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Federal Court of Australia |
Last Updated: 14 March 2007
FEDERAL COURT OF AUSTRALIA
Bauer v Power Pacific International Media Pty Ltd [2007] FCA 349
TRADE PRACTICES - alleged breaches of
Trade Practices Act 1974 (Cth) and Fair Trading Act 1989 (Qld) in
"cold calling" various businesses and making certain representations seeking to
secure advertising in publications - whether
appropriate nexus between
contravening conduct as alleged and the consent orders
proposed
CONTEMPT - guilty plea by second, third and fourth
respondents to contempt of orders of the Federal Court - deliberate and repeated
instances
of contempt - where parties jointly propose penalty - responsibility
of Court to determine penalty - whether Court should grant
leave for the
withdrawal of charges as against first and fifth respondents - whether penalty
of 6 months imprisonment, suspended
for 24 months and costs order against third
and fourth respondents was appropriate - penalty at high end of range of
penalties for
contempt - need for 2 trials of 4-5 weeks each
averted
COSTS - whether liquidator for the first respondent
entitled to costs
Held: The Court is prepared to make the orders
proposed by the parties. The injunctions are appropriate. A penalty of 6 months
imprisonment,
suspended for 24 months is at the high end of the range of
penalties for contempt and is appropriate given the serious nature of
the
contempt charges and the deliberate and repeated instances of
contempt.
Federal Court of Australia Act
1976 (Cth) ss 31, 43
Trade Practices Act 1974 (Cth)
ss 52, 64(2A), 64(3)
Fair Trading Act 1989 (Qld) ss 38,
52(2), 52(3)
Australian Securities and
Investments Commission v Matthews (2001) 39 ACSR 110
cited
Construction, Forestry, Mining & Energy Union v BHP Steel (AIS)
Pty Ltd [2003] FCAFC 13 cited
Foster v Australian Competition and
Consumer Commission [2006] FCAFC 21; [2006] 149 FCR 135 considered
Gallagher v
Durack [1983] HCA 2; (1983) 152 CLR 238 cited
Hughes (trading as Crowded Planet) v
Australian Competition & Consumer Commission [2004] FCAFC 319
cited
Minister for Industry, Tourism and Resources v Mobil Oil Australia
Pty Ltd [2004] FCAFC 72 applied
NW Frozen Foods Pty Ltd v Australian
Competition and Consumer Commission (1996) 71 FCR 285 applied
R v
Fletcher; Ex parte Kisch [1935] HCA 1; (1935) 52 CLR 248
cited
BRIAN JAMES BAUER (IN HIS CAPACITY
AS COMMISSIONER FOR FAIR TRADING PURSUANT TO S 19 OF THE FAIR TRADING ACT
1989 (QLD)) v POWER PACIFIC INTERNATIONAL MEDIA PTY LTD, SPACELINK HOLDINGS PTY
LTD, DAVID ROBERT BARRETT, TRENT DAVID BARRETT AND FRANK
WILSON
QUD167
OF 2004
COLLIER J
14 MARCH
2007
BRISBANE
|
BRIAN JAMES BAUER (IN HIS CAPACITY AS
COMMISSIONER FOR FAIR TRADING PURSUANT TO S 19 OF THE FAIR TRADING ACT 1989
(QLD))
Applicant |
|
|
AND:
|
THE COURT ORDERS THAT:
1. The First Respondent by itself, its servants or agents or otherwise, be permanently restrained from:
(a) representing to any person, in the course of the First Respondent’s business, that any servant or agent of, or other person engaged by, the First Respondent:
(i) is engaged in an occupation or a course of study when that is untrue;
(ii) is seeking a journal or publication for a stated purpose when the journal or publication is being sought for a different purpose;
(b) representing to any person, in the course of the First Respondent’s business, that any servant or agent of, or other person engaged by, the First Respondent is connected or associated with:
(i) Telstra;
(ii) Yellow Pages;
(iii) an organisation or entity other than the First Respondent;
(c) representing to any person, in the course of the First Respondent’s business, that such person, or another person known to such person, has been previously contacted by a servant or agent of, or other person engaged by, the First Respondent when that is untrue;
(d) representing to any person, in the course of the First Respondent’s business, that such person, or another person known to such person, had previously agreed to advertise with the First Respondent, or in a publication produced by or on behalf of the First Respondent, when that is untrue;
(e) sending to any person, in the course of the First Respondent’s business, any tax invoice or request for payment in respect of advertising or proposed advertising that has not been requested by or on behalf of the recipient of the tax invoice or other request for payment;
(f) sending to any person, in the course of the First Respondent’s business, any notice or other document by which it is asserted that legal proceedings may be brought and/or that Court costs may be incurred, save in cases where:
(i) the amount claimed in such notice or other document is then due and owing by the recipient; and
(ii) the First Respondent then intends to institute Court proceedings if payment is not made;
(g) representing to any person, in the course of the First Respondent’s business:
(i) to the effect that any advertising placed with, or in a publication produced by or on behalf of, the First Respondent will provide assistance or support to, or otherwise advantage, a person, corporation or organisation other than the First Respondent;
(ii) to the effect that the First Respondent is, or a publication produced by or on behalf of the First Respondent is, affiliated or connected with firefighters or a firefighting organisation, police or a police organisation, emergency services organisation or any other community, government or charitable organisation or group;
(h) representing to any person, in the course of the First Respondent’s business, to the effect that if advertising is placed with, or in a publication produced by or on behalf of, the First Respondent, then the advertising of that person's business will be the only advertisement of that kind in any one publication produced by or on behalf of the First Respondent.
2. The Second Respondent, by itself, its servants or agents or otherwise, be permanently restrained from:
(a) representing to any person, in the course of the Second Respondent’s business, that any servant or agent of, or other person engaged by, the Second Respondent:
(i) is engaged in an occupation or a course of study when that is untrue;
(ii) is seeking a journal or publication for a stated purpose when the journal or publication is being sought for a different purpose;
(b) representing to any person, in the course of the Second Respondent’s business, that any servant or agent of, or other person engaged by, the Second Respondent is connected or associated with:
(i) Telstra;
(ii) Yellow Pages;
(iii) an organisation or entity other than the Second Respondent,
when that is untrue;
(c) representing to any person, in the course of the Second Respondent’s business, that such person, or another person known to such person, has been previously contacted by a servant or agent of, or other person engaged by, the Second Respondent when that is untrue;
(d) representing to any person, in the course of the Second Respondent's business, that such person, or another person known to such person, had previously agreed to advertise with the Second Respondent, or in a publication produced by or on behalf of the Second Respondent, when that is untrue;
(e) sending to any person, in the course of the Second Respondent’s business, any tax invoice or request for payment in respect of advertising or proposed advertising that has not been requested by or on behalf of the recipient of the tax invoice or other request for payment;
(f) sending to any person, in the course of the Second Respondent’s business, any notice or other document by which it is asserted that legal proceedings may be brought and/or that Court costs may be incurred, save in cases where:
(i) the amount claimed in such notice or other document is then due and owing by the recipient; and
(ii) the Second Respondent then intends to institute Court proceedings if payment is not made;
(g) representing to any person, in the course of the Second Respondent’s business:
(i) to the effect that any advertising placed with, or in a publication produced by or on behalf of, the Second Respondent will provide assistance or support to, or otherwise advantage, a person, corporation or organisation other than the Second Respondent;
(ii) to the effect that the Second Respondent is, or a publication produced by or on behalf of the Second Respondent is, affiliated or connected with firefighters or a firefighting organisation, police or a police organisation, emergency services organisation or any other community, government or charitable organisation or group,
when that is untrue;
(h) representing to any person, in the course of the Second Respondent’s business, to the effect that if advertising is placed with, or in a publication produced by or on behalf of, the Second Respondent, then the advertising of that person's business will be the only advertisement of that kind in any one publication produced by or on behalf of the Second Respondent, when that is untrue.
3. The Third Respondent be permanently restrained from being directly or indirectly knowingly concerned in, or party to, any conduct by the First Respondent or the Second Respondent, or any other corporation consisting of:
(a) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, that any servant or agent of, or other person engaged by, the First and/or Second Respondents or any other corporation:
(i) is engaged in an occupation or a course of study when that is untrue;
(ii) is seeking a journal or publication for a stated purpose when the journal or publication is being sought for a different purpose;
(b) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, that any servant or agent of, or other person engaged by, the First and/or Second Respondents or by engaging any other corporation is connected or associated with:
(i) Telstra;
(ii) Yellow Pages;
(iii) an organisation or entity other than the First and Second Respondents or the other corporation,
when that is untrue;
(c) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, that such person or another person known to such person has been previously contacted by a servant or agent of, or other person engaged by, the First and/or Second Respondents or by engaging any other corporation when that is untrue;
(d) representing to any person, in the course of the First and/or Second Respondent’s business, or in the course of any other corporation’s business, that such person or another person known to such person had previously agreed to advertise with the First and/or Second Respondents, or any other corporation, or in a publication produced by or on behalf of the First and/or Second Respondents, or any other corporation, when that is untrue;
(e) sending to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, any tax invoice or request for payment in respect of advertising or proposed advertising that has not been requested by or on behalf of the recipient of the tax invoice or other request for payment;
(f) sending to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, any notice or other document by which it is asserted that legal proceedings may be brought and/or that Court costs may be incurred, save in cases where:
(i) the amount claimed in such notice or other document is then due and owing by the recipient; and
(ii) the First and/or Second Respondent, or any other corporation, then intend to institute Court proceedings if payment is not made;
(g) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business:
(i) to the effect that any advertising placed with, or in a publication produced by or on behalf of, the First and/or Second Respondents, or any other corporation, will provide assistance or support to, or otherwise advantage, a person, corporation or organisation other than the First and/or Second Respondents or the other corporation;
(ii) to the effect that the First and/or Second Respondents or any other corporation are, or a publication produced by or on behalf of the First and/or Second Respondents or any other corporation is, affiliated or connected with firefighters or a firefighting organisation, police or a police organisation, emergency services organisation or any other community, government or charitable organisation or group,
when that is untrue;
(h) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, to the effect that if advertising is placed with, or in a publication produced by or on behalf of, the First Respondent or the Second Respondent, or any other corporation, then the advertising of that person's business will be the only advertisement of that kind in any one publication produced by or on behalf of the First Respondent or the Second Respondent, or any other corporation, when that is untrue.
4. The Fourth Respondent be permanently restrained from being directly or indirectly knowingly concerned in, or party to, any conduct by the First Respondent or the Second Respondent or any other corporation consisting of:
(a) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, that any servant or agent of, or other person engaged by, the First and/or Second Respondents or by engaging any other corporation:
(i) is engaged in an occupation or a course of study when that is untrue;
(ii) is seeking a journal or publication for a stated purpose when the journal or publication is being sought for a different purpose;
(b) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, that any servant or agent of, or other person engaged by, the First and/or Second Respondents, or any other corporation is connected or associated with:
(i) Telstra;
(ii) Yellow Pages;
(iii) an organisation or entity other than the First and Second Respondents or the other corporation,
when that is untrue;
(c) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, that such person or another person known to such person has been previously contacted by a servant or agent of, or other person engaged by, the First and/or Second Respondents, or engaged by any other corporation when that is untrue;
(d) representing to any person, in the course of the First and/or Second Respondent’s business, or in the course of any other corporation’s business, that such person or another person known to such person had previously agreed to advertise with the First and/or Second Respondents, or any other corporation, or in a publication produced by or on behalf of the First and/or Second Respondents, or any other corporation when that is untrue;
(e) sending to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, any tax invoice or request for payment in respect of advertising or proposed advertising that has not been requested by or on behalf of the recipient of the tax invoice or other request for payment;
(f) sending to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, any notice or other document by which it is asserted that legal proceedings may be brought and/or that Court costs may be incurred, save in cases where:
(i) the amount claimed in such notice or other document is then due and owing by the recipient; and
(ii) the First and/or Second Respondents or any other corporation, then intend to institute Court proceedings if payment is not made;
(g) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business:
(i) to the effect that any advertising placed with, or in a publication produced by or on behalf of, the First and/or Second Respondents, or any other corporation, will provide assistance or support to, or otherwise advantage, a person, corporation or organisation other than the First and/or Second Respondents, or any other corporation;
(ii) to the effect that the First and/or Second Respondents or any other corporation are, or a publication produced by or on behalf of the First and/or Second Respondents or any other corporation is, affiliated or connected with firefighters or a firefighting organisation, police or a police organisation, emergency services organisation or any other community, government or charitable organisation or group,
when that is untrue;
(h) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, to the effect that if advertising is placed with, or in a publication produced by or on behalf of, the First Respondent or the Second Respondent, or any other corporation, then the advertising of that person’s business will be the only advertisement of that kind in any one publication produced by or on behalf of the First Respondent or the Second Respondent, or any other corporation, when that is untrue.
5. The Fifth Respondent be permanently restrained from being directly or indirectly knowingly concerned in, or party to, any conduct by the First Respondent or the Second Respondent or any other corporation consisting of:
(a) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business that any servant or agent of, or other person engaged by, the First and/or Second Respondents or engaged by any other corporation is connected or associated with:
(i) Telstra;
(ii) Yellow Pages;
(iii) an organisation or entity other than the First and Second Respondents or the other corporation;
(b) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, that such person or another person known to such person has been previously contacted by a servant or agent of, or other person engaged by, the First and/or Second Respondents or engaged by any other corporation when that is untrue;
(c) representing to any person, in the course of the First and/or Second Respondent’s business, or in the course of any other corporation’s business, that such person or another person known to such person had previously agreed to advertise with the First and/or Second Respondents or engaged by any other corporation when that is untrue.
6. The First Respondent by itself, its servants or agents or otherwise, be permanently restrained from carrying on, or being involved in any manner in, the business of selling advertising in any publication or on the internet.
7 The Second Respondent by itself, its servants or agents or otherwise, be permanently restrained from carrying on, or being involved in any manner in, the business of selling advertising in any publication or on the internet.
8 The Third Respondent by himself, his servants or agents or otherwise, be permanently restrained from:
(a) carrying on, or being involved in any manner in (including but not limited to providing training, advice or assistance of any kind), the business of selling advertising in any publication or proposed publication or on the internet;
(b) being connected with (including but not limited to holding a directorship of or controlling (by virtue of his shareholding or otherwise)) any corporation which engages in, or is associated with, the business of selling advertising in any publication or proposed publication or on the internet.
9 The Fourth Respondent by himself, his servants or agents or otherwise, be permanently restrained from:
(a) carrying on, or being involved in any manner in (including but not limited to providing training, advice or assistance of any kind), the business of selling advertising in any publication or proposed publication or on the internet;
(b) being connected with (including but not limited to holding a directorship of or controlling (by virtue of his shareholding or otherwise)) any corporation which engages in, or is associated with, the business of selling advertising in any publication or proposed publication or on the internet.
10 The Fifth Respondent by himself, his servants or agents or otherwise, be permanently restrained from:
(a) carrying on, or being involved in any manner in (including but not limited to providing training, advice or assistance of any kind), the business of selling advertising in any publication or proposed publication or on the internet;
(b) being connected with (including but not limited to holding a directorship of or controlling (by virtue of his shareholding or otherwise)) any corporation which engages in, or is associated with, the business of selling advertising in any publication or proposed publication on the internet.
11 Having regard to its plea of guilty, the Second Respondent is found guilty of the charges referred to in paragraphs 1, 2, 4, 6, 8, 10, 12 and 13 inclusive of the amended statement of charge filed on 21 February 2007.
12 Having regard to his plea of guilty, the Third Respondent is found guilty of the charges referred to in paragraphs 14 to 18 inclusive of the amended statement of charge filed on 21 February 2007;
13 Having regard to his plea of guilty, the Fourth Respondent is found guilty of the charges referred to in paragraphs 19 to 25 inclusive of the amended statement of charge filed on 21 February 2007.
14 The Third Respondent be imprisoned for a period of six (6) months.
15 A warrant for the Third Respondent’s committal to prison for a period of six (6) months issue.
16 The warrant lie in the Registry to the intent that it not be executed provided that the Third Respondent refrains from contravening the orders referred to in paragraphs 3 and 8 above for a period of 24 months from the date of these orders.
17 The Fourth Respondent be imprisoned for a period of six (6) months.
18 A warrant for the Fourth Respondent’s committal to prison for a period of six (6) months issue.
19 The warrant lie in the Registry to the intent that it not be executed provided that the Fourth Respondent refrains from contravening the orders referred to in paragraphs 4 and 9 above for a period of 24 months from the date of these orders.
20 The Second, Third and Fourth Respondents pay the Applicant’s costs of and incidental to the application filed on 30 August 2004 and the notice of motion for contempt filed on 2 June 2006, agreed in the sum of $180,000 if paid to the Commissioner of Fair Trading by way of a bank cheque or cleared funds within fourteen (14) days from the date of these orders, or $245,000 if not paid by that date (whereupon the said sum of $245,000 shall be payable forthwith).
21 Each of the Third and Fourth Respondents has liberty to apply to the Court to vary paragraphs 8 and 9 of these orders upon giving twenty-one days notice in writing to the Applicant’s solicitor.
Notice to Phillip Aggs, Liquidator of the First Respondent, Power Pacific International Media Pty Ltd
The First Respondent, Power Pacific International Media Pty Ltd, is liable to
imprisonment or to sequestration of property if Power
Pacific International
Media Pty Ltd disobeys any of paragraphs 1 and 6 of this Order of Justice
Collier dated 14 March 2007.
Notice to the Second Respondent, Spacelink Holdings Pty Ltd
The Second Respondent, Spacelink Holdings Pty Ltd, is liable to imprisonment
or to sequestration of property if Spacelink Holdings
Pty Ltd disobeys any of
paragraphs 2 and 7 of this Order of Justice Collier dated 14 March 2007.
Notice to the Third Respondent, David Robert Barrett
The Third Respondent, David Robert Barrett, is liable to imprisonment or to sequestration of property if:
(a) the Second Respondent, Spacelink Holdings Pty Ltd, disobeys any of paragraphs 2 and 7 of this Order of Justice Collier dated 14 March 2007; or
(b) he, David Robert Barrett, disobeys any of paragraphs 3 and 8 of this Order of Justice Collier dated 14 March 2007.
Notice to the Fourth Respondent, Trent David Barrett
The Fourth Respondent, Trent David Barrett, is liable to imprisonment or to sequestration of property if:
(a) the Second Respondent, Spacelink Holdings Pty Ltd, disobeys any of paragraphs 2 and 7 of this Order of Justice Collier dated 14 March 2007; or
(b) he, Trent David Barrett, disobeys any of paragraphs 4 and 9 of this Order of Justice Collier dated 14 March 2007.
Notice to the Fifth Respondent, Frank Wilson
The Fifth Respondent, Frank Wilson, is liable to imprisonment or to
sequestration of property if Frank Wilson disobeys any of paragraphs
5 and 10 of
this Order of Justice Collier dated 14 March
2007.
Note: Settlement and entry of orders is dealt with in Order 36
of the Federal Court Rules.
|
BETWEEN:
|
BRIAN JAMES BAUER (IN HIS CAPACITY AS COMMISSIONER FOR FAIR TRADING
PURSUANT TO S 19 OF THE FAIR TRADING ACT 1989
(QLD))
Applicant |
|
AND:
|
POWER PACIFIC INTERNATIONAL MEDIA PTY LTD
First Respondent SPACELINK HOLDINGS PTY LTD Second Respondent DAVID ROBERT BARRETT Third Respondent TRENT DAVID BARRETT Fourth Respondent FRANK WILSON Fifth Respondent |
|
JUDGE:
|
COLLIER J
|
|
DATE:
|
14 MARCH 2007
|
|
PLACE:
|
BRISBANE
|
REASONS FOR JUDGMENT
1 The respondents in this case are the subjects of a related application and notice of motion by the applicant. Pursuant to the application filed 26 November 2004, in respect of which the hearing was scheduled for later this year, the applicant sought injunctive and declaratory relief against the respondents:
• in the case of the first and second respondents, by reason of their alleged contraventions of ss 52, 64(2A) and 64(3) Trade Practices Act 1974 (Cth) ("TPA") and of ss 38, 52(2) and 52(3) Fair Trading Act 1989 (Qld) ("FTA") committed since 2000, and
• in the case of the third, fourth and fifth respondents, as persons who were knowingly concerned in or party to the contraventions by the first and second respondents of the TPA and the FTA.
2 The notice of motion, in respect of which the hearing was due to commence Monday this week, was an amended statement of charge for contempt of court filed 21 February 2007 amending a statement of charge filed 2 June 2006, alleging that the respondents had breached an order made by Cooper J in this matter on 12 November 2004, which order was made by his Honour restraining the respondents from certain activity until the trial of the action or earlier order.
The applicant’s case
3 In summary, the applicant’s primary case was that the first and second respondent generated income by "cold calling" various businesses seeking to secure advertising in publications produced by or on behalf of the first and second respondents. The publications contained articles and a collection of advertisements by various businesses that paid the first and second respondents for such "advertising". At all material times the third respondent was the sole director and shareholder of the first and second respondents, the fourth respondent was responsible for the day to day management of the first and second respondents, and the fifth respondent was an employee of the first and second respondents.
4 In summary, the applicant contended that:
• servants or agents of the first and second respondents, during telephone conversations, falsely represented that they were a university student studying marketing, a teacher at Bond University, or from either the Yellow Pages or Telstra, or had previously been in contact with the relevant business operator, or that the business operator had previously agreed to place an advertisement in a publication of the first and second respondent
• the first and second respondents engaged in misleading conduct by sending invoices to businesses seeking payments in respect of purported advertisements in various publications when the recipient had not requested or authorised the advertising, in contravention of ss 64(2A) and 64(3) TPA and ss 52(2) and 52(3) FTA
• the first and second respondents engaged in misleading conduct by sending documents headed "Notice of Intention to Summons" to business operators who had been contacted by servants or agents of the first and second respondents, representing that legal proceedings would be filed against the recipient if the recipient did not pay for unauthorised advertising, which conduct was in breach of s 51A TPA and s 37 FTA
• servants or agents of the first respondent or second respondent during telephone conversations engaged in misleading conduct by suggesting that if the advertising were authorised it would assist community groups
• servants or agents of the first respondent or second respondent during telephone conversations engaged in misleading conduct in representing that if the business advertised in a publication of either respondent, such business would be the only advertiser of that kind in any one publication of either respondent, which representations were misleading pursuant to s 51A TPA and s 37 FTA.
5 Consent orders made by Cooper J in this matter on 12 November 2004 were as follows:
1. Until the trial of the action or earlier order, the First and Second Respondents, by themselves, their servants or agents or otherwise, be restrained from:
(a) representing to any person, in the course of the First and/or Second Respondents’ business, that any servant or agent of, or other person engaged by, the First and/or Second Respondents:
(i) is engaged in an occupation or a course of study when that is untrue;
(ii) is seeking a journal or publication for a stated purpose when the journal or publication is being sought for a different purpose;
(b) representing to any person, in the course of the First and/or Second Respondents’ business, that any servant or agent of, or other person engaged by, the First and/or Second Respondents is connected or associated with:
(i) Telstra;
(ii) Yellow Pages;
(iii) an organisation or entity other than the First and Second Respondents;
(c) representing to any person, in the course of the First and/or Second Respondents’ business, that such person or another person known to such person has been previously contacted by a servant or agent of, or other person engaged by, the First and/or Second Respondents when that is untrue;
(d) representing to any person, in the course of the First and/or Second Respondent’s business, that such person or another person known to such person had previously agreed to advertise with the First and/or Second Respondents, or in a publication produced by or on behalf of the First and/or Second Respondents, when that is untrue;
(e) sending to any person, in the course of the First and/or Second Respondents’ business, any tax invoice or request for payment in respect of advertising or proposed advertising that has not been requested by or on behalf of the recipient of the tax invoice or other request for payment;
(f) sending to any person, in the course of the First and/or Second Respondents’ business, any notice or other document by which it is asserted that legal proceedings may be brought and/or that Court costs may be incurred, save in cases where:
(i) the amount claimed in such notice or other document is then due and owing by the recipient; and
(ii) the First and/or Second Respondents then intend to institute Court proceedings if payment is not made;
(g) representing to any person, in the course of the First and/or Second Respondents’ business:
(i) to the effect that any advertising placed with, or in a publication produced by or on behalf of, the First and/or Second Respondents will provide assistance or support to, or otherwise advantage, a person, corporation or organisation other than the First and/or Second Respondents;
(ii) to the effect that the First and/or Second Respondents are, or a publication produced by or on behalf of the First and/or Second Respondents is, affiliated or connected with firefighters or a firefighting organisation, police or a police organisation, emergency services organisation or any other community, government or charitable organisation or group;
(h) representing to any person, in the course of the First and/or Second Respondents’ business, to the effect that if advertising is placed with, or in a publication produced by or on behalf of, the First Respondent or the Second Respondent, then the advertising of that person’s business will be the only advertisement of that kind in any one publication produced by or on behalf of the First Respondent or the Second Respondent.
2. Until the trial of the action or earlier order, the Third Respondent be restrained from being directly or indirectly knowingly concerned in, or party to, any conduct by the First Respondent or the Second Respondent or any other corporation consisting of:
(a) representing to any person, in the course of the First and/or Second Respondents’ business, that any servant or agent of, or other person engaged by, the First and/or Second Respondents:
(i) is engaged in an occupation or a course of study when that is untrue;
(ii) is seeking a journal or publication for a stated purpose when the journal or publication is being sought for a different purpose;
(b) representing to any person, in the course of the First and/or Second Respondents’ business, that any servant or agent of, or other person engaged by, the First and/or Second Respondents is connected or associated with:
(i) Telstra;
(ii) Yellow Pages;
(iii) an organisation or entity other than the First and Second Respondents;
(c) representing to any person, in the course of the First and/or Second Respondents’ business, that such person or another person known to such person has been previously contacted by a servant or agent of, or other person engaged by, the First and/or Second Respondents when that is untrue;
(d) representing to any person, in the course of the First and/or Second Respondent’s business, that such person or another person known to such person had previously agreed to advertise with the First and/or Second Respondents, or in a publication produced by or on behalf of the First and/or Second Respondents, when that is untrue;
(e) sending to any person, in the course of the First and/or Second Respondents’ business, any tax invoice or request for payment in respect of advertising or proposed advertising that has not been requested by or on behalf of the recipient of the tax invoice or other request for payment;
(f) sending to any person, in the course of the First and/or Second Respondents’ business, any notice or other document by which it is asserted that legal proceedings may be brought and/or that Court costs may be incurred, save in cases where:
(i) the amount claimed in such notice or other document is then due and owing by the recipient; and
(ii) the First and/or Second Respondents then intend to institute Court proceedings if payment is not made;
(g) representing to any person, in the course of the First and/or Second Respondents’ business:
(i) to the effect that any advertising placed with, or in a publication produced by or on behalf of, the First and/or Second Respondents will provide assistance or support to, or otherwise advantage, a person, corporation or organisation other than the First and/or Second Respondents;
(ii) to the effect that the First and/or Second Respondents are, or a publication produced by or on behalf of the First and/or Second Respondents is, affiliated or connected with firefighters or a firefighting organisation, police or a police organisation, emergency services organisation or any other community, government or charitable organisation or group;
(h) representing to any person, in the course of the First and/or Second Respondents’ business, to the effect that if advertising is placed with, or in a publication produced by or on behalf of, the First Respondent or the Second Respondent, then the advertising of that person’s business will be the only advertisement of that kind in any one publication produced by or on behalf of the First Respondent or the Second Respondent.
3. Until the trial of the action or earlier order, the Fourth Respondent be restrained from being directly or indirectly knowingly concerned in, or party to, any conduct by the First Respondent or the Second Respondent or any other corporation consisting of:
(a) representing to any person, in the course of the First and/or Second Respondents’ business, that any servant or agent of, or other person engaged by, the First and/or Second Respondents:
(i) is engaged in an occupation or a course of study when that is untrue;
(ii) is seeking a journal or publication for a stated purpose when the journal or publication is being sought for a different purpose;
(b) representing to any person, in the course of the First and/or Second Respondents’ business, that any servant or agent of, or other person engaged by, the First and/or Second Respondents is connected or associated with:
(i) Telstra;
(ii) Yellow Pages;
(iii) an organisation or entity other than the First and Second Respondents;
(c) representing to any person, in the course of the First and/or Second Respondents’ business, that such person or another person known to such person has been previously contacted by a servant or agent of, or other person engaged by, the First and/or Second Respondents when that is untrue;
(d) representing to any person, in the course of the First and/or Second Respondent's business, that such person or another person known to such person had previously agreed to advertise with the First and/or Second Respondents, or in a publication produced by or on behalf of the First and/or Second Respondents, when that is untrue;
(e) sending to any person, in the course of the First and/or Second Respondents’ business, any tax invoice or request for payment in respect of advertising or proposed advertising that has not been requested by or on behalf of the recipient of the tax invoice or other request for payment;
(f) sending to any person, in the course of the First and/or Second Respondents’ business, any notice or other document by which it is asserted that legal proceedings may be brought and/or that Court costs may be incurred, save in cases where:
(i) the amount claimed in such notice or other document is then due and owing by the recipient; and
(ii) the First and/or Second Respondents then intend to institute Court proceedings if payment is not made;
(g) representing to any person, in the course of the First and/or Second Respondents’ business:
(i) to the effect that any advertising placed with, or in a publication produced by or on behalf of, the First and/or Second Respondents will provide assistance or support to, or otherwise advantage, a person, corporation or organisation other than the First and/or Second Respondents;
(ii) to the effect that the First and/or Second Respondents are, or a publication produced by or on behalf of the First and/or Second Respondents is, affiliated or connected with firefighters or a firefighting organisation, police or a police organisation, emergency services organisation or any other community, government or charitable organisation or group;
(h) representing to any person, in the course of the First and/or Second Respondents’ business, to the effect that if advertising is placed with, or in a publication produced by or on behalf of, the First Respondent or the Second Respondent, then the advertising of that person's business will be the only advertisement of that kind in any one publication produced by or on behalf of the First Respondent or the Second Respondent.
4. Until the trial of the action or earlier order, the Fifth Respondent be restrained from being directly or indirectly knowingly concerned in, or party to, any conduct by the First Respondent or the Second Respondent or any other corporation consisting of:
(a) representing to any person, in the course of the First and/or Second Respondents’ business, that any servant or agent of, or other person engaged by, the First and/or Second Respondents is connected or associated with:
(i) Telstra;
(ii) Yellow Pages;
(iii) an organisation or entity other than the First and Second Respondents;
(b) representing to any person, in the course of the First and/or Second Respondents’ business, that such person or another person known to such person has been previously contacted by a servant or agent of, or other person engaged by, the First and/or Second Respondents when that is untrue;
(c) representing to any person, in the course of the First and/or Second Respondent’s business, that such person or another person known to such person had previously agreed to advertise with the First and/or Second Respondents when that is untrue.
6 In relation to the contempt proceeding, the applicant contended in summary that:
• the first and second respondents committed numerous breaches of Cooper J’s order
• the third respondent was guilty with each of the first and second respondents for contempt specified in each of paras 1-13 of the amended statement of charge by wilfully failing to take any, or any reasonable, steps to ensure that either the first or second respondents obeyed Cooper J’s order
• the fourth respondent breached para 3 of Cooper J’s order by being directly or indirectly knowingly concerned in or party to the conduct referred to in paras 1-13 of the amended statement of charge, or alternatively by wilfully failing to take any or any reasonable steps to ensure that Cooper J’s order was obeyed
• the fifth respondent breached paras 4(b) and 4(c) of Cooper J’s order by being directly or indirectly knowingly concerned in or a party to the conduct of the first and second respondents referred to in paras 2(a)(i), 2(a)(ii), 2(c), 3(d)(iv), 4(d)(iv), 5(v) and 6(x) of the amended statement of charge.
Hearing on Monday 12 March 2007
7 On Monday this week, Mr Couper SC for the applicant sought the leave of the Court to substitute the new Commissioner of Fair Trading for the State of Queensland, Mr Bauer, as the applicant in this matter. This application was unopposed, and I granted leave.
8 Secondly, Mr Couper SC advised the Court that a winding up order had been made in respect of the first respondent under the provisions of the Corporations Act 2001 (Cth), and that Mr Philip Aggs had been appointed liquidator of the first respondent. Mr Couper SC sought the leave of the Court to proceed with the primary proceeding and the contempt proceeding against the first respondent pursuant to s 471B Corporations Act 2001 (Cth). Neither Mr Aggs, who appeared in person, nor Counsel for the second, third, fourth or fifth respondents opposed this course of action, and I granted leave.
9 Thirdly, Mr Couper SC for the applicant informed me that the primary matter the subject of the application filed 26 November 2004 had been resolved between the parties. Paragraphs 1-10 of a draft Consent Order filed by the parties in Court on Monday propose that the respondents (and, in the case of the first and second respondents by themselves or their servants or agents) be permanently restrained from:
1) making certain representations
2) sending certain notices to third parties
3) carrying on, or being involved in the business of selling advertising in any publication or proposed publication or on the internet
4) (in the case of the third, fourth and fifth respondent) being connected with – including, but not limited to holding a directorship or controlling (by virtue of shareholding or otherwise) – any corporation which engages in or is associated with the business of selling advertising in any publication or proposed publication or on the internet.
10 The third and fourth categories of proposed restraint are broad, and the Court must be satisfied that there is an appropriate nexus between the contravening conduct as alleged and the orders. As Mr Couper for the applicant submitted, this issue in the context of restraining orders pursuant to s 80 TPA was addressed recently by the Full Court in Foster v Australian Competition and Consumer Commission [2006] FCAFC 21; [2006] 149 FCR 135 at 149 where their Honours observed:
In our view, the need, suggested by the authorities, for a nexus between the contravention of the Act which the Court has found and the terms of the restraint which it then decides to impose is a specific reflection of Lockhart J’s insistence that the power be exercised ‘judicially and sensibly’. It goes to the appropriateness of the relief contemplated by the concluding words of s 80(1), not to the extent of the power to grant it. If the Court considers that a complete prohibition, whether permanently or for a specified period, on a respondent’s engaging in a particular field of commercial activity or industry is required to protect the public from conduct of the kind which constituted the contravention, s 80 is wide enough to support such a prohibition as a matter of power...
11 Given the history of this matter, the conduct alleged, and the proposed consent to this restraint by the third, fourth and fifth respondents, I am satisfied that the proposed orders as detailed in the draft Consent Orders are appropriate in the circumstances, and I set them out in full in the orders of this judgment.
12 Finally, the parties have also submitted that the contempt charges against the respondents be resolved in accordance with the proposal contained in the draft Consent Order filed on Monday. I note that these charges relate only to breaches of the orders of Cooper J in respect of which the statement of charge alleges contempt. Otherwise they do not relate to the substance of the matters alleged in the primary application.
Details of the proposal to resolve contempt charges
13 The details of the proposal to resolve the contempt charges against the respondents are as follows:
First respondent
14 As the first respondent is in liquidation, the applicant seeks the leave of the Court to withdraw the contempt charges against it.
Second respondent
15 Having regard to its plea of guilty, the second respondent be found guilty of the charges referred to in paras 1,2,4,6,8,10,12 and 13 inclusive in the amended statement of charge.
Third respondent
16 Having regard to its plea of guilty, the third respondent be found guilty of the charges referred to in paras 19-25 inclusive of the amended statement of charge.
17 The third respondent be sentenced to a term of imprisonment of six months.
A warrant be issued for the third respondent’s committal to prison for a period of six months.
The warrant lie in the Registry to the intent that it not be executed provided that the third respondent refrains from contravening orders permanently restraining him for a period of twenty-four months from the date of these orders. Specifically, the relevant proposed orders to permanently restrain the third respondent are as follows:
1. The Third Respondent be permanently restrained from being directly or indirectly knowingly concerned in, or party to, any conduct by the First Respondent or the Second Respondent, or any other corporation consisting of:
(a) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, that any servant or agent of, or other person engaged by, the First and/or Second Respondents or any other corporation:
(i) is engaged in an occupation or a course of study when that is untrue;
(ii) is seeking a journal or publication for a stated purpose when the journal or publication is being sought for a different purpose;
(b) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, that any servant or agent of, or other person engaged by, the First and/or Second Respondents or by engaging any other corporation is connected or associated with:
(i) Telstra;
(ii) Yellow Pages;
(iii) an organisation or entity other than the First and Second Respondents or the other corporation,
when that is untrue;
(c) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, that such person or another person known to such person has been previously contacted by a servant or agent of, or other person engaged by, the First and/or Second Respondents or by engaging any other corporation when that is untrue;
(d) representing to any person, in the course of the First and/or Second Respondent's business, or in the course of any other corporation’s business, that such person or another person known to such person had previously agreed to advertise with the First and/or Second Respondents, or any other corporation, or in a publication produced by or on behalf of the First and/or Second Respondents, or any other corporation, when that is untrue;
(e) sending to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, any tax invoice or request for payment in respect of advertising or proposed advertising that has not been requested by or on behalf of the recipient of the tax invoice or other request for payment;
(f) sending to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, any notice or other document by which it is asserted that legal proceedings may be brought and/or that Court costs may be incurred, save in cases where:
(i) the amount claimed in such notice or other document is then due and owing by the recipient; and
(ii) the First and/or Second Respondent, or any other corporation, then intend to institute Court proceedings if payment is not made;
(g) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business:
(i) to the effect that any advertising placed with, or in a publication produced by or on behalf of, the First and/or Second Respondents, or any other corporation, will provide assistance or support to, or otherwise advantage, a person, corporation or organisation other than the First and/or Second Respondents or the other corporation;
(ii) to the effect that the First and/or Second Respondents or any other corporation are, or a publication produced by or on behalf of the First and/or Second Respondents or any other corporation is, affiliated or connected with firefighters or a firefighting organisation, police or a police organisation, emergency services organisation or any other community, government or charitable organisation or group,
when that is untrue;
(h) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, to the effect that if advertising is placed with, or in a publication produced by or on behalf of, the First Respondent or the Second Respondent, or any other corporation, then the advertising of that person's business will be the only advertisement of that kind in any one publication produced by or on behalf of the First Respondent or the Second Respondent, or any other corporation, when that is untrue.
2. The Third Respondent by himself, his servants or agents or otherwise, be permanently restrained from:
(a) carrying on, or being involved in any manner in (including but not limited to providing training, advice or assistance of any kind), the business of selling advertising in any publication or proposed publication or on the internet;
(b) being connected with (including but not limited to holding a directorship of or controlling (by virtue of his shareholding or otherwise)) any corporation which engages in, or is associated with, the business of selling advertising in any publication or proposed publication or on the internet.
Fourth Respondent
18 Having regard to his plea of guilty, the fourth respondent be found guilty of the charges referred to in paras 19-25 inclusive of the amended statement of charge.
The fourth respondent be sentenced to a term of imprisonment of six months.
A warrant be issued for the fourth respondent’s committal to prison for a period of six months.
The warrant to lie in the Registry to the intent that it not be executed provided that the fourth respondent refrains from contravening orders permanently restraining him for a period of twenty-four months from the date of these orders. Specifically, the relevant proposed orders to permanently restrain the third respondent are as follows:
1. The Fourth Respondent be permanently restrained from being directly or indirectly knowingly concerned in, or party to, any conduct by the First Respondent or the Second Respondent or any other corporation consisting of:
(a) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, that any servant or agent of, or other person engaged by, the First and/or Second Respondents or by engaging any other corporation:
(i) is engaged in an occupation or a course of study when that is untrue;
(ii) is seeking a journal or publication for a stated purpose when the journal or publication is being sought for a different purpose;
(b) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, that any servant or agent of, or other person engaged by, the First and/or Second Respondents, or any other corporation is connected or associated with:
(i) Telstra;
(ii) Yellow Pages;
(iii) an organisation or entity other than the First and Second Respondents or the other corporation,
when that is untrue;
(c) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, that such person or another person known to such person has been previously contacted by a servant or agent of, or other person engaged by, the First and/or Second Respondents, or engaged by any other corporation when that is untrue;
(d) representing to any person, in the course of the First and/or Second Respondent’s business, or in the course of any other corporation’s business, that such person or another person known to such person had previously agreed to advertise with the First and/or Second Respondents, or any other corporation, or in a publication produced by or on behalf of the First and/or Second Respondents, or any other corporation when that is untrue;
(e) sending to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, any tax invoice or request for payment in respect of advertising or proposed advertising that has not been requested by or on behalf of the recipient of the tax invoice or other request for payment;
(f) sending to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, any notice or other document by which it is asserted that legal proceedings may be brought and/or that Court costs may be incurred, save in cases where:
(i) the amount claimed in such notice or other document is then due and owing by the recipient; and
(ii) the First and/or Second Respondents or any other corporation, then intend to institute Court proceedings if payment is not made;
(g) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business:
(i) to the effect that any advertising placed with, or in a publication produced by or on behalf of, the First and/or Second Respondents, or any other corporation, will provide assistance or support to, or otherwise advantage, a person, corporation or organisation other than the First and/or Second Respondents, or any other corporation;
(ii) to the effect that the First and/or Second Respondents or any other corporation are, or a publication produced by or on behalf of the First and/or Second Respondents or any other corporation is, affiliated or connected with firefighters or a firefighting organisation, police or a police organisation, emergency services organisation or any other community, government or charitable organisation or group,
when that is untrue;
(h) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, to the effect that if advertising is placed with, or in a publication produced by or on behalf of, the First Respondent or the Second Respondent, or any other corporation, then the advertising of that person's business will be the only advertisement of that kind in any one publication produced by or on behalf of the First Respondent or the Second Respondent, or any other corporation, when that is untrue.
2. The Fourth Respondent by himself, his servants or agents or otherwise, be permanently restrained from:
(a) carrying on, or being involved in any manner in (including but not limited to providing training, advice or assistance of any kind), the business of selling advertising in any publication or proposed publication or on the internet;
(b) being connected with (including but not limited to holding a directorship of or controlling (by virtue of his shareholding or otherwise)) any corporation which engages in, or is associated with, the business of selling advertising in any publication or proposed publication or on the internet.
Fifth respondent
19 The applicant seeks the leave of the Court to withdraw the contempt charges against the fifth respondent. The reasons for this proposal are:
• the fifth respondent is eighty-five years old
• the charges against the fifth respondent are far more limited than those made against the third and fourth respondents
• after considering the evidence against the fifth respondent, the applicant acknowledges difficulties in proving the allegations to the requisite degree
• the fifth respondent has agreed to injunctive relief proposed against him.
Costs
20 The second, third and fourth respondents are to pay the applicant’s costs of and incidental to the application and the notice of motion for contempt, agreed in the sum of $180,000 if paid to the applicant by way of bank cheque or cleared funds within fourteen days from the date of orders made, or $245,000 if not paid by that date (in which case the sum would be payable forthwith).
Liberty to apply
21 Upon giving 21 days notice in writing to the applicant’s solicitor the third and fourth respondents have liberty to apply to the Court to vary the proposed orders imposing broad restraints on the conduct of these respondents considered earlier in this judgment, namely:
• The Third Respondent by himself, his servants or agents or otherwise, be permanently restrained from:
(a) carrying on, or being involved in any manner in (including but not limited to providing training, advice or assistance of any kind), the business of selling advertising in any publication or proposed publication or on the internet;
(b) being connected with (including but not limited to holding a directorship of or controlling (by virtue of his shareholding or otherwise)) any corporation which engages in, or is associated with, the business of selling advertising in any publication or proposed publication or on the internet.
• The Fourth Respondent by himself, his servants or agents or otherwise, be permanently restrained from:
(a) carrying on, or being involved in any manner in (including but not limited to providing training, advice or assistance of any kind), the business of selling advertising in any publication or proposed publication or on the internet;
(b) being connected with (including but not limited to holding a directorship of or controlling (by virtue of his shareholding or otherwise)) any corporation which engages in, or is associated with, the business of selling advertising in any publication or proposed publication or on the internet.
Relevant principles
22 The power of the Federal Court to punish for contempt is found in s 31 Federal Court of Australia Act 1976 (Cth). In light of the proposed withdrawal of charges against the first and fifth respondents, and the guilty pleas by the second, third and fourth respondents, it is obviously unnecessary for me to consider whether the elements of contempt have been established in respect of any of all of the respondents. The only issues for my consideration in this case are:
a. whether the Court should grant leave for the withdrawal of the contempt charges against the first and fifth respondents, and
b. whether the Court should consent to the orders proposed by the parties as to penalties, including costs, to be imposed on the second, third and fourth respondent.
23 Relevant principles for the Court when a negotiated resolution of contraventions of the law is advanced by the parties were considered by the Full Court in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 and Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72. So far as are applicable to this case, the principles articulated in these cases are as follows:
1) It is the responsibility of the court to determine the appropriate penalty to be imposed.
2) Determining the quantum of a penalty is not an exact science. Within a permissible range, the courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another.
3) There is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy. Accordingly, when the regulator and contravenor have reached agreement, they may present to the Court a statement of facts and opinions as to the effect of those facts, together with joint submissions as to the appropriate penalty to be imposed.
4) The view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty.
5) In determining whether the proposed penalty is appropriate, the court examines all the circumstances of the case. Where the parties have put forward an agreed statement of facts, the Court may act on that statement if it is appropriate to do so.
6) Where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is, in the Court’s view, appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if within the permissible range.
24 The Full Court in Mobil Oil [2004] FCAFC 72 emphasised however the responsibility of the Court in considering the proposal of this nature of the parties – as their Honours said at [79]:
But in neither [criminal nor civil penalty] case is the court relieved from the responsibility of exercising its own judgment as to the appropriate sentence (in criminal cases), or whether the proposed penalty is within the appropriate range for the contravention (in civil penalty cases).
Application of principles to this case
25 After considering the proposed orders, the history of this matter, and the submissions of Counsel I am satisfied that the orders proposed by the parties in relation to the contempt charges are appropriate in the circumstances. My reasons are as follows:
1. I accept the applicant’s submissions in relation to withdrawing the charges against the first respondent. I note that the first respondent is in liquidation, and the submission in Court on Monday by Mr Aggs, liquidator of the first respondent, that the first respondent is insolvent. I accept the proposition that, in these circumstances, pursuit of the first respondent, which is a corporate entity, is pointless. There are no funds to satisfy any orders, for example, for a fine or costs. It is therefore appropriate for the Court to grant leave to the applicant to withdraw these charges.
2. I accept the applicant’s submissions as to withdrawing the charges against the fifth respondent, in light of his age, his role in the conduct the subject of the applicant’s claims, and the concession by the applicant as to the evidence against him.
3. I note that the second, third and fourth respondent have pleaded guilty, which is an issue to be taken into consideration for the purposes of sentence (NW Foods 71 FCR at 293). I note also the submission of Mr Atkinson for the second, third and fourth respondents that, in pleading guilty, the respondents have avoided the need for two trials, each of which was estimated to be four to five weeks, and have therefore relieved the resources of both the Court and the applicant (cf NW Foods 71 FCR at 291).
4. In this case, the second, third and fourth respondents have pleaded guilty to a statement of charge alleging deliberate and repeated instances of contempt of the orders of Cooper J. Given the nature of the contempt, a significant penalty is in order.
5. The Courts have generally accepted that a term of imprisonment is appropriate only in the most serious criminal contempt cases: R v Fletcher; Ex parte Kisch [1935] HCA 1; (1935) 52 CLR 248 at 257 per Evatt J, Gallagher v Durack [1983] HCA 2; (1983) 152 CLR 238. In this case the proposal of the parties that the third and fourth respondents be sentenced to six months imprisonment, albeit suspended, is at the high end of the range of penalty for contempt, particularly as it is common ground that the respondents had not previously been found by the Court to have acted in contempt. However, the serious nature of the contempt charges in this case, to which the second, third and fourth respondents have pleaded guilty, in my view warrants the prospect of a period of imprisonment.
6. The Federal Court is empowered to impose a sentence of imprisonment for contempt of court, to be suspended on conditions including as to length of time of the suspension: Hughes (trading as Crowded Planet) v Australian Competition & Consumer Commission [2004] FCAFC 319 at [56]. In the case before me, the proposal that the sentence of six months be suspended for two years is consistent with other decisions involving similarly serious contempts of court (cf Hughes [2004] FCAFC 319 at [57]).
7. In my view, however, while the sentence is at the higher range, it is not so high as to be oppressive (NW Foods 71 FCR at 293, cf Australian Securities and Investments Commission v Matthews (2001) 39 ACSR 110 where the contemnor was sentenced to twelve months imprisonment, suspended for two years and the Court similarly found that the sentence was not so high as to be oppressive).
8. I note the parties jointly propose that the period of imprisonment of the third and fourth respondents be suspended. In this context however I note that the applicant in this case is the State regulator in the field of consumer protection. It is appropriate to accord weight to the views of the regulator, in particular as to the deterrent quality both for the respondents and for others who may be disposed to engage in conduct of a similar kind (NW Foods 71 FCR at 292, Mobil Oil [2004] FCAFC 72 at [79]).
9. Although the award of costs is at the discretion of the Court, commonly in contempt cases there is a link between the award of indemnity costs and the penalty, where the award of costs is in lieu of a fine: Construction, Forestry, Mining & Energy Union v BHP Steel (AIS) Pty Ltd [2003] FCAFC 13 per Moore J at [8]-[12]. In this case the proposed orders do not include a fine to be paid by the second, third and fourth respondents, however they do impose an obligation on these respondents to pay a not insignificant sum in costs to the applicant.
10. I am satisfied that this is not a case where the nature of the proposed penalty is an insufficient deterrent by community standards so as to cause the Court to decline to sanction the proposal. I note the submissions by Mr Atkinson that the suspension of the six month sentence results in the third and fourth respondents being their own "judge and jury" for 24 months and that this is well-calculated to ensure their good behaviour. While this remains to be seen in practice, the detailed and clear nature of the proposed orders, the permanent restraints on the conduct of the respondents as articulated in the proposal, the not inconsiderable length of time during which the sentence is suspended and the default period of imprisonment in the event of breach of the orders in my view means that the proposed penalty appropriate in this case.
Costs of Mr Aggs
26 During Monday’s hearing Mr Aggs, the liquidator of the first respondent, raised the issue of whether, in view of the insolvency of the first respondent, an order for costs for his appearance could be made in his favour against the applicant. Clearly the Court has jurisdiction to award costs: s 43 Federal Court of Australia Act 1976 (Cth). However I indicated to Mr Aggs during the hearing, and I confirm in my judgment, that in my view it is not appropriate to make the order for costs as raised by Mr Aggs. While it is important from a public policy perspective that the liquidation of insolvent corporations be conducted by experienced insolvency practitioners, and therefore that practitioners be indemnified to the extent possible in undertaking this task, I note that the costs of the liquidator receive priority in the liquidation, and that in this case the absence of funds does not derogate from the duty of the liquidator to ensure the corporation is represented in Court in circumstances where serious contempt and injunctive proceedings against the company are under consideration by the Court.
Conclusion
27 Accordingly, in the circumstances I am prepared to make the orders
proposed by the parties in the draft Consent Orders submitted
by the parties at
the hearing on Monday.
THE COURT ORDERS THAT:
1. The First Respondent by itself, its servants or agents or otherwise, be permanently restrained from:
(a) representing to any person, in the course of the First Respondent’s business, that any servant or agent of, or other person engaged by, the First Respondent:
(i) is engaged in an occupation or a course of study when that is untrue;
(ii) is seeking a journal or publication for a stated purpose when the journal or publication is being sought for a different purpose;
(b) representing to any person, in the course of the First Respondent’s business, that any servant or agent of, or other person engaged by, the First Respondent is connected or associated with:
(i) Telstra;
(ii) Yellow Pages;
(iii) an organisation or entity other than the First Respondent;
(c) representing to any person, in the course of the First Respondent’s business, that such person, or another person known to such person, has been previously contacted by a servant or agent of, or other person engaged by, the First Respondent when that is untrue;
(d) representing to any person, in the course of the First Respondent’s business, that such person, or another person known to such person, had previously agreed to advertise with the First Respondent, or in a publication produced by or on behalf of the First Respondent, when that is untrue;
(e) sending to any person, in the course of the First Respondent’s business, any tax invoice or request for payment in respect of advertising or proposed advertising that has not been requested by or on behalf of the recipient of the tax invoice or other request for payment;
(f) sending to any person, in the course of the First Respondent’s business, any notice or other document by which it is asserted that legal proceedings may be brought and/or that Court costs may be incurred, save in cases where:
(i) the amount claimed in such notice or other document is then due and owing by the recipient; and
(ii) the First Respondent then intends to institute Court proceedings if payment is not made;
(g) representing to any person, in the course of the First Respondent’s business:
(i) to the effect that any advertising placed with, or in a publication produced by or on behalf of, the First Respondent will provide assistance or support to, or otherwise advantage, a person, corporation or organisation other than the First Respondent;
(ii) to the effect that the First Respondent is, or a publication produced by or on behalf of the First Respondent is, affiliated or connected with firefighters or a firefighting organisation, police or a police organisation, emergency services organisation or any other community, government or charitable organisation or group;
(h) representing to any person, in the course of the First Respondent’s business, to the effect that if advertising is placed with, or in a publication produced by or on behalf of, the First Respondent, then the advertising of that person's business will be the only advertisement of that kind in any one publication produced by or on behalf of the First Respondent.
2. The Second Respondent, by itself, its servants or agents or otherwise, be permanently restrained from:
(a) representing to any person, in the course of the Second Respondent’s business, that any servant or agent of, or other person engaged by, the Second Respondent:
(i) is engaged in an occupation or a course of study when that is untrue;
(ii) is seeking a journal or publication for a stated purpose when the journal or publication is being sought for a different purpose;
(b) representing to any person, in the course of the Second Respondent’s business, that any servant or agent of, or other person engaged by, the Second Respondent is connected or associated with:
(i) Telstra;
(ii) Yellow Pages;
(iii) an organisation or entity other than the Second Respondent,
when that is untrue;
(c) representing to any person, in the course of the Second Respondent’s business, that such person, or another person known to such person, has been previously contacted by a servant or agent of, or other person engaged by, the Second Respondent when that is untrue;
(d) representing to any person, in the course of the Second Respondent's business, that such person, or another person known to such person, had previously agreed to advertise with the Second Respondent, or in a publication produced by or on behalf of the Second Respondent, when that is untrue;
(e) sending to any person, in the course of the Second Respondent’s business, any tax invoice or request for payment in respect of advertising or proposed advertising that has not been requested by or on behalf of the recipient of the tax invoice or other request for payment;
(f) sending to any person, in the course of the Second Respondent’s business, any notice or other document by which it is asserted that legal proceedings may be brought and/or that Court costs may be incurred, save in cases where:
(i) the amount claimed in such notice or other document is then due and owing by the recipient; and
(ii) the Second Respondent then intends to institute Court proceedings if payment is not made;
(g) representing to any person, in the course of the Second Respondent’s business:
(i) to the effect that any advertising placed with, or in a publication produced by or on behalf of, the Second Respondent will provide assistance or support to, or otherwise advantage, a person, corporation or organisation other than the Second Respondent;
(ii) to the effect that the Second Respondent is, or a publication produced by or on behalf of the Second Respondent is, affiliated or connected with firefighters or a firefighting organisation, police or a police organisation, emergency services organisation or any other community, government or charitable organisation or group,
when that is untrue;
(i) representing to any person, in the course of the Second Respondent’s business, to the effect that if advertising is placed with, or in a publication produced by or on behalf of, the Second Respondent, then the advertising of that person's business will be the only advertisement of that kind in any one publication produced by or on behalf of the Second Respondent, when that is untrue.
3. The Third Respondent be permanently restrained from being directly or indirectly knowingly concerned in, or party to, any conduct by the First Respondent or the Second Respondent, or any other corporation consisting of:
(a) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, that any servant or agent of, or other person engaged by, the First and/or Second Respondents or any other corporation:
(i) is engaged in an occupation or a course of study when that is untrue;
(ii) is seeking a journal or publication for a stated purpose when the journal or publication is being sought for a different purpose;
(b) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, that any servant or agent of, or other person engaged by, the First and/or Second Respondents or by engaging any other corporation is connected or associated with:
(i) Telstra;
(ii) Yellow Pages;
(iii) an organisation or entity other than the First and Second Respondents or the other corporation,
when that is untrue;
(c) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, that such person or another person known to such person has been previously contacted by a servant or agent of, or other person engaged by, the First and/or Second Respondents or by engaging any other corporation when that is untrue;
(d) representing to any person, in the course of the First and/or Second Respondent’s business, or in the course of any other corporation’s business, that such person or another person known to such person had previously agreed to advertise with the First and/or Second Respondents, or any other corporation, or in a publication produced by or on behalf of the First and/or Second Respondents, or any other corporation, when that is untrue;
(e) sending to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, any tax invoice or request for payment in respect of advertising or proposed advertising that has not been requested by or on behalf of the recipient of the tax invoice or other request for payment;
(f) sending to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, any notice or other document by which it is asserted that legal proceedings may be brought and/or that Court costs may be incurred, save in cases where:
(i) the amount claimed in such notice or other document is then due and owing by the recipient; and
(ii) the First and/or Second Respondent, or any other corporation, then intend to institute Court proceedings if payment is not made;
(g) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business:
(i) to the effect that any advertising placed with, or in a publication produced by or on behalf of, the First and/or Second Respondents, or any other corporation, will provide assistance or support to, or otherwise advantage, a person, corporation or organisation other than the First and/or Second Respondents or the other corporation;
(ii) to the effect that the First and/or Second Respondents or any other corporation are, or a publication produced by or on behalf of the First and/or Second Respondents or any other corporation is, affiliated or connected with firefighters or a firefighting organisation, police or a police organisation, emergency services organisation or any other community, government or charitable organisation or group,
when that is untrue;
(h) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, to the effect that if advertising is placed with, or in a publication produced by or on behalf of, the First Respondent or the Second Respondent, or any other corporation, then the advertising of that person's business will be the only advertisement of that kind in any one publication produced by or on behalf of the First Respondent or the Second Respondent, or any other corporation, when that is untrue.
4. The Fourth Respondent be permanently restrained from being directly or indirectly knowingly concerned in, or party to, any conduct by the First Respondent or the Second Respondent or any other corporation consisting of:
(a) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, that any servant or agent of, or other person engaged by, the First and/or Second Respondents or by engaging any other corporation:
(i) is engaged in an occupation or a course of study when that is untrue;
(ii) is seeking a journal or publication for a stated purpose when the journal or publication is being sought for a different purpose;
(b) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, that any servant or agent of, or other person engaged by, the First and/or Second Respondents, or any other corporation is connected or associated with:
(i) Telstra;
(ii) Yellow Pages;
(iii) an organisation or entity other than the First and Second Respondents or the other corporation,
when that is untrue;
(c) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, that such person or another person known to such person has been previously contacted by a servant or agent of, or other person engaged by, the First and/or Second Respondents, or engaged by any other corporation when that is untrue;
(d) representing to any person, in the course of the First and/or Second Respondent’s business, or in the course of any other corporation’s business, that such person or another person known to such person had previously agreed to advertise with the First and/or Second Respondents, or any other corporation, or in a publication produced by or on behalf of the First and/or Second Respondents, or any other corporation when that is untrue;
(e) sending to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, any tax invoice or request for payment in respect of advertising or proposed advertising that has not been requested by or on behalf of the recipient of the tax invoice or other request for payment;
(f) sending to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, any notice or other document by which it is asserted that legal proceedings may be brought and/or that Court costs may be incurred, save in cases where:
(i) the amount claimed in such notice or other document is then due and owing by the recipient; and
(ii) the First and/or Second Respondents or any other corporation, then intend to institute Court proceedings if payment is not made;
(g) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business:
(i) to the effect that any advertising placed with, or in a publication produced by or on behalf of, the First and/or Second Respondents, or any other corporation, will provide assistance or support to, or otherwise advantage, a person, corporation or organisation other than the First and/or Second Respondents, or any other corporation;
(ii) to the effect that the First and/or Second Respondents or any other corporation are, or a publication produced by or on behalf of the First and/or Second Respondents or any other corporation is, affiliated or connected with firefighters or a firefighting organisation, police or a police organisation, emergency services organisation or any other community, government or charitable organisation or group,
when that is untrue;
(i) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, to the effect that if advertising is placed with, or in a publication produced by or on behalf of, the First Respondent or the Second Respondent, or any other corporation, then the advertising of that person’s business will be the only advertisement of that kind in any one publication produced by or on behalf of the First Respondent or the Second Respondent, or any other corporation, when that is untrue.
5. The Fifth Respondent be permanently restrained from being directly or indirectly knowingly concerned in, or party to, any conduct by the First Respondent or the Second Respondent or any other corporation consisting of:
(a) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business that any servant or agent of, or other person engaged by, the First and/or Second Respondents or engaged by any other corporation is connected or associated with:
(i) Telstra;
(ii) Yellow Pages;
(iii) an organisation or entity other than the First and Second Respondents or the other corporation;
(b) representing to any person, in the course of the First and/or Second Respondents’ business, or in the course of any other corporation’s business, that such person or another person known to such person has been previously contacted by a servant or agent of, or other person engaged by, the First and/or Second Respondents or engaged by any other corporation when that is untrue;
(d) representing to any person, in the course of the First and/or Second Respondent’s business, or in the course of any other corporation’s business, that such person or another person known to such person had previously agreed to advertise with the First and/or Second Respondents or engaged by any other corporation when that is untrue.
6. The First Respondent by itself, its servants or agents or otherwise, be permanently restrained from carrying on, or being involved in any manner in, the business of selling advertising in any publication or on the internet.
7. The Second Respondent by itself, its servants or agents or otherwise, be permanently restrained from carrying on, or being involved in any manner in, the business of selling advertising in any publication or on the internet.
8. The Third Respondent by himself, his servants or agents or otherwise, be permanently restrained from:
(a) carrying on, or being involved in any manner in (including but not limited to providing training, advice or assistance of any kind), the business of selling advertising in any publication or proposed publication or on the internet;
(b) being connected with (including but not limited to holding a directorship of or controlling (by virtue of his shareholding or otherwise)) any corporation which engages in, or is associated with, the business of selling advertising in any publication or proposed publication or on the internet.
9. The Fourth Respondent by himself, his servants or agents or otherwise, be permanently restrained from:
(c) carrying on, or being involved in any manner in (including but not limited to providing training, advice or assistance of any kind), the business of selling advertising in any publication or proposed publication or on the internet;
(d) being connected with (including but not limited to holding a directorship of or controlling (by virtue of his shareholding or otherwise)) any corporation which engages in, or is associated with, the business of selling advertising in any publication or proposed publication or on the internet.
10. The Fifth Respondent by himself, his servants or agents or otherwise, be permanently restrained from:
(e) carrying on, or being involved in any manner in (including but not limited to providing training, advice or assistance of any kind), the business of selling advertising in any publication or proposed publication or on the internet;
(f) being connected with (including but not limited to holding a directorship of or controlling (by virtue of his shareholding or otherwise)) any corporation which engages in, or is associated with, the business of selling advertising in any publication or proposed publication on the internet.
11. Having regard to its plea of guilty, the Second Respondent is found guilty of the charges referred to in paragraphs 1, 2, 4, 6, 8, 10, 12 and 13 inclusive of the amended statement of charge filed on 21 February 2007.
12. Having regard to his plea of guilty, the Third Respondent is found guilty of the charges referred to in paragraphs 14 to 18 inclusive of the amended statement of charge filed on 21 February 2007;
13. Having regard to his plea of guilty, the Fourth Respondent is found guilty of the charges referred to in paragraphs 19 to 25 inclusive of the amended statement of charge filed on 21 February 2007.
14. The Third Respondent be imprisoned for a period of six (6) months.
15. A warrant for the Third Respondent’s committal to prison for a period of six (6) months issue.
16. The warrant lie in the Registry to the intent that it not be executed provided that the Third Respondent refrains from contravening the orders referred to in paragraphs 3 and 8 above for a period of 24 months from the date of these orders.
17. The Fourth Respondent be imprisoned for a period of six (6) months.
18. A warrant for the Fourth Respondent’s committal to prison for a period of six (6) months issue.
19. The warrant lie in the Registry to the intent that it not be executed provided that the Fourth Respondent refrains from contravening the orders referred to in paragraphs 4 and 9 above for a period of 24 months from the date of these orders.
20. The Second, Third and Fourth Respondents pay the Applicant’s costs of and incidental to the application filed on 30 August 2004 and the notice of motion for contempt filed on 2 June 2006, agreed in the sum of $180,000 if paid to the Commissioner of Fair Trading by way of a bank cheque or cleared funds within fourteen (14) days from the date of these orders, or $245,000 if not paid by that date (whereupon the said sum of $245,000 shall be payable forthwith).
21. Each of the Third and Fourth Respondents has liberty to apply to the Court to vary paragraphs 8 and 9 of these orders upon giving twenty-one days notice in writing to the Applicant’s solicitor.
Notice to Phillip Aggs, Liquidator of the First Respondent, Power Pacific International Media Pty Ltd
The First Respondent, Power Pacific International Media Pty Ltd, is liable to
imprisonment or to sequestration of property if Power
Pacific International
Media Pty Ltd disobeys any of paragraphs 1 and 6 of this Order of Justice
Collier dated 14 March 2007.
Notice to the Second Respondent, Spacelink Holdings Pty Ltd
The Second Respondent, Spacelink Holdings Pty Ltd, is liable to imprisonment
or to sequestration of property if Spacelink Holdings
Pty Ltd disobeys any of
paragraphs 2 and 7 of this Order of Justice Collier dated 14 March 2007.
Notice to the Third Respondent, David Robert Barrett
The Third Respondent, David Robert Barrett, is liable to imprisonment or to sequestration of property if:
(a) the Second Respondent, Spacelink Holdings Pty Ltd, disobeys any of paragraphs 2 and 7 of this Order of Justice Collier dated 14 March 2007; or
(b) he, David Robert Barrett, disobeys any of paragraphs 3 and 8 of this Order of Justice Collier dated 14 March 2007.
Notice to the Fourth Respondent, Trent David Barrett
The Fourth Respondent, Trent David Barrett, is liable to imprisonment or to sequestration of property if:
(a) the Second Respondent, Spacelink Holdings Pty Ltd, disobeys any of paragraphs 2 and 7 of this Order of Justice Collier dated 14 March 2007; or
(b) he, Trent David Barrett, disobeys any of paragraphs 4 and 9 of this Order of Justice Collier dated 14 March 2007.
Notice to the Fifth Respondent, Frank Wilson
The Fifth Respondent, Frank Wilson, is liable to imprisonment or to
sequestration of property if Frank Wilson disobeys any of paragraphs
5 and 10 of
this Order of Justice Collier dated 14 March 2007.
Associate:
Dated: 14
March 2007
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Solicitor for the Applicant:
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Counsel for the First Respondent:
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Counsel for the Second, Third and Fourth Respondents:
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Damien Atkinson
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Solicitor for the Second, Third and Fourth Respondents:
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Ryan & Bosscher
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Counsel for the Fifth Respondent:
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Date of Hearing:
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Date of Judgment:
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URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/349.html