14 April 2004: Proceedings were instituted in the Federal Court, Adelaide, against Fox Symes & Associates Pty Ltd, its directors Mr Tim Maher and Ms Deborah Southon, and also a related company, Debt Relief Services Pty Ltd, alleging misleading and deceptive conduct in the promotion of Debt Agreement Proposals under Part IX of the Bankruptcy Act 1966.
The ACCC further alleges unconscionable conduct because the two companies exploited the social and financial vulnerability of their customers in promoting debt agreements under Part IX of the Act.
A hearing for arguments and further and better particulars is listed for 9 September 2004.
The ACCC had to provide further and better particulars to the respondent's solicitors by 30 September 2004. The respondents have until 14 October 2004 to file a strike-out application. The next hearing date is yet to be set.
28 October 2004: Justice Lander ordered that the proceedings be dismissed against the second respondent, Debt Relief services. Justice Lander also ordered, with the consent of the applicant, that the applicant's statement of claim be struck out and that unless the applicant filed an amended application and further statement of claim by 15 November 2004, the proceedings would stand dismissed against Fox Symes & Associates and the third and fourth respondents, Tim Maher and Deborah Southon. The court also ordered, by consent, that the applicant pay the respondents' costs of the proceedings to date.
15 November 2004: The ACCC filed and served an amended application and fresh statement of claim against Fox Symes & Associates, Tim Maher and Deborah Southon.
The ACCC alleges that: Fox Symes engaged in misleading and deceptive conduct regarding representations concerning bankruptcy, credit ratings and Fox Symes’ liability; Tim Maher and Deborah Southon were knowingly concerned in alleged misrepresentations about bankruptcy and credit ratings; Fox Symes engaged in unconscionable conduct regarding the witnesses named in these proceedings.
The new statement of claim abandons allegations of systemic unconscionable conduct by Fox Symes and the allegation that Tim Maher and Deborah Southon engaged in unconscionable conduct. It also abandons some of the misrepresentations previously pleaded.
The ACCC is seeking declarations, publication orders, probation orders and refunds.
2 February 2005: Application to strike out ACCC's statement of claim. Justice Lander reserved his decision.
5 August 2005: Justice Lander in the Federal Court, Adelaide, ordered that the ACCC’s pleadings in relation to Fox Syme & Associates advertising representations that ‘It’s not bankruptcy’ be struck out. Justice Lander stated that the pleadings did not disclose the whole of the advertisements or the context of the advertisements, and that the imputations of the advertising pleaded by the ACCC were not made out.
Justice Lander ordered that the ACCC’sclaims of false and misleading conduct in relation to the ‘not bankruptcy’ representations made in the context of the Fox Symes’ FAQ sheet and meetings between consultants and the witnesses be struck out. Justice Lander found that Part IX Debt Agreements are an alternative to bankruptcy and that the ACCC’s arguments did not support the contrary.
Justice Lander also ordered that the pleadings for loss and damage suffered by the witnesses be struck out on the grounds that they did not plead reliance on the alleged conduct. Justice Lander struck out the ACCC’s pleadings in relation to the accessorial liability of the second and third respondents for its failure to plead knowledge of the alleged falsity of the alleged conduct.
The court directed the applicant to file a notice of motion with an amended statement of claim by 19 August 2005 and to pay the respondent’s costs.
19 August 2005: the ACCC filed a notice of motion and amended statement of claim with the Federal Court. The new statement of claim seeks to incorporate Justice Lander’s views. The next hearing will be on 5 September 2005.
5 September 2005: Justice Lander ordered that the ACCC’s pleadings in relation to Fox Syme & Associates advertising representations 'Debt Relief for individuals. It’s not bankruptcy. It’s not a loan. It’s legal. It releases you from debt' be struck out. Justice Lander found that there was nothing in the advertisements that gave rise to the imputation pleaded by the ACCC that Fox Symes offered services to persons in financial difficulty, arising from debts, which would enable them to be released from their debts without any consequences to them similar to the consequences that would result from them becoming bankrupt.
Justice Lander gave the ACCC leave to file a further amended statement of claim.
21 September 2005: the ACCC filed a further amended statement of claim and a further amended application.
A directions hearing had been set down for 8 November 2005.
12 October 2005: Fox Symes & ors filed a cross-claim against the ACCC in the Federal Court of Australia. The cross-claim alleges that the ACCC has defamed the cross-applicants in its media release and other publications.
8 November 2005:Justice Lander has listed the trial to commence on 3 October 2006.
16 November 2005: Fox Symes & ors filed an amended cross-claim.
24 January 2006: Fox Symes & ors filed an application to strike-out parts of the ACCC’s reply to the defence to the substantive proceedings and parts of the ACCC’s defence to the amended cross-claim.
3 February 2006: The ACCC filed an application to strike out parts of Fox Symes' amended cross claim, parts of Fox Symes' reply to the ACCC's defence to the amended cross claim and Fox Symes' further and better particulars of its reply to the ACCC's defence.
7 February 2006: Justice Lander listed the strike out applications for hearing on 2 March 2006.
2 March 2006: Justice Lander heard the strike out applications and made orders in relation to the pleadings and costs.
16 March 2006: Fox Symes & ors filed a second amended cross-claim.
27 March 2006: Justice Lander listed the next directions hearing for 1 May 2006.
28 April 2006: Justice Lander made orders in relation to the filing of evidence by the parties and listed the next directions hearing for 28 August 2006.
10 June 2006: Fox Symes & Associates Pty Ltd and its directors, Mr Tim Maher and Ms Deborah Southon, gave undertakings to the Federal Court as part of a settlement of the ACCC’s legal action against them. The settlement of the legal action was entered into by Fox Symes and its directors on the basis that they do not admit that they engaged in conduct in contravention of the Act.
The undertakings provided to the court by Fox Symes include undertakings that, for a period of five years, it:
will not make certain statements to customers or potential customers in respect of debt agreement proposals and debt agreements;
will use its best endeavours to inform customers and potential customers that details of a debt agreement proposal or debt agreement are highly likely to be recorded on a person’s credit report as maintained by credit reporting agencies;
will explain the nature and effect of all documents provided to customers and potential customers by Fox Symes, and
will bring to the attention of customers and potential customers the amount of all fees payable in respect of a debt agreement. Mr Maher and Ms Southon have also provided an undertaking to the court that they will take all reasonable steps to ensure that Fox Symes complies with the undertakings it has given.
As part of the settlement, Fox Symes has also agreed with the ACCC that it will refund the application fee paid to it by the individuals named in the legal action.
