Australian Communications and Media Authority v Mobilegate Ltd A Company Incorporated in Hong Kong (No 7) (includes corrigendum dated 5 March 2010) [2010] FCA 133 (8 February 2010)

Last Updated: 8 March 2010

FEDERAL COURT OF AUSTRALIA

Australian Communications and Media Authority v Mobilegate Ltd A Company Incorporated in Hong Kong (No 7) [2010] FCA 133

Citation:		Australian Communications and Media Authority v Mobilegate Ltd A Company Incorporated in Hong Kong (No 7) [2010] FCA 133
Parties:		AUSTRALIAN COMMUNICATIONS AND MEDIA AUTHORITY v MOBILEGATE LTD A COMPANY INCORPORATED IN HONG KONG, WINNING BID PTY LTD ACN 121 026 793, JOBSPY PTY LTD ACN 112 801 073, SIMON ANTHONY OWEN, TAREK ANDREAS SALCEDO, SCOTT MARK MOLES, GLENN CHRISTOPHER MAUGHAN and SCOTT GREGORY PHILLIPS
File number:		QUD 426 of 2008
Judge:		LOGAN J
Date of judgment:		8 February 2010
Corrigendum:		5 March 2010
Catchwords:		PRACTICE AND PROCEDURE – Civil Penalty Proceedings – No case to answer submissions – Whether a Respondent is required to be put to an election – Held in the circumstance Respondent should be put to an election
Legislation:		Spam Act 2003 (Cth) s 16 Trade Practices Act 1974 (Cth) s 52 Federal Court Rules O 32 r 4(4)
Cases cited:		True Floor Service Proprietary Limited v Jenkins (No 2) (2006) 232 ALR 532 (distinguished) Protean (Holdings) Limited (Receivers and Managers appointed) and American Home Assurance Company [1985] VR 187 (followed) Cahill v Construction Forestry, Mining and Energy Union (No 2) [2008] FCA 1292; (2008) 170 FCR 357 (distinguished) Compaq Computer Australia Proprietary Limited v Mary [1998] FCA 968; (1998) 157 ALR 1 (cited) Australian Competition and Consumer Commission v Amcor Printing Papers Group Limited [2000] FCA 17; (2009) 169 ALR 344 (cited)
Date of hearing:	8 February 2010
Place:	Brisbane
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	25
Counsel for the Applicant:	Mr S Couper QC with Ms M Brennan
Solicitor for the Applicant:	Australian Government Solicitor
Counsel for the Eighth Respondent:	Mr T Laing
Solicitor for the Eighth Respondent:	Morgan Conley Solicitors

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION	QUD 426 of 2008

BETWEEN:	AUSTRALIAN COMMUNICATIONS AND MEDIA AUTHORITY Applicant
AND:	MOBILEGATE LTD A COMPANY INCORPORATED IN HONG KONG First Respondent WINNING BID PTY LTD ACN 121 026 793 Second Respondent JOBSPY PTY LTD ACN 112 801 073 Third Respondent SIMON ANTHONY OWEN Fourth Respondent TAREK ANDREAS SALCEDO Fifth Respondent SCOTT MARK MOLES Sixth Respondent GLENN CHRISTOPHER MAUGHAN Seventh Respondent SCOTT GREGORY PHILLIPS Eighth Respondent

JUDGE:	LOGAN J
DATE OF ORDER:	8 FEBRUARY 2010
WHERE MADE:	BRISBANE

CORRIGENDUM

1. On the order page of the Judgment, the Orders should read as follows:
   1. The Eighth Respondent is to elect whether to advance the no case submission or to give evidence.
      

instead of:

1. The subpoena in respect of Mr Owen is set aside.

2. Reserve until Tuesday 9 February 2010 the question of any other orders in respect of the Applicant’s costs of the subpoena and the question of any liberty to apply.
   

I certify that the preceding one (1) numbered paragraph is a true copy of the Corrigendum to the Reasons for Judgment herein of the Honourable Justice Logan.

Associate:

Dated: 5 March 2010

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.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION	QUD 426 of 2008

BETWEEN:

AUSTRALIAN COMMUNICATIONS AND MEDIA AUTHORITY Applicant

AND:

MOBILEGATE LTD A COMPANY INCORPORATED IN HONG KONG First Respondent WINNING BID PTY LTD ACN 121 026 793 Second Respondent JOBSPY PTY LTD ACN 112 801 073 Third Respondent SIMON ANTHONY OWEN Fourth Respondent TAREK ANDREAS SALCEDO Fifth Respondent SCOTT MARK MOLES Sixth Respondent GLENN CHRISTOPHER MAUGHAN Seventh Respondent SCOTT GREGORY PHILLIPS Eighth Respondent

JUDGE:	LOGAN J
DATE OF ORDER:	8 FEBRUARY 2010
WHERE MADE:	BRISBANE

THE COURT ORDERS THAT:

1. The subpoena in respect of Mr Owen is set aside.
2. Reserve until Tuesday 9 February 2010 the question of any other orders in respect of the Applicant’s costs of the subpoena and the question of any liberty to apply.

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.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION	QUD 426 of 2008

BETWEEN:

AUSTRALIAN COMMUNICATIONS AND MEDIA AUTHORITY Applicant

AND:

MOBILEGATE LTD A COMPANY INCORPORATED IN HONG KONG First Respondent WINNING BID PTY LTD ACN 121 026 793 Second Respondent JOBSPY PTY LTD ACN 112 801 073 Third Respondent SIMON ANTHONY OWEN Fourth Respondent TAREK ANDREAS SALCEDO Fifth Respondent SCOTT MARK MOLES Sixth Respondent GLENN CHRISTOPHER MAUGHAN Seventh Respondent SCOTT GREGORY PHILLIPS Eighth Respondent

JUDGE:	LOGAN J
DATE:	8 FEBRUARY 2010
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1. My reasons for judgment in respect of the question as to whether the Eighth Respondent should be put to an election are as follows.
2. So far as the Eighth Respondent, Mr Scott Gregory Phillips, is concerned the Australian Communications and Media Authority (the Authority) seeks the following relief. A declaration that he:
   1. aided and abetted IMP, his central management and controllers in Australia, to send SMS messages or to cause SMS messages to be sent via 1977 3366 and was knowingly concerned in, and a party to, IMP, his central management and controllers in Australia, sending SMS messages or causing SMS messages to be sent via 1977 3366 to, first, Australian mobile telephone numbers, which its servants or agents had obtained by deception using fabricated dating website profiles for the purposes of dishonestly obtaining the account holder’s acceptance of its safe divert service; or
   2. to Australian mobile telephone account holders who had replied “Yes” in circumstances where the company knew that their acceptance of its safe divert service had been obtained by deception, each in contravention of s 16(1) of the Spam Act 2003 (Cth) (Spam Act) and thereby engaged in conduct in contravention of s 16(9) of the Spam Act.
3. The Authority seeks the imposition of pecuniary penalties for the alleged contravention of the Spam Act. It also seeks injunctive relief in addition and in the way foreshadowed in the application. It seeks, in the event of contraventions being found, compensatory orders in the event of my being satisfied that another person or persons have suffered loss or damage as a result of the alleged contraventions.
4. Apart from alleging contraventions of the Spam Act the Authority also alleges, as against the Eighth Respondent, his aiding, abetting and being knowingly concerned and a party to a corporate contravention of s 52 of the Trade Practices Act 1974 (Cth) (Trade Practices Act). The essence of that contravention is akin to that which grounds the alleged corporate contravention of the Spam Act in the sense that it centres around the allegation of fake dating website profiles and the absence of any informing of the users of those website profiles that they were fake. Injunctive relief, as well as declaratory relief, is sought in relation to the Trade Practices Act alleged contravention. A contravention of s 52, does not, of course, carry with it any pecuniary penalty liability, though it does carry with it a liability potentially for, as I have said, declaratory and injunctive relief.
5. The case has reached the following stage. All of the Authority’s evidence has been read insofar as it is evidence-in-chief and cross-examined upon. The Authority has also tendered certain documentary evidence. On 7 December 2009, and while Mr Phillips was represented by other counsel, it was signified in open court that it was proposed to seek leave to file and read an affidavit of Mr Phillips. I was invited to look at that affidavit. The invitation came in the context of whether or not another witness, whose evidence was foreshadowed in Mr Phillips’ case, should give his evidence orally or, rather, whether an affidavit ought to be furnished and filed and served. That other witness was Mr Sam Sciacca.
6. A little later that same day, as a result of the Authority making it plain that reliance might be placed on an absence of a particular body of evidence, it became apparent that a degree of embarrassment attended the further conduct of Mr Phillips’ case by counsel then instructed on his behalf. The result of that in the first instance was an adjournment of the case until the following day, 8 December 2009, at which point Mr Laing, who presently appears, first announced an appearance on behalf of Mr Phillips. At that stage, there was no indication of any proposal to make a no case submission, but rather it was foreshadowed that three witnesses would be called on behalf of Mr Phillips.
7. Two of those I have already identified. The third, it would seem, was proposed to be Mr Conley, although no affidavit from him was then sought to be filed and read.
8. It seemed to me at the time that the interests of justice, having regard to the considerable body of evidence led in the Authority’s case, were such that the trial ought not then and there proceed. Rather, having regard to the interests of justice in the circumstances, it seemed to me that the case ought to be adjourned until today. That was so, notwithstanding a certain disposition on the part of Mr Laing then and there to continue the trial.
9. Over the course of the adjournment, there has been, self-evidently from the submission made on behalf of Mr Phillips today, an opportunity which was not present on 8 December 2009 for Mr Laing to analyse closely the nature of the case at an evidentiary level brought against Mr Phillips by the Authority. It would seem that it is this analysis, in conjunction with the change of counsel, which has prompted the application on behalf of Mr Phillips not just to make a no case submission, but to do so without being put to an election so far as the giving of evidence is concerned.
10. Order 32 r 4(4) of the Federal Court Rules provides that:

Where, at the conclusion of the evidence for the party to begin, no document or thing has been admitted in evidence on tender by the opposite party, the opposite may elect to adduce evidence or not to adduce evidence.

11. In this case, there has been, as I have indicated, a position voiced in open court on behalf of Mr Phillips by counsel then representing him. That position was to adduce evidence from him personally as well as from Mr Sam Sciacca. That position was signified without there being any indication of a disposition to advance a no case submission.
12. It is true that it is possible to find authority which stands for the proposition that the tendering of exhibits in the course of the evidence of an applicant’s witness’s evidence does not preclude the ability to make a no case submission at the end of an applicant’s case: see True Floor Service Proprietary Limited v Jenkins (No 2) (2006) 232 ALR 532 (True Floor Case). That is not this case. Here, the position is akin to a desire to make a no case submission after the oral evidence in chief of the respondent has been received but before that respondent is cross-examined.
13. The affidavit of Mr Phillips is, in effect, his evidence in chief. There was, on 7 December 2009 signified by counsel then representing Mr Phillips, a desire to have leave further to examine him in chief so as to provide Mr Phillips with an opportunity to correct particular statements made in that affidavit. Nonetheless, in essence, that affidavit is the evidence in chief of that respondent. Thus, whilst it may be accepted for present purposes that there is no general rule that requires a party making a no case submission to elect to call no further evidence if some evidence has already been led or if exhibits have been tendered during cross-examination, it is necessary carefully to analyse the circumstances of particular cases where nonetheless a no case submission has been entertained without election.
14. At a further level of abstraction so far, as authority is concerned, it may also be accepted that, where a no case submission is put forward, three courses are open to a trial judge. The root authority in relation to an exposition of those courses is a judgment delivered by Tadgell J as a member of the Full Court of the Victorian Supreme Court in Protean (Holdings) Limited (Receivers and Managers appointed) and American Home Assurance Company [1985] VR 187 at 237. It must be said that the choices are put in an inclusory way. Perhaps there are others. In any event, the three to which Tadgell J adverts are these:
    1. the judge might decline to entertain the submission at that stage unless the moving party elects before making it not to call any evidence, either generally or on the issue on which the ruling was sought; or
    2. the judge might allow the submission to be made without putting the moving party to any election of that stage but leaving, until he or she has heard it, the question whether or not he or she would rule on it without requiring an election to be made, and having heard the submission and any answer to it by the respondent party, he or she could either rule on it or not, perhaps requiring an election to be made as a prerequisite to his or her so doing; or
    3. the judge might indicate that he or she would entertain both the submission and rule on it without requiring an election to be made by the moving party.
15. Though it is not an invariable rule there does seem to be a preference on the authorities before deciding whether to entertain the submission and deciding whether to require the moving party, in this case it would be Mr Phillips, to elect to receive some submissions about the nature of the no case submission and also to understand the response that would be made on behalf of the other party.
16. In this instance I have the benefit of an elaboration in the written outline of submissions on behalf of Mr Phillips of the nature of the no case submission which is proposed to be made on his behalf. It is evident from that written outline that a detailed critique seriatim of the various aspects of the case which the Authority seeks to make is proposed to be made on behalf of Mr Phillips. Prominent in that critique is the submission that the case against Mr Phillips relies upon inferences being drawn based on allegations of his knowledge of corporate wrongdoing. That particular quality of the proposed no case submission sets it apart from one of those which was advanced before Kenny J in Cahill v Construction Forestry, Mining and Energy Union (No 2) [2008] FCA 1292; (2008) 170 FCR 357 (Cahill (No 2)).
17. In that instance, at the close of Mr Cahill’s case, the union made a no case submission. What was put forward there was that even if the conduct alleged was proven it could not amount to “building industrial action” for particular reasons. In other words, that part of a no case submission which the union promoted in that case turned upon a question of statutory construction. In the alternative, the union promoted a no case submission to the effect that the evidence adduced by Mr Cahill failed to make out the essential elements of the contraventions alleged against the union. In the course of a comprehensive review of authority, touching upon the question of whether persons seeking to make a no case submission should be put to an election. Kenny J observed at page 369-370 at [29]:

There is, of course, good reason for the general rule that a decision will not be given on a no case submission unless the submitting party elects to call no evidence. If a judgment in favor of a no case submission is overturned on appeal it would generally be necessary to order a new trial.

18. Her Honour refers, in that regard, to Compaq Computer Australia Proprietary Limited v Mary [1998] FCA 968; (1998) 157 ALR 1 at 7 and Australian Competition and Consumer Commission v Amcor Printing Papers Group Limited [2000] FCA 17; (2009) 169 ALR 344 at 357. Her Honour then continues:

The trial in the present case has proceeded over four days. There has been significant cross-examination of the witnesses called by the applicant. While the respondents have filed witness statements from five persons at the commencement of the trial, they stated they would not be relying on two of these statements. They have not indicated whether or not [another named person] will give evidence and, if he does in what circumstances he would do so.

19. Then, a little later in that same passage:

The trial is unlikely to take any more than two days to complete.

20. In this instance, whilst the trial has not gone for four days, it is fair to say that there has been extensive cross-examination of the Authority’s witnesses. Further, in the ordinary course of events, it would seem, having regard to the parties’ position at the time of the adjournment in December, that the evidence in this case would be able to be completed, if not also submissions, this week.
21. On behalf of Mr Phillips, it was submitted that there were factors which told in favour of being able to advance a no case submission without being put to an election, so far as the giving of evidence was concerned. In that regard, the gravity of the contraventions, as well as the potential exposure to substantial pecuniary penalty and commercial opprobrium were relied upon.
22. I accept readily that there are analogies to be drawn between cases where contraventions of the Trade Practices Act or industrial legislation, carrying with them exposure to pecuniary penalty, and cases under the Spam Act. It is evident from a study of that Act that Parliament has made provision for very substantial penalties indeed. Further, the allegation of being knowingly concerned in this case is an allegation, in effect, of being knowingly concerned in an exercise in deception. Thus, the analogies sought to be drawn on behalf of Mr Phillips are not ill-founded. Nonetheless, the type of no case submission which is sought to be advanced without being put to an election is one which carries with it, in my opinion, the consequence that, if a conclusion reached by me as to an absence of any reasonable basis for the drawing of inferences is concerned is an error, and shown to be so in the event of an appeal, the inevitable consequence of that would be the ordering of a new trial. This is not a no case submission propounded on the basis of a statutory construction thought to favour the respondent, nor is it one of those cases of a kind referred to in authority where the making of a no case submission might have ramifications for other respondents. There is no other respondent who or which is an active party.
23. It may well be that, unlike the True Floor case, the terms of O 32 r 4(4) are, in the circumstances of this case, a complete answer. By that I mean that rule provides for a choice to be made at the conclusion of the evidence for the party to begin, ie, at the conclusion of the Authority’s case. That choice was made and, that being so, that rule would seem to carry with it the consequence that a no case submission could not be entertained. Nonetheless, there does seem to be a body of authority which supports, nonetheless, the existence of a discretion. These authorities are referred to by Kenny J at para 2 in Cahill (No 2).
24. Assuming, then, that I have a discretion, it seems to me that given the type of no case submission that is sought to be made, this is a case where I ought to require Mr Phillips to elect as to whether to advance that submission or give evidence. In so doing, I am assuming, considerably, in my opinion, in his favour, in even entertaining the application that he is not foreclosed from making it because of the forensic choice already evident on 7 December 2009 by his signifying, through his counsel, that he would give evidence, ie, adduce an affidavit.
    
25. I therefore propose to, and do, require Mr Phillips to elect.
    

I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.

Associate:

Dated: 3 March 2010