’), represented that:
(a)	each of the companies and persons carrying on business within Australia listed within the Internet Directory (the ‘Australian Businesses’) had corresponded with the respondent with a view to becoming a listed member in the Internet Directory; and
(b)	each of the Australian Businesses had given their authority or consent to their names, addresses and particulars to be entered in the Internet Directory,

when in fact each of the representations in 1(a) and (b) above was false in that:

(c)	not all of the Australian Businesses had corresponded with the respondent with a view to becoming a listed member of the Internet Directory; and
(d)	not all of the Australian Businesses had in fact given the respondent their authority or consent to become a listed member in the Internet Directory,

and by virtue of making such representations, engaged in conduct, in trade or commerce, that was misleading or deceptive, or likely to mislead or deceive, in contravention of section 52 of the Trade Practices Act 1974 (Cth) (the ‘Act’).

2.	A declaration that the respondent in trade or commerce, by reason of sending to companies and persons carrying on business within Australia documents which were in the form of invoices or demands for payment (the ‘Invoices’):
2.1	which represented that:

2.1.1. payment for entry as a listed member in the ‘Fax Directory International’, the Internet Directory, and the International Fax and Business Directory in CD-ROM format under the style or title ‘Fax Directory International’ or ‘International Fax Directory’ which included the same or substantially the same listings and information as found in the Internet Directory (the ‘CD-ROM Directory’), was due and payable to the respondent from the date of the Invoices;
2.1.2. if payment on the Invoices was made within fourteen (14) days, the amount due and payable to the respondent would in each case be reduced by 3%;
2.1.3. the respondent had a presently existing right to payment in the sum specified in the Invoices; and
2.1.4. each of the invoices was a bill, invoice or statement of amount due, based upon an existing, or prior business relationship between the respondent and the company or business to whom each of the Invoices was addressed in each case, or

2.2

which set out the price of being a listed member in the ‘Fax Directory International’, the Internet Directory, and the International Fax and Business Directory in CD-ROM format under the style or title ‘Fax Directory International’ or ‘International Fax Directory’ which included the same or substantially the same listings and information as found in the Internet Directory (the ‘CD-ROM Directory’), and not stating as prominently that no claim is made to the price,

asserted a right to payment from the companies or persons carrying on business within Australia to whom it sent the Invoices of a charge for the making in the ‘Fax Directory International’, the Internet Directory and the CD-ROM Directory of an entry relating to such companies or businesses, in circumstances in which the respondent did not know or did not have reasonable cause to believe that the making of the entry was authorised, in contravention of section 64(3) of the Act.
Injunctions

3.	An injunction for a period of five (5) years from the date of this order restraining the respondent, whether by itself, its servants, agents or otherwise howsoever, in trade or commerce, from representing that all of the companies or persons carrying on business within Australia listed within a directory operated or published by the respondent (the ‘Australian Businesses’), whether such directory is contained within a website operated by the respondent, in CD-ROM format or howsoever otherwise stored or published including by any electronic or non-electronic means had:
3.1.	corresponded with the respondent with a view to becoming a listed member in such directory, when in fact not all of the Australian Businesses had corresponded with the respondent with a view to becoming a listed member in such directory; and
3.2.	given their authority or consent for their names and/or addresses and/or other particulars to be entered in such directory, when in fact not all the Australian Businesses had given such authority or consent.
4.	An injunction for a period of five (5) years from the date of this order restraining the respondent, whether by itself, its servants, agents or otherwise howsoever, in trade or commerce, from sending documents to companies or persons carrying on business within Australia which are in the form of invoices or demands for payment for a charge for the making of an entry in a directory operated or published by the respondent, whether such directory was contained within a website operated by the respondent, in CD-ROM format or otherwise stored or published by any electronic or non-electronic means, of an entry, which invoices are demands for payment:
4.1	and which by the totality of the words, images and statements contained therein, represent that:

4.1.1. payment for entry as a listed member in the ‘Fax Directory International’, the Internet Directory, and the International Fax and Business Directory in CD-ROM format under the style or title ‘Fax Directory International’ or ‘International Fax Directory’ which included the same or substantially the same listings and information as found in the Internet Directory (the ‘CD-ROM Directory’), was due and payable to the respondent from the date of the Invoices; or
4.1.2. the respondent had a presently existing right to payment in the sum specified in the Invoices; and
4.1.3. each of the invoices was a bill, invoice or statement of amount due, based upon an existing, or prior business relationship between the respondent and the company or business to whom each of the Invoices was addressed in each case,

4.2	set out the charge for the making of an entry in a directory and not state as prominently or more prominently that no claim is made to payment of the charge,

unless the company or business has in fact authorised the making of an entry.
Costs

5.	The respondent pay the applicant’s costs of the action to be taxed on a party/party basis.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	W96 OF 2002

BETWEEN:	AUSTRALIAN COMPETITION & CONSUMER COMMISSION APPLICANT
AND:	IT & T AG RESPONDENT

JUDGE:	RD NICHOLSON J
DATE:	16 JULY 2004
PLACE:	PERTH

REASONS FOR JUDGMENT

1 These proceedings were commenced by an application and statement of claim on 28 March 2002.

2 On 3 May 2002 the applicant was granted leave to serve the application and statement of claim on the respondent in Switzerland in accordance with Div 3 of O 8 of the Federal Court Rules. Such service was effected on 17 October 2002.

3 On 13 August 2003, the Court made orders, inter alia, that the respondent be granted leave to file a notice of appearance and a defence within the time periods referred to therein (‘the Time Periods’), the Time Periods commencing from the date of service of the said orders (‘the Orders’) upon the respondent. Pursuant to order 3 of the Orders, it was stated that in the event of the respondent not filing both a notice of appearance and defence within the Time Periods, then ‘judgment shall be entered for the Applicant against the Respondent with costs and the Court may make the orders against the respondent as set out in the Application.’

4 The applicant arranged for service of the Orders on the respondent in Switzerland in accordance with Div 3 of O 8 of the Federal Court Rules. Such service was effected on 20 January 2004.

5 Following service of the Orders, the respondent has not filed either a notice of appearance or a defence within the Time Periods, and the applicant now seeks that judgment be entered against the respondent and that the Court make the orders as set out in the minute of proposed orders.

6 The applicant alleged in its statement of claim that the respondent’s conduct gave rise to numerous contraventions of s 52 of the Trade Practices Act 1974 (Cth) (‘the Act’). Further and in the alternative the applicant alleged in its statement of claim that the respondent asserted a right to payment in circumstances such that it constituted a contravention of s 64(2A) of the Act, or alternatively, s 64(3) of the Act. Further or alternatively, it was alleged that the respondent engaged in conduct that was liable to mislead the public as to the nature and characteristics of the services provided in the course of the respondent’s business contrary to s 55A of the Act.

7 The facts asserted in the statement of claim were that the respondent carried on a business which involved it in certain activities in trade and commerce. These were the publication, promotion, distribution, supply and/or maintenance on the respondent’s website of an internet directory and of an international fax directory (the CD-ROM Directory), and the distribution and supply of documents to companies and businesses within the States and Territories of Australia whose names, addresses and particulars are or were listed in the Internet Directory and/or the CD-ROM Directory or whose names were proposed to be so listed. Such statements were headed ‘IT & T International Business Directories’ and were in the form of invoices or demands for payment (‘the Invoices’). It was claimed that the totality of words, images and statements within the Internet Directory incorporated implied representations that each of the companies and businesses listed therein had corresponded with the respondent with a view to becoming a listed member in that directory and that each of such businesses had given their authority or consent for their particulars to be entered in that directory. Additionally, it was said that the respondent had sent unsolicited documents (the Invoices) by international mail to numerous companies and businesses in Australia in circumstances which gave rise to the following expressed or implied representations:

(1)	payment for entry as a listed member in the ‘Fax Directory International’, the Internet Directory and/or the CD-ROM Directory was due and payable to the respondent from the date of the Invoices;
(2)	if payment was made within fourteen (14) days, the amount due and payable to the respondent would in each case be reduced by 3%;
(3)	the respondent had a presently existing right to payment in the sum specified in the Invoices; and
(4)	each of the Invoices was a bill, invoice or statement of account due, based upon an existing or prior business relationship between the respondent and the company or business to whom each of the Invoices was addressed in each case.

8 Then it was pleaded that such representations were false. Additionally, it was said that the respondent failed to disclose adequately, or at all, to the companies and businesses to whom it sent the Invoices the existence or contents of May 2001 small print conditions or the October 2001 small print conditions. It was claimed that the respondent had thereby engaged in misleading or deceptive conduct contrary to s 52 of the Act. Additionally it was claimed that the print conditions were not stated on the Invoices with a necessary prominence so that the respondent was to be taken to have asserted a right to payment pursuant to s 64(5)(e) of the Act.

9 In support of its present application the applicant filed an outline of submissions dated 15 July 2004. That outline, in addition to setting out the above matters also addressed the issue of the proof of the contraventions. Those submissions are uncontroverted. They are on their face ones which the Court should accept. In my view they establish that there is a uncontroverted proper foundation for the making of the orders sought.

10 During the course of oral submissions, counsel for the applicant tabled a minute of proposed orders. Counsel for the applicant abandoned the request for a declaration relating to a contravention of s 64(2A) of the Act and in lieu thereof moved the Court for a declaration relating to contravention of s 64(3) of the Act. In similar vein, counsel abandoned the request for an injunction based upon a right to payment and sought instead an injunction relating to demands for payment by the Invoices.

11 In reliance upon the detailed written submissions for the applicant and their oral presentation, and in the absence of any contravener, I made the declarations and injunctions in the form attached to these reasons.

I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice RD Nicholson.

Associate:

Dated: 22 July 2004

Counsel for the Applicant:	Mr S Owen-Conway QC
Solicitor for the Applicant:	Australian Government Solicitor
There was no appearance for the Respondent
Date of Hearing:	16 July 2004
Date of Judgment:	16 July 2004