ss. 52. 53 and 64. Alleged misleading and deceptive conduct and demanding payment for unsolicited goods
10 March 2005: Proceeding instituted in the Federal Court, Sydney, alleging L&L Supply engaged in misleading and deceptive conduct and other contraventions of the Trade Practices Act in the supply of packing tape and other products.
The ACCC alleges that L&L Supply has operated an office supply scam from two locations—Wickham in Newcastle, NSW and Miami, Florida, USA—in which Australian business consumers are targeted with offers of packing tape supplies, either free of cost or at very low prices. The ACCC alleges that L&L Supply sends the tape to the targeted businesses and later invoices them for the goods at very expenses prices. The ACCC alleges that L&L Supply offshore sales representatives, based in a Miami call centre, misled business consumers into believing that packing tape orders had been approved by a senior manager of their company who was a friend of the recently deceased director of L&L Supply. The ACCC alleges that after speaking to the target company L&L Supply in Miami sent details of the Australian 'customer' to its warehouse in Wickham which dispatched the packing tape and issued an invoice to the so-called customer. The ACCC alleges that this conduct contravenes ss. 52 and 53 of the Act.
The ACCC also alleges L&L Supply engaged in conduct contravening s. 64 of the Act by asserting a right to payment for the supply of goods in circumstances where the goods had not been ordered by the 'customer'.
As a first step in proceedings, the ACCC obtained a Mareva order form the court freezing the company's Australian bank account. The ACCC is seeking a range of orders including injunctions, declarations, findings of fact, compensation and various non-punitive orders.
17 March 2005: Directions hearing held before Justice Jacobson in the Federal Court, Sydney.
30 March 2005: Mareva orders were extended by consent to 28 July 2005, interim orders were made and a further directions hearing is listed for 28 July 2005.
18 July 2005: The freezing orders were extended by consent to 16 September 2005. Interim orders were made and further directions listed for 16 September 2005.
15 September 2005: the freezing orders were extended by consent to 23 November 2005. Interim orders were made and further directions listed for 22 November 2005.
6 January 2006: The Federal Court declared that L&L Supply contravened section 52, 53, and 64 of the TPA and that L&L Supply misled its customers in relation to the supply of packing tape. The Federal Court ordered:
a range of injunctions to prevent L&L Supply engaging in the illegal conduct in the future
L&L Supply to compensate a number of businesses misled by the illegal conduct of L&L Supply
L&L Supply to send letters to its customers and publish notices in newspapers to advise its customers of the Federal Court's orders, and
L&L Supply to pay the ACCC's costs.
The Federal Court made the orders sought by the ACCC by default under Order 35A of the Federal Court rules following the failure by L&L Supply to meet its obligations under the Court ordered timetable.
28 March 2006: A directions hearing on the Mareva injunction was heard by Justice Madgwick , At this hearing the Applicant was seeking further orders in relation to the frozen funds, including orders for the payment of compensation to some of the affected businesses. Justice Madgwick ordered the approximately $12,000 of frozen funds be paid to 6 parties on whose behalf the ACCC took a representative action. The remaining funds in the bank account will be paid towards the ACCC’s legal costs in bringing the action. The Court also ordered the dissolution of the asset preservation order within 28 days by 1 May 2006.
