Federal Court fines internet trader for contempt

11 April 2002

The Federal Court has fined Purple Harmony Plates Pty Ltd $20,000 and imposed $10,000 fines on the company directors Helen Therese Glover and Neal Arthur Lyster for contempt. The fines are payable within 60 days and they have also been ordered to pay the ACCC’s legal costs.

The Federal Court imposed the fines because the respondents failed to implement court orders following a decision last year that they were in breach of the Trade Practices Act 1974. That earlier decision related to the making of unsubstantiated health and other claims for products promoted on the Internet.

The misleading claims included that the Purple Harmony Plates:

  • protected against electromagnetic radiation from computers, televisions, mobile telephones etc
  • energised water and freed it from odour and chlorine
  • lowered body stress and fatigue levels
  • grouped together heavy metals and other impurities [in water] into larger molecules so that they could not be absorbed by the body
  • helped strengthen the immune system
  • increased general health
  • accelerated healing
  • reduced less severe aches and pains or niggly coughs and colds
  • improve plant growth
  • ionised car fuel to allow a more complete fuel burn.

The Federal Court orders included:

  • declarations that the business engaged in misleading and deceptive conduct prohibited by the Trade Practices Act 1974
  • injunctions preventing the business from engaging in similar conduct in the future
  • corrective statements in writing to customers
  • refunds to consumers who believe they were misled.

Purple Harmony Plates Pty Ltd was also ordered by the court to publish a corrective statement on its website within 14 days. The corrective statement was required to offer refunds and should have been displayed immediately upon accessing the website’s homepage and order form. Consumers would then be required to interactively disable the automatically generated statement before proceeding.

The Federal Court found that the "[t]he fines submitted by the Commission are appropriate as there has been a deliberate and wilful refusal and neglect to comply with the order[s]. The respondents have not sought to excuse or explain their conduct other than by submissions in substance that they were not obliged to recognise or observe the authority or order of the Court. Those submissions were plainly untenable".

"Enforcement of the law is a high priority as consumers must be fully and truthfully informed", ACCC Chairman, Professor Allan Fels, said. "This is especially so in respect of matters involving medical and health issues. Although the States and Territories have relaxed tight restrictions on advertising in the sector, permission has not been given for 'open slather' to mislead consumers. It also sends a clear message to businesses that they cannot hide behind the Internet and use it as an excuse to ignore obligations arising under the Trade Practices Act. Irrespective of the medium, conduct in trade or commerce in Australia is subject to the Act".

Release number: 
MR 075/02
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