Australian Competition and Consumer Commission v Bon Levi [2008] FCA 68

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Bon Levi [2008] FCA 68 AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v BON LEVI and CRAIG CLEARY QUD 155 OF 2004

SIOPIS J

14 FEBRUARY 2008

PERTH IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY QUD 155 OF 2004

BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Applicant

AND: BON LEVI

First Respondent

CRAIG CLEARY

Second Respondent

JUDGE: SIOPIS J

DATE OF ORDER: 14 FEBRUARY 2008

WHERE MADE: PERTH

THE COURT ORDERS THAT:

1 The first respondent's notice of motion filed 30 October 2007 is dismissed. 2 Costs are reserved. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY QUD 155 OF 2004

BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Applicant

AND: BON LEVI

First Respondent

CRAIG CLEARY

Second Respondent

JUDGE: SIOPIS J

DATE: 14 february 2008

PLACE: PERTH

REASONS FOR JUDGMENT 1 On 28 February 2005 Kiefel J made orders on the application of the applicant (ACCC) restraining the first respondent, Mr Bon Levi, from offering and entering into franchise agreements in respect of a number of businesses associated with Mr Levi. The ACCC claims that Mr Levi breached those orders and on 13 June 2007 commenced a proceeding in this Court alleging contempt of court by Mr Levi. 2 By a notice of motion filed on 30 October 2007, Mr Levi seeks to stay the further prosecution of the contempt proceeding against him on the grounds that he is indigent and through no fault of his own is unable to obtain legal representation to defend the allegations made against him in that proceeding. He relies upon the principle in Dietrich v The Queen (1992) 177 CLR 292 (Dietrich). 3 There are two main issues, namely: 1 whether Mr Levi has established that he is indigent and that through no fault of his own he is unable to obtain legal representation; and 2 whether the Dietrich principle applies to a proceeding for contempt of court. 4 Mr Levi relied upon three affidavits filed on 30 October 2007, 17 January 2008 and 25 January 2008 respectively. Mr Levi was cross‑examined. The ACCC relied upon the affidavits of Mr Guy Timothy Launder and Ms Cherry Kay Roza. They were not cross‑examined. Has Mr Levi shown he is indigent? 5 I turn to the first question. Mr Levi deposed that he was bankrupt and was "employed as a marketing consultant by Australian Massage Trust, trading as Bikini Girls Massage". He said that he was paid $500 cash per week. In addition, Mr Levi said he was, until October 2007, provided with rent free accommodation at the back of the Bikini Girls' premises at Applecross. He said that he subsequently moved to a house in Sanctuary Waters and pays $110 per week in rent. His other weekly outgoings are $150 for food, $90 for entertainment and $150 for family. Mr Levi said that his wife, Mrs Susan Heelan, lives in Queensland and works as a nurse in the Gold Coast. He said that he has sent her monies on a regular basis to assist with living expenses and to enable her to fly to meet him from time to time in Melbourne or Perth. He also said that his employment with the massage business had caused him to travel four times since October 2006. His reasonable expenses in respect of that travel were paid by the Australian Massage Trust. Mr Levi deposed that he was unable to afford legal representation to defend the contempt of court proceeding. 6 Mr Levi said that he had made a number of attempts to obtain legal representation for the contempt proceeding. He had made unsuccessful applications to each of Legal Aid Queensland and Legal Aid Western Australia for legal assistance in respect of the contempt proceeding. He has also written to a number of private lawyers as to whether they would be prepared to act for him pro bono. In each of the letters that he wrote requesting assistance from the private lawyers, he said that in his view, the trial was likely to last two weeks. None of the lawyers responded favourably to Mr Levi. 7 Mr Levi said the he was employed by the Australian Massage Trust that conducted the Bikini Girls massage business from a number of locations in the Perth metropolitan area. 8 Mr Levi admitted that he was the appointor of the Australian Massage Trust. The object of the Trust is to trade as "Bikini Girls Massage". The sequestration order in respect of Mr Levi was made on 27 September 2006. The Australian Massage Trust Deed records that Mr Levi signed the Trust Deed as appointor on 1 August 2006. One of the two trustees of the Australian Massage Trust is Mr Michael Coyne who resides in Melbourne. The other trustee is Mr Levi's wife, Mrs Heelan. Mr Levi is also named in the Trust Deed as the beneficiary of the trust on behalf of his grandson. 9 Mr Levi is also the appointor of the Prestige Auto Trust. One schedule to the Prestige Auto Trust Deed records that the trust was established on 1 October 2006. A second schedule to the Trust Deed stated that as of 14 August 2007, there were three motor vehicles held by trust. These were a Chevrolet Corvette V8 ‑ registration number 1CLO 652, a blue Mercedes‑Benz ‑ registration number 1ALZ 262 and a pink panel van – registration number 1BNO 490. 10 Mr Launder deposed that he had carried out an investigation into the affairs of Mr Levi. He annexed to his affidavit copies of a number of documents which he had obtained in the course of his investigations. One of these documents is the lease of the premises at 901 Canning Highway, Applecross from which the Bikini Girls massage business operates in Applecross. The lease was entered into on the 16 September 2006 and is signed by Mr Levi as the lessee. There was an assignment of the lease by Mr Levi on 14 June 2007 to himself and his wife jointly. Further Mr Launder exhibited correspondence between Mr Levi and the managing agents of the leased property which demonstrated that it was Mr Levi who had dealt with the managing agents in respect of the leased premises. 11 Mr Launder also annexed to his affidavit, an application for the registration of a business name "Bikini Girls Massage and Sauna" with the Western Australian Department of Consumer and Employment Protection in respect of a business to be carried out at 901 Canning Highway, Applecross. This document records that the application was made by Mr Levi on 31 October 2006, and he described himself as the person who would or did carry on the business. Subsequently, Mr Levi filed a notice of cessation of the use of that name with effect from 4 May 2007. However, Mr Launder also annexed an application for registration of a business name "Bikini Girls Massage" in respect of a business to be carried out at 901 Canning Highway, Applecross and at Shop 4, 1251 Hay Street, West Perth. The commencement date of the business was shown to be 4 May 2007. The applicant for the business name was recorded as Cherry Kay Roza. 12 Mr Launder also annexed to his affidavit correspondence which shows that it was Mr Levi who dealt with Ms Tan, acting as agent for the landlord, in respect of the lease of the premises at 1251 Hay Street, West Perth, from which a Bikini Girls massage business was conducted. 13 Inquiries by Mr Launder also revealed that it was Mr Levi who on 8 November 2006 made a "Planning Approval Application" to the City of Melville in respect of the Bikini Girls massage business which is conducted from the Applecross premises. Mr Launder also annexed a number of letters demonstrating that it was Mr Levi who corresponded with the City of Melville in respect of this planning approval application. 14 Ms Cherry Roza deposed that she worked as a masseuse at the Bikini Girls business at Applecross for about a year between June 2006 and July 2007. Ms Roza deposed that: During the whole time that I worked at Bikini Girls, Bon was in charge of the business and made all of the decisions about the business. He was in charge of the day‑to‑day running of the business and told me and the other girls what to do. 15 Ms Roza also deposed that Mr Levi handled all the expenses of the business and paid them all in cash and that she never saw Mr Levi with a bankcard or credit card. Mr Levi also drafted the brochures and flyers for the Bikini Girls businesses and paid to have them printed at a place either in the City or in Victoria Park. Mr Levi set the prices for the massages. A 40 minute massage cost the client $66. The masseuse would get $22 of that sum and Mr Levi would keep $44. The clients had to pay cash as there were no credit card or EFTPOS facilities available on the premises. Ms Roza said that: When the client paid the girls, we were instructed by Bon to put the money in an envelope and put it in a drawer or, later, a cash box that was screwed to the table. We had to put all the money we received for the massage, the $66, into the drawer and Bon would sort out our payment at the end of the night.