The Australian Competition and Consumer Commission obtained orders by consent yesterday in the Federal Court at Melbourne against The Triumphant Group Pty Ltd for breaches of the Trade Practices Act 1974.
The orders against Triumphant are in addition to the declarations and orders made by the Federal Court against Imagine Essential Services Limited and Mr Richard Evans* on 4 March 2008 (see www.austlii.edu.au/au/cases/cth/FCA/2008/349.html).
The orders against Imagine, Mr Evans and Triumphant relate to the sale by Imagine of licences to operate its system. Under the Imagine system, licensees would approach businesses with a view to having them take the purported benefit of Imagine's agreements with essential services providers to obtain claimed savings on services such as telephone and electricity (earning commissions when businesses signed up). Small business people invested anywhere between $60,000 and $250,000 to purchase a licence from Imagine.
The ACCC alleged Triumphant, in its capacity as marketing and promotional agent for Imagine, made false and misleading representations in connection with the sale of Imagine licences.
The ACCC's proceeding against Triumphant concerned four key groups of representations which were alleged to be false, misleading or deceptive and in some cases were representations which Triumphant had no reasonable grounds to make, namely:
- the profitability of the Imagine licensing system
- the number of customers that Imagine would give licensees through agreements that Imagine claimed to have with accountants
- the number and variety of agreements that Imagine claimed to have with essential service providers and the level of savings that Imagine licensees could provide to customers as a result of those agreements, and
- membership to certain professional associations.
Justice Gordon of the Federal Court declared Triumphant had engaged in the above conduct in breach of the Act.
Justice Gordon also made a number of orders, including:
- an injunction restraining Triumphant from making the same or similar representations in circumstances where they are not true or where there are no reasonable grounds for making the representations, and
- an order requiring Triumphant to publish on its website certain information about the proceeding.
ACCC Chairman, Mr Graeme Samuel, said: "The saying 'don't kill the messenger' does not apply to marketing and event management companies who spruik the business schemes of other parties. These companies can also be liable under the Trade Practices Act for statements they make even though the scheme they promote is not their own. They must exercise vigilance and care when making promotional claims on another's behalf and should be slow to make such claims without all the relevant facts at hand."