Heartlink company director Mr Laurence Hann has been banned for 15 years from managing a company and penalised $450,000 after the Federal Court found his conduct amounted to an 'egregious series' of contraventions of competition and consumer law.
The judgement handed down yesterday concerned false, misleading or deceptive conduct in the promotion and sale of a parcel distribution business for 'Heartlink' branded household products. The court found that consumers were misled about the profitability and earnings potential of the business opportunity as well as the overall viability of the business.
Australian Competition and Consumer Commission chairman Rod Sims said the ACCC considers this a very important outcome.
"It is the first time the ACCC has obtained orders from the Federal Court which disqualify an individual from managing companies."
"This outcome demonstrates the ACCC will use all its powers to take action against those who engage in unscrupulous business practices which prey on disadvantaged or vulnerable consumers."
The ACCC took court action against:
- Halkalia Pty Ltd
- Heartlink Enterprises Pty Ltd
- National Semi-Retired Group Pty Ltd
- Mr Laurence Glynne Hann (also known as Laurie Hann), and
- Ms Vicki Ann Lowe.
Justice Tracey declared that Mr Hann had aided and abetted the contravening conduct of the three respondent corporations and had engaged in contravening conduct.
In handing down the $450,000 civil pecuniary penalty against Mr Hann, Justice Tracey said "I consider his conduct to constitute an egregious series of contraventions of legislation designed to protect consumers. He well knew what he was doing was wrong but he still persisted."
As well as disqualifying Mr Hann from managing a corporation for 15 years, Justice Tracey also imposed injunctions against Mr Hann for 15 years which prevent him from carrying on a business or supplying goods or services in connection with which:
- persons are invited to invest money or perform work
- any claim is made that moneys or profits earned by the sale of goods are donated to charity, or
- goods or services concerned are or include household cleaning products.
In making these orders, Justice Tracey said "the conduct has resulted in substantial losses being sustained by people, many of them elderly, across Australia. Mr Hann has a long history of establishing companies and other entities and using them to promote dubious business opportunities in order to obtain funds. He should not have the opportunity to do so again."
Justice Tracey also made further orders, including:
- a civil pecuniary penalty against Halkalia Pty Ltd in the amount of $450,000
- injunctions against each of Halkalia Pty Ltd, Heartlink Enterprises Pty Ltd and National Semi-Retired Group Pty Ltd in similar terms to those imposed against Mr Hann for 15 years
- declarations that Halkalia Pty Ltd, Heartlink Enterprises Pty Ltd, National Semi-Retired Group Pty Ltd and Mr Hann had each engaged in false, misleading or deceptive conduct in contravention of sections 52 and 59(2) of the Trade Practices Act 1974, and
- costs.
Justice Tracey also restrained Ms Vicki Ann Lowe from engaging in the promotion of business activities or opportunities where representations are made as to the potential earnings of that business activity, where there are no reasonable grounds for such representations. This injunction was ordered by consent following the filing of a Statement of Agreed Facts in relation to the ACCC's case against Ms Lowe.