Australian Competition and Consumer Commission v Jetplace Pty Ltd [2010] FCA 759 (21 July 2010)

Last Updated: 21 July 2010

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Jetplace Pty Ltd

[2010] FCA 759

Citation:		Australian Competition and Consumer Commission v Jetplace Pty Ltd [2010] FCA 759
Parties:		AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v JETPLACE PTY LTD, MARK SEMAAN and MAXWELL JAMES MCGUIRE
File number:		WAD 196 of 2009
Judge:		GILMOUR J
Date of judgment:		21 July 2010
Legislation:		Trade Practices Act 1974 (Cth) ss 2, 4, 6A, 52 and 53(c), 75B, 80, 84(2), 86, 86C(2)(b), (d) Evidence Act 1995 (Cth) s 191 Federal Court of Australia Act 1976 (Cth) ss 19, 21, 23 Judiciary Act 1903 (Cth) s 39B(1A)(c)
Cases cited:		Australian Competition and Consumer Commission v Allergy Pathway Pty Ltd [2009] FCA 960 referred to Australian Competition and Consumer Commission v Construction, Forestry, Mining and Energy Union [2006] FCA 1730 cited Australian Competition and Consumer Commission v Cosic Holdings Pty Ltd [2009] FCA 1579 cited Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (2006) 236 ALR 665 cited Australian Competition and Consumer Commission v On Clinic Australia Pty Ltd (1996) 35 IPR 635 referred to Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc [1999] FCA 18; (1999) 95 FCR 114 referred to Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc [1999] FCA 18; (1999) 161 ALR 79 referred to Australian Competition and Consumer Commission v Goldy Motors [2000] FCA 1885 cited Australian Competition and Consumer Commission v Grove and Edgar Pty Ltd [2008] FCA 1956 cited Australian Competition and Consumer Commission v IMB Group [1999] FCA 313 cited Australian Competition and Consumer Commission v Pacific Dunlop [2001] FCA 740 cited Australian Competition and Consumer Commission v Target Australia Pty Ltd [2001] FCA 1326 referred to Australian Competition and Consumer Commission v Virgin Mobile Australia Pty Ltd (No 2) [2002] FCA 1548 cited Australian Competition and Consumer Commission v Wilson Parking 1992 Pty Ltd [2009] FCA 1580 cited Australian Competition and Consumer Commission v Wizard Mortgage Corporation Ltd [2002] FCA 1317 cited Australian Competition and Consumer Commission v Z-tek Computer (1987) 78 FCR 197 cited Australian Competition and Consumer Commission v 4WD Systems Pty Ltd [2003] FCA 850; (2003) 200 ALR 491 cited Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564 cited Bank of Kuwait and the Middle East v Ship MV Mawashi Al Gasseem (No 2) [2007] FCA 815; (2007) 240 ALR 120 cited BMI Ltd v Federated Clerks Union of Australia (1983) 51 ALR 401 referred to Forster v Jododex Aust Pty Ltd [1972] HCA 61; (1972) 127 CLR 421 cited Gardner v Dairy Industry Authority of NSW (1977) 18 ALR 55 cited ICI Australia Operations Pty Limited v Trade Practices Commission [1992] FCA 474; (1992) 38 FCR 248 cited Minister for the Environment, Heritage and the Arts v PGP Developments Pty Ltd [2010] FCA 58 cited Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 cited Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (No 2) [1993] FCA 83; (1993) 41 FCR 89 cited Thomson Australian Holdings Proprietary Limited v Trade Practices Commission [1981] HCA 48; (1981) 148 CLR 150 cited Warramunda Village Inc v Pryde [2001] FCA 61; (2001) 105 FCR 437 cited
Date of submissions:	29 April 2010
Place:	Perth
Division:	GENERAL DIVISION
Category:	No Catchwords
Number of paragraphs:	84
Solicitor for the Applicant:	Australian Government Solicitor
Solicitor for the Respondent:	Freehills

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	WAD 196 of 2009

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	JETPLACE PTY LTD (ACN 102 421 590) First Respondent MARK SEMAAN Second Respondent MAXWELL JAMES MCGUIRE Third Respondent

JUDGE:	GILMOUR J
DATE OF ORDER:	21 JULY 2010
WHERE MADE:	PERTH

THE COURT DECLARES THAT:

First respondent

1. The first respondent from December 2004 until 26 November 2008:

(a) by causing to be published statements about services available at the website "www.redhotpie.com.au" ("Website") and operating profiles on the Website;

(b) represented that every profile viewable on the Website had been created by a visitor registered on the Website ("Member") (the "Visitor Representation");

(c) when in fact the first respondent created and operated 1,371 profiles on the Website,

has in trade or commerce:

(d) engaged in conduct that was misleading or deceptive, or was likely to mislead or deceive, in contravention of s 52 of the Trade Practices Act 1974 (the "Act"); and

(e) in connexion with the supply, or possible supply, of services represented that being a Member ("Membership") had performance characteristics and benefits that it does not have, in contravention of s 53(c) of the Act.

2. The first respondent from December 2004 until 26 November 2008:

(a) by causing to be published statements about services available at the Website and operating profiles on the Website;

(b) represented that any profile identified in response to a search of profiles conducted by a Member would be a profile created by a Member ("Search Representation");

(c) when in fact profiles identified in response to a search of profiles conducted by a Member could include profiles that had been created by the first respondent and not a Member,

has, in trade or commerce:

(d) engaged in conduct that was misleading or deceptive, or was likely to mislead or deceive, in contravention of s 52 of the Act; and

(e) in connexion with the supply, or possible supply, of services represented that Membership had performance characteristics and benefits that it does not have, in contravention of s 53(c) of the Act.

3. The first respondent from December 2004 until 26 November 2008:

(a) by causing to be published statements about services available at the Website and operating profiles on the Website;

(b) represented that every profile viewable on the Website and some messages received from a profile provided an opportunity for a Member to socialise on the Website with a Member who created that profile or caused the message to be sent ("Interaction Representation");

(c) when in fact the first respondent operated profiles that could not provide the opportunity to socialise on the Website with a Member,

has, in trade or commerce:

(d) engaged in conduct that was misleading or deceptive, or was likely to mislead or deceive, in contravention of s 52 of the Act; and

(e) in connexion with the supply, or possible supply, of services represented that Membership had performance characteristics and benefits that it does not have, in contravention of s 53(c) of the Act.

Second respondent

4. The second respondent has, in respect of the contraventions of the Act by the first respondent referred to in paras 1 to 3 above:

(a) aided, abetted, counselled or procured the first respondent to engage in the conduct; and

(b) was directly or indirectly knowingly concerned in, or party to, the first respondent's conduct;

for the purposes of s 75B and s 80(1) of the Act, by reason that the second respondent:

(c) created, or authorised the creation of, and use of the profiles by the first respondent including the sending of messages by those profiles;

(d) authorised or permitted the publication or broadcast of statements on the Website referred to in paras 1 to 3 above;

(e) knew of all of the facts and circumstances by reason of which the Visitor, Search and Interaction Representations were misleading or deceptive or likely to mislead or deceive; and

(f) knew that Membership did not have the represented performance characteristics and benefits.

Third respondent

5. The third respondent has, in respect of the contraventions of the Act by the first respondent referred to in paras 1 to 3 above:

(a) aided, abetted, counselled or procured the first respondent to engage in the conduct; and

(b) was directly or indirectly knowingly concerned in, or party to, the first respondent's conduct;

for the purposes of s 75B and s 80(1) of the Act, by reason that the third respondent:

(c) knew of the existence of profiles created, published and operated by the first respondent;

(d) authorised or permitted the publication or broadcast of statements on the Website referred to in paras 1 to 3 above;

(e) knew of all of the facts and circumstances by reason of which the Visitor, Search and Interaction Representations were misleading or deceptive or likely to mislead or deceive; and

(f) knew that Membership did not have the represented performance characteristics and benefits.

AND THE COURT ORDERS BY CONSENT THAT

Injunctions

First respondent

6. The first respondent be restrained, for a period of 3 years, whether by itself or by its directors, servants, agents or otherwise howsoever, in trade or commerce in Australia, from the following conduct relating to online services, including those services related to the Website:

(a) creating any profiles, whether by statements, descriptions or images, so as to appear to visitors or Members that the profile was created by a Member, in circumstances where the profile was not created by a Member; or

(b) operating any profile of the kind described in paragraph 6.1 to send any kind of message by any means including electronic mail,

other than as specified in para 7.

7. Paragraph 6 does not apply to profiles created by the first respondent’s directors, servants or agents solely for their personal or private use.

Second respondent

8. The second respondent be restrained, for a period of 3 years from:

(a) aiding, abetting, counselling or procuring; or

(b) being directly or indirectly knowingly concerned in, or party to,

the First Respondent, or any other corporation, whether by, itself, its servants, agents or howsoever otherwise, in trade and commerce in Australia from the following conduct relating to online services, including those services related to the Website:

(c) creating any profiles that include statements descriptions or images so as to appear to visitors or Members that the profile was created by a Member, in circumstances where the profile was not created by a Member; or

(d) operating any profile of the kind described in paragraph 8.3 to send any kind of message by any means including electronic mail,

other than as specified in para 9.

8. Paragraph 8 does not apply to profiles created by the second respondent or a director, servant or agent of the first respondent solely for his or their personal or private use.

Third respondent

9. The third respondent be restrained, for a period of 3 years from:

(a) aiding, abetting, counselling or procuring; or

(b) being directly or indirectly knowingly concerned in, or party to,

the first respondent, or any other corporation, whether by itself, its servants, agents or howsoever otherwise, in trade and commerce in Australia from the following conduct relating to online services, including those services related to the Website:

(c) creating any profiles, whether by statements, descriptions or images, so as to appear to visitors or Members that the profile was created by a Member, in circumstances where the profile was not created by a Member; or

(d) operating any profile of the kind described in para 10.3 to send any kind of message by any means including electronic mail,

other than as specified in para 11.

10. Paragraph 10 does not apply to profiles created by the third respondent or a director, servant or agent of the first respondent solely for his or their personal or private use.

Trade Practices Compliance

11. The first respondent at its own expense:

(a) do arrange for all of its directors, servants and agents who are or may be involved in creating or authorising the content of the Website to attend practical trade practices training designed to ensure they are aware of their responsibilities and obligations in relation to:

(i) misleading and deceptive conduct prohibited by s 52 of the Act; and

(ii) representations of the kind prohibited by s 53(c) of the Act;

(b) do ensure that the first training session is to be conducted within six months of the date of the order of the Court and subsequent sessions are to be held at 12 monthly intervals thereafter for a period of 2 years;

(c) do ensure that the training is administered by a suitably qualified compliance professional or legal practitioner with expertise in trade practices law;

(d) do request the trade practices professional who conducted the training to provide to the first respondent, within 14 days of completion of each of the three annual training sessions, a written statement or certificate verifying that such training has occurred and listing the names of the persons who attended each session;

(e) do within 14 days of receiving the written statement or certificate referred to in 12.4, provide a copy to the applicant; and

(f) if no written statement or certificate was provided to the first respondent in accordance with para 12.4, do provide to the applicant, within 14 days of completion of each of the three annual training sessions, a written statement:

(i) explaining the circumstances of and reasons for the written statement or certificate not being provided; and

(ii) stating that such training has been carried out and listing the person who provided the training, the date or dates upon which the training was provided and the names of the persons who attended each session.

Corrective Advertising

12. Pursuant to ss 80 or 86C of the Act, the first respondent, at its own expense:

IN RESPECT OF GUEST MEMBERS

(a) do cause to be published, within 14 days of the date of this order, a notice to each person who was registered on the Website as a Guest Member at any time between December 2004 and 26 November 2008 and is at the date of the order of the court a Guest Member, in a manner which is immediately viewable by that Guest Member upon logging in to their account for the first occasion after the date of publication on which they do log in to that account, a notice in the terms of Annexure A to this order, such notice be maintained for a period of 90 days from the date of first publication;

IN RESPECT OF PREMIUM, PREMIUMPLUS AND PLATINUM MEMBERS

(b) do cause to be published, within 14 days of the date of this order, a notice to each person who was registered on the Website as:

(i) a Premium or PremiumPLUS Member at any time between December 2004 and 26 November 2008; or

(ii) a Platinum Member at any time between 2005 and 26 November 2008,

and is at the date of the order of the court a Premium, PremiumPLUS or Platinum Member (as the case may be), in a manner which is immediately viewable by that Premium, PremiumPLUS or Platinum Member upon logging in to their account for the first occasion after the date of publication on which they do log in to that account, a notice in the terms of Annexure B to this order, such notice be maintained for a period of 90 days from the date of first publication;

(c) use its best endeavours to ensure that the notices referred to in paras 13.1 and 13.2 above:

(i) shall be of a size that consists of at least 40% of the area of the log-in screen;

(ii) shall include the business logo of the first respondent at the top as appearing in Annexures A and B;

(iii) shall have a black background and be prominently in white text;

IN RESPECT OF GUEST MEMBERS

(d) to cause to be sent, within 14 days of the date of this order, a notice in terms of Annexure C to this order, by email to all persons who are, or were registered on the Website as Guest Members at any time between December 2004 and 26 November 2008 to the last known email address of that Guest Member;

IN RESPECT OF PREMIUM, PREMIUM-PLUS AND PLATINUM MEMBERS

(e) to cause to be sent, within 14 days of the date of this order, a notice in terms of Annexure D to this order, by email to all persons who are, or were registered on the Website as:

(i) Premium or PremiumPLUS Members at any time between December 2004 and 26 November 2008; or

(ii) Platinum Members at any time between 2005 and 26 November 2008,

to the last known email address of those Premium, PremiumPLUS or Platinum Members (as the case may be); and

(f) within 21 days of the date of this order, provide the applicant with written confirmation that the requirements of Order 13.1 to 13.5 have been completed including the number of notices that were sent by email.

Other Orders

13. The respondents do pay the applicant’s costs of this application to be taxed if not agreed.
    

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

Annexure A

<insert RedHotPie logo>

BY ORDER OF THE FEDERAL COURT OF AUSTRALIA

The Federal Court has ordered Jetplace Pty Ltd, the operator of the RedHotPie website, to disclose that between December 2004 and November 2008, Jetplace created and operated 1371 profiles, which were made to appear that they were created by visitors to the website. Jetplace used some of those profiles to send flirts or customised messages to some members of the website. The profiles may also have appeared in searches carried out by visitors to or members of the website.

Following legal action by the Australian Competition and Consumer Commission (ACCC) the Federal Court has now declared that Jetplace had

(a) engaged in misleading or deceptive conduct; and

(b) represented that membership of the website had performance characteristics and benefits that it did not have

contrary to sections 52 and 53(c) of the Trade Practices Act 1974

The Court further declared that Jetplace directors, Mr Maxwell James McGuire and Mr Mark Semaan, were aware of and party to that conduct.

In addition to the declarations the Court made orders restraining Jetplace, Mr McGuire and Mr Semaan, from engaging in similar conduct in the future. Jetplace was also ordered:

• to publish this notice when either you or other specified members login;
• to send a notice to the email address that you have registered with us;
• to implement a corporate Trade Practices Compliance Program; and
• to pay ACCC costs.

You can access a copy of Court decision at http://www.austlii.edu.au/au/cases/cth/linsert referencej.html

Annexure B

<insert RedHotPie logo>

BY ORDER OF THE FEDERAL COURT OF AUSTRALIA

The Federal Court has ordered Jetplace Pty Ltd, the operator of the RedHotPie website, to disclose that between December 2004 and November 2008, Jetplace created and operated 1371 profiles, which were made to appear that they were created by visitors to the website. Jetplace used some of those profiles to send flirts or customised messages to some members of the website. The profiles may also have appeared in searches carried out by visitors to or members of the website.

Following legal action by the Australian Competition and Consumer Commission (ACCC) the Federal Court has now declared that Jetplace had

(a) engaged in misleading or deceptive conduct; and

(b) represented that membership of the website had performance characteristics and benefits that it did not have

contrary to sections 52 and 53(c) of the Trade Practices Act 1974

The Court further declared that Jetplace directors, Mr Maxwell James McGuire and Mr Mark Semaan, were aware of and party to that conduct.

In addition to the declarations the Court made orders restraining Jetplace, Mr McGuire and Mr Semaan, from engaging in similar conduct in the future. Jetplace was also ordered:

• to publish this notice when either you or other specified members login;
• to send a notice to the email address that you have registered with us;
• to implement a corporate Trade Practices Compliance Program; and
• to pay ACCC costs.

Jetplace and its directors apologise to all members of the website for engaging in the conduct outlined above and Jetplace offers a refund to a paying member who became a paying member in the period stated above and can demonstrate that they were misled by the conduct into paying for membership of the website.

If you require any further information, please contact Jetplace on [insert email address]

You can access a copy of Court decision at http://www.austlii.edu.au/au/cases/cth/linsert referencej.html

Annexure C
<insert RedHotPie logo>
[Letterhead]

Attention: [insert member id]
By email: [insert member email]
[insert date]
Dear [insert member Name],

BY ORDER OF THE FEDERAL COURT OF AUSTRALIA

The Federal Court has ordered Jetplace Pty Ltd, the operator of the RedHotPie website, to disclose that between December 2004 and November 2008, Jetplace created and operated 1371 profiles, which were made to appear that they were created by visitors to the website. Jetplace used some of those profiles to send flirts or customised messages to some members of the website. The profiles may also have appeared in searches carried out by visitors to or members of the website.

Following legal action by the Australian Competition and Consumer Commission (ACCC) the Federal Court has now declared that Jetplace had

(a) engaged in misleading or deceptive conduct; and

(b) represented that membership of the website had performance characteristics and benefits that it did not have

contrary to sections 52 and 53(c) of the Trade Practices Act 1974*

The Court further declared that Jetplace directors, Mr Maxwell James McGuire and Mr Mark Semaan, were aware of and party to that conduct.

In addition to the declarations the Court made orders restraining Jetplace, Mr McGuire and Mr Semaan, from engaging in similar conduct in the future. Jetplace was also ordered:

• to publish this notice when either you or other specified members login;
• to send a notice to the email address that you have registered with us;
• to implement a corporate Trade Practices Compliance Program; and
• to pay ACCC costs.

You can access a copy of Court decision at http://www.austlii.edu.au/au/cases/cth/linsert referencej.html

Jetplace and its directors apologise to all members of the website for engaging in the conduct outlined above
Yours sincerely,
[insert name]
[insert position]

* Section 52 of the TPA prohibits a corporation from engaging in misleading and deceptive conduct. Section 53(c) of the TPA prohibits a corporation from representing that goods or services have the, sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have.

Annexure D
<insert RedHotPie logo>
[Letterhead]

Attention: [insert member id]
By email: [insert member email]
[insert date]
Dear [insert member Name],

BY ORDER OF THE FEDERAL COURT OF AUSTRALIA

The Federal Court has ordered Jetplace Pty Ltd, the operator of the RedHotPie website, to disclose that between December 2004 and November 2008, Jetplace created and operated 1371 profiles, which were made to appear that they were created by visitors to the website. Jetplace used some of those profiles to send flirts or customised messages to some members of the website. The profiles may also have appeared in searches carried out by visitors to or members of the website.

Following legal action by the Australian Competition and Consumer Commission (ACCC) the Federal Court has now declared that Jetplace had

(a) engaged in misleading or deceptive conduct; and

(b) represented that membership of the website had performance characteristics and benefits that it did not have

contrary to sections 52 and 53(c) of the Trade Practices Act 1974*

The Court further declared that Jetplace directors, Mr Maxwell James McGuire and Mr Mark Semaan, were aware of and party to that conduct.

In addition to the declarations the Court made orders restraining Jetplace, Mr McGuire and Mr Semaan, from engaging in similar conduct in the future. Jetplace was also ordered:

• to publish this notice when either you or other specified members login;
• to send a notice to the email address that you have registered with us;
• to implement a corporate Trade Practices Compliance Program; and
• to pay ACCC costs.

You can access a copy of Court decision at http://www.austlii.edu.au/au/cases/cth/linsert referencej.html

Jetplace and its directors apologise to all members of the website for engaging in the conduct outlined above and Jetplace offers a refund to a paying member who became a paying member in the period stated above and can demonstrate that they were misled by the conduct into paying for membership of the website.

Should you require any further information, please contact Jetplace on [insert email address]]

You can access a copy of Court decision at http://www.austlii.edu.au/au/cases/cth/linsert referencej.html

Yours sincerely,

[insert name]
[insert position]

* Section 52 of the TPA prohibits a corporation from engaging in misleading and deceptive conduct. Section 53(c) of the TPA prohibits a corporation from representing that goods or services have the, sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	WAD 196 of 2009

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	JETPLACE PTY LTD (ACN 102 421 590) First Respondent MARK SEMAAN Second Respondent MAXWELL JAMES MCGUIRE Third Respondent

JUDGE:	GILMOUR J
DATE:	21 JULY 2010
PLACE:	PERTH

REASONS FOR JUDGMENT

1. The parties have reached agreement on the resolution of these proceedings initiated by the Australian Competition and Consumer Commission which concern contraventions by the respondents of ss 52 and 53(c) of the Trade Practices Act 1974 (Cth) (the Act). The parties have agreed to the terms of proposed orders to be made by consent.
2. The orders are proposed against a background of a statement of claim dated 4 November 2009, a defence dated 17 December 2009 as well as a statement of agreed facts dated 22 April 2010, signed by the parties’ solicitors and admitted into evidence. I have, in these reasons, employed much of the written submissions filed by the applicant and am grateful for this most valuable assistance.
3. An “agreed fact” pursuant to s 191 of the Evidence Act 1995 (Cth) means “a fact that the parties to a proceeding have agreed is not, for the purposes of the proceeding to be disputed”. This does not mean that the Court must necessarily accept it as a fact: Minister for the Environment, Heritage and the Arts v PGP Developments Pty Limited [2010] FCA 58 at [35]. Ordinarily however, it seems to me, a Court will treat agreed facts as facts for the purposes of the proceeding.

The statement of agreed facts

4. I have set out the statement of agreed facts between paras [5]-[44] below although I have not found it necessary to include the annexures.

Parties

5. The applicant is a body corporate established by s 6A of the Act and is entitled to sue in its corporate name.
6. The first respondent (“Jetplace”) is and was at all material times:

(1) a company duly incorporated pursuant to the Corporations Act 2001 (Cth);

(2) able to be sued in its corporate name;

(3) a trading corporation within the meaning of s 4 of the Act; and

(4) carrying on business, including the business activities described in paras 12 to 15 and 17 to 36 below, in trade or commerce in Australia.

7. The second respondent (“Semaan”):

(1) is, and at all material times has been:

(a) a shareholder of Jetplace;

(b) a servant or agent of Jetplace;

(c) aware of the activities of Jetplace referred to in paras 12 to 15 and 17 to 36 below; and

(d) together with the third respondent, in effective control of the business operations of Jetplace; and

(2) is, and since 16 April 2007 has been, one of two directors of Jetplace.

8. The third respondent (“McGuire”):

(1) is, and at all material times has been:

(a) one of two directors of Jetplace;

(b) a shareholder of Jetplace;

(c) aware of the activities of Jetplace referred to in paras 12 to 15 and 17 to 36, but excluding sub-para 30(1); and

(d) together with Semaan, in effective control of the business operations of Jetplace; and

(2) is, and since 16 April 2007 has been, the secretary of Jetplace.

9. The conduct referred to below as conduct engaged in by Semaan on behalf of Jetplace:

(1) was conduct within the scope of his actual or apparent authority as a director, servant or agent of Jetplace; and

(2) is deemed to be the conduct of Jetplace under s 84(2) of the Act.

10. The conduct referred to below as conduct engaged in by McGuire on behalf of Jetplace:

(1) was conduct within the scope of his actual or apparent authority as a director of Jetplace; and

(2) is deemed to be the conduct of Jetplace under s 84(2) of the Act.

11. Jetplace admits that it contravened ss 52 and 53 of the Act and McGuire and Semaan admit that they were accessories to those contraventions.

Background

12. Jetplace, McGuire and Semaan have engaged in the conduct described below in relation to the operation of a website known as “RedHotPie” which is accessible via uniform resource locator address “www.redhotpie.com.au” (“Website”). A screen capture of the homepage of the Website was taken by the applicant on 7 November 2008 and forms part of these Agreed Facts.
13. The Website is a socialising, dating and entertainment website that enables people to create user profiles on the Website through which they can socialise online and, potentially, make arrangements to meet with other users of the Website.
14. People using the Website socialise by creating profiles that are registered on the Website, viewing the profiles that others have created, and sending messages from one profile to another. Set out below is the manner in which:

(1) profiles can be searched for and viewed;

(2) messages can be sent between profiles; and

(3) various limitations on use of the Website by different classes of members, are imposed.

15. The Website has developed in form and content since it was first published online in December 2002. It has two primary dating and socialising sections known as:

(1) “Yes Singles Dating”, which provides dating personals and related services; and

(2) “Uncut”, which uses a similar format but provides a forum for users who wish to be more sexually expressive in their socialising.

Those respective portals are viewable on the screenshot taken on 7 November 2008 of the Website homepage a copy of which forms part of the Agreed Facts.

16. The conduct that is the subject of these proceedings relates to the operation of the Uncut section of the Website.

Website overview

17. From December 2002 Jetplace has:

(1) operated the Website;

(2) provided services to an online community using the Website including:

(a) permitting a visitor to the Website (which for these purposes is a person who was neither a director, servant or agent of Jetplace) (“Visitor”) to register as a member of the Website (“Member”) by creating a profile by which the member describes characteristics of the person represented by the profile (“Profile”);

(b) permitting a Member, in relation to a Profile created by that Member, to specify the username (“Username”), sex, age, geographical location and sexual interest or interests of that Profile (“Criteria”) and recording and storing Profiles on the Website’s database (“Database”);

(c) providing, on the Website, a search engine (“Search Engine”) by which a Member can:

(1) specify the Criteria of Profiles that may be of interest to that Member;

(2) use the Search Engine to identify Profiles that may meet the Criteria specified by that Member (“Search”); and

(3) review any Profile identified by a Search.

A screenshot of the first page of search results listing women seeking men in Western Australia, the search conducted and captured on 11 June 2009 forms part of these Agreed Facts.

(d) permitting a Member to review any Profile;

(e) providing, on the Website, a messaging system that enables a Member, in the circumstances referred to in sub-paras 18(2) and 21(3) to 21(6) below, to send from their Profile to another Profile:

(i) one of several pre-scripted messages, being messages composed by Jetplace, by the Member selecting from a drop down menu (“Flirt”); and

(ii) a customised message, being a message composed by the Member (“Customised Message”).

One page of screenshots of portions of pages from the Website captured on 1 December 2008 and showing drop down boxes from which Flirt messages can be chosen forms part of these Agreed Facts.

Free membership until December 2004

18. From December 2002 until in or about December 2004 Jetplace permitted a Member, without charge (“Free Member”):

(1) to register as a Free Member by creating a Profile;

(2) by use of a Profile created by that Free Member, to:

(a) conduct a Search;

(b) send a Flirt to an unlimited number of Profiles;

(c) receive a Flirt from an unlimited number of Profiles;

(d) send a Customised Message to a Profile;

(e) receive a Customised Message from an unlimited number of Profiles; and

(f) communicate with, socialise with and meet other Members.

Membership features after December 2004 and conduct thereafter

19. From December 2004 Jetplace began to charge a fee for various levels of membership of the Website.
20. From 2005 Jetplace operated the “Uncut” section of the Website as a separate section to the “Yes Singles Dating” section.
21. From in or about December 2004 (and in respect of a Platinum Member since 2005):

(1) Jetplace has permitted a Member to register as:

(a) a Guest Member (“Guest Member”);

(b) a Premium Member (“Premium Member”);

(c) a PremiumPLUS Member (“PremiumPLUS Member”); and

(d) a Platinum Member (“Platinum Member”).

(2) Guest Members do not pay a fee for membership, while Premium Members, PremiumPLUS Members and, since 2005, Platinum Members pay fees on a sliding scale.

(3) Jetplace has permitted Guest Members, without charge, to, amongst other things, create one or more Profiles and by use of one or more of those Profiles, to:

(a) conduct a Search;

(b) send up to three Flirts per day to a Profile;

(c) receive an unlimited number of Flirts from a Profile;

(d) receive an unlimited number of Customised Messages from a Profile created by a Premium Member, PremiumPLUS Member or a Platinum Member (“Paying Member”);

(e) send a Flirt in response to a Flirt sent to them by a Profile;

(f) send a Customised Message in response to a Customised Message sent to them by a Profile created by a Paying Member;

(g) send a Customised Message to a Platinum Member without first receiving a message from that Member; and

(h) socialise with and potentially meet Members, by the use of Customised Message, to the extent referred to in sub-paras 21(3)(f) and 21(3)(g) above;

(4) Jetplace has permitted a Member to register as a Premium Member, on payment of a fee, to amongst other things, create one or more Profiles and by use of one or more of those Profiles, to:

(a) conduct a Search;

(b) send up to ten Flirts per day to a Profile;

(c) send up to five Customised Messages per day to a Profile;

(d) receive an unlimited number of Flirts and Customised Messages from a Profile;

(e) send a Flirt in response to a Flirt sent to them by a Profile;

(f) send a Customised Message in response to a Customised Message sent to them by a Profile created by a Paying Member, and in the circumstances referred to in sub-para 21(3)(f) above, by a Guest Member; and

(g) socialise with and potentially meet Members, by the use of a Customised Message, to the extent referred to in the previous sub-paragraph.

(5) Jetplace has permitted a Member to register as a PremiumPLUS Member, on payment of a fee, to amongst other things, create one or more Profiles and by use of one or more of those Profiles, to:

(a) conduct a Search;

(b) send up to twenty Flirts per day to a Profile;

(c) send up to twenty Customised Messages per day to a Profile;

(d) receive an unlimited number of Flirts and Customised Messages from a Profile;

(e) send a Flirt in response to a Flirt sent to them by a Profile;

(f) send a Customised Message in response to a Customised Message sent to them by a Profile created by a Paying Member, and in the circumstances referred to in sub-para 21(3)(f) above, by a Guest Member;

(g) socialise with and potentially meet Members, by the use of a Customised Message, to the extent referred to in the previous sub-paragraph; and

(6) Jetplace has permitted a Member to register as a Platinum Member, on payment of a fee, to, amongst other things, create one or more Profiles and by use of one or more of those Profiles, to:

(a) conduct a Search;

(b) send up to thirty Flirts per day to a Profile;

(c) send up to fifty Customised Messages per day to a Profile;

(d) receive an unlimited number of Flirts and Customised Messages from a Profile;

(e) send a Flirt in response to a Flirt sent to them by a Profile;

(f) send a Customised Message in response to a Customised Message sent to them by a Profile created by a Paying Member, and in the circumstances referred to in para 21(3)(f) above, by a Guest Member;

(g) receive a Customised Message from a Guest Member without first sending a message to that member; and

(h) socialise with and potentially meet Members, by the use of a Customised Message, to the extent referred to in the previous sub-paragraph.

Administrative profiles

22. From in or about December 2004 until 26 November 2008 Jetplace:

(1) created Profiles on the Website that:

(a) had not been created by a Member; and

(b) specified Criteria that had not been created by a Member (“Administrative Profiles”),

which Administrative Profiles by reason of having not been created by a Member,

(c) could not lead to socialising between, or a meeting of, Members.

Screenshots of the Criteria of two examples of the Administrative Profiles with the "handles" TrixNkicks and Goldie_locks as viewed using the Website by a Member and captured on 1 December 2008 forms part of these Agreed Facts;

(2) caused Administrative Profiles to include Criteria so as to appear to Visitors and Members that the Administrative Profile was created by a Member;

(3) caused or permitted Administrative Profiles to be recorded and stored on the Database, from which a Search of the Profiles of Members could be conducted;

(4) caused or permitted the Search Engine to identify Administrative Profiles in response to a Search of Profiles conducted by a Member, in which the Criteria specified by a Member corresponded with the Criteria specified in an Administrative Profile and displayed by default in the following manner:

(a) ranked, firstly according to whether a Profile was a Platinum Member, PremiumPLUS Member, Premium Member or Guest Member (in that order);

(b) ranked secondly, according to the time of the last log-in to the Website (with more recent log-ins being listed first); and

(c) limited to 200 pages, at 10 results per page;

(5) permitted Administrative Profiles to be viewed by Visitors and Members; and

(6) operated the Administrative Profiles by causing Administrative Profiles to send Flirts and Customised Messages to the Profiles of Members.

Screenshot of the inbox of a Member containing messages including a Flirt message from the Administration Profile Goldie-locks, that page having been captured on 17 November 2008 forms part of these Agreed Facts.

23. In or around November 2005 Semaan and McGuire developed and approved a formal policy for Jetplace in relation to the creation and use of Administrative Profiles;
24. The Administrative Profiles were created by, or authorised for publication by, Semaan.
25. As at :

(1) February 2009, the Website had approximately 600,000 registered Profiles of which approximately 586,000 were created by Guest Members; and

(2) 26 November 2008, there were 1,371 Administrative Profiles recorded and stored on the Database. Of those 1,371 Profiles, 1045 were recorded as female Guest Members and 308 were recorded as being male and female couple Guest Members. The total number of Administrative Profiles at that time represented 0.23% of all Profiles recorded on the Website.

A copy of page 7 of the Freehills Submissions to the applicant on behalf of the respondents referred to below in paras 41 to 44 which include a table of the types of Profiles on the Website and their numbers as at 3 February 2009 forms part of this Statement of Agreed Facts.

26. Semaan caused or permitted Administrative Profiles to:

(1) send Flirts to the Profiles of Members;

(2) send Customised Messages to the Profiles of Members; and

(3) be operated so they were viewable by other Members as being “online” from time to time including being recorded in the visitor history of Profiles created by Members.

27. Semaan created and from time to time caused to be used by Jetplace programs to automate and schedule the Administrative Profiles to undertake the actions described in para 26 above. As a result of:

(1) the search ranking criteria referred to in para 22(4); and

(2) the selectivity of the use of Administration in Profiles;

only some of the Administrative Profiles could be located and viewed by members at any time.

28. On or about 27 November 2008 Semaan deactivated the Administrative Profiles such that they could not be found using the Search Engine and could no longer send Flirts or Customised Messages, although they remained stored on the Database.
29. In or about January 2009 Semaan removed all Administrative Profiles from the Database.

Further publications on the Website

30. Jetplace published, or caused to be published, the following on the Website:

(1) from July 2006 to until at least 26 November 2008 in the “Frequently Asked Questions” section of the Website, Jetplace stated:

“Each and every profile you see on our website was placed by a person just like you – someone who came to our site and registered. When you create an account with us, you’re joining the thousands who make this choice every single day”;

(2) from at least December 2004 on each occasion that a Visitor visited the Website’s homepage, Jetplace has stated:

(a) the then total number of Member listings (being the then total number of listings created in relation to each Profile created by a Member on the Website (“Member Listings”));

(b) the total number of Member Listings that were online at that time on the Website;

(c) that the Uncut Section “was for singles and swingers looking for casual dating, adult chat rooms, forums, adult swingers parties and sex stories”; and

(3) on each occasion that a Member, in relation to a Profile created by that Member, visited that Profile’s “My Stats” portion of the Website, Jetplace stated:

(a) the then number of times that the Profile had been reviewed by a Profile created by another Member:

(i) since the Member last logged onto the Website; and

(ii) in the preceding month; and

(b) the Username of any Profile which had recently viewed the Member’s Profile and provided the Member’s Profile with a hypertext link to the Profile of those Members.

(hereinafter referred to as the “Website Publications”)

Representations and contraventions

31. By the Website Publications and the conduct referred to in para 26, Jetplace represented that:

(1) every Profile viewable on the Website had been created by a visitor registered on the Website (“Visitor Representation”);

(2) any Profile identified, in response to a Search of Profiles conducted by a Member, would be a Profile created by a Member (“Search Representation”); and

(3) every profile viewable on the Website and messages received from a profile provided an opportunity for a Member to socialise on the Website and potentially meet with a Member who created that profile or caused the message to be sent (“Interaction Representation”).

(collectively referred to as the “Representations”)

32. The Visitor Representation was misleading and deceptive because Jetplace created and operated Administrative Profiles viewable by Members on the Website.
33. The Search Representation was misleading and deceptive because Profiles identified in response to a Search of Profiles conducted by a Member, could include Administrative Profiles that had not been created by a Member.
34. The Interaction Representation was misleading and deceptive because Administrative Profiles were viewable on the Website and sent messages using the Website but could not provide the opportunity of socialising with, and potentially meeting a Member because Administrative Profiles were created and operated by the first respondent.
35. Jetplace admits that by making the Representations, it engaged in conduct in trade or commerce that was misleading or deceptive or likely to mislead or deceive in contravention of s 52 of the Act.
36. Jetplace also admits that by:

(1) publishing or causing to be published the Website Publications;

(2) making each of the Representations; and

(3) reason of the matters referred to in paras 21 to 29 above;

Jetplace has, in trade or commerce, made representations as to the performance characteristics and benefits of being a Member (“Membership”) that it does not have, in contravention of s 53(c) of the Act.

Semaan

37. Semaan was involved in and responsible for Jetplace making each of the Representations by reason that, at all material times:

(1) in November 2005 he developed and approved a formal policy for Jetplace in relation to the creation and use of Administrative Profiles;

(2) he created, or authorised the creation of, and use of the Administrative Profiles, including the sending of messages by the Administrative Profiles;

(3) he authorised or permitted the Website Publications to be published on the Website;

(4) he knew of all of the facts and circumstances by reason of which each of the Visitor, Search and Interaction Representations were misleading or deceptive or likely to mislead or deceive; and

(5) he knew that Membership did not have the represented performance characteristics and benefits;

and the facts referred to in paras 7 and 9 above.

38. In respect of the contraventions of the Act by Jetplace, Semaan:

(1) aided, abetted, counselled or procured Jetplace to engage in the conduct; and

(2) was directly or indirectly knowingly concerned in or party to, that conduct;

for the purposes of s 75B and s 80(1) of the Act.

McGuire

39. McGuire was involved in and responsible for Jetplace making each of the Representations by reason that at all material times:

(1) in November 2005 he developed and approved a formal policy for Jetplace in relation to the creation and use of Administrative Profiles;

(2) he caused the Website Publications to be published on the Website (other than the FAQ referred to in para 30(1) above);

(3) he knew of the existence and use of the Administrative Profiles created, published and operated by the first respondent;

(4) knew of all of the facts and circumstances by reason of which the Visitor, Search and Interaction Representations were misleading or deceptive or likely to mislead or deceive (except for the matters relating to the "FAQ" referred to in para 30(1) above); and

(5) he knew that Membership did not have the represented performance characteristics and benefits;

and the facts referred to in paras 8 and 10 above.

40. In respect of the contraventions of the Act by Jetplace, McGuire:

(1) aided, abetted, counselled or procured Jetplace to engage in the conduct; and

(2) was directly or indirectly knowingly concerned in or party to, that conduct;

for the purposes of s 75B and s 80(1) of the Act.

Pre litigation submission to the ACCC

41. On 20 February 2009 solicitors for the respondents provided a 17 page submission to the applicant about the operation of the Website and conduct that is the subject of these proceedings (“Freehills Submissions”). The Freehills Submissions were supported by several folders of documents relating to the operation of the Website and the use of Administrative Profiles.
42. The Freehills Submissions set out from the respondents' perspective, the purpose of the Administrative Profiles.
43. The Freehills Submissions argued that that Administrative Profiles were developed by the Respondents as a central security measure, in order to minimise any adverse impacts upon genuine users of the Website, to unlawful, predatory or other nefarious activities which people and organisations may attempt to perpetrate through the Website.
44. The applicant filed the application after the Freehills Submissions were submitted to it.

Proposed orders

45. The proposed orders provide for:

In relation to the first respondent:

(a) declarations under s 21 of the Federal Court of Australia Act 1976 (Cth) (“Federal Court Act”) that the first respondent has contravened ss 52 and 53(c) of the Act”;

(b) injunctions under s 80 of the Act;

(c) a probation order under s 86C(2)(b) of the Act requiring the first respondent to arrange for all of its directors, servants and agents who are or may be involved in creating or authorising the content of the website www.redhotpie.com.au (“Website”) to attend practical trade practices training conducted by an independent person with appropriate knowledge of the Act, which is designed to ensure that the attendees are aware of their responsibilities and obligations in relation to ss 52 and 53(c) of the Act;

(d) an order under s 86C(2)(d) of the Act requiring the first respondent to publish, at the first respondent's expense and in the way specified in the proposed order:

• a notice to each person who was a Member at any time between December 2004 and 26 November 2008 and is now a Member, in a manner which is immediately viewable by that Member upon logging in to their account for the first occasion after the date of publication on which they log in to that account on the homepage of the Website; and
• an email notice to persons who are, or were Members at any time between December 2004 and 26 November 2008,

in the terms specified in the Orders;

In relation to the second respondent:

(e) declarations under s 21 of the Federal Court Act that the second respondent has contravened ss 52 and 53(c) of the Act; and

(f) injunctions under s 80 of the Act;

In relation to the third respondent:

(g) declarations under s 21 of the Federal Court Act that the second respondent has contravened ss 52 and 53(c) of the Act; and

(h) injunctions under s 80 of the Act;

In relation to all respondents

(i) an order that the respondents pay the applicant’s costs, to be taxed if not agreed.

Jurisdiction and grant of orders

46. The Court’s jurisdiction to hear the application and to grant the relief sought is to be found in s 86 of the Act, ss 19, 21 and 23 of the Federal Court Act and s 39B(1A)(c) of the Judiciary Act 1903 (Cth).

Consent orders and admissions

47. In determining whether to make the orders the Court must be satisfied that what is proposed is in the public interest. The Court weighs the public interest and the desirability of an agreed resolution of enforcement proceedings: Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc. [1999] FCA 18; (1999) 161 ALR 79.
48. The Court’s power to make orders extends to making orders in proceedings resolved between the parties by consent. In Australian Competition and Consumer Commission v Target Australia Pty Ltd [2001] FCA 1326 at [24], Lee J stated:

It is the Court's duty in receiving consent orders in any matter to scrutinise such orders as to their appropriateness. However, after being satisfied as to the appropriateness of the orders, the Court should be slow to impede final settlement of such matters, particularly those involving public interest considerations. Moreover, the public has an interest in the mutual resolution of litigation, and subject to the foregoing the Court should be careful not to refuse to make orders simply because the orders may have been different had it been the Court's task to formulate them.

49. In deciding whether consent orders conform with legal principle, the Court is entitled to treat the respondents' consent as involving an admission of all facts necessary or appropriate to the granting of the relief sought: Thomson Australian Holdings Proprietary Limited v Trade Practices Commission [1981] HCA 48; (1981) 148 CLR 150 at 164 per Gibbs CJ, Stephen, Mason and Wilson JJ.
50. Where the parties have reached an agreed position in relation to declarations, the position may differ from the general principles stated above. In BMI Ltd v Federated Clerks Union of Australia (1983) 51 ALR 401 at 413–414 Keely and Beaumont JJ stated:

We think that it is generally undesirable that the court should grant relief by way of declaratory orders under s 108 in the absence of any contest on the question. If the matter were merely one of private right between particular parties, for example, a question as to the respective rights of parties under a contract, it may well be appropriate for a court to make a declaration as to those rights by consent. In such a case, the public and other parties cannot be affected, let alone bound, by such a declaration.

51. In Australian Competition and Consumer Commission v Allergy Pathway Pty Ltd [2009] FCA 960 at [18]–[19], Finkelstein J, citing BMI Ltd, made declarations in terms that had been submitted by consent by the parties. However, in doing so, his Honour stated:

The declaration cases, however, require proof by way of evidence. An assurance by parties (whether by admission or agreed statement) that asserted facts are true will not suffice. Moreover, the House of Lords did not think a departure from this rule was justified because of administrative expediency.

For the time being, at least until a Full Court holds otherwise, it is, in my view, incumbent upon a single judge of the Federal Court to follow BMI and therefore not grant a declaration involving a public right in the absence of evidence that supports the declaration.

52. Since then, by way of illustration this Court has made declarations supported by a signed statement of agreed facts in the following decisions: Australian Competition and Consumer Commission v Cosic Holdings Pty Ltd [2009] FCA 1579; Australian Competition and Consumer Commission v Wilson Parking 1992 Pty Ltd [2009] FCA 1580; Minister for the Environment, Heritage & the Arts v PGP Developments Pty Limited [2010] FCA 58.

Declarations

53. Generally, whether it is appropriate for the Court to make declarations is a matter informed by the following:

(a) a declaration must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions: Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564 at 582 per Mason CJ and Dawson, Toohey and Gaudron JJ;

(b) a declaration must be more than just a summary of conclusions reached in reasons for judgment: Warramunda Village Inc. v Pryde [2001] FCA 61; (2001) 105 FCR 437 at [8] and [13];

(c) the person seeking the declaration must have “a real interest...[and] must be able to secure a proper contradictor, that is to say, some one presently existing who has a true interest to oppose the declaration sought”: Forster v Jododex Australia Pty Ltd [1972] HCA 61; (1972) 127 CLR 421 at 437-8 per Gibbs J, quoting Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 at 448 per Lord Dunedin; Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564 at 582 per Mason CJ and Dawson, Toohey and Gaudron JJ; and

(d) a declaration will not be granted if it will produce no foreseeable consequences for the parties Gardner v Dairy Industry Authority (NSW) (1977) 18 ALR 55 at 69 per Mason J, or have no utility: Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (No 2) [1993] FCA 83; (1993) 41 FCR 89 at 99 per Sheppard J.

54. The power of the Court to make declarations under s 21 of the Federal Court Act extends to the making of declarations that particular conduct contravened the Act: Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (No 2) [1993] FCA 83; (1993) 41 FCR 89.
55. In deciding whether it is appropriate to make declarations in an ACCC instituted proceeding, the Court has looked to the public interest nature of the proceedings and the public interest role the applicant has in enforcing the Act: Australian Competition and Consumer Commission v Target Australia Pty Ltd [2001] FCA 1326 at [18]; Australian Competition and Consumer Commission v Goldy Motors Pty Ltd [2000] FCA 1885 at [30] and [34]; Australian Competition and Consumer Commission v Grove and Edgar Pty Ltd [2008] FCA 1956 at [20]. More specifically, the Court has observed that declarations:

(a) are an appropriate vehicle to record the court’s disapproval of the contravening conduct: Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (No 2) [1993] FCA 83; (1993) 41 FCR 89 at 100;

(b) serve to vindicate the applicant's claim that the respondent contravened the Act: Australian Competition and Consumer Commission v Goldy Motors Pty Ltd at [30];

(c) are of some assistance to the applicant in future in carrying out the duties which are conferred upon it by the Act: Australian Competition and Consumer Commission v Goldy Motors Pty Ltd at [34];

(d) are of assistance in clarifying the law: Australian Competition and Consumer Commission v Goldy Motors Pty Ltd at [34]; and

(e) may inform consumers of the dangers arising from a respondent’s contravening conduct: Australian Competition and Consumer Commission v Pacific Dunlop Ltd [2001] FCA 740, at [59]-[69].

56. Further, the public interest may be advanced or protected by a declaration of contravening conduct that was directed to large numbers of the public over a significant period of time, notwithstanding that other relief may be denied: Australian Competition and Consumer Commission v IMB Group Pty Ltd [1999] FCA 313 at [21].
57. The statutory objective of the Act is “to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection”: s 2 of the Act. The seeking of declaratory relief in appropriate matters is consistent with this objective, as declarations clearly state the nature of the conduct and the fact that it is unlawful. This serves to educate the Australian community, as well as relevant market participants of the kind of conduct that may contravene the Act. It also promotes general deterrence and community-wide compliance with the Act.
58. The Court has on many occasions acknowledged that declarations play an important public interest role in the resolution of proceedings brought under the Act. Declarations are recognised to have a particular public interest outcome that other remedies, important as they are, are not able to provide.
59. There is a long held view that a declaration, being a judicial act, should only be made on evidence and not simply on admissions or deemed admissions: Bank of Kuwait and the Middle East v Ship MV Mawashi Al Gasseem (No 2) [2007] FCA 815; (2007) 240 ALR 120 at [10]- [11] per Mansfield J and the cases referred to therein, particularly the observations of Kiefel J in Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (2006) 236 ALR 665. The statement of agreed facts supplied to the Court, is drafted in such a way to supply the Court with evidence of the contravening conduct.
60. The declarations proposed are an appropriate means of assisting the applicant in carrying out its role pursuant to the Act, and deterring others from similar conduct. The declarations in the terms proposed clearly identify aspects of the respondents' conduct which are in contravention of the Act.
61. I am of the opinion that the Court may make the proposed declarations based upon the statement of agreed facts and should do so in this case because:

(a) the policy objective to which the principle in BMI Ltd is directed is the necessity for a substantial factual basis for the making of declaratory orders where the rights of third parties may be affected;

(b) the facts in the statement of agreed facts meet that policy objective because:

• it constitutes evidence of facts which it is open to the Court to accept;
• it contains detailed facts and not merely admissions as to broad conclusions;
• the facts stated are self-evidently within the knowledge of the parties;
• the facts stated concern only the conduct of the parties to the proceeding, each of whom is represented by competent solicitors; and
• there are no relevant third party rights or interests to be protected or affected.

Injunctions

62. Injunctions may be ordered under s 80 of the Act if it is in the public interest to do so: Australian Competition and Consumer Commission v 4WD Systems Pty Ltd [2003] FCA 850; (2003) 200 ALR 491 at [212] and [216].
63. As the terms of s 80(4) and (5) of the Act suggest, the Court has a wider jurisdiction to grant an injunction under s 80 of the Act than under traditional equitable principles, though these remain relevant: Australian Competition and Consumer Commission v 4WD Systems Pty Ltd at [212] per Selway J citing ICI Australia Operations Pty Ltd v Trade Practices Commission [1992] FCA 474; (1992) 38 FCR 248 at 256-7.
64. Injunctions under s 80 of the Act are available and appropriate, not only to restrain an apprehended repetition of the contravening conduct, but also to deter a repetition of the conduct: Australian Competition and Consumer Commission v Wizard Mortgage Corporation Ltd [2002] FCA 1317 at [22]- [26].
65. The admitted facts must disclose a sufficient nexus between the conduct alleged and the orders sought otherwise the Court, in granting relief, will not be exercising judicial power within the confines of Chapter III of the Constitution: Australian Competition and Consumer Commission v Z-tek Computer (1987) 78 FCR 197 at 203.
66. The proposed injunctions must be clearly and precisely stated so that they are capable of being obeyed and will not require the continual supervision of the Court: Australian Competition and Consumer Commission v 4WD Systems Pty Ltd at [212].
67. The applicant has a legitimate concern to prevent repetition of the conduct that occurred in this instance. Deterrence of repetition of the conduct by the respondent will be more likely to be achieved if the Court grants not only the declaratory but also the injunctive relief sought by the applicant. There is a sufficient nexus between the terms of the injunctions and the admitted conduct. The terms of the injunctions are clear and capable of being obeyed. They are, in my opinion, appropriate orders to be made in this case.

Probation orders

68. Pursuant to s 86C(2)(b) of the Act, the Court may make a probation order for a period of no longer than three years. The probation order, for the purposes of ensuring that the person does not engage in the contravening conduct, similar conduct or related conduct during the period of the order, includes an order directing the person to establish an education and training program for employees or other persons involved in the person's business, being a program designed to ensure their awareness of the responsibilities and obligations in relation to the contravening conduct, similar conduct or related conduct: s 86C(4).
    
69. The orders for compliance programs should be expressed with sufficient precision to enable a breach of the order to be ascertained and effectively punished, however I accept that it is neither practicable nor useful to prescribe with particularity the content of such programs: Australian Competition and Consumer Commission v Construction, Forestry, Mining and Energy Union [2006] FCA 1730.
70. Although it is usual for such orders to include an order that the respondent have its program independently audited, the applicant in this case only requires that, within 14 days of completion of each of the three annual seminars, the first respondent request the person who conducts the training to provide the first respondent with a written statement or certificate verifying that the training has taken place, and listing the names of the persons who attended each session.
71. The applicant seeks to ensure that the first respondent's relevant directors, servants and agents attend seminars to educate them on the respondents' legal obligations under Part V of the Act, in particular with respect to ss 52 and 53(c) of the Act, with a view to preventing any further breaches.
72. These orders will tend to serve an important educative purpose in the case of the personal respondents and I am satisfied that they should be made.

Publication orders

73. The purpose of ordering corrective advertising under s 86C of the Act is to protect the public interest. Punitive considerations should not be entertained. In Australian Competition and Consumer Commission v On Clinic Australia Pty Ltd (1996) 35 IPR 635, Tamberlin J observed at 640:

The purpose of corrective advertising is to protect the public interest: see Makita (Australia) Pty Ltd v Black & Decker (Australasia) Pty Ltd (1990) 12 ATPR 41-030 51,477-8. Corrective advertising is intended to dispel incorrect or false impressions which may have been created as a result of deceptive or misleading conduct. It is not intended to be punitive. In any matter concerning corrective advertising the timing of such corrective advertising is of course important ... There is no principle that any particular period is appropriate as a point beyond which corrective advertising is not warranted. In the context of advertising it is necessary to examine the nature, extent and intensity of the advertising and the media in which it has been released with a view to deciding whether there could reasonably be any current misapprehension as a result of the advertisements.

74. Advertising that is directed to dispelling incorrect or false impressions created as a result of deceptive or misleading conduct will generally have, as an ancillary benefit, some public educational effect in relation to the operation of the relevant legislative provisions. In Australian Competition and Consumer Commission v Target Australia Pty Ltd [2001] FCA 1326, Lee J commented, at [21] that:

...the purpose sought to be achieved by corrective advertising is to raise public awareness – for both consumers and competitors – as to the type of conduct that may contravene the Act, and as to the outcome of the particular litigation.

75. In Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc [1999] FCA 18; (1999) 95 FCR 114, French J, as his Honour then was, observed that it is important that corrective advertisements do more than merely announce a ‘win’ for the ACCC and the contrition of the respondent. His Honour said at [49]:

Such advertisements in cases involving contraventions of Part IV are within the power conferred by s 80 if they are directed to informing the relevant markets of the outcome of the litigation so that those in the market have at least a broad understanding of the ways in which the contraveners have had to change their conduct. This will at least alert those in the markets to question or inquire about the lawfulness of conduct in the future which may seem to contravene the Act and/or breach the injunctions which have been granted.... [Such advertisements] aid in the enforcement of the primary orders and the prevention of the repetition of the contravening conduct.

76. His Honour expressed similar views in Australian Competition and Consumer Commission v Virgin Mobile Australia Pty Ltd (No 2) [2002] FCA 1548 at [22].
77. Here, the proposed forms of “corrective advertising” sought by the applicant require the first respondent to cause to be published, within 14 days of the date of the Orders notices:

(a) to each person who was a Member at any time between December 2004 and 26 November 2008 and is now a Member, in a manner which is immediately viewable by that Member upon logging in to their account for the first occasion after the date of publication on which they do log in to that account (“Pop Up Notice”); and

(b) by email to all persons who are, or were Members at any time between December 2004 and 26 November 2008 to the last known email address of that Member (“Email Notice”).

78. The applicant has distinguished between notices to be published to "Guest" Members ("Non-Paying Members") and those to be published to "Premium, PremiumPLUS and Platinum" Members ("Paying Members").
79. Any Pop Up or Email Notices to Paying Members, contain two additional paragraphs:

Jetplace and its directors apologise to all members of the website for engaging in the conduct outlined above and offers a refund to any paying member who was misled by the conduct into paying for membership of the website.

Should you require any further information, please contact Jetplace on [insert email address]

80. The additional paragraphs serve to alert Paying Members that the respondents are prepared to refund their membership fees, if such members can show that the misleading conduct was a factor causing them to pay for their membership.
81. I accept that the proposed publication notices serve both to protect and educate consumers and to prevent a repetition of the contravening conduct. Importantly, the publication notices specifically target Members who may have been affected by the respondents' conduct during the relevant period of the breaches, but not after. The respondents and the applicant have consulted and agree that the proposed methods of delivering the publication notices are feasible. These orders ought be made.

Freehills Submissions

82. The applicant submits that the issues raised by the Freehills Submissions referred to at para 37 of the statement of agreed facts do not diminish the respondents' culpability under the Act. I take this to be an intended reference to para 39 of that document.
83. I accept that submission. Given the respondents’ concession that they have contravened the Act, the Freehills Submissions merely provide some background information in respect of the contravening conduct.

Orders

84. I am satisfied for all of these reasons, that it is in the public interest and appropriate to make orders in the terms agreed between the parties and set out in the minute of consent orders dated 22 April 2010.
    

I certify that the preceding eighty-four (84) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour.

Associate:

Dated: 21 July 2010