FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v Roberson [2008] FCA 1735 PRACTICE AND PROCEDURE – application for orders on default under Order 35A rule 3(2)(c) TRADE PRACTICES – appropriate relief for non-compliance with an undertaking given under s 87B(1) Trade Practices Act 1974 (Cth)ss 87B(1) and 87B(4) Federal Court Rules O4 r8, O9 r2(1) and r2(2),O11 r20, O35A r2(2), O35A r 3(2) and O35A r3(2)(c) Federal Court of Australia Act 1976 (Cth) s 21 Universal City Studios LLLP v Hoey t/as DVD Kingdom (2006) 232 ALR 525 Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd (ACN 075 400 529) (2006) ('Dataline.net.au') 236 ALR 665 Bank of Kuwait and the Middle East v Ship MV "Mawashi Al Gasseem" (No 2) (2007) 240 ALR 120 Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd (in liquidation) (2007) 161 FCR 513 Australian Competition and Consumer Commission v Storesonline International, Inc (2007) ATPR 48,236 Hadgkiss v Aldin (No 2) (2007) 169 IR 76 AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v RICHARD ALEXANDER ROBERSON NSD 1290 of 2008 GRAHAM J 4 NOVEMBER 2008 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1290 of 2008 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: RICHARD ALEXANDER ROBERSON Respondent JUDGE: GRAHAM J DATE OF ORDER: 4 NOVEMBER 2008 WHERE MADE: SYDNEY THE COURT: 1. Declares that the respondent (also known as Richard James) has breached paragraph 11 of the undertaking pursuant to section 87B of the Trade Practices Act 1974 (Cth) ("the Act") executed by him and accepted by the applicant on 2 April 2008 (the Undertaking), by failing to provide the letter in the form and terms of "Annexure A" to the Undertaking (see Schedule 1 hereto) to all persons for whom he had address information and who had subscribed to the service that the respondent trading as Backpacker Employment Services (BES) offered in the period from May 2007 to October 2007 (inclusive), within 30 days of the Undertaking coming into effect, or at all. 2. Declares that the respondent (also known as Richard James) has breached paragraph 12 of the Undertaking, as he did not cause to be published in either the Manning River Times or the Port Macquarie News a consumer notice in the form and terms of "Annexure B" to, and paragraph 12 of, the Undertaking within 30 days of the Undertaking coming into effect, or at all. 3. Declares that the respondent (also known as Richard James) has breached paragraph 16 of the Undertaking, by failing to attend practical trade practices training focusing on sections 52, 53(c) and (d) and 53B of the Act (Trade Practices training), within 2 months of the Undertaking coming into effect, or at all. 4. Declares that the respondent (also known as Richard James) has breached paragraph 18 of the Undertaking, by failing to provide to the applicant a written statement or certificate from the trade practices professional who conducts the Trade Practices training referred to in paragraph 16 of the Undertaking to the applicant within 14 days of completion of the training verifying that such training has occurred, with such written statement or certificate outlining: (a) the title of the training seminar; (b) the name of the person(s) who conducted the training seminar; and (c) the date of attendance at the training seminar. 5. Declares that the respondent (also known as Richard James) has breached paragraph 19 of the Undertaking, by failing to: (a) develop procedures for recording, storing and responding to trade practices complaints (complaint handling system); and (b) provide the applicant with an outline of the complaint handling system developed, within 2 months of the Undertaking coming into effect, or at all. 6. Declares that the respondent (also known as Richard James) has breached paragraph 20 of the Undertaking, by failing to provide to the applicant copies of documents or information in respect of: (a) the Trade Practices training; and (b) the complaint handling system, in response to the applicant's request of 29 July 2008. 7. Orders that the respondent communicate with each of the persons whose names and telephone numbers are listed in Schedule 2 hereto on or before 28 November 2008 by telephoning each of those persons and reading a statement to each of them in accordance with the terms of Schedule 3 hereto. 8. Orders pursuant to section 87B(4) of the Act that the respondent cause to be published within 21 days of the date of these Orders, a consumer notice in the form and terms of Schedule 4 to these Orders, with such notice to be: (a) published in the following newspapers: (i) Manning River Times; and (ii) Port Macquarie News; (b) of a size not less than 12cm x 10cm; (c) in text which is in a type size not less than 8 point; (d) published in the employment section; and (e) published once in each of the above newspapers. 9. Orders pursuant to section 87B(4) of the Act that the respondent will within 14 days after the publication of the relevant notices, provide the applicant with written evidence of the consumer notice he has caused to be published pursuant to Order 9 above, by providing to the applicant a copy of the consumer notice which has been published in each of the Manning River Times and Port Macquarie News. 10. Orders that the respondent pay the applicant's costs of the application and of the motion. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court's website. Schedule 1 Schedule 2 Name Telephone number Hollie Mason 0406942489 Tyron Pigors 0420590984 Laura Chappell 0420590984 Matt Coward 0431962770 Kai Taylor 0424313062 Jane Harwick 0414073889 Donna Bates 0410961625 Dale Raiston 0406624191 Johana Norberg 0406624191 Samma Roylance 042440915 Criss Jefford 042440915 Kian & Bee Chain 0141526413 Lauren Andrew 0422772282 Cassandra Green 0424421922 Kimbery Chohesy 0401644520 Michelle Pender 0421942310 David Brown 0437592941 Ben Hicks 0403276960, (02)658113897 Russell McKelvey 0432439478 Jade Stace 0409666014 Andrew Bitmead 0428149622 Whane Bowen 0406745188 Bret Boyden 0429834627 Rob Lassing 0419249170 David Brown 0437592941 Schedule 3 It is Richard Roberson from Backpackers Employment Services calling. I'm also known as Richard James. My address is 90 Seafront Circuit, Bonny Hills, NSW, 2445 From about May 2007 to October 2007 I made certain representations in relation to the availability of fruit picking jobs for a period of between 6 to 12 months in a variety of locations from Taree in NSW to Queensland. I also made representations to employment agencies in Taree and to some subscribers directly, including the following: * From July 2007 there would be between 200 and 300 fruit picking jobs available at the Moorland Orange Juice Orchard; * I could supply fruit picking jobs to persons in a variety of locations if they agreed to subscribe to BES at a cost of $50 for a 6 month subscription or $100 for a 12 month subscription; and * I could guarantee employment to those persons who subscribed to BES for the period of their subscription. These representations may have influenced your decision to subscribe to BES. The ACCC considers that the representations referred to above may be misleading and in breach of sections 52, 53(c) and (d) and 53B of the Trade Practices Act 1974. At the time I made the representations I was not able to offer fruit picking jobs for a period of 6 to 12 months and I had no arrangement with Moorland Orchard whereby it was able to offer the number of jobs claimed. Further, subscribing to BES did not ensure that employment would be available for the period of the subscription. In order to address its concerns, I have given a court enforceable undertaking to the ACCC. As part of this undertaking, I agreed to: * offer a refund of the total subscription fee paid to those subscribers who did not retain employment for the period of their subscription; * refrain from making similar representations in the future if they are not true or if I don't have reasonable grounds for making them, and * implement a trade practices compliance program. If you subscribed to BES and wish to obtain a refund of your subscription fee, please send your request for a refund in writing to: Mr Richard Roberson Backpackers Employment Services 1/90 Seafront Circuit Bonny Hills NSW 2445. You should remember to include in your request, your name, contact details, the date on which you subscribed to BES and the details of your employment, if any, during your subscription. I am offering a refund to subscribers until 31 March 2009. You should, therefore, ensure that your request for a refund is received by no later than this date. You will also be required to prove that you were not employed for the period of your subscription (e.g. by way of statutory declaration). If you want to obtain a copy of what I have just said you may care to contact Fiona Grant at the Sydney Office of the Australian Competition and Consumer Commission, GPO Box 3648, Sydney, NSW, 2001 Schedule 4 TEXT OF CONSUMER NOTICE TO APPEAR IN NEWSPAPERS: CONSUMER NOTICE FROM RICHARD ALEXANDER ROBERSON AND BACKPACKER EMPLOYMENT SERVICES In mid-2007 I made certain representations that may have influenced people's decision to subscribe to Backpacker Employment Services (BES). These representations related to the availability and duration of fruit picking jobs in a variety of locations from Taree in NSW to Queensland. In particular, that that there would be available between 200 and 300 fruit picking jobs at the Moorland Orange Juice Orchard and that a subscriber to BES would be guaranteed employment for the length of their subscription. The ACCC considers that by making these representations in circumstances where such jobs were not available as claimed and the absence of reasonable grounds upon which to base the representations, I engaged in misleading conduct in breach of the Trade Practices Act 1974. In order to address its concerns, I gave a court enforceable undertaking to the ACCC. As part of this undertaking, I agreed to offer a refund of the total subscription fee paid to those subscribers who did not retain employment for the period of their subscription. If you subscribed to BES and wish to obtain a refund of your subscription fee, please send your request by 31 March 2009 in writing to: Mr Richard Roberson / Richard James Backpackers Employment Services 1 -90 Seafront Circuit Bonny Hills NSW 2445. Remember to include in your request, your name, contact details, the date on which you subscribed to BES and the details of your employment, if any, during your subscription. Proof that you were not employed for the length of your subscription will also be required (e.g. by way of statutory declaration). If you have any queries about this notice, please call Richard on 0415 357 137. This notice has been paid for by BES and placed by order of the Federal Court. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1290 of 2008 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: RICHARD ALEXANDER ROBERSON Respondent JUDGE: GRAHAM J DATE: 4 NOVEMBER 2008 PLACE: SYDNEY REASONS FOR JUDGMENT 1 Under Order 9 rule 2(1) of the Federal Court Rules ('the Rules') a respondent is required to enter an appearance before the date appointed for a directions hearing and before filing any document. 2 Section 87B(1) of the Trade Practices Act 1974 (Cth) ('the Trade Practices Act') makes provision for the proffering of undertakings to the Australian Competition and Consumer Commission ('the ACCC'), the applicant in these proceedings, and for the acceptance thereof, by the ACCC. Section 87B(1) provides: '87B(1) The Commission may accept a written undertaking given by a person for the purposes of this section in connection with a matter in relation to which the Commission has a power or function under this Act (other than Part X).' 3 On 25 March 2008, the respondent, Richard Alexander Roberson, who is also known as Richard James, proffered an undertaking to the ACCC, which was accepted by it on 2 April 2008. On or about 30 May 2008, the respondent had a conversation with Sandra Irene Haywood, a Classified Sales Consultant for the 'Port Macquarie News' in which the respondent said words to the effect, 'I changed my name to James'. 4 Section 87B(4) of the Trade Practices Act, permits the Court to make orders in circumstances where it is satisfied that a person has breached a term of an undertaking, given to the ACCC in accordance with s 87B(1). 5 By an Application filed 15 August 2008, supported by a Statement of Claim, also filed 15 August 2008, the ACCC has sought orders under s 87B(4) of the Trade Practices Act and declarations under s 21 of the Federal Court of Australia Act 1976 (Cth) said to arise from breaches, by the respondent, of terms of the undertaking of 25 March 2008 which was accepted by the ACCC on 2 April 2008. The Application took the form prescribed by Form 5 of the Federal Court Forms and specified as the time and date for hearing, 9.30 am on 1 September 2008, being a date upon which it was open to the Court to give directions for the further hearing of the proceeding. 6 Under Order 4, rule 8 of the Rules, provision is made for an applicant to state a date for a directions hearing in an Application, and I am satisfied that by the words of the Application presently before the Court, 1 September 2008 was stated as the relevant date for a directions hearing in this matter. 7 Under Order 9, rule 2(1) of the Rules, a respondent is required to enter an appearance 'before the date appointed for a directions hearing' although it is permissible for an appearance to be entered thereafter, in accordance with Order 9, rule 2(2) of the Rules. 8 No appearance was entered in this matter by the respondent on or before 1 September 2008, nor has any appearance been entered since that date. 9 Under Order 35A of the Rules, it is open to the Court to deal with a matter such as this in a certain way if a respondent is 'in default' (see Order 35A, rule 3(2)). Under Order 35A, rule 2(2), a respondent is in default for the purposes of Order 35A, if the respondent has not satisfied the applicant's claim and: '(a) the time for the respondent to enter an appearance has expired and the respondent has failed to enter an appearance; or (b) the time for the respondent to file a defence has expired and the respondent has failed to file a defence; … …' 10 Under Order 11, rule 20 of the Rules, a respondent is required to file a defence within seven days after the directions hearing where the Application was accompanied by a Statement of Claim, as was the case in the present proceedings. The first directions hearing in this matter took place on 1 September 2008. No Defence had been filed by the respondent by that date or within seven days thereafter. 11 In the circumstances, the respondent was 'in default' for the purposes of Order 35A. 12 By a Notice of Motion filed 14 October 2008, the applicant has sought an order that the Court give judgment against the respondent for the relief sought in the Application, in accordance with Order 35A, rule 3(2)(c) of the Rules. 13 Order 35A, rule 3(2)(c) provides: '(3)(2) If a respondent is in default, the Court may: … (c) if the proceeding was commenced by an application supported by a statement of claim … - give judgment against the respondent for the relief that: (i) the applicant appears entitled to on the statement of claim; (ii) the Court is satisfied it has power to grant; …' 14 Detailed consideration has been given by various judges of the Court to the operation of Order 35A, rule 3(2)(c), its meaning and the circumstances in which the discretion which it confers should be exercised. Order 35A was inserted into the Rules towards the end of 2004. 15 Sackville J gave consideration to rule 3 in Universal City Studios LLLP v Hoey t/as DVD Kingdom (2006) 232 ALR 525 at [8] – [10]. It is unnecessary to refer to the observations which fell from his Honour in that case, as later authority has established a clear line of approach which should be adopted in relation to matters arising under Order 35A, rule 3(2)(c). 16 On 3 November 2006, Kiefel J, then a judge of this Court, considered the rule in Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd (ACN 075 400 529) (2006) ('Dataline.net.au') 236 ALR 665 at [45] – [50]. Her Honour also gave consideration to the desirability of orders being made in respect of participation in a trade practice compliance program at [96] – [99]. Her Honour did not consider it a proper use of the Court's power to require the physical attendance of a person for the purpose of re-education. She pointed out that there are a number of objections to it and also pointed out that it raised questions as to supervision and enforcement (at [99]). 17 Following the judgment of Kiefel J, but before consideration of that matter on appeal, Order 35A rule 3 was further considered by Mansfield J in Bank of Kuwait and the Middle East v Ship MV "Mawashi Al Gasseem" (No 2) (2007) 240 ALR 120. His Honour referred to the reasons for judgment of Keifel J in Dataline.net.au and observed that the rule conferred a power in the Court which was discretionary as to whether relief, as sought, should be granted. His Honour proceeded to make declaratory orders, as sought, founded upon what he referred to as 'deemed admissions' on the relevant Statement of Claim. 18 An appeal from Kiefel J's judgment in Dataline.net.au came before a Full Court comprising Moore, Dowsett and Greenwood JJ, whose judgment was handed down on 7 September 2007 (see Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd (in liquidation) (2007) 161 FCR 513). Their Honours summarised the process of reasoning of Kiefel J and, as I would understand it, expressed their approval of the approach which her Honour had advocated (see for example at [57]). At [42] the Full Court under the heading 'Order 35A, r 3(2)(c) principles' said '42 Order 35A, r 3(2)(c) of the Federal Court Rules predicated upon an event of default (O 35A, r 2(2)) contemplates that judgment may be given against a respondent for relief to which the applicant appears entitled "on the statement of claim" and the Court is satisfied it has "power to grant". In determining the relief, O 35A permits regard to be had to the "face of the statement of claim"; no evidence need be adduced to prove the factual contentions; allegations of fact in the statement of claim are deemed admitted ([45]); and although such admissions are generally taken as made only for the purpose of the relief sought by the statement of claim, O 35A consistent with O 35 contemplates judgment for relief not necessarily claimed in the pleading but nevertheless open on the facts deemed admitted ([47]). The terms of the rule suggest that recourse is not appropriate to affidavit evidence of additional facts to those alleged in the statement of claim ([48]). Although the ACCC contended that affidavit evidence of facts not customarily alleged in the statement of claim might be adduced ([48]) on a hearing as to relief and the observations of Lord Woolf MR in Phonograhic Performance Ltd v Maitra (1998) 41 IPR 225 at 230-231 suggest that as to discretionary relief evidence of relevant facts going to the exercise of the discretion should be properly before the Court, evidence which would alter the pleaded case should not be admitted ([50]). The fourth respondent accepted that further affidavit material might be accepted by the Court in relation to the relief sought ([50]). Regard ought not to be had to evidence of facts which could have been but were not pleaded concerning the conduct of the respondents. Regard ought not to be had to evidence of a further purpose of Mr Russell in connection with Dataline's conduct of resale price maintenance to undercut prices charged by VISPs to customers so as to attract those customers to Australis ([51]). Evidence as to the present circumstances of Mr Russell is relevant and admissible in the determination of a pecuniary penalty ([51]). Mr Russell continues to work in the same type of business as that conducted by Dataline and Australis ([90]).' (The numbers identified in square brackets through the passage quoted above, are references to paragraph numbers in the judgment of Kiefel J at first instance.) 19 The next case to which reference should be made is Australian Competition and Consumer Commission v Storesonline International, Inc (2007) ATPR 48,236, a judgment of Tamberlin J, in which his Honour considered the appropriate scope of relief where there had been contraventions of terms of an undertaking given and accepted in that case. 20 The final case to which reference needs be made is Hadgkiss v Aldin (No 2) (2007) 169 IR 76; a judgment of Gilmour J which was handed down on 20 December 2007. In that case his Honour made reference at [9] to the judgment of the Full Court in Dataline.net.au at [42]. His Honour also gave consideration at [19]-[23] to the appropriateness of declaratory relief on deemed admitted facts. 21 The undertaking proffered by the respondent to the ACCC on 25 March 2008, which was accepted by the respondent on 2 April 2008, was set out as attachment 1 to the Statement of Claim filed 15 August 2008 as follows: 'TRADE PRACTICES ACT 1974 UNDERTAKING TO THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION GIVEN FOR THE PURPOSES OF SECTION 87B BY RICHARD ALEXANDER ROBERSON PERSON GIVING UNDERTAKING (1) This Undertaking is given to the Australian Competition and Consumer Commission (the ACCC) by Mr Richard Alexander Roberson of 1-90 Seafront Circuit, Bonny Hills in the State of New South Wales under section 87B of the Trade Practices Act 1974 (the Act). BACKGROUND (2) Mr Richard Alexander Roberson (Mr Roberson) carries on a business registered in the Australian Capital Territory (ACT F00122516) known as Backpacker Employment Services and a business registered in Queensland known as Backpackers Employment Service Transport (QLD BN20015938) (collectively referred to in this Undertaking as BES). BES is a small business which provides employment services to unemployed persons, including those with disabilities, in regional centres in New South Wales and Queensland. (3) During the period from about May 2007 to October 2007, Mr Roberson published or caused to be published, advertisements in a variety of media, including on the internet, offering fruit picking jobs. Mr Roberson represented in the advertisements that fruit picking jobs were available for a period of between 6 to 12 months in a variety of locations from Taree in New South Wales to Queensland. (4) During telephone conversations with employees of employment placement agencies in the Taree area, and to some subscribers directly, Mr Roberson also represented that: (a) he would have between 200 and 300 fruit picking jobs available from July 2007 at Moorland Orange Juice Orchard, Moorland, NSW (Moorland Orchard) offering the rate of pay of$16 per hour or $30 per bin, including accommodation; (b) he could supply fruit picking jobs to unemployed persons in a variety of locations if they agreed to subscribe to BES at a cost of $50 for a 6 month subscription or $100 for a 12 month subscription; and (c) he could guarantee employment to those persons who subscribed to BES for the length of their subscription. The ACCC's enquiries (5) The ACCC's enquiries revealed that insofar as the representations were in respect of future matters, Mr Roberson did not have reasonable grounds for making the representations. In particular, Mr Roberson had no arrangement with Moorland Orchard whereby that business would provide employment to any fruit pickers referred to it by Mr Roberson. Further, Moorland Orchard intended to offer four or five fruit picker jobs which were to be available from September 2007 for a period of up to two weeks. More generally, Mr Roberson had no reasonable grounds for representing that he would offer fruit picking jobs to subscribers for the period of their respective subscriptions. The ACCC's concerns (6) The ACCC was concerned that the representations made by Mr Roberson and referred to in paragraphs 3 and 4 above were likely to mislead consumers as to the availability, terms and conditions of employment opportunities he claimed to exist, particularly employment opportunities at the Moorland Orchard. The ACCC considered that by making these representations Mr Roberson engaged in conduct in contravention of sections 52, 53(c) and (d) and 53B of the Act. (7) In order to address the ACCC's concerns, Mr Roberson has offered to give this undertaking to the ACCC. COMMENCEMENT (8) This undertaking comes into effect when: (a) The undertaking is executed by Mr Roberson; and (b) The ACCC accepts the Undertaking so executed. (9) Upon the commencement of this Undertaking, Mr Roberson undertakes to assume the obligations set out below. UNDERTAKINGS (10) Mr Roberson hereby undertakes for a period of 3 years from the date of this Undertaking coming into effect, for the purposes of section 87B of the Act, that he will immediately cease and thereafter refrain from making representations to the effect that: (a) the services provided by BES have sponsorship or approval by Moorland Orchard or any other entity in circumstances where this is not the case; (b) BES has sponsorship, approval or affiliation with Moorland Orchard or any other entity in circumstances where this is not the case; (c) BES is able to provide employment to its subscribers in a variety of locations from Taree to Queensland, or any other locations, in circumstances where this is not the case and/or he does not have reasonable grounds for making such representations; and (d) BES is able to guarantee employment to its subscribers for the length of their subscription, in circumstances where this is not the case and/or he does not have reasonable grounds for making such representation. (11) Mr Roberson also undertakes that he will, at his own expense: (a) within 30 days of this Undertaking coming into effect, cause to be sent to all persons, for whom he has address information for, and who subscribed to BES in the period from May 2007 to October 2007 (inclusive), a letter in the form and terms of "Annexure A", subject only to such variations as may be agreed to by the ACCC in writing; and (b) within 45 days of this Undertaking coming into effect, provide the ACCC with a schedule in writing which lists the name and contact details of each subscriber to whom a letter has been sent pursuant to subparagraph 11(a) above. (12) Within 30 days of the date of this Undertaking coming into effect, Mr Roberson will, at his own expense, cause to be published a consumer notice in the form and terms of "Annexure A", subject only to such variations as may be agreed to by the ACCC in writing. Such notice will be: (a) published in the following newspapers: (i) Manning River Times; and (ii) Port Macquarie News; (b) of a size not less than 12cm x 10cm; (c) in text which is in a type size not less than 8 point; (d) published in the employment section; and (e) published once in each of the above newspapers. (13) In the event that Mr Roberson receives a request for a refund from a person in response to the consumer notice required to be sent or published pursuant to paragraphs 11 or 12 above, Mr Roberson will refund the full subscription price paid by that person to him or BES, so long as the request is received by Mr Roberson within 6 months of the date of this Undertaking coming into effect and the person is able to prove by way of statutory declaration or otherwise that they were not employed for the period of their subscription. (14) Mr Roberson will, within 2 weeks from the end of the 6 month period starting from the date of this Undertaking coming into effect, provide the ACCC with a report giving details of the total refunds sought, the number of refunds processed and approved and the total value of the refunds. TRADE PRACTICES COMPLIANCE PROGRAM (15) Mr Roberson, at his own expense, will implement a Trade Practices Compliance Program covering sections 52, 53(c) and (d) and 53B of the Act in accordance with the requirements set out below and will maintain and continue to implement the Trade Practices Compliance Program for a period of 3 years from the date of the Undertaking coming into effect. Training (16) Within 2 months of this Undertaking coming into effect, and thereafter at least once a year for the period of the Undertaking, Mr Roberson will attend practical trade practices training focusing on sections 52, 53(c) and (d) and 53B of the Act. (17) Mr Roberson will ensure that the training referred to in paragraph (16)(a) above is administered by a suitably qualified, compliance professional or legal practitioner with expertise in trade practices law. (18) Mr Roberson will provide a written statement or certificate from the trade practices professional who conducts the training referred to in paragraph (16) above to the ACCC within 14 days of completion of the training verifying that such training has occurred. The statement or certificate will outline: (a) the title of the seminar; (b) the name of the person(s) who conducted the seminar; and (c) the date of attendance at the seminar. Complaints handling (19) Mr Roberson will: (a) develop procedures for recording, storing and responding to trade practices complaints within two months of this Undertaking coming into effect; and (b) provide the ACCC with an outline of the complaint handling system developed within two months of the Undertaking coming into effect. (20) If requested by the ACCC, Mr Roberson will provide, at his own expense, copies of any other documents or information in respect of matters which are the subject of the Compliance Program. ACKNOWLEDGMENTS (21) Mr Roberson acknowledges that the ACCC will make this Undertaking available for public inspection. (22) Mr Roberson further acknowledges that the ACCC will from time to time publicly refer to this Undertaking. (23) Mr Roberson further acknowledges that this Undertaking in no way derogates from the rights and remedies available to any other person arising from the alleged conduct. Signed by Richard Alexander Roberson [signed] …………………………………. Richard Alexander Roberson Dated this 25 day of 3 2008 ACCEPTED BY THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION PURSUANT TO SECTION 87B OF THE TRADE PRACTICES ACT 1974. [signed] …………………………………. Graeme Julian Samuel Chairman Dated this 2d day of April 2008 ANNEXURE A TEXT OF LETTER TO SUBSCRIBERS [On BES letterhead] [Insert name and address of subscriber] Dear [insert name of subscriber] Important information about your subscription to Backpacker Employment Services I operate the Backpacker Employment Services (BES) business [refer to earlier comment re Backpacker Employment Service Transport] and am writing to you as a current or former subscriber to BES. From about May 2007 to October 2007 I made certain representations in relation to the availability of fruit picking jobs for a period of between 6 to 12 months in a variety of locations from Taree in NSW to Queensland. I also made representations to employment agencies in Taree and to some subscribers directly, including the following: From July 2007 there would be between 200 and 300 fruit picking jobs available at the Moorland Orange Juice Orchard; I could supply fruit picking jobs to persons in a variety of locations if they agreed to subscribe to BES at a cost of $50 for a 6 month subscription or $100 for a 12 month subscription; and I could guarantee employment to those persons who subscribed to BES for the period of their subscription. These representations may have influenced your decision to subscribe to BES. The ACCC considers that the representations referred to above may be misleading and in breach of sections 52, 53(c) and (d) and 53B of the Trade Practices Act 1974. At the time I made the representations I was not able to offer fruit picking jobs for a period of 6 to 12 months and I had no arrangement with Moorland Orchard whereby it was able to offer the number of jobs claimed. Further, subscribing to BES did not ensure that employment would be available for the period of the subscription. In order to address its concerns, I recently gave a court enforceable undertaking to the ACCC. As part of this undertaking, I agreed to offer a refund of the total subscription fee paid to those subscribers who did not retain employment for the period of their subscription. I have also agreed to refrain from making similar representations in the future if they are not true or if I don't have reasonable grounds for making them, and to implement a trade practices compliance program. If you subscribed to BES and wish to obtain a refund of your subscription fee, please send your request for a refund in writing to: Mr Roberson Backpacker Employment Services 1 -90 Seafront Circuit Bonny Hills NSW 2445. You should remember to include in your request, your name, contact details, the date on which you subscribed to BES and the details of your employment, if any, during your subscription. I am offering a refund to subscribers until [insert date -within 6 months of this Undertaking coming into effect]. You should, therefore, ensure that your request for a refund is received by no later than this date. You will also be required to prove that you were not employed for the period of your subscription (e.g. by way of statutory declaration). If you have any queries about this letter, please call me on [insert contact phone number]. Yours sincerely Richard Alexander Roberson ANNEXURE B TEXT OF CONSUMER NOTICE TO APPEAR IN NEWSPAPERS 1 CONSUMER NOTICE FROM RICHARD ALEXANDER ROBERSON AND BACKPACKER EMPLOYMENT SERVICES In mid-2007 I made certain representations that may have influenced people's decision to subscribe to BES. These representations related to the availability and duration of fruit picking jobs in a variety of locations from Taree in NSW to Queensland. In particular, that that there would be available between 200 and 300 fruit picking jobs at the Moorland Orange Juice Orchard and that a subscriber to BES would be guaranteed employment for the length of their subscription. The ACCC considers that by making these representations in circumstances where such jobs were not available as claimed and the absence of reasonable grounds upon which to base the representations, I engaged in misleading conduct in breach of the Trade Practices Act 1974. In order to address its concerns, I recently gave a court enforceable undertaking to the ACCC. As part of this undertaking, I agreed to offer a refund of the total subscription fee paid to those subscribers who did not retain employment for the period of their subscription. If you subscribed to BES and wish to obtain a refund of your subscription fee, please send your request by [insert date] in writing to: Mr Roberson Backpackers Employment Services 1 -90 Seafront Circuit Bonny Hills NSW 2445. Remember to include in your request, your name, contact details, the date on which you subscribed to BES and the details of your employment, if any, during your subscription. Proof that you were not employed for the length of your subscription will also be required (e.g. by way of statutory declaration). If you have any queries about this notice, please call Richard on [insert contact phone number]. This notice has been paid for by BES and placed because of the undertaking given to the ACCC by Richard Alexander Roberson.' 22 In the Statement of Claim, the ACCC charged that the respondent had the day to day management and control of two businesses, one registered in the Australian Capital Territory and known as 'Backpacker Employment Services' and the other registered in Queensland known as 'Backpacker Employment Service Transport', collectively referred to in the Statement of Claim as 'Backpacker Employment Services (BES)'. 23 In paragraph 3 of the Statement of Claim, the applicant charged that the respondent had, from about May 2007 to October 2007, engaged in certain conduct including making representations in relation to employment in the fruit picking industry. 24 It was alleged that the conduct in question was in breach of ss 52, 53(c) and (d) and 53B of the Trade Practices Act. The ACCC contended that the respondent breached a number of terms of his undertaking including paragraphs 11, 12, 15, 16, 17, 18, 19 and 20. 25 In paragraph 9 of the Statement of Claim, the ACCC charged that the respondent had not caused letters to be sent as required by paragraph 11(a) of the undertaking. In paragraph 10, the ACCC charged that the respondent had failed to provide the ACCC with a schedule in writing as required by paragraph 11(b) of the undertaking. 26 In paragraphs 12 and 13 of the Statement of Claim, the ACCC charged that the respondent had failed to publish certain advertisements in the 'Manning River Times' and the 'Port Macquarie News' newspapers as required by paragraph 12 of the undertaking. 27 In paragraph 15 of the Statement of Claim the ACCC charged that the respondent had failed to provide it with a written statement or certificate in accordance with paragraph 18 of the undertaking verifying that the respondent had attended trade practice compliance training as referred to in paragraph 16 of the undertaking. 28 In paragraph 18 of the Statement of Claim the ACCC charged that the respondent had not undertaken the required training as referred to in paragraph 16 of the undertaking. 29 In paragraphs 20 to 23 inclusive the ACCC charged that the respondent had failed to comply with paragraphs 19 and 20 of the undertaking. 30 On the hearing of the current Motion some additional evidence has been led, but not evidence of facts which could have been but were not pleaded concerning the conduct of the respondent, nor was any evidence called which was in conflict with the matters charged in the Statement of Claim to which reference has been made. 31 I am satisfied that the Application and Statement of Claim were duly served upon the respondent on 18 August 2008 and that on 10 September 2008 a sealed copy of the Court's orders of 1 September 2008, that is to say, the date of the directions hearing, were served upon the respondent. I am satisfied that the Notice of Motion filed 14 October 2008 was served upon the respondent by prepaid express post directed to him at 90 Seafront Circuit, Bonny Hills, NSW on or shortly after 15 October 2008, the date of posting. 32 Whilst the undertaking required notices to be published in the newspapers to which reference has been made, no such notices were published. However, a form of notice was formulated following communication between Kristy Leanne Laws, a Classifieds Supervisor and the respondent on or about 11 March 2008. A copy of the form of notice as formulated is to be found in exhibit KL-1 to the affidavit of Ms Laws affirmed 17 October 2008. It would appear that the respondent failed to proceed with the publication of the notices once he was advised by Ms Laws that the cost of publication of the notice in the two papers would total $704.22. 33 After receiving some reminders from the ACCC in relation to his obligations under the undertaking, the respondent sent a document to the ACCC which is annexure MC-4 to the affidavit of Molly Choucair affirmed 3 November 2003. That document provides a list of five names to whom it is said that the respondent sent letters as requested on 'Monday', which I take to have been a Monday shortly before 2 June 2008. The communication also included a statement that a refund of $100 had been made on 24 January 2008 to one Jessica Mellon. 34 It would appear that the respondent had provided a list of 'Backpackers Employment Members' in June 2008. Ms Choucair made contact with one of the persons included on the list being a Ben Hicks. It seems clear that the respondent did post to Mr Hicks a letter generally as required of him by the undertaking, on or about 19 May 2008. 35 Another person whose name appeared on the list as having become a member on a date in July 2007 was listed as 'Whane Bowen'. Mr Bowen swore an affidavit indicating that he saw an advertisement in the 'Port Macquarie News' newspaper in or around June 2007 to which he responded which resulted in him subscribing $50 to become a 'member' of 'Backpackers Employment'. He says that he was sent a receipt for his six month subscription fee of $50 and further says that he had not, as of 23 October 2008, received a letter from the respondent as required by the undertaking in terms similar to that sent by the respondent to Mr Hicks. 36 The list of 'Backpackers Employment Members' provided by the respondent included only a relatively small number of names on 3 pages. Somewhat curiously, dates on the list jump, on one page, from 2007 back to 2006 and then forwards again to 2007. 37 The dates with which the ACCC is concerned is the period from 'about May 2007 to October 2007' which I would understand to mean 1 May 2007 to 31 October 2007. It is difficult to discern the dates referable to 'members' on one of the pages of 'Backpackers Employment Members'. The other two pages suggest that there were about 26 persons whose membership dates fall within the relevant timeframe. 38 Those 26 would appear to have contributed approximately $1300 in total to the respondent for their membership rights. Some may have paid for a 12 month membership rather than six months, in which case the total may be a little more than the figure mentioned of $1300. 39 Under Order 11 of the Rules, a pleading should contain and contain only a statement in a summary form of the material facts on which a party relies. A pleading should be as brief as the nature of the case admits, but under Order 11, rule 9, 'A party may by his pleading raise any point of law.' 40 By reference to matters alleged in the Statement of Claim and the evidence going to breach, which is germane to the manner in which the Court should exercise its discretion to grant or refuse relief, I am satisfied that the respondent breached the terms of the undertaking to which reference has been made. Accordingly, declarations should be made as sought in the Application filed 15 August 2008 when taken with annexures A and B to the undertaking. 41 As to the remaining orders that are sought, it seems to me that there are serious difficulties associated with those parts of the undertaking which require the respondent to put in place a complaints handling scheme referable to trade practices complaints and to undertake training in relation to the application of ss 52, 53(c) and (d) and 53B of the Trade Practices Act. 42 Bonny Hills, where the respondent appears to reside, is located near Taree and is far removed from any centre where one might expect any trade practices courses to be given which might be of any value in ensuring that the respondent is made aware of his obligations under the sections mentioned. 43 One might have thought that mere disclosure by the applicant to the respondent of the terms of the sections, which are quite straightforward, would do more good than requiring him to somehow or other identify a course of training that he should undertake and then attend same. The salutary experience of his involvement in these proceedings will no doubt be more than sufficient to alert him to the need for people carrying on businesses such as his, soliciting employment for people whom he describes as 'backpackers', to comply with the requirements of the Trade Practices Act in relation to misleading and deceptive conduct and other like conduct. 44 In my opinion, it would be appropriate to make orders requiring the respondent to communicate with the 26 persons whose names are listed on the three page list of 'Backpackers Employment Members', to ensure that they are, effectively, invited to make an application for a refund of their respective subscriptions of $50 or $100, as the case may be. It will be appropriate to require the respondent to make refunds to such persons as may request a refund following notification of the availability of such a refund. 45 I do not favour the making of an order in terms of paragraph 7 in the Application which requires the transmission of letters to all persons for whom he [the respondent] has address information and who has subscribed to BES' service as contemplated by prayer for relief 7. 46 If orders are to be made by the Court, they must be orders which can be enforced, and in relation to which proceedings for contempt may be brought if there is non-compliance. 47 I do not favour the making of an order in terms of paragraph 8, which simply requires a reporting back to the ACCC of the action taken in respect of the 26-odd individuals mentioned. 48 I do favour imposition of a requirement upon the respondent to proceed with the publication of notices in the 'Manning River Times' and 'Port Macquarie News' newspapers, as contemplated generally by paragraph 9 of the Application. 49 I agree with the proposal for an order to be made generally in accordance with paragraph 10, which simply seeks the provision by the respondent of copies of the notices, as published, to the ACCC. 50 For the reasons I have given, I do not favour the relief sought in paragraphs 11 and 12, and would not be disposed to make orders in accordance with those paragraphs. 51 It seems to me that it would be appropriate for an order for costs to be made against the respondent. I will not say that he has flouted the requirements of his undertaking, in his absence. However, the limited compliance that there has been seems to have arisen as a result of follow-up action taken by the ACCC, which should have been unnecessary. 52 Whether or not the failure to write to Mr Bowen resulted from the fact that the respondent did not have his address, is a matter upon which one can but speculate. It certainly seems clear from the evidence of Mr Bowen, that at the time when a receipt was sent to him for his subscription of $50, the respondent then had Mr Bowen's address. 53 The applicant has asked that the Court adjourn the matter to allow telephone calls to be placed by the ACCC to see if it can identify addresses for the 26-odd persons, so that an order could be formulated requiring letters to be written to each of the 26 persons, informing them of their rights to obtain a refund of the relevant subscription. In my view, given the amount of money that is involved, it would be inappropriate to commit more time and expense to the securing of orders under s 87B(4) of the Trade Practices Act. 54 I would propose that order 7 be implemented by requiring the respondent to telephone the persons identified on the numbers that are included in the 'Backpackers Employment Members' list, with an obligation being cast upon him to read to each of the persons, with whom he is able to communicate, a statement generally in accordance with the terms of the proposed letter, which is included as annexure A to the Application. I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. Associate: Dated: 18 November 2008 Counsel for the Applicant: D H Godwin Solicitor for the Applicant: Australian Government Solicitor The Respondent did not appear. Date of Hearing: 4 November 2008 Date of Judgment: 4 November 2008