Australian Competition & Consumer Commission v Pest Free Australia Pty Ltd [2004] FCA 527

FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v Pest Free Australia Pty Ltd [2004] FCA 527 AUSTRALIAN COMPETITION & CONSUMER COMMISSION v PEST FREE AUSTRALIA PTY LTD (ACN 002 388 623) & ORS N1204 OF 2002 EMMETT J 30 APRIL 2004 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N1204 OF 2002

BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

APPLICANT

AND: PEST FREE AUSTRALIA PTY LTD (ACN 002 388 623)

FIRST RESPONDENT

RAYMOND DARCY CONNELL

SECOND RESPONDENT

DARREN CONNELL

THIRD RESPONDENT

JUDGE: EMMETT J

DATE: 30 APRIL 2004

PLACE: SYDNEY

REASONS FOR JUDGMENT THE PROCEEDING THE ALLEGED REPRESENTATIONS THE PROMOTIONAL LETTERS THE PASSAS LETTER THE SHOLZ LETTER THE FORSTER LETTER THE FORREST LETTER THE ROGOIANO LETTER NEWSPAPER ADVERTISEMENTS RADIO ADVERTISEMENTS THE PROMOTIONAL BROCHURE THE DOMESTIC FLYER THE LABEL THE COMMERCIAL FLYER THE OPERATION AND INFORMATION MANUAL THE COMPANY PROFILE BOOKLET THE WEBSITE TELEVISION ADVERTISEMENTS CONCLUSION

THE PROCEEDING 1 The first respondent, Pest Free Australia Pty Limited ('the Company'), carries on business as a manufacturer and supplier of electronic pest control devices for controlling and repelling rats, mice and cockroaches and, possibly, other insects and vermin. The Company, in the course of that business, supplies plug-in devices ('the Devices') to consumers and wholesale purchasers in Australia both for domestic use (' the Domestic Device') and for non-domestic use (' the Commercial Device'). The applicant, the Australian Competition and Consumer Commission ('the Commission'), asserts that, in connection with the supply or possible supply, or, the promotion of the supply of either or both the Domestic Device and the Commercial Device, the Company has published or caused to be published and distributed communications of various kinds in which it has made various representations concerning the Devices in contravention of Part V of the Trade Practices Act 1974 (Cth) ('the Act'). 2 The Commission had some difficulty in formulating its case against the Company. The Commission's case, in its final form, is pleaded in a Seventh Amended Statement of Claim ('the Statement of Claim'). The parties considered that it was desirable that certain issues be tried and determined separately from, and prior to, the determination of all other issues in the proceeding. Accordingly, I made an order under Order 29 of the Federal Court Rules. The order was the result of successive refinements of earlier orders made under Order 29. 3 The general thrust of the Commission's complaints is that the Company has represented that the Devices: * affect the sensitive metabolism of insects and vermin such as mice, rats and cockroaches, with the result that they cannot eat, sleep or breed; * cause the death, by dehydration and/or starvation, of insects and vermin such as mice, rats and cockroaches, if they are unable to escape the effects of the Devices. Many other representations are also alleged. They all relate to the operation and effect of the Devices. 4 The Commission says that, by making such representations, the Company has also represented that: * there is a reasonable foundation in scientific knowledge or testing for the statements so represented; and * the Devices have certain performance characteristics, uses or benefits. 5 The Commission alleges that, in contravention of s 52(1) of the Act, the Company made representations that were misleading or deceptive or likely to mislead or deceive. The Commission also alleges that, in contravention of s 53(c) of the Act, the Company has made representations that the Devices have performance characteristics, uses or benefits that they do not have.