Australian Competition and Consumer Commission v Keshow [2005] FCA 558 (5 May 2005)

TRADE PRACTICES – sale of educational materials in indigenous communities – unconscionable conduct – section 51AB Trade Practices Act 1974 considered – declarations made

Trade Practices Act 1974 (Cth) ss 51AB and 52
Trade Practices Legislation Amendment Act 1992 (Cth)
Trade Practices Revision Act 1986 (Cth)

Thomson Australian Holdings Pty Ltd v Trade Practices Commission [1981] HCA 48; (1981) 148 CLR 150 cited
Australian Competition & Consumer Commission v Lux Corporation Pty Ltd [2004] FCA 926 followed
Australian Competition & Consumer Commission v CG Berbatis Holdings Pty Ltd (2003) 214 CLR 51; [2003] HCA 18 cited
Australian Competition & Consumer Commission v Samton Holdings Pty Ltd (2002) 117 FCR 301; [2002] FCA 62 cited
Hurley v McDonalds Australia Ltd (2000) ATPR 41-741 cited
Australian Competition & Consumer Commission v Simply No-Knead (Franchising) Pty Ltd [2000] FCA 1365; (2000) 104 FCR 253 cited
Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 36 FLR 134 cited
Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594 cited
Our Town FM Pty Ltd v Australian Broadcasting Tribunal (1987) 16 FCR 465 cited
Drayton v Martin (1996) 67 FCR 1 cited
Australian Competition & Consumer Commission v CG Berbatis Holdings Pty Ltd (No.2) [2000] FCA 2; (2000) 96 FCR 491 cited
Glenariff Holdings Pty Ltd v Tah Land Pty Ltd [2005] FCA 132 cited
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191 cited
Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 79 ALR 83 cited
State Government Insurance Corporation v Government Insurance Office of New South Wales (1991) 28 FCR 511 cited
Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 cited
Australian Competition & Consumer Commission v Z-Tek Computer Pty Ltd (1997) 78 FCR 197 applied

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v RAMON LAL KESHOW

NTD.19 of 2004

MANSFIELD J
5 MAY 2005
ADELAIDE (HEARD IN ALICE SPRINGS)

IN THE FEDERAL COURT OF AUSTRALIA
NORTHERN TERRITORY DISTRICT REGISTRY	D.19 OF 2004

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPLICANT
AND:	RAMON LAL KESHOW RESPONDENT
JUDGE:	MANSFIELD J
DATE OF ORDER:	5 MAY 2005
WHERE MADE:	ADELAIDE (HEARD IN ALICE SPRINGS)

Ms White	16 September 1998 to about August 2004	$10,440
Ms Dixon	24 September 1998 to 16 October 2003	$2,080
Ms Williams	24 September 1998 to 27 November 2003	$6,930
Ms Patterson	24 September 1998 to 6 May 1999	$680
Ms Doolan	25 September 1998 to 21 May 1999	$720
Ms Dickson	10 August 2000 to 2 October 2003	$4,000
Ms Turner	15 May 2003 to 8 January 2004	$1,080
Ms Palmer	4 June 2003 to 28 January 2004	$600

(8) The respondent pay to the applicant its costs of the proceedings.

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

IN THE FEDERAL COURT OF AUSTRALIA
NORTHERN TERRITORY DISTRICT REGISTRY	D.19 OF 2004

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPLICANT
AND:	RAMON LAL KESHOW RESPONDENT

JUDGE:	MANSFIELD J
DATE:	5 MAY 2005
PLACE:	ADELAIDE (HEARD IN ALICE SPRINGS)

1 The applicant alleges that in the period between September 1998 and May 2003 the respondent in his dealings with eight residents of indigenous communities is central Australia engaged in conduct that was unconscionable and misleading. It is convenient to call those eight persons collectively ‘the complainants’, although it is of course necessary to deal with their individual circumstances. Declarations are sought that, by that conduct, the respondent contravened s 51AB, and alternatively s 51AA, of the Trade Practices Act 1974 (Cth) (the TP Act) and s 52 of the TP Act. The applicant further alleges that from about August 1998 the respondent more generally contravened s 51AB, and alternatively s 51AA, of the TP Act in dealings with consumers living in indigenous communities in the Northern Territory. I will call those persons ‘the respondent’s customers’. In addition to the declarations sought, the applicant seeks injunctive and other relief against the respondent.

2 For the reasons which appear below, I have determined that the respondent has contravened s 51AB and s 52 of the TP Act in his dealings with each of the complainants who are residents of the indigenous communities of Little Sisters Camp, Amoonguna and Santa Teresa, all out of Alice Springs. I have also determined that the respondent more generally engaged in conduct which contravened s 51AB of the TP Act in certain of his dealings with consumers living in indigenous communities in the Northern Territory between about September 1998 and May 2004. I propose to make declarations and orders along the lines sought by the applicant. That relief does not in all respects reflect the relief sought by the applicant.

3 The overall picture which the evidence presents is that the respondent is what is sometimes called a ‘humbugger’. He sold and supplied, or purported to sell and supply, to residents of indigenous communities in the Northern Territory in the period in question children’s educational materials and later household goods. He took advantage of the lack of education and commercial experience of those in the communities in doing so. In many instances, the educational materials were not needed or useful having regard to the age of the child or children of the consumer. The products he contracted to provide were most commonly not supplied, or not supplied in their entirety. Whether a contract to provide educational materials was met was haphazard. The payment arrangements in each instance involved an open-ended periodic payment authority, procured at the instance of the respondent, and authorising payment on the day which Centrelink or like benefits were regularly received by the particular complainant or other community resident. The respondent in a number of instances continued to receive periodic payments well after the value of the goods to be provided by him (whether or not they had been provided) had been received. In fact, there is no evidence to show that the respondent maintained adequate records of what products had been sold to which consumers, whether the products had been provided, as agreed, or what had been paid for them.

4 Before referring to my detailed findings, it is necessary to indicate how the issues came before the Court. The application was supported by a statement of claim. It set out in detail the factual allegations upon which the relief claimed was sought. The allegations in the statement of claim and the amended statement of claim concern the nature of the business structure operated by the respondent, his dealings with each of the complainants, and his dealings more generally with indigenous communities in the Northern Territory from about August 1998 to about April 2004. They also address in some detail what the applicant contends to be significant features of those communities and of the numbers of those communities, including the complainants. Both the application and the statement of claim were amended in certain respects at the hearing, but not in any way which altered the essential thrust of the allegations.

5 The respondent filed a document entitled ‘Defence’. It consists of a series of factual assertions, but does not address the allegations in the statement of claim or in the amended statement of claim in detail or in sequence. Certain of the facts asserted in the defence are inconsistent with allegations in the amended statement of claim. The defence asserts that the complainants comprise only eight of 58 of the respondents’ ‘indigenous customers’ in the Northern Territory, and that the respondent treated those persons no differently from any of his other customers.

6 The respondent in the defence asserts that he approached each of his customers with the intent of selling educational material at what he considered to be a reasonable price, and that each of the complainants accepted the materials and agreed to pay through ‘period payments’ on a ‘quid pro quo’ basis. He also claims to have sent the articles purchased to the stated address but, ‘in most cases found they had moved to places unknown’ so the materials were re-sent at his cost to the main office of the particular community for the customer to pick up after first ringing the office. He asserts that each of his customers were given his contact details, including his home telephone number and his mobile telephone number, and was given the opportunity of making reverse call charges to him.

7 The ‘Defence’ further asserts that each of the respondent’s customers was told that the respondent was not empowered to stop periodic payments, but they could do so at any time by contacting their bank. He asserts that each of the respondent’s customers was shown ‘a direct copy’ of the materials to be acquired at the time of purchase.

8 The defence acknowledges that the respondent’s customers in some cases did not stop periodic payments and had moved to places unknown. The respondent was therefore unable to contact them. He acknowledged receipt of overpayments which ‘I have stated all along I am more than happy to refund, less the cost of the goods provided to the main offices and the addresses they no longer resided at’. The respondent asserts in that regard that the applicant on one occasion stopped him from approaching people in remote locations (by implication, when the respondent was intending to make a repayment), and he had complied with all requests of the applicant, including closing bank accounts. It will be necessary to address those claims in the course of considering the evidence.

9 At the time of the defence the respondent indicated that he was considering appearing at the hearing either through legal representation or in person. He did not attend the hearing. Shortly prior to the hearing he provided to the applicant a document indicating his preparedness to submit to certain orders. As the defence stood, because on its face it disputed factual assertions by the applicant in the amended statement of claim, the hearing proceeded. The Court must be satisfied as to the existence of facts which give rise to the entitlement to exercise its powers to make orders sought under the TP Act: see Thomson Australian Holdings Pty Ltd v Trade Practices Commission [1981] HCA 48; (1981) 148 CLR 150.

10 The conduct complained of all took place in the Northern Territory, and so the TP Act applies to that conduct of the respondent. It is clearly conduct in trade or commerce. It is conduct within a territory: s 6(2)(a)(iii). Sections 51AA, 51AB and 52 therefore include a reference to the respondent as an individual: s 6(2)(h) of the TP Act.

11 The complainants comprise Ingrid White, Roseanne Dixon, Deane Williams, Louanne Patterson, Marlene Doolan, Rosina Dickson, Fiona Turner and Muriel Palmer. Each of them gave evidence. In addition, the applicant adduced evidence from the general manager of the Amoonguna community Kay Byerley and from two of its officers, including the applicant’s communications with the respondent and a transcript of a lengthy interview with the respondent, and exhibiting primary records including bank records of each of the complainants and a helpful analysis of those bank records. The final witness at the hearing was Dr David Martin, a social anthropologist, to address the typical cultural or social features or conditions of those living in indigenous communities in the Northern Territory. The possible need for such evidence may be discerned from the judgment of Nicholson J in Australian Competition & Consumer Commission v Lux Corporation Pty Ltd [2004] FCA 926 at [98] (Lux). I shall discuss Dr Martin’s evidence below.

12 The evidence adduced was ultimately uncontested. It is therefore possible to make findings of fact in narrative form without the need to discuss all of the evidence in detail. I shall refer to evidence in detail where I think it is desirable to do so.

13 The respondent is now 63 years of age. He is a teacher by training. After working for some years as a class teacher, he worked for many years at correspondence schools and then since 1992 as a tutor for students. He formed the plan of selling educational materials, and developed potential educational materials from about 1993. He was ready to proceed with that plan by 1998.

14 Thereafter the respondent has carried on three businesses. Firstly, he registered the name ‘National Maths Academy’ (NMA) as a business name in Western Australia on 11 May 1998. He is the sole registered proprietor of that business. Its business is tutoring and providing maths materials to students. Secondly, on 16 December 1998, the respondent registered the name ‘Drysdale Correspondence Schools’ (DCS) for providing correspondence courses. He is also the sole registered proprietor of that business and operates it. Thirdly, on 9 January 2002, he caused to be registered in his wife’s name the business ‘Easy Buying Service’ (EBS) for providing household goods on layby. Although that business is registered in his wife’s name, the respondent is principally responsible for operating it, and is assisted in the bookwork by his wife. In all respects, what he did on behalf of that business was clearly within the scope of his authority. Those businesses were operated both in the Northern Territory and in Western Australia, and to an extent between Western Australia and the Northern Territory.

15 The NMA educational material comprised eight modules. Each contained a written and/or pictorial text and a tape recording. He intended that the educational package should include a tape recorder and a bookshelf. In his interview the applicant estimated the cost of the educational package, including freight, was up to about $340, and the price he intended to charge including freight was about $740. The modules were not extensive or complex. They are clearly pitched at developing age groups. They included modules entitled:

Clearly, as the titles indicate, some modules are aimed at very basic skills and some at more complex skills. They would not represent the learning for a particular school age. The monthly supply of the modules would not be of real assistance to any particular child or educational level. A pre-school child for example would not benefit from other than possibly the first three modules referred to.

16 There is no evidence about what, if any, materials underlay the business of DCS.

17 The evidence suggests there was no real business structure for EBS. It did not have any coherent business plan, nor any detailed records, and its acquisition and supply of household goods was random and haphazard, at least in respect of the transactions the subject of evidence.

18 In about September 1998 the respondent started visiting small communities in the Northern Territory for the purpose of promoting and selling the materials developed for NMA. Included in those communities were communities at which each of the complainants was resident. Later, he procured orders for unspecified goods through DCS. The details of the relevant transactions are set out below.

19 The complainants resided at three communities around Alice Springs. The Little Sisters Camp is located just south of Heavitree Gap in Alice Springs and about half a kilometre west of the Stuart Highway. It is described as a Special Purpose Lease area. Access is not permitted without written permission of the Tangentyere Council. There is prominent signage to that effect immediately outside the Little Sisters Camp. The Amoonguna community is a few kilometres to the south of Ross River Road, which runs east from the Stuart Highway a little south of Alice Springs, and in all is about 15 kilometres from Alice Springs. Again, it is a closed community. There is prominent signage on the road immediately before entering the Amoonguna community to that effect. There is a further sign which requires visitors to report to the Amoonguna administration office. It maintains a sign-in book for visitors. The third community is the Santa Teresa community. It is about 70 kilometres south-east of Alice Springs on a dirt road. It is also a closed community. Entry to each of those three communities is by permit only. The respondent did not procure a permit to enter those communities when he first visited them. I accept the evidence of the office manager at the Amoonguna community, Kay Byerley, that visitors are required to sign in at the administration office near the entrance to the community and that (contrary to a claim made by the respondent in an interview with an officer of the applicant) he did not sign in when he visited that community in 1998.

20 The complainants Roseanne Dixon, Marlene Doolan, Louanne Patterson, Rosina Dickson and Muriel Palmer reside at the Amoonguna community. The complainants Deanne Williams and Fiona Turner live at Santa Teresa community. The complainant Ingrid White lives at Little Sisters Camp.

21 The respondent also visited other communities in the Northern Territory, including Hermannsburg, Meekatharra and at Katherine and Tennant Creek.

22 In around September 1998 the respondent approached Ingrid White at Little Sisters Camp. She was then 25 years old. She had two children, a daughter then aged eight and a son then aged five. She was unemployed and received Centrelink payments fortnightly.

23 The respondent approached Ms White uninvited. He showed her a folder with a picture on the front of it, and including a book and some cassette tapes. He did not mention the NMA. He told her that the folder would be good for her children and that it would help them with learning. Although she does not remember it, I infer that he discussed with her the sources of her income, and when she was paid. The respondent acknowledged in the course of his interview with the applicant’s officers that he was aware that most, if not all, of the complainants were in receipt of social services through Centrelink. He did not explain to Ms White how much the folders or educational material would cost or how they would be paid for. She provided him with her bank account number. He then presented to her a form to sign so that she could get the folders. He asked her to sign the form, and she did. She did not read it before signing it. She says, and I accept, that she did not know that the form was an authorisation to take money from her bank account fortnightly, although I find that she expected to receive educational materials by signing the form, and somehow to pay for them. In fact, the form which she signed was a periodical payment form directed to her bank authorising it to debit from her account $40 each fortnight, on the day on which that account received payment of Centrelink benefits. The payment was to the credit of the NMA. It authorised payments until further notice.

24 There was no written contract for the sale and purchase of the educational materials. I find it was for the eight modules of the NMA learning materials to be provided periodically in exchange for fortnightly payments. The respondent did not explain to Ms White how many fortnightly payments were required. Having obtained details as to her bank account and when her Centrelink payments were received, he inserted those details into the periodical payment form together with the debit authorisation for $40 each fortnight to the credit of the NMA, together with current bank charges, until further notice. He then arranged to lodge that form with the relevant bank.

25 In about 14 September 2001 the respondent again visited Ms White uninvited. He procured from her details of her bank account and the date of payment of Centrelink benefits, and got her signature to a further periodical payment form requesting that her account be debited with $40 each fortnight to the credit of DCS until further notice together with current bank charges in force for this service from time to time. The respondent caused that form to be lodged with the bank. From 14 September 2001, Ms White’s bank debited a further $40 per fortnight from an account held to the credit of DCS in accordance with that form. Again, the form was unlimited in terms of time. There is no evidence to suggest that the respondent had any particular educational material (other than the eight modules of NMA learning materials) available to supply through DCS.

26 Ms White does not recall the visit in 2001, nor the name DCS. However, she acknowledges that she signed that second periodic payment authorisation. She does remember talking to the respondent on two separate occasions. The incompleteness of her memory is consistent with the way in which she presented when giving evidence. She was born in Yuendumu and completed schooling for some years at Alice Springs. She has not studied since that time nor worked. She is primarily a Walpiri speaker, and speaks Walpiri with her family at Little Sisters Camp. She learned English at school in Alice Springs.

27 I find that on each of the occasions when Ms White signed the periodical payment forms, the respondent did not provide her with any written document recording any contract for the supply of educational or other materials, nor mention NMA or DCS. There was no written contract. There was no invoice or other record of the transactions issued to her. I further find that the respondent did not provide her with his contact details. In his interview, he suggested that he had a yellow A3 sized piece of paper containing that information. Ms White specifically recalled having seen a large yellow piece of paper in his possession, but not receiving it. I accept her evidence. Consequently, she did not know his address or his telephone contact numbers or how to get in touch with him. I also find that she did not understand the detail of the periodical payment forms which she signed. In particular she did not understand that they were open-ended in point of time, and did not understand how much money she was thereby authorising to be paid to the respondent. He did not leave her with a copy of either of the periodical payment forms. He made no explanation to her of the consequential bank charges which would be incurred, including the non-payment fee of $35 debited on each occasion that there was insufficient funds to the credit of her account to meet the periodical payments authorised. She had little information as to the nature of the educational material which she had agreed to receive on the first occasion, and except in the most general terms (i.e. that the information would help her children’s education) she had no knowledge and made no judgment about the utility of that material. She was not told the full cost of the learning materials which she had agreed to acquire, nor the number of fortnightly payments she would be required to make to pay for those materials, nor when those payments would stop. There was no calculation done by the respondent at the time, or subsequently, so that the payments would cut out when a certain amount of money had been paid to meet the cost of the materials to be supplied. There was no discussion concerning the way in which materials could be returned to the respondent if they were not required. The respondent did not ask anything about the ages or learning abilities of her children. At the time of the attendances, there were a significant number of other persons, including young children, living with Ms White in her house and in adjoining houses, so there is no basis for inferring that the respondent had any awareness of her particular children’s ages or learning abilities.

28 Subsequently, the respondent did not supply any educational materials to Ms White. In his interview, he claimed to have given her one module of the eight modules of the NMA learning materials. I accept Ms White’s evidence that she did not receive it. The failure to send any of the other modules to her was unexplained. It was not because she had shifted from Little Sisters Camp. Following the dealings in September 2001, no educational materials were received by Ms White from the respondent, whether from DCS or otherwise. The absence of any identified DCS correspondence material leads me to the conclusion that there was none to provide, or at the least none of any structured and genuine educational quality. The respondent has received payment from Ms White on a fortnightly basis in respect of the two accounts totalling $10,440. In the period from 16 September 1998 to 21 May 2004, the authorised payments through an NMA account totalled $5680. In the period from 14 September 2001 to 21 May 2004, he received through a DCS account $4760. The respondent made no attempt to stop those payments or to refund any moneys to Ms White.

29 The respondent was interviewed by officers of the applicant on 8 April 2004, including concerning his dealings with Ms White. On 3 June 2004, he attended the Little Sisters Camp unannounced and gave Ms White a colour television and a tape recorder. She did not ask for those items. She does not know why he gave them to her. He did not then make any attempt to repay any sums to her.

30 The Little Sisters Camp was, on the evidence, a camp for indigenous Australians. Evidence was given by David Martin, a social anthropologist, about Little Sisters Camp. I will refer further to his evidence in due course. In addition, I had the benefit of an inspection of each of the Little Sisters Camp, the Amoonguna community and the Santa Teresa community. The persons in the Little Sisters Camp, including Ms White, are indigenous Australians. They live in relative poverty. Generally, they have relatively poor English skills and in Ms White’s case English is her second language. She was not in paid employment. Her primary source of income was government welfare benefits. She had little or no experience in business dealings or commercial documents, and had limited exposure to such transactions. She did not have an individual mail box, nor a telephone connected to her home at material times, but used the centre facilities at the Little Sisters Camp for such purposes. She did not fully understand that the consequence of signing the forms in 1998 and 2001 would be the regular and indefinite withdrawal of money from her account on a fortnightly basis. Eventually, with the assistance of the local police in Alice Springs, arrangements were made to terminate those periodical payments and they were brought effective from 21 May 2004.

31 Also in September 1998, the respondent approached Roseanne Dixon who then lived in the Santa Teresa community. She now lives at Amoonguna. She was at the time 27 years old and had two sons then aged eight and one. She has since had two further children born in August 1999 and February 2004. As with the other complainants, her source of income was from parenting payments and family assistance money from Centrelink.

32 Ms Dixon went to primary school at Amoonguna, and at Alice Springs, leaving high school after Year 9. She has not worked since, although she did a course at the Institute of Aboriginal Development to learn to write in English and Arrernte. Her primary language now is English and she speaks English at home.

33 The respondent visited her at her house at Santa Teresa. His visit was unsolicited. He showed her a file with books and tapes in it, and told her that it was good for her children for learning. He explained that the product would cost $40 per fortnight and she would be sent books and tapes in the mail on a recurrent basis. He then showed her a periodical payments form to sign. He sought from her, and received, details of her bank account and other personal information and completed that form. He did not read it to her, nor get her to read it. She signed the form because she thought it would be good for her children to get some books and tapes.

34 The respondent did not give her a copy of any documents when he left. There was no contract for the sale and purchase of educational material. There was no mention of NMA. He did not leave with her a copy of the periodic payment form. He did not give her any other document which recorded his identity, his business, or the means of contacting him either by telephone or by writing. He did not explain to her how to stop payments, or how many payments would be taken from her account. She had no idea how much she had agreed to pay for the educational materials she was to receive.

35 Subsequently, Ms Dixon received three instalments of tapes and books from the respondent.

36 The respondent lodged with Ms Dixon’s bank in Alice Springs the periodical payment form, authorising a fortnightly debit of $40 to the credit of NMA until further notice. Then, from 24 September 1998, $40 per fortnight was debited from that account to the credit of an account in the name of NMA started by the respondent.

37 In his interview the respondent first said that he ‘must have’ told Ms Dixon that the cost of the educational materials and ‘another sound system’ was $740. He further said that Ms Dixon ‘agreed to keep making the payments, that she could ask for something else if she needed it’, as an explanation for why the periodical payment form was open-ended. Upon being pressed, however, he did not firmly dispute any of the version of events which she put forward and I accept her evidence as reliable.

38 I therefore find that, at the time he first approached her, the respondent demonstrated a file with books and tapes in it, together with a Lion King story book. He did not tell her the total cost was $740. He did not then mention another sound system. He told her that the cost would be $40 per fortnight and that he would regularly send educational materials to her. He did not tell her how long she would have to make payments for, or how much the total cost of the materials was. He did not tell her how often she would get the materials. He did not tell her how to stop payments. He did not explain to her the effect of the periodical payment form, namely that it was unlimited in point of time, and she did not read the form. She said in evidence that she was unable to read.

39 The respondent did not leave any papers with her. There was no written document recording the agreement. The periodical payment form was not copied and provided to her. The yellow sheet of paper which, the respondent asserted, was left with a number of the complainants, was not left with her. She did not have details of his business or personal contact or his telephone contacts. She was unable to contact him.

40 The respondent visited Ms Dixon again in 1999, when she was living at Amoonguna, and when she had just had her third son. His visit was again unsolicited. He gave her a baby’s dress. She did not ask for it and did not know why he gave it to her. It is clear the respondent was able to contact her, and hence to maintain the supply of periodic educational material to her, despite her move to Amoonguna. However, only three instalments or modules of educational material were sent. Nevertheless the periodic payments continued indefinitely.

41 In 2003 the respondent again visited Amoonguna and called upon Ms Dixon. On that occasion he gave her a portable stereo and a Harry Potter DVD. He told her that next time he visited he might bring her a microwave. In his interview, he acknowledged that he had provided those items, although they were not educational materials. He acknowledged that Ms Dixon had only contracted to buy educational materials. On neither of those two subsequent visits did he point out to her that she was continuing to pay $40 per week. He made no effort to provide further educational materials. He made no effort to tell Ms Dixon how to terminate payments. In fact, the respondent had virtually no record of what money she had paid or what he had sent to her, or to others.

42 Ultimately, in about October 2003, arrangements were made to terminate the periodical payment authorisation.

43 Between 17 July 1998 and 14 November 2003 Ms Dixon had payments made to the account of NMA totalling $2080. As those periodical payments were drawn from time to time from the account when there were insufficient funds, she incurred bank fees of $35 on each occasion when the periodical payment could not be met. Those bank fees themselves totalled $2695. The respondent did not explain to Ms Dixon the consequences of there being insufficient funds in her account to meet her periodical payment obligations.

44 Deanne Williams lives at the Santa Teresa community. She is 24 years old. Her primary language is Arrente, but she speaks some English and she can read it a little.

45 In about September 1998, Ms Williams was approached by the respondent at her home. She was then only 17 years old. She had one child, then aged eight months. The respondent introduced himself by his first name. He said he was from the NMA, and showed Ms Williams certain of the NMA educational material. He asked about her children, and was told she had only a young baby. The respondent told Ms Williams that he would send her books and tapes and a tape recorder for a cost of $40 per fortnight for her children for learning. He did not tell her how many books and tapes would be sent, or how much the total of the NMA educational material would cost. Ms Williams apparently agreed to proceed. It is self-evident that the NMA educational material had no immediate relevance to Ms Williams’ child, and that most of it would be of no use for some years.

46 The respondent then asked Ms Williams for, and received, details to complete a periodical payment form directed to her bank. It authorised the fortnightly payment of $40 to an account in the name of NMA. He completed the form and asked her to sign it. She did not read it. She was not really able to read it sufficiently to comprehend it. The respondent did not read it to her. She did not realise it was open-ended in time. The respondent did not give Ms Williams a copy of the periodical payment form. He then arranged to lodge that form with her bank.

47 From 24 September 1998, the bank debited Ms Williams’ account in favour of an NMA account at $40 per fortnight. The periodical payments authority was withdrawn effective only on 22 July 2004. By that time the periodical payments totalled $6080.

48 The respondent arranged for Ms Williams to be sent only two modules of the NMA educational materials. They were sent soon after September 1998.

49 The next contact between the respondent and Ms Williams occurred on about 15 May 2003. She does not recall the visit, but it clearly occurred as she signed another periodical payments authority at his request. It was completed by the respondent, other than Ms Williams’ signature. I infer it was completed by the respondent asking Ms Williams for the details inserted in the form. It authorised a further periodical payment from her account in favour of an account of EBS of $50 per fortnight, commencing on 15 May 2003. It also was unlimited in time. It was then lodged with Ms Williams’ bank by the respondent.

50 From 29 May 2003, Ms Williams’ bank debited her account with $50 per fortnight payable to an account of EBS. Between that date and 31 December 2003, her account was debited with $850 to EBS. Ms Williams then arranged for those periodical payments to cease. Some time early in 2004 the respondent arranged to speak to Ms Williams by telephone to query why the payments had ceased.

51 The respondent did not then provide Ms Williams with any materials. There is no record of any purchase order he raised, or of any allocation of any goods to her name to be held until paid off, or any record of the progressive payments being made against the price of any goods either in May 2003 or at about that time. In May 2004, the respondent arranged for a DVD player and a television set to be provided to her. She had not asked for those items to be supplied. When they were supplied, there is nothing to suggest they came with any invoice, or other record showing what had been progressively paid. The respondent’s conduct in her case indicates an awareness of his regular receipt of periodical payments, but does not indicate any proper accounting for them.

52 Ms Williams also, like each of the complainants, was given no written contract or invoice for any goods. She was given no means of contacting the respondent. She too was shown a yellow sheet of paper, presumably containing the respondent’s contact details, but it was not left with her. She then, on two occasions, was invited to sign a periodical payment form which was open-ended in time. She was given no details of when those payments would cease, or the price of the goods she was to receive. In her case, I find the EBS arrangement did not even designate particular goods she was to receive or when she would receive them.

53 Louanne Patterson was 24 years old when the respondent first contacted her in September 1998. She then had a six year old daughter, and was living with her husband at Amoonguna. She subsequently had a further daughter in 1999. Her first language is Amatjerra, but she is also able to speak English (and Arrente and Walpiri), although her ability to read and write English is not good. She too received her income through Centrelink benefits.

54 The respondent approached Ms Patterson uninvited. He showed her certain of the NMA educational materials, and told her they would help her children learn maths and songs quicker. He invited her to get those materials for her children. She was told she would have to pay fortnightly for those materials. The respondent then obtained from Ms Patterson details, including her bank details, for a periodical payment form and completed it. She signed it where she was asked. It was not read to her, and she could not read it herself. It authorised a payment of $40 per fortnight to an account in the name of NMA. It was open-ended in time. The respondent did not tell her that. Nor did he tell her the cost of the materials to be supplied. The respondent then lodged the periodical payment form with Ms Patterson’s bank.

55 Between 24 September 1998 and 6 May 1999 a total of $680 was paid from Ms Patterson’s account to an account in the name of NMA. Ms Patterson was then assisted in writing to her bank to cancel the periodical payments authority. In that period she received only one module of the NMA educational materials.

56 Again, the respondent did not give Ms Patterson any written contract or invoice. He did not tell her the extent of the educational materials. He did not tell her the price she was to pay for the materials. He did not give her his contact details. In his interview he asserted having left with her the yellow sheet with his contact details, but when pressed did not dispute that he may not have done so. I accept her evidence that he did not do so. He did not explain to her the content of the periodical payment form, in particular that it was open-ended, and did not read it to her or leave her with a copy of it.

57 Marlene Doolan is a another of the complainants who was contacted by the respondent, uninvited, in September 1998. At the time she was 28 years old. She then had three children, aged 10, 4 and 2. She was living with her partner at Amoonguna at the time. She converses readily in English, although she is quietly spoken.

58 The respondent told Ms Doolan his business was providing educational tools to remote communities. He said he was from Melbourne. He showed her a sample of the NMA educational materials, and told her they would help her children with their schooling. He explained she would receive a folder each month, and would have to pay $40 each fortnight for them. He did not say how many folders would be provided, or their total cost, or how long the payments were to be made. The respondent then sought to obtain from Ms Doolan details to complete a periodical payment authorisation to her bank. She did not have them, but agreed to get them. The respondent returned a few days later. He then completed the periodical payment authorisation, including Ms Doolan’s bank details. He asked her to sign it. She did so as she thought it would help her children. He did not read it to her or explain that it was open-ended in time. However, she understood that she was to pay $40 per fortnight for some time, and to receive in exchange a folder of educational materials monthly. Ms Doolan’s partner was present on both those occasions. The respondent then lodged that form with Ms Doolan’s bank.

59 Shortly after that, the respondent provided her with the first folder of educational materials and a tape recorder. She subsequently received up to a further six folders.

60 The respondent visited Amoonguna again in May 1999. He approached Ms Doolan to endeavour to sell her further materials, but she declined. She also requested him to arrange for the earlier periodical payments form to be cancelled, and he did so. Between 25 September 1998 and 21 May 1999, Ms Doolan paid a total of $720 to the respondent through an NMA account.

61 The respondent gave no written contract or invoice to Ms Doolan. He did not explain that the periodical payment form was open-ended, or provide her with a copy of it. He did not identify the price of the materials to be supplied, or when the periodical payments would have met that price. He did not tell her how to stop those payments, although when she asked him to do so he complied. He did not leave her with any contact details for him or NMA.

62 Rosina Dickson was 25 years old when she was first approached by the respondent in August 2000. She lived at Amoonguna with her partner. She then had three children, aged 3, 2 and six months. She speaks English well, but can write and read it only slightly.

63 The respondent approached Ms Dickson at her house uninvited. He asked if she had children, but did not seek any details about their ages or aptitudes. He then offered to provide books and tapes for them. In response to his request, Ms Dickson gave him details to complete a periodical payment authorisation for her bank. He said it was to pay for the books and tapes. She understood the cost was $50 per fortnight, and that the books and tapes would then be sent to her. She was asked to sign the periodical payments authority, and she did so. She was not told it was open-ended in time, and she did not understand that. The respondent did not explain that to her. She could not herself read the form. She was not given a copy of it. She now says she is not sure why she signed the form. She did not know the total cost of the books and tapes, or how long she had to make the payments for.

64 The respondent then lodged that form with Ms Dickson’s bank. The form authorised payments from her account to an account of NMA at $50 per fortnight indefinitely. Between 10 August 2000 and 1 October 2003 Ms Dickson made payments totalling $4000 to that account. The payments ceased on Ms Dickson’s instruction when she was talking to bank officers about another matter, and the ongoing fortnightly payment of $50 to NMA was identified to her.

65 The respondent only despatched one lot of books and tapes to Ms Dickson. She did not complain to the respondent. She did not have his contact details, as he had not left them with her. Nor had he given her any written contract or invoice, or a copy of the periodical payment authority.

66 In about mid 2003, again unprompted, the respondent visited Ms Dickson at Amoonguna and gave her a watch and a portable stereo. She did not ask for those items. The watch worked only for a brief period, and the stereo did not work.

67 The respondent did not give Ms Dickson any written contract or invoice. He did not leave her his contact details. He did not explain to her that the periodical payment authority was open-ended, or give her a copy of it. He did not tell her how many sets of books and tapes would be delivered, or their cost, or when the periodical payments would meet that cost. He did not tell her how to stop making the periodical payments. He has made no attempt to refund monies to her.

68 Fiona Turner lives at Santa Teresa. In May 2003 she was 30 years old. She speaks English and Arrernte, and can read and write in English. She presently works full time in the Santa Teresa community office. She was one of the two complainants whose oral evidence gave me the impression they were more commercially astute and forceful than the other complainants. The other was Ms Doolan.

69 Ms Turner first met the respondent on about 15 May 2003 whilst she was visiting her sister-in-law Rosina Dickson at Amoonguna. It was the occasion when the respondent gave Ms Dickson a stereo and a watch (see [67] above). At a certain point, Ms Dickson was elsewhere and the respondent asked Ms Turner if she wanted a tape recorder, a DVD player, toys and a stereo. He told her she would have to pay $60 per fortnight to get those things, but did not say the total price or when they would be supplied. He obtained details from her to complete a periodical payment authorisation to her bank, and told her it meant that she would pay $60 per fortnight. He did not explain about lay-bys, or about EBS. In fact the form authorised $60 fortnightly payments to an account of EBS.

70 By late 2003, as Ms Turner had received nothing from the respondent, and she noticed that the periodical payments were continuing, she instructed the bank to cancel the payments. In the period from 15 May 2003 to 8 January 2004 payments of $1080 had been made by her to EBS. The termination of payments prompted no response from the respondent. However, in May 2004 the respondent left a telephone message for Ms Turner that she could collect a DVD player from an hotel in Alice Springs, and she did so.

71 As with the other complainants, the respondent did not give Ms Turner any written contract, invoice or purchase note. He gave her no information about the business of EBS. He did not give her his contact details. He had her sign a periodical payment authority which was open ended, and did not give her a copy. He did not tell her of the price she was to pay for any item, or how many fortnightly payments would be required. In fact, the evidence strongly suggests (and I find) that the respondent did not address those matters himself. He did not acquire or hold items to be provided to Ms Turner on lay-by. Nor did he keep any records by which he allocated her periodical payments to the cost of a particular item, even an item to be acquired when sufficient was paid. He did not supply her with any of the goods he discussed with her in a timely manner.

72 Muriel Palmer first had contact with the respondent about 21 May 2003. She was then 22 years old. She lived at Amoonguna with her family, including her two children then aged 4 and 2. She can speak English and Arrernte, but can only read or write English a little. Her income is from Centrelink payments.

73 The respondent approached her uninvited whilst she was at home on 21 May 2003. He did not introduce himself. He offered Ms Palmer a DVD player, and told her she would have to pay him $50 per fortnight for it. He then got from her the details necessary to complete a periodical payment authority for her bank, and asked her to sign it. She did so. It authorised payment of $50 per fortnight to an account of EBS. It was open-ended or indefinite. The respondent then lodged that form with her bank. In December 2003, the respondent delivered a DVD player to Ms Palmer. She had not heard from him in the meantime. He had given her no written contract, purchase order or invoice. He had given her no document with his contact details. He had told her nothing about EBS. He did not give her a copy of the periodical payment authority. He did not explain to her that it was open-ended, or how many payments she would have to make to meet the cost of the DVD player. The payments were made between 4 June 2003 and 28 January 2004, when Ms Turner terminated the authority with the assistance of the local police and an officer of the applicant. She had paid to the EBS account $600 by that time.

74 The respondent conducted his businesses generally in remote towns and indigenous communities in Western Australia and the Northern Territory. This application concerns only his dealings in the Northern Territory. The indigenous communities he visited required permits for entry, but the respondent did not obtain them.

75 Over the period from 24 September 1998 to 22 July 2004 the respondent’s customers in the Northern Territory (including the complainants) totalled 114. There were 81 customers who provided periodical payment forms to the respondent for payments made to NMA, through five different bank accounts in the name of NMA. There were 23 customers who provided periodical payment forms to the respondent for payments made to DCS through a bank account in its name. There were 10 customers who provided periodical payment forms to the respondent for payments made to EBS through a bank account in its name. The total of the payments to NMA was $114,337. The total of the payments to DCS was $27,775. The total of the payments to EBS was $11,525. Thus the total payments received by the respondent from the respondent’s customers over that period was $153,637. The total receipts of those businesses from some 563 customers in the period referred to, that is customers in both Western Australia and the Northern Territory, as evidenced by available banking records totalled $799,828 comprising $546,427 for NMA, $128,001 for DCS and $125,400 for EBS.

76 The other evidence of the respondent’s dealings with the respondent’s customers (other than the complainants) comes from the respondent’s answers to questions given during his examination by officers of the applicant. To the extent that material consists of admissions, it is receivable in evidence as it is clearly relevant: s 81 of the Evidence Act 1995 (Cth). I have been careful to ensure that answers to questions are not taken out of context, or are not used as admissions where the respondent has elsewhere during his examination given a somewhat different answer.

77 The respondent visited the Northern Territory, including Alice Springs and indigenous communities in its vicinity, in September 1998 and then about every eight months. He sought to promote his businesses in large measure through remote townships and indigenous communities, to the extent that some 80% of the respondent’s customers in the Northern Territory were Aboriginal people and a similar proportion of his customers in Western Australia were also Aboriginal people.

78 When dealing with the complainants, the respondent realised that all or most of their income was from their Centrelink payments, and that a fortnightly payment to him of (say) $50 by one of the complainants would absorb about 10% of that person’s regular payments. He was also aware that the complainants each lived in a generally impoverished community. Their oral evidence convinces me that each of the complainants reacted to the respondent’s approaches with diffidence and passive acquiescence rather than any apparent enthusiasm or informed judgment or understanding about the transaction proposed by the respondent. I infer that the respondent realised in the case of almost all of the respondent’s customers from indigenous communities that all or most of their income was from Centrelink payments, and that the fortnightly payments authorised would absorb a significant proportion of that customer’s income. I also infer that he was aware that generally the respondent’s customers were from impoverished indigenous communities, and that the response to his approaches was generally diffident and passive acquiescence rather than any apparent enthusiasm or informed judgment or understanding of the proposed transaction. The respondent at interview did not put forward any information inconsistent with those inferences.

79 I would reach those views independently of the views of Dr Martin, and for reasons which appear below I am satisfied that the respondents dealings with the respondent’s customers did contravene s 51AB(1) of the TP Act without taking into account his evidence. His evidence does support the conclusion of unconscionable conduct on the part of the respondent.

80 Dr Martin is a well qualified anthropologist, presently working as a research fellow in the Centre for Aboriginal Economic Policy Research at the Australian National University as well as an independent anthropological consultant. He has published extensively on a range of anthropological issues concerning Aboriginal communities. His work experience has exposed him to various Aboriginal communities since 1976. I have no hesitation in accepting him as qualified to give expert evidence within his qualifications and experience.

81 The applicant engaged Dr Martin to obtain his opinion concerning the respondent’s dealings with the complainants, and with the respondent’s customers. He was briefed to assume certain facts about those dealings. I have found those facts to have been proved. The questions he was asked to address were:

82 In addressing those questions, Dr Martin carefully interviewed each of the complainants as well as having recourse to material with which he was familiar through his past training and experience, and to further specific material which he identified and discussed in his evidence. That material included published socioeconomic information as to the characteristics of the communities in which the complainants lived, and published information about the educational and financial literacy of persons living in such communities.

83 Dr Martin’s conclusions are expressed in three parts: concerning the complainants individually, concerning the complainants as a group and as members of their communities, and concerning indigenous consumers in remote communities in the Northern Territory. He was at pains to point out that culture is not determinative of action, so cultural anthropology is not a discipline predictive of the behaviour of particular individuals.

84 I have not placed any real reliance on the opinions of Dr Martin concerning the individual consumers. His assessment of their individual educational and financial literacy did not purport to be diagnostic, and I regard it merely as his assessment of those matters from his exposure to those individuals. Those are aspects of his opinion which derive from his view of the cultural elements of the communities in which they live. I refer to those aspects below. As I have found above, when considering the other evidence concerning the complainants, in most cases they would have presented to the respondent as diffident and shy people with limited commercial sophistication. I do not think any of them would have engaged in a conversation with the respondent which might have exhibited any particular interest in what he was offering to sell or the normal interest or awareness of a consumer about matters such as cost or delivery, or the terms of the periodical payment forms. Clearly the complainants lived in communities where the income levels were very low, and where most residents were in receipt of Centrelink or like benefits. Most, but not necessarily all, in those communities lacked the language skills in English to deal in an informed way with a commercial transaction, even a relatively simple one. I find also that most, but not necessarily all, in those communities would not have understood the full consequences of signing the open-ended periodical payment forms.

85 In addition, on the basis of Dr Martin’s report, I find that each of the complainants as young Aboriginal women for cultural reasons would not directly question the respondent to elicit information from him. Those characteristics, he said, would be typical of the indigenous communities in the Northern Territory visited by the respondent.

86 Dr Martin’s general conclusions are largely contained in the following passages from his report:

87 I must add, as Dr Martin did, that it would be unsafe and inappropriate to assume that all the residents of Little Sisters Camp, Amoonguna and Santa Teresa, or indeed that all the residents of indigenous communities in the Northern Territory, are necessarily poorly educated and have poor financial literacy. That would clearly not be true. From my observations of the complainants in their evidence, as well as their evidence, I think it is true of the complainants to varying degrees. My findings above reflect that. I think it is likely to be true, to varying degrees, of each of the respondent’s customers simply because any degree of financial sophistication would have lead any of those customers to decline to sign an open-ended periodical payment form, or indeed to conclude a transaction with no written record of it. The explanation for the respondent’s customers having done so probably lies in the cultural factors identified by Dr Martin, but (as I noted above) I have concluded that the respondent’s conduct contravened s 51AB in all the circumstances without having regard to his evidence about those cultural factors and without attributing to the respondent an understanding of those cultural factors.

88 The respondent was also aware at material times that he was being overpaid by a number of the respondent’s customers including certain of the complainants. That is, he was aware that the periodical payment authorisations in a number of instances resulted in him receiving more, and in some instances much more, than the selling price of the goods he had agreed to supply. As noted earlier, his ‘selling price’ for the NMA educational materials including the tape recorder and shelf was about $740. He was also aware that some of the respondent’s customers, including certain of the complainants, had not been provided with the goods or all the goods which he had agreed to sell them. Despite that knowledge, the respondent did not take steps to fulfil the supply of goods which he had contracted to supply. The evidence does not support his claim that the movement of the complainants or of the respondent’s customers meant he could not deliver educational materials to them. Nor did the respondent take steps to notify the respondent’s customers, including any of the complainants, of the overpayment or of the payment beyond the ‘selling price’, or as to how they might stop payments. Nor did the respondent take steps to isolate the overpayments or excessive payments into an account held on behalf of those who had overpaid either in individual accounts or in a collective account. The evidence indicates that the respondent accessed all the funds in the several accounts from time to time as his own.

89 Lest it be concluded that the respondent simply kept no records at all, I should note that in his interviews with officers of the applicant, he said that his records relating to the three businesses were mainly in a briefcase which had been stolen in late 2003. Those records were said to include details of the respondent’s customers, and the amounts they had each paid. My firm impression from his answers to questions on the topic is that the records he maintained were rudimentary, and amounted to little more than copies of the periodical payment forms he had procured and the bank statements for the various bank accounts. The respondent acknowledged that he had not caused to be prepared any financial statements for any of the three businesses, and had not caused to be prepared any income tax returns for the period after 30 June 1998 despite receiving a gross income of between $600 and $800 per week. His description of the stolen records, and his indication that he could constitute individual ledger records for each of the respondent’s customers from primary documents (copies having been obtained from the relevant bank sources, or having been partly retained by him), also points to the conclusion that he did not maintain any records dealing individually and separately with the respondent’s customers (including the complainants) either as to what they had paid or what he had supplied to them. That also accords with the random and haphazard supply of goods to them, including in some cases goods which he had not agreed to supply. It also adopts a somewhat more favourable view of the respondent’s position than might otherwise be the case: a general knowledge of overpayments or excessive payments by a number of the respondent’s customers, rather than a specific knowledge of particular customers’ overpayments or excessive payments and the deliberate decision in each individual case to nevertheless continue to permit those payments to be made or to notify the particular customer of the circumstances. In the case of EBS, the respondent did not profess to have any records which should routinely be kept to conduct such a business.

90 The picture is, as the respondent acknowledged, that for a significant number of the respondent’s customers he was just taking their money, and was providing nothing for it.

91 As there is no contradictor, it is appropriate to be cautious in my consideration of ss 51AB and 51AA of the TP Act. Although s 51AB was introduced (as s 52A) into the TP Act by the Trade Practices Revision Act 1986 (Cth), it is only in recent times that it has been the subject of significant judicial consideration. Similarly, s 51AA was introduced into the TP Act by the Trade Practices Legislation Amendment Act 1992 (Cth) but has only recently been the subject of significant judicial consideration, particularly by the High Court in Australian Competition & Consumer Commission v CG Berbatis Holdings Pty Ltd (2003) 214 CLR 51; [2003] HCA 18 (Berbatis, High Court), and by the Full Court of this Court in Australian Competition & Consumer Commission v Samton Holdings Pty Ltd (2002) 117 FCR 301; [2002] FCA 62 (Samton). Section 51AB has been considered by the Full Court of this Court in Hurley v McDonalds Australia Ltd (2000) ATPR 41-741 (Hurley), by Sundberg J in Australian Competition & Consumer Commission v Simply No-Knead (Franchising) Pty Ltd [2000] FCA 1365; (2000) 104 FCR 253 (Simply No-Knead), and by Nicholson J in Lux.

92 The scope of the concept of unconscionable conduct in those provisions, in s 51AC of the TP Act, and ss 12CA, 12CB and 12CC of the Australian Securities and Investments Commission Act 2001 (Cth) is regarded by commentators as potentially very wide, even having regard to the words of apparent limitation in s 51AA forbidding conduct that is unconscionable ‘within the meaning of the unwritten law ... of the States and Territories’. See e.g. Pearson ‘The Ambit of Unconscionable Conduct in Relation to Financial Services’ (2005) 23 CSLJ 105; Bigwood, ‘Curbing Unconscionability: Berbatis in the High Court of Australia’, Casenote, (2004) 28 MULR 203.

93 Section 51AA(2) provides that s 51AA does not apply to conduct that is prohibited by s 51AB or s 51AC. It is therefore to s 51AB that I should first turn. It is not suggested that s 51AC has been contravened in the present circumstances.

For the reasons given earlier at [10] s 51AB applies to the respondent. Unlike s 51AA, s 51AB(1) does not have the qualification or explanation that the conduct be unconscionable ‘within the meaning of the unwritten law, from time to time, of the States and Territories’. Section 51AB(1) simply prohibits conduct that is in all the circumstances unconscionable. Section 51A concerns representatives as to future matters. My consideration of the circumstances does not require me specifically to have regard to s 51AB(7) or s 51A of the TP Act.

95 The applicant’s submissions maintain the submissions put in Berbatis, High Court as to the breadth of operation of s 51AA(1), as its submissions largely replicate the potential interpretations of s 51AA(1) as recorded in the judgment of Callinan J at [159]. However, as I have reached the view that the respondent has contravened s 51AB(1) of the TP Act, it is not necessary to further address s 51AA.

96 In my judgment, the conduct of the respondent which I have found to have been engaged in was clearly

The expression ‘trade or commerce’ is a term of common usage and wide import. It encompasses conduct for the purposes of the sale and supply of goods, including the communications, the bargain, the transport and delivery of the goods and the payment for them: Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 36 FLR 134 at 167 per Deane J; Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594 at 604. The goods which the respondent sought to sell, and agreed to sell, to the respondent’s customers in the Northern Territory were consumer goods, not acquired for the purpose of resupply, but acquired for domestic use: see subs 51AB(5) and (6). The relevant conduct of the respondent was in connection with the supply or possible supply of consumer goods to the respondent’s customers: see e.g. Our Town FM Pty Ltd v Australian Broadcasting Tribunal (1987) 16 FCR 465 per Wilcox J at 479; Drayton v Martin (1996) 67 FCR 1 per Sackville J at 32.

97 The term ‘unconscionable’ is not defined in the TP Act. Apart from the guidance given by s 51AB(2), its scope would appear to flow from its ordinary meaning of ‘showing no regard for conscience, irreconcilable with what is right or reasonable’: Samton at [44]. See also Hurley at 41-740 to 41-741, [19]-[22], and Simply No-Knead at 264-267, [30]-[37]. In Australian Competition & Consumer Commission v CG Berbatis Holdings Pty Ltd (No.2) [2000] FCA 2; (2000) 96 FCR 491, French J at first instance at 502-503 also said there was no reason to confine the meaning of unconscionable conduct in s 51AB(1) by reference to the qualifying or limiting additional words in s 51AA(1). I respectfully agree with Nicholson J in Lux at [98] where his Honour quoting Hurley said that what is required is serious misconduct or something clearly unfair or unreasonable. His Honour there added:

Nicholson J expressed similar views in Glenariff Holdings Pty Ltd v Tah Land Pty Ltd [2005] FCA 132 at [7]- [8] when addressing s 51AC of the TP Act.

98 In Lux, the Court was asked to make a finding of unconscionable conduct in contravention of s 51AB(1), in part based upon the alleged intellectual impairment of the relevant consumer. Evidence from an expert on the topic was not accepted. The Court was asked to make a finding of intellectual impairment on the part of the consumer based upon the Court’s impression of her presentation in evidence. Nicholson J said at [75]:

Her Honour referred to the demeanour of the consumer in giving evidence, including that she was ‘softly spoken and intimidated by the process’, but was not prepared to infer from her demeanour that the asserted intellectual impairment existed. His observations did not support the inference that the consumer was ‘patently a person of some vulnerability because she was substantially illiterate and unable to understand commercial matters in any depth’: see at [76].

99 Section 52 of the TP Act is of course well known. It establishes a norm for conduct. Clearly the respondent engaged in conduct in trade or commerce. The issue is simply whether, having regard to the meaning of the words ‘misleading or deceptive or is likely to mislead or deceive’, the respondent’s conduct had that character: see Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191. That is a question of fact in the circumstances of each case. Conduct is misleading or deceptive if it induces or is capable of inducing error.

100 There is nothing inherently unconscionable about procuring the sale of goods by unsolicited approaches to consumers. In this matter, however, the respondent’s conduct had the features which satisfy me that it was unconscionable in the sense referred to in the authorities discussed above.

101 I have made findings as to the educational and commercial literacy of the complainants. Imbalance between a retailer and consumer in educational or commercial literacy generally will not of itself be enough to make a transaction unconscionable. In this matter, the respondent’s dealings had additional features. He was a mature person clearly well able to understand the nature of the transactions into which he entered, and to appreciate those things which a consumer with normal commercial acumen might inquire about, or expect. Clearly, as I have found, none of the complainants made such inquiries or pursued such expectations. In particular, the respondent did not proffer, and none of the complainants sought, any written record of the contract into which they had entered. The respondent must have realized that. The respondent did not proffer, and none of the complainants sought, details of the number of modules of education materials of NMA which would be provided, nor when they would be provided, nor how much they would cost. The respondent did not provide, and none of the complainants sought, information as to when the anticipated purchase price for the goods to be supplied would have been paid for by the periodical payments authorised, nor what would happen when that purchase price was reached, nor how the periodical payments could then be terminated. The respondent could have, but did not make any such calculation himself. He could have specified, but did not, a termination date for the periodical payments in the periodical payment form to meet the anticipated selling price. The periodical payment forms used by the respondent imposed conditions upon the complainants, and the respondent’s customers, which were not reasonably necessary for the protection of the legitimate interests of the respondent: see s 51AB(2)(b). In the case of the contracts with DCS not only was there no documentary record of the agreement provided to the complainant Ms White, but there was no evidence to indicate that the respondent had any educational materials to provide to her (beyond the NMA educational materials) at the time of the contract or, indeed, subsequently. He did not provide any DCS correspondence educational material. In the case of the transactions involving the sale of household goods by lay-by through EBS, the respondent did not provide, and the complainants Ms Williams, Ms Turner and Ms Palmer did not seek, details of the product or products to be acquired except in some instances by a generic description (e.g. DVD player). Nor did the respondent take any steps following the making of those contracts to acquire or allocate any particular goods for supply to that complainant or to any other of his customers who entered into arrangements involving payment to EBS. Those matters illustrate firstly that the respondent’s customers, including the complainants, did not fully understand the nature of the transactions they entered into. The only document they signed in each instance was the periodical payment form. I have found the complainants did not have a full understanding of that document. I find the same is true of the respondent’s customers in the Northern Territory generally. That is not to say that each of the complainants, or each of the respondent’s customers, did not understand the effect of the periodical payment form or for cultural reasons did not have the capacity to decline his approach. I have found in the case of Ms Turner and Ms Doolan that they had that understanding. I am sure there are a number of the respondent’s customers who did have a similar understanding, and to varying degrees the capacity in the light of their background and education, to decline to enter into a transaction with him. Overall, I am satisfied that all but those two complainants, and the majority of the respondent’s customers, did not fully understand the periodical payments form. And I am satisfied that each of the respondent’s customers including the complainants did not fully understand the nature of the transactions into which they entered.

102 The quality of the respondent’s record keeping indicates that his commitment to supply goods agreed to be sold by him was, at best, half-hearted and somewhat random. The findings concerning the individual complainants indicate that clearly enough. Moreover, the respondent’s conduct in being prepared to continue to receive periodical payments from certain of the complainants, and certain of his other customers, when the amount of those payments clearly very substantially exceeded the value of any goods which he had agreed to supply, indicates the inadequacy of his record keeping. More importantly, in my view, it illustrates that his purpose in entering into the agreements was not simply to secure the sale of particular goods of a particular value or at a particular price, and to provide those goods in a timely manner to the purchaser. His preparedness to take advantage of the complainants and of the respondent’s customers by securing open-ended periodical payment forms in those circumstances, in my judgment, illustrates more than the relevant strengths of the bargaining positions of the respondent on the one hand and of the complainants and of the respondent’s customers on the other. It also indicates the imposition of conditions by the respondent that were not reasonably required for the protection of the legitimate interests of the respondent.

103 I have found that the complainants (other than Ms Turner and Ms Doolan) did not understand the full implications of the periodical payment form which they executed. The transactions involving Ms White provide a good illustration of those matters. They lead me to the view that, even at the time of the transactions, the respondent in only the most general way may have had an intention to supply the goods which he had contracted to supply, but had in mind at the time the prospect of receiving considerably more than the value of the goods to be supplied from the complainants and from the respondent’s customers. Were it otherwise, his record keeping would have been quite different, and he would have monitored on an individual account basis the payments made by each of the complainants and by each of the respondent’s customers, to ensure that payments did not exceed the value of the goods which he had agreed to supply. He would also have maintained records as to what goods he had supplied from time to time, and what additional goods were required to be supplied, and at what times, to meet those contracts.

104 The particular considerations referred to in s 51AB(2)(a), (b) and (c) in particular, together with the more general considerations to which I have referred, all point very firmly to the conclusion of unconscionable conduct. There is insufficient evidence to determine whether the complainants or the respondent’s customers could have acquired identical or equivalent goods or services from another person other than the respondent for a different amount than that which the respondent might have had in mind. Clearly, the amounts paid by way of periodical payments in a number of instances well exceeded the amount for which (for example) television or DVD sets could have been procured, and I also conclude that the proposed selling price (not expressed) for the NMA educational materials of $740, as the respondent acknowledged, was considerably in excess of their direct cost and included an allowance for his expertise in developing those materials so that, again, payments authorised beyond that amount which the transactions with the consumers at the time enabled (and which in many instances came to pass) are also an additional feature leading to the unconscionability of the respondent’s conduct: see s 51AB(2)(e).

105 The respondent, in my view, was aware of the income level of each of the complainants in general terms, and of the significant proportion of their income which the periodical payment authorised would absorb. In the case of Ms White in particular, notwithstanding that knowledge he procured from her a further periodical payment form for an additional slightly increased amount some years later in circumstances where she had already massively overpaid him. That behaviour was clearly unconscionable.

106 Having regard to those findings, in my judgment, the respondent’s conduct in entering into the transactions with the complainants was unconscionable. So too was his conduct in then receiving the periodical payments which he secured by lodging the periodical payment forms procured as part of each transaction with the complainants. Even though not all the factors to which s 51AB(2) directs attention operate to point to unconscionable conduct on the respondent’s part in the case of each of the complainants, the overall picture which my findings represent is one of conduct on the respondent’s part which showed no regard for conscience, and which was clearly unfair and unreasonable in respect of each of the complainants.

107 I have also reached that view with respect to each of the respondent’s dealings with the respondent’s customers in the Northern Territory. Obviously, those persons would have differing degrees of exposure to commercial and business transactions and differing facility in communicating in English; some would in general terms have understood the nature of the periodical payment forms, and many would not. Consequently, as with the transactions involving the complainants, not all the factors to which s 51AB(2) directs attention would operate to point to unconscionable conduct on the part of the respondent in his dealings with each of the respondent’s customers. But my findings as to the respondent’s way of operating, to which I have referred in detail above, also lead to the conclusion that his conduct in relation to each of the respondent’s customers was unconscionable as that term is used in s 51AB(1) of the TP Act.

108 As I have said, I have not had regard to the evidence of Dr Martin in reaching those conclusions. However, his evidence if taken into account supports those conclusions and may provide a further reason for reaching them in the way explained above. His evidence explains why the complainants entered into such disadvantageous arrangements. They were each, to differing degrees, vulnerable by reason of their personal circumstances to succumb to the unsolicited proposal of someone such as the respondent to sign an open-ended periodical payment form. They were each indigenous female persons living in relatively poor circumstances, dependent primarily upon government welfare payments, and who had limited commercial experience. They had a natural reticence and diffidence in firmly refusing to accede to such a proposal as the respondent presented. As I have found, a number of those traits would have been apparent to the respondent at the time.

Ms White	16 September 1998 to about August 2004	$10,440
Ms Dixon	24 September 1998 to 16 October 2003	$2,080
Ms Williams	24 September 1998 to 27 November 2003	$6,930
Ms Patterson	24 September 1998 to 6 May 1999	$680
Ms Doolan	25 September 1998 to 21 May 1999	$720
Ms Dickson	10 August 2000 to 2 October 2003	$4,000
Ms Turner	15 May 2003 to 8 January 2004	$1,080
Ms Palmer	4 June 2003 to 28 January 2004	$600

110 I am also satisfied that, as the applicant alleges, the respondent’s conduct in his dealings with each of the consumers contravened s 52 of the TP Act. Section 52 proscribes engaging in conduct that is misleading or deceptive. Conduct may be misleading or deceptive even if there is no positive and express misrepresentation: see e.g. per Lockhart J in Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 79 ALR 83 at 93; per French J in State Government Insurance Corporation v Government Insurance Office of New South Wales (1991) 28 FCR 511 at 561-562 and per Gummow J in Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 40-41.

111 The respondent by entering into each of the transactions with the complainants, in all the circumstances, engaged in misleading or deceptive conduct by not disclosing to each of the complainants that the transaction being entered into involved each complainant’s agreement to periodical payments being debited from her account indefinitely (unless steps were taken to terminate the authorisation), and by failing to disclose to each complainant the number of modules of educational materials (or in the case of DCS and EBS transactions, the nature of the materials to be provided) or the costs to the complainant of the materials to be provided or the time at which the periodical payments would equate to that cost. Indeed, in view of my findings about the respondent’s method of operating, and the nature of his business records, I find that it was misleading and deceptive for the respondent not to disclose that in the case of the NMA transactions he would not know clearly how many modules he had dispatched or when they would have been paid for and, in the case of the DCS and EBS transactions, he would not appropriate particular materials or goods to meet the contract and would not monitor carefully the amounts paid by the particular complainant to enliven at a particular time his obligation to supply materials or goods under those contracts.

113 The applicant also seeks injunctions against the respondent in the following terms:

114 Section 80 of the TP Act authorises the grant of injunctions in respect of conduct contravening s 51AB and 52 in the discretion of the Court. Merkel J in Australian Competition & Consumer Commission v Z-Tek Computer Pty Ltd (1997) 78 FCR 197 at 200-204 discussed the circumstances in which the power under s 80 may be exercised. Those circumstances are satisfied in this matter.

115 I propose to grant an injunction almost in terms of (5) in [113] above. I am very conscious that I should not assume that any dealings between the respondent and persons in the indigenous communities referred to will necessarily be inappropriate. There are no doubt persons within those communities who could capably negotiate with the respondent. I should not restrain the respondent from dealing with them nor preclude them from dealing with him. I do not make such an assumption. I raised those matters with the applicant. I was assured that the relevant land councils support the grant of an injunction in the terms sought. I therefore propose to do so in the circumstances, notwithstanding the concern I referred to. The respondent’s course of conduct over some five to six years, including in some cases securing two periodic payment forms from certain persons, in my view warrants the making of such an order. I will limit the order to operate for a period of three years, rather than the unlimited period sought by the applicant.

116 I am also cautious about granting the injunction in terms of (6) in [113] above. It is wide in its reach, as it extends to any transaction with any customer of the respondent, however well informed. However, on balance, I have reached the view that I should make such an order. The respondent has indicated that he consents to the making of such an order. Also, the disclosure of information required is specifically directed to remedying what I have found to have been misleading and deceptive conduct by the respondent in respect of the complainants, and is information which any informed consumer should understand in any event. Again, I will limit the term of that injunction to a period of three years.

117 The respondent has indicated that he consents to an order that he undertake a trade practices compliance program in the following terms:

The objective of the proposed program relates specifically to the conduct of the respondent which infringed the TP Act, and his conduct indicates that such an order is called for in the circumstances. I will therefore make such an order.

118 The applicant also sought an order that the respondent close every bank account held in the names of NMA, DCS and EBS. I do not propose to make that order. Although those business names were the vehicles for the respondent’s dealings with the respondent’s customers, he is entitled to conduct businesses under those names, including operating bank accounts in those names. The injunctions I propose to grant are, in my view, sufficient to prevent further conduct of the kind which I have found infringed ss 51AB and 52 of the TP Act.

119 Finally, as the applicant requested, I note that the findings made above will, by reason of s 83 of the TP Act, be prima facie evidence of the facts so found, including in any claim for compensation by or on behalf of any of the complainants under s 87(1A).

I certify that the preceding one hundred and twenty (120) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

Counsel for the Applicant:	R Layton QC with N Wilson

Solicitor for the Applicant:	Australian Government Solicitor

Counsel for the Respondent:	The respondent did not appear

Date of Hearing:	7 & 8 February 2005

Date of Judgment:	5 May 2005

5.2	the Amoonguna Community;
5.3	the Santa Teresa Community;
5.4	indigenous communities located on freehold land pursuant to s 6 of the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) and for which an entry permit is required pursuant to s 4 of the Aboriginal Land Act (NT);
5.5	town camps for which the Tangentyere Council Directorate require a person to obtain permission to enter

6.1	the nature of the form or authority;
6.2	the time period for which the form or authority will have effect;
6.3	the periodic and total amounts that it is anticipated will be paid to the respondent or his business or company by the prospective customer under the form or authority;
6.4	the goods or services that will be provided to the prospective customer in exchange for payments made under the form or authority; and
6.5	the time period over which the goods or services will be provided.

5.6	the Amoonguna Community;
5.7	the Santa Teresa Community;
5.8	indigenous communities located on freehold land pursuant to s 6 of the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) and for which an entry permit is required pursuant to s 4 of the Aboriginal Land Act (NT);
5.9	town camps for which the Tangentyere Council Directorate require a person to obtain permission to enter

6.6	the nature of the form or authority;
6.7	the time period for which the form or authority will have effect;
6.8	the periodic and total amounts that it is anticipated will be paid to the respondent or his business or company by the prospective customer under the form or authority;
6.9	the goods or services that will be provided to the prospective customer in exchange for payments made under the form or authority; and
6.10	the time period over which the goods or services will be provided.

Federal Court of Australia

Australian Competition and Consumer Commission v Keshow [2005] FCA 558 (5 May 2005)