A vulnerable consumer has been compensated, and a businessman and his company fined for misleading the Australian Competition and Consumer Commission, in litigation finalised this week in the Federal Court, Hobart.
Following criminal proceedings Mr Simon Charles Clarke and his company Narnia Investments Pty Ltd were convicted and fined a total of $7,000 after pleading guilty to providing false or misleading information in response to an information notice issued by the ACCC under section 155 of the Trade Practices Act 1974.
The ACCC was investigating allegations for separate civil proceedings that Mr Clarke and Advanced Hair Studio Hobart (a business controlled by Narnia) had engaged in false or misleading conduct towards a vulnerable consumer by refusing to release the consumer from his $15,500 hair replacement contract and refusing to refund the consumer's $1,800 deposit. Mr Clarke was then National Sales Manager with Advanced Hair Studio Pty Ltd.
In separate civil proceedings taken by the ACCC in the Federal Court in Hobart, Mr Clarke and Narnia were found to have contravened section 52 of the Act by misrepresenting to the consumer that he did not have the right to terminate his contract and to obtain a refund of his deposit.
Injunctions restraining Narnia and Mr Clarke were imposed by the court and Mr Clarke was ordered to attend trade practices law compliance training.
Narnia and Mr Clarke also provided court-enforceable undertakings to the ACCC requiring them to pay the consumer the $5,000 balance owing of $10,000 damages and to refund the consumer's $1,800 deposit. Narnia and Mr Clarke also must pay the ACCC's costs.
In handing down the sentence in the criminal proceedings Justice Marshall found that the conduct of Mr Clarke and his company: "was in the nature of denial and the laying of a false trail."
Justice Marshall noted: "The nature and circumstances of each offence make it a serious transgression for Narnia and Mr Clarke."
Justice Marshall decided that a term of imprisonment for Mr Clarke would not be appropriate in this case given the plea of guilty and Mr Clarke having no prior convictions.
Justice Marshall also ordered Mr Clarke and his company to pay the prosecutor's costs in addition to the fines imposed.
ACCC Chairman, Mr Graeme Samuel, said: "The sentence imposed by the Federal Court showed that there were serious consequences for companies and individuals who attempt to mislead the ACCC by knowingly furnishing false or misleading information.
"The ACCC also gives priority to obtaining appropriate redress for affected consumers – in this case $10,000 in damages and a refund of deposit money paid."
The relevant sections of the Act are: Section 52 of the Act which prohibits a corporation engaging in misleading or deceptive conduct or conduct likely to mislead or deceive; Section 155 which gives the ACCC broad investigatory powers to obtain information, documents and evidence in relation to possible contraventions of the Act, and Section 155(5) of the Act which makes it an offence for a person to knowingly furnish information or evidence that is false or misleading in purported compliance with a section 155 Notice.