The Federal Court at Adelaide has made orders, by consent, against Globex Systems Pty Ltd, its directors and two former employees for contraventions of the Trade Practices Act 1974.
The Australian Competition and Consumer Commission began court action in December 2004 after receiving more than 70 complaints and inquiries about the company which supplies products, including industrial cleaning products and printer and photocopier cartridges, by direct telephone marketing.
The proceedings against Globex, its directors, Mr Warren Skry and Mr David Skry, and two of its former employees, Ms Emma Gourlay and Ms Claire Trobe, alleged false representations and misleading and deceptive conduct. It was alleged that they had represented that businesses and primary schools in South Australia, Victoria, New South Wales and Queensland had agreed to buy from Globex cleaning products or cartridges from the company. It was alleged they represented that the cartridges were new and not refilled. It was also alleged that Globex asserted it had a right to payment for unsolicited goods.
The relief sought included interim injunctions to restrain Globex from engaging in similar conduct which were ordered by the court by consent.
In May 2005 the Federal Court fined Globex $4,900 for contempt of the interim orders.
Globex admitted that it had made representations to an association in NSW in February 2005 that the association had ordered ink cartridges, had entered into a purchase agreement with Globex and was required to take delivery of the cartridges when those representations were untrue.
The court has now made final orders by consent as follows:
- declarations that:
- Globex engaged in misleading and deceptive conduct and made false representations in its dealings with various parties by making representations to the effect that they had entered into an agreement to purchase goods from Globex, were obliged to purchase goods from Globex, that the next order of goods was ready for delivery and/or that Globex had a right to payment for goods that were unsolicited
- Globex asserted a right to payment for unsolicited goods in its dealings with various parties when it did not have reasonable cause to believe that there was a right to payment
- Mr David Skry and Mr Warren Skry aided and abetted, counselled or procured or were knowingly concerned in the contraventions of the TPA by Globex, and
- Ms Gourlay and Ms Trobe engaged in misleading and deceptive conduct and made false representations when they were, on Globex's behalf, dealing with particular parties
- injunctions restraining:
- Globex from making certain representations concerning whether a person has ordered goods from Globex, has entered into an agreement to buy goods from Globex or is obliged to buy goods from Globex where the representations are not correct
- Globex from asserting or representing a right to payment for goods unless there are reasonable grounds for believing that Globex has a right to payment
- Mr David Skry and Mr Warren Skry from aiding, abetting, counselling or procuring or being in any way knowingly concerned in or party to conduct by Globex that the company is restrained from engaging in, and
- Ms Trobe and Ms Gourlay from using telephonic services to make certain representations concerning, for example, whether a person has ordered any goods or has entered into an agreement to purchase goods where the representations are not correct
- an order requiring Globex to publish a notice acknowledging its conduct in certain State daily newspapers and The Australian within 21 days
- an order that Globex implement a Trade Practices compliance program, and
- an order that Globex pay the ACCC's costs.
An example of the conduct engaged in by Globex in respect of which the proceedings were brought and the above orders were obtained is found below.
"The ACCC will pursue companies which mislead customers and potential customers and tries to force them to buy goods which arrive on their doorstep unsolicited or tries to convince or bully them into believing that they have agreed to buy goods or more goods when they have not", ACCC Chairman, Mr Graeme Samuel, warned today.
"Unfortunately, for some businesses this is their standard business practice. It is how they make money and stay in business when the only money any business should make is honest dollars".