Hughes v Australian Competition & Consumer Commission [2002] FCA 915

FEDERAL COURT OF AUSTRALIA

Hughes v Australian Competition & Consumer Commission [2002] FCA 915 DAVID ZPG HUGHES v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION N 305 of 2002 SACKVILLE J 18 JULY 2002 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 305 OF 2002

BETWEEN: DAVID ZPG HUGHES

APPLICANT

AND: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

RESPONDENT

JUDGE: SACKVILLE J

DATE OF ORDER: 18 JULY 2002

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. The application for an extension of time to file and serve a notice of appeal be dismissed. 2. The applicant pay the respondent's costs of the application for an extension of time to file and serve a notice of appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 305 OF 2002

BETWEEN: DAVID ZPG HUGHES

APPLICANT

AND: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

RESPONDENT

JUDGE: SACKVILLE J

DATE: 18 JULY 2002

PLACE: SYDNEY

EDITED EX TEMPORE REASONS FOR JUDGMENT 1 This is an application for an extension of time in which to file and serve a notice of appeal from a judgment given by a Judge of this Court on 18 March 2002. The proceedings at first instance were brought by the Australian Competition and Consumer Commission ("ACCC") against the present applicant ("Mr Hughes"). 2 After a hearing that apparently lasted two days, the primary Judge made a series of declarations and restraining orders against Mr Hughes. The substance of those declarations is that Mr Hughes had engaged in conduct in trade or commerce through the use of telephonic services that was misleading or deceptive, or likely to mislead or deceive, contrary to s 52 of the Trade Practices Act 1974 (Cth) ("TP Act"). On his Honour's findings, Mr Hughes contravened s 52 in a number of respects but in particular by publishing or causing to be published advertisements at the Crowded Planet internet site located and associated with the domain name "http://www.crowded.org". Those advertisements represented to the public that: "(a) Crowded Planet could supply new or oral contraceptives at lower prices resulting in consumers saving money; and (b) uses of Microgynon AE 50 ED - "Can miss one"; and (c) the use of Noriday AE 28 has "nil side effects"." The primary Judge also found that Mr Hughes had made a number of other misrepresentations by virtue of material appearing on the internet site. 3 The restraining orders made by his Honour included orders preventing Mr Hughes offering oral contraceptives for sale in Australia without disclosing certain information specified in the orders. 4 The present application was made necessary because Mr Hughes did not seek to appeal against the declarations and orders made by the primary Judge until 15 April 2002. This means that his application was filed outside the time provided by Federal Court Rules, O 52 r 15. 5 A directions hearing was held on 1 May 2002 in connection with Mr Hughes' application for an extension of time to file and serve a notice of appeal. Mr Hughes was present on that occasion. Directions were made that he be given six weeks to file an amended proposed notice of appeal and any affidavits in support of his application. The hearing of the application for an extension of time to file and serve a notice of appeal was set down for today, that is 18 July 2002. 6 Since that directions hearing Mr Hughes has filed what I shall take to be a draft notice of appeal. He has also filed an affidavit in handwritten form which appears to be directed in part to some of the factual issues addressed by his Honour. The grounds identified in the draft notice of appeal are as follows: "(a) Breach of s 51(i) and s 99 of the Australian Constitution; (b) ACCC and Federal Court have no Constitutional power over State registered small business (c) ACCC and Federal Court have no jurisdiction over internet and email traffic carried on posts and telegraphs within the USA." 7 On 16 July 2002, Mr Hughes sent an email to my associate requesting what he described as "telephone directions" for today's hearing. He put a number of grounds forward to support this application. One of those grounds was that there was a warrant out for Mr Hughes' arrest from the Adelaide Magistrates Court and "the more I travel through the rest of SA the more likely I am to be picked up and arrested on the outstanding warrant". A copy of that email was sent to the Australian Government Solicitor. 8 In an email sent by my associate to Mr Hughes, a copy of which was provided to the solicitor for the ACCC, I declined Mr Hughes' request. I noted that one of his reasons for seeking a telephone directions hearing was his concern about being arrested on the outstanding warrant. I took the view that it would be inappropriate for the Court to order a telephone hearing where one reason for the request for such a hearing the applicant's desire was to minimise the risk of apprehension on an outstanding warrant from another Australian court. 9 When the matter was called today Mr Hughes did not appear. I adjourned the proceedings for a short time in order to provide a further opportunity for Mr Hughes to appear in case he had been delayed. It is now nearly 10.30 am and Mr Hughes has not appeared. An attempt to make telephone contact with him this morning was unsuccessful. In these circumstances it seems to me that the appropriate course is to proceed with the application for an extension of time in Mr Hughes' absence. 10 Mr McNeilly, who appeared on behalf of the ACCC, has acknowledged that if the only question was whether Mr Hughes had provided an excuse for his failure to lodge a notice of appeal within the time specified by the rules there might be no sound basis for resisting the application for an extension of time in which to file and serve a notice of appeal. Mr McNeilly submits, however, that Mr Hughes has not demonstrated any arguable basis for a successful appeal. In my opinion that submission is made out. 11 Insofar as the draft notice of appeal refers to the Constitution it raises no arguable issue. To the extent that Mr Hughes' affidavit seeks to raise factual issues addressed by the primary Judge, I do not think that the affidavit identifies any arguable point for the consideration of a Full Court. The remaining issue identified in the notice of appeal is whether the Federal Court has jurisdiction over internet and email traffic carried on post and telegraphs within the United States. 12 The primary Judge addressed the question of jurisdiction and power at [77]-[80] of the judgment. His Honour held that, although the representations made by Mr Hughes were on an internet site that was "based" in the United States, the Court nonetheless had power to grant relief pursuant to ss 5 and 6 of the TP Act. Although his Honour did not specifically refer to s 6(3) of the TP Act, it is clear from his analysis that he intended to invoke that section. 13 Section 6(3)(a) provides that, in addition to the effect that the TP Act otherwise has, the provisions of the relevant parts of Pt V of the Act have the effect that they would have if those provisions were, by express provision, confined in their operation to engaging in conduct to the extent to which the conduct involves the use of postal, telegraphic or telephonic services or takes place in a radio or television broadcast. Section 6(3)(b) of the TP Act further provides that a reference in the relevant provisions of Pt V to a corporation includes a reference to "a person not being a corporation". 14 The primary Judge found that the representations made by Mr Hughes were placed on the website using postal, telegraphic or telephonic services and were thereby made available for people to see by visiting the site. His Honour also found that Mr Hughes had placed on the site misleading or deceptive material with the intention that consumers in Australia and elsewhere would use telephonic services to access that information and rely upon it. Nothing in the material provided by Mr Hughes casts doubt upon those findings. 15 On the basis of those findings I am not satisfied that there is an arguable issue raised as to the scope of the TP Act. I observe, for example, that in Data Flow Computer Services Pty Limited v Goodman (1999) ATPR 41-730 at 43, 468, Hely J noted that it had been common ground in that case that s 52 of the TP Act applied to the sending of email by virtue of s 6(3)(a) of the TP Act. 16 In these circumstances the appropriate course is to dismiss the application for an extension of time in which to file and serve the notice of appeal. Mr Hughes must pay the ACCC's costs. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville.