The Full Federal Court has dismissed an appeal by Mr Peter Foster against an order restraining his involvement in any business relating to weight loss, cosmetic or health industry products or services for five years.
The Full Court ruling follows ACCC action last year against key persons involved in Chaste Corporation's TRIMit scheme for both resale price maintenance* and misleading and deceptive conduct. The misleading conduct included representations as to:
- the efficacy of the purported diet pill TRIMit
- the genuineness of the Chaste business, and
- the concealment of Mr Foster's role in the business.
For his involvement in the resale price maintenance aspects of the TRIMit scheme, the Federal Court penalised Mr Foster $150,000 and made other orders in relation to misleading and deceptive conduct.
At first instance, Justice Lander noted that: "Mr Foster had convictions in relation to the unlawful sale and promotion of weight loss products, and a reputation as the instigator of dubious and failed schemes for profit for the conduct of businesses promoting and selling weight loss products" and that "from its inception Chaste's business was conducted by Mr Foster and Mr Webb for the purpose of extracting the maximum possible revenue from unsuspecting area managers who had hoped to participate in a genuine business opportunity in selling a researched and effective weight loss aid to retailers".
Justice Lander then made an order restraining Mr Foster from being directly or indirectly involved in the promotion or conduct by a corporation of any business relating to weight loss, cosmetic or health industry products or services of any kind for five years.
In the appeal, Mr Foster challenged the court's power to make such a wide order.
In its unanimous decision on Friday, the Full Court stated: "The evidence and the findings at first instance in the present case gave rise to a real fear that Foster would, unless restrained, commit further conduct of the same general kind".
In confirming the court's power to grant the order against Mr Foster in the terms sought by the ACCC, the Full Court stated: "If the court considers that a complete prohibition, whether permanently or for a specified period, on a respondent's engaging in a particular field of commercial activity or industry is required to protect the public from conduct of the kind which constituted the contravention, s80 is wide enough to support such a prohibition as a matter of power".
Australian Competition and Consumer Commission, Chairman, Mr Graeme Samuel said: "The Full Court's decision supports the importance of protecting the Australian public from serious misleading and deceptive conduct".
Mr Foster has also been ordered to pay the ACCC's court costs.