Australian Competition and Consumer Commission v Fox Symes & Associates Pty Ltd (No 2) [2005] FCA 1251

REASONS FOR JUDGMENT 1 This is an application by the applicant for leave to amend its statement of claim filed in these proceedings. The history of this matter is set out in a judgment which I gave in Australian Competition and Consumer Commission v Fox Symes and Associates (2005) FCA 1071. In that judgment I traced the course of these proceedings and concluded that a number of representations alleged by the applicant to amount to misleading and deceptive conduct ought to be struck out. 2 I will not repeat what I said in that judgment. In particular, I struck out paragraphs 15 to 20 of the then statement of claim. Those paragraphs alleged misleading and deceptive conduct arising out of a series of advertisements which contained the expression, 'it's not bankruptcy'. I concluded in that earlier hearing that the imputations which were said to arise from the use of the words 'it's not bankruptcy' could not arise in law. For that reason, I struck out those paragraphs. 3 At the same time I criticised the pleader for failing to identify the precise words used in the advertisements which were to said to give rise to the misleading and deceptive conduct. The proposed amended statement of claim deals with the second of those issues. In paragraphs 15 to 20B, the pleader has identified precisely the words which are said to give rise to an imputation which is pleaded in paragraph 20. The pleader has set out the words in the body of the statement of claim itself and also annexed actual advertisements to the statement of claim. That criticism has been addressed. 4 The words which are relied on now to give rise to the imputation which I will mention shortly are the words: 'Debt relief for individuals'; 'It's not bankruptcy'; 'It's not a loan'; 'It's legal'; 'It releases you from your debts'. Those words have been used in a series of advertisements in newspapers and other publications and also in television advertisements. It is said in paragraph 20 that those words represented to persons in sections of the Australian public that Fox Symes offered services to persons in financial difficulty, arising from debts, which would enable them to be released from their debts without any consequences to them similar to the consequences that would result from them becoming bankrupt. 5 The imputation that is pleaded in paragraph 20 is that the words, to which I have already referred, meant to the persons reading or hearing those words that the respondent offered services to persons in financial difficulty arising from debts which would enable those persons to be released from their debts without any consequences to those persons similar to the consequences that would result from them becoming bankrupt. The pleader has identified the section of the Australian public to whom the advertisements were directed in particulars under paragraph 20. Those persons are: (a) persons with a relatively low income, low asset base and a limited ability to increase capacity; (b) unable to pay their debts as and when they fell due; (c) limited financial planning skills; (d) suffering or vulnerable to pressure from creditors; (e) suffering stress or anxiety as a consequence of financial difficulties; and (f) relatively low level of education and/or literacy. 6 For the purpose of the argument today that section of the Australian public particularised in paragraph 20 ought to be accepted. 7 Those persons are therefore persons who are presently insolvent and who are looking for some sort of relief. It is not pleaded, I think, that any of the actual words used in any of the advertisements are misrepresentations. I have said that I think that is the case, because the particulars given in paragraph 20 include the claim the representation in paragraph 20 is partly express and partly implied. In my opinion, there is nothing in any of the advertisements which would lead to a finding that those advertisements contain the express words to support the imputation which is pleaded. 8 If the imputation arises, it must be implied from the words to which I have referred. Mr Slattery QC and Mr Duggan, who appeared for the applicant, conceded that if I were to find that the imputation cannot arise at law then I should strike out the paragraphs to which the respondent takes objection. Otherwise it would lead to the rather perverse result that people would misunderstand the effect of the misrepresentation but be entitled to complain that the conduct of Fox Symes was misleading and deceptive. I think the concession was rightly made. 9 The only consequences which are pleaded are that the details of the debt agreement under Part IX would be entered on the National Personal Insolvency Index; and that as a result credit providers would give adverse credit ratings to persons listed on the National Personal Insolvency Index with debt agreements in the same terms: paragraph 20A. There is nothing, in my opinion, in the words 'It's not bankruptcy' that could lead to someone hearing those words or seeing those words to think that they would not be subject to an adverse credit rating by a credit provider if a credit provider was approached for credit after entering into a Part IX agreement. 10 In my opinion, the imputation pleaded cannot arise on the words which are relied upon for the imputation. There is nothing in those words which would lead anyone to think that whatever the process is being undertaken in that advertisement, would not lead to consequences similar to the consequences that would result in them becoming bankrupt. For those reasons, I think paragraph 20 cannot stand and has to be struck out. Paragraphs 15 to 20B cannot stand if the imputation is struck out. 11 For those reasons, leave should be given to file the statement of claim without including paragraphs 15 to 20B. 12 The orders of the court will be: 1. The applicant has leave to file an amended statement of claim in the terms of the amended statement of claim being annexure ESG1 to the affidavit of Emma Scotia Gill, save for paragraphs 15 to 20B for which leave is not granted. 2. The applicant to pay the first respondent's costs of the notice of motion. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander.