19 July 2004: The ACCC instituted legal proceedings in the Federal Court, Sydney, against Advanced Medical Institute Pty Ltd (AMI), Mr Philip Somerset of ColbyCo Media and Mr Ian Turpie alleging misleading and deceptive conduct in relation to the advertising and promotion of a nasal spray form of treatment for erectile dysfunction (impotence).
The ACCC has alleged that AMI has breached s. 52 of the Trade Practices Act (Act) by causing an advertisement to appear in a number of major metropolitan newspapers in Australia between 28 March 2004 and 2 May 2004 containing representations that:
Mr Turpie had undertaken an interview during which he disclosed, in the presence of his wife, that he was losing his sexual potency, and
AMI nasal delivery system had cured Mr Turpie of the effects of impotence or erectile dysfunction and improved his sexual potency.
The ACCC has alleged that these representations were not true. The ACCC has also alleged that Mr Somerset was knowingly concerned in the preparation and publication of the advertisement on behalf of AMI in breach of s. 52 of the Act.
The ACCC has further alleged that Mr Turpie was knowingly concerned in the contravention s. 52 of the Act. Mr Turpie admitted his role in the alleged contravention. As a result of his cooperation, the ACCC granted Mr Turpie a partial indemnity for his role in the alleged contravention.
A directions hearing for this matter was listed for 1 September 2004 before Justice Lindgren in the Federal Court, Sydney.
1 September 2004: Orders were made by consent in the Federal Court against Mr Ian Turpie. Proceedings were not dismissed against Mr Turpie due to a proposed cross-claim by the first respondent. The ACCC's legal proceedings continue against AMI and Mr Philip Somerset of Colby Media who are defending the case. The matter is listed for a further directions hearing on 8 December.
8 December 2004: A directions hearing was held and a further timetable set down. A further directions hearing is listed for 2 March 2005 and a trial date listed for 16 May 2005.
2 March 2005: Further timetable set down and matter listed for hearing on 16–18 May 2005.
16 May 2005: Hearing commenced and continued until 19 May 2005. Hearing is now adjourned until 29 August 2005.
30 August 2005: Trial commenced before Justice Lindgren.
6 September 2005: Justice Lindgren delivered a judgment on the admissibility of certain ACCC records pursuant to s. 69 of the Evidence Act 1995.
22 September 2005: Final hearing following closing submissions by parties, Justice Lindgren has reserved his decision.
15 August 2006: The Federal Court declared that AMI engaged in conduct that was misleading or deceptive in breach of s. 52 of the Act by causing advertisements to be published in major newspapers in Australia from 27 March to 18 April 2004 featuring Mr Turpie, and containing representations including:
that Mr Turpie had undertaken an interview during which he disclosed, in the presence of his wife, that he was losing his sexual potency, and
AMI’s nasal delivery system had cured or alleviated Mr Turpie of the effects of impotence or erectile dysfunction.
The court also declared that Mr Philip Somerset, of ColbyCo Media, the advertising agent for AMI, by preparing and causing the advertisements to be published, was knowingly concerned in, or party to, the breach of s. 52 of the Act.
Justice Lindgren found that Mr Philip Somerset had been knowingly concerned in AMI's contraventions as he knew that the representations were not true. The court also ordered both AMI and Mr Somerset to pay the ACCC's costs.
Justice Lindgren declined to make any orders as to injunctions and corrective advertising. He thought that the conduct of the parties had ceased and there was no longer any threat of repetition. He also thought that the offending representations in the advertisements had also ceased to have any influence that might be overcome by corrective advertising.
Following Mr Turpie's admission of his involvement in the alleged conduct, the ACCC granted him partial immunity in return for his cooperation. On 1 September 2004 the ACCC discontinued legal proceedings against Mr Turpie when the court, by consent, made an injunction restraining Mr Turpie from engaging in the offending conduct or similar conduct in the future; and Mr Turpie is to attend a trade practices compliance seminar.
