ss. 12DA, 12DB, 12DF and 12GD of the ASIC Act alleged misleading or deceptive conduct
On 30 November the High Court dismissed the ACCC and ASIC's application for special leave to appeal the Full Federal Court decision of John Bevins Pty Ltd v Cassidy and ASIC. While the High Court said it did not endorse all the reasoning of the Full Federal Court, it did not grant special leave to appeal because in its view this matter was not a suitable vehicle for the determination of the issues raised by the applicants.
The issues raised by the ACCC included the respective approaches to interpretation of what is required to prove accesorial liability in the context of s. 52 of the Trade Practices Act and its analogues.
In December 2003 the Full Federal Court had overturned the original decision that John Bevins Pty Ltd, the advertising agency for Medical Benefits Fund of Australia Ltd (MBF), was knowingly concerned in contraventions of the Act by virtue of its role in creating misleading advertisements. The Full Federal Court previously affirmed an earlier decision that television advertising by MBF between May and June 2001 and on billboards in August and September 2001 was misleading.
s. 65AAC alleged participation in a pyramid scheme
The ACCC instituted proceedings on 15 November 2004 against Australian Communications Network Pty Ltd, a reseller of telecommunications services, for alleged breaches of the pyramid selling scheme provisions of the Trade Practices Act.
It also instituted proceedings against ACN's managing director, Mr Martin Paech and others involved in the company.
On 23 November the ACCC applied for an interim injunction which would prevent ACN from accepting payments from participants until the hearing and determination of the matter.
As a result of the ACCC application, ACN gave undertakings to the court, including that all participation payments ACN receives from new independent representatives from midnight 23 November 2004 until further order of the Federal Court shall be held in trust.
The application for interim injunction was heard before Justice Brad Selway. A trial is scheduled in the week beginning 21 February 2005.
ss. 52, 53(c) false and misleading representations
On 1 November the Federal Court, Adelaide, found that Set Sale Realty Pty Ltd and its director, Mr David Pilling, had made false and misleading representations about having ACCC approval for its real estate property selling system.
In January 2004 Set Sale Realty sent an email to various real estate agents with the subject heading, ‘ACCC approves pilling system’, and attached an unsigned extract from an ACCC letter to Mr Pilling. It suggested that the extract be used by real estate agents in the information kits they provide to prospective vendors. It also attached a signed letter from the ACCC for the same purpose.
The court declared that Set Sale Realty had engaged in misleading and deceptive conduct or conduct that was likely to mislead or deceive in contravention of s. 52 of the Act and had represented that the system had approval that it did not have in contravention of s. 52(c) of the Act.
The court granted a three-year injunction restraining Set Sale Realty and David Pilling from representing that the system has ACCC approval or any similar representation.
It also made orders including that Set Sale Realty write to each of its real estate agents to inform them of the decision and pay the ACCC's costs of $6000.
The court also found that Mr Pilling aided and abetted and was knowingly concerned in the conduct and ordered him to attend a trade practices compliance seminar.
ss. 51A, 52, 53(c) false and misleading representations
On 2 November the Federal Court, Adelaide, made orders by consent against Phoneflasher.com Pty Ltd, its former director, Ms Jimeale Jorgensen, and its majority shareholder and agent, Mr Alan Jorgensen, for false and misleading representations about the Phoneflasher mobile phone accessory.
Phoneflasher.com supplied Phoneflashers to various retailers throughout Australia with claims that they reduced radiation and therefore had associated health benefits.
The court declared that Phoneflasher.com had engaged in conduct that was misleading or deceptive or was likely to mislead or deceive in contravention of s. 52 of the Act; and made false or misleading representations that the Phoneflasher had performance characteristics that it did not have contrary to s. 53(c) of the Act.
The court also granted a three year injunction restraining Phoneflasher.com and Mr Alan Jorgensen and Ms Jimeale Jorgensen from making representations that the Phoneflasher, reduces radiation, provides health benefits for the user of the telephone, or prevents short-term memory deterioration by absorbing electromagnetic radiation.
Orders were also made against Phoneflasher.com including that it write to each retail outlet it supplied with the Phoneflashers to advise them of the orders and that it pay the ACCC costs of $20 000.
The court also declared that Mr Alan Jorgensen and Ms Jimeale Jorgensen were knowingly concerned in the conduct.
ACCC action has resulted in penalties totalling $535 625 being imposed on McMahon Services Pty Ltd, SA Demolition & Salvage Pty Ltd and DCD Enterprises Pty Ltd (trading as D&V Services) and a number of their representatives.
The penalties were ordered by the Federal Court, Adelaide, on 4 November 2004, for price fixing a tender to the Department of Defence for demolition and asbestos removal work in late 2000.
By consent, each of the companies and the various individuals gave undertakings to the court. The undertakings relate to the provision of asbestos and demolition services and include that the companies refrain from discussing with any competitor any information relating to the price likely to be tendered by them and knowingly fixing, or aiding and abetting the fixing of, price in any tender.
All the parties undertook to establish and/or attend trade practices compliance training.
The penalties ordered against D&V Services and its directors were consented to by those parties.
On 4 November 2004 the ACCC instituted proceedings in the Federal Court, Melbourne, against Wizard Home Loans Pty Ltd, alleging breaches of the misleading or deceptive conduct provisions of the Trade Practices Act.
The ACCC alleges Wizard breached s. 52 of the Act by placing advertisements for mobile lending managers in newspapers in New South Wales, Victoria and Queensland which were liable to mislead the public as to the nature of the position. The ACCC alleges the advertisements were likely to mislead people into believing the positions were employed positions when they were self -employment opportunities.
The ACCC further alleges that annual remuneration figures provided to the managers were likely to mislead.
The ACCC is also taking a representative action seeking compensation on behalf of an individual that responded to an advertisement and accepted one of the positions.
A directions hearing for this matter is listed before Justice Peter Gray on 20 December 2004 in the Federal Court, Melbourne.
s. 53(c) alleged false and misleading representations
On 1 November the ACCC filed a Notice of Discontinuance in its proceedings against the supplier of a plug-in pest device following the Federal Court's acceptance of undertakings from Pest Free Australia Pty Ltd.
The ACCC alleged that Pest Free made representations that its electronic plug-in devices had performance characteristics, uses or benefits they did not have. The representations were made in a television advertisement, on Pest Free's website, and in other brochures and promotional material.
As part of the settlement of this matter the company gave undertakings to the Federal Court to refrain from making certain representations about the devices.
On 14 October the Federal Court, Sydney granted leave for the ACCC to discontinue proceedings against the company and its directors and noted that the parties agreed that the discontinuance was without prejudice to previous costs orders in the respondent's favour and that each party bear its own costs since 30 June 2004.
s. 45 attempt to induce another business to enter into a market sharing agreement for the collection of recyclable waste paper
On 18 November penalties of $500 000 imposed on Visy Paper Pty Ltd for trying to stop a competitor, Northern Pacific Paper, from taking Visy's customers.
Penalties of $25 000 were also imposed on two senior executives of the company.
The Federal Court, Sydney, also ordered declarations and injunctions restraining Visy and the executives from engaging in similar conduct in future and ordered a trade practices compliance program.
The penalties follow the High Court's finding in October 2003 that Visy attempted to contravene s. 45 of the Trade Practices Act which deals with anti-competitive conduct. The proceedings were instituted by the ACCC in December 1998.
