FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v Exclusive Media & Publishing Pty Ltd [2014] FCA 228 Citation: Australian Competition and Consumer Commission v Exclusive Media & Publishing Pty Ltd [2014] FCA 228 Parties: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v EXCLUSIVE MEDIA & PUBLISHING PTY LTD ACN 136 430 825, ELITE PUBLISHING GROUP PTY LTD ACN 130 180 719, WILTSHIRE PUBLISHERS PTY LTD ACN 121 437 741, SUPERIOR PUBLICATIONS PTY LTD ACN 120 552 365 and ANDREW EDWARD CLIFFORD File number: QUD 306 of 2011 Judge: DOWSETT J Date of judgment: 14 March 2014 Legislation: Trade Practices Act 1974 (Cth) ss 51AC, 52, 53(bb), 53(c), 60 Date of hearing: 11 September 2012 Place: Brisbane Division: GENERAL DIVISION Category: No Catchwords Number of paragraphs: 16 Counsel for the Applicant: Mr M Hodge Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondents: Mr A Tragardh Solicitor for the Respondents: Galbally Rolfe, Barristers & Solicitors IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 306 of 2011 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: EXCLUSIVE MEDIA & PUBLISHING PTY LTD ACN 136 430 825 First Respondent ELITE PUBLISHING GROUP PTY LTD ACN 130 180 719 Second Respondent WILTSHIRE PUBLISHERS PTY LTD ACN 121 437 741 Third Respondent SUPERIOR PUBLICATIONS PTY LTD ACN 120 552 365 Fourth Respondent ANDREW EDWARD CLIFFORD Fifth Respondent JUDGE: DOWSETT J DATE: 14 MARCH 2014 PLACE: BRISBANE REASONS FOR JUDGMENT 1 I heard submissions in this matter on 11 September 2012. The parties had agreed as to proposed orders, and I was satisfied that such proposed orders were appropriate. I made the relevant orders, indicating that I would give my reasons at a later stage. Unfortunately other matters have, until recently prevented me from attending to the preparation of those reasons, and so their publication has been delayed. 2 The applicant ("ACCC") brought proceedings against five respondents, four of them being corporations. I shall refer to the first to fourth respondents as "Exclusive", "Elite", "Wiltshire", and "Superior" respectively. I shall refer to the fifth respondent, Andrew Edward Clifford, as "Mr Clifford". ACCC sought declarations, injunctions and other relief in connection with alleged breaches of ss 52, 53(bb), 53(c), 51AC and 60 of the Trade Practices Act 1974 (Cth) (the "Trade Practices Act") as it stood at relevant times. The conduct in question occurred between February 2009 and August 2010. At all material times Mr Clifford was the sole director, secretary and shareholder of each of the four corporate respondents, all of which carried on the business of supplying, or purporting to supply advertising services to persons in Australia, using printed publications which it produced and/or distributed. The publications addressed the issue of child safety. In effect ACCC asserts that each of the corporate respondents engaged in similar conduct in connection with the sale of advertising in publications, and that Mr Clifford was knowingly concerned in such conduct. 3 For the sake of convenience the relevant conduct may be divided into three categories, each reflecting a different stage in each, overall transaction. First, the relevant corporate respondent would contact by telephone a representative of another commercial undertaking (the "recipient"), purportedly with reference to a publication distributed by that corporate respondent. The recipient would be told that: a document was shortly to be sent to it, by facsimile or email; the recipient had already paid, or agreed to pay to advertise in the relevant publication; or the document was being sent so that the recipient could indicate how many complimentary copies of the publication it wanted to receive. 4 The recipient was also told that if it signed the document, it would not be treated as a "confirmation or acceptance of an offer to acquire advertising services". It was further said that the person making the telephone call would send a confirmation document to the recipient, with a space for the recipient to nominate the number of complimentary copies and space for a signature, confirming that it wished to receive such complimentary copies. 5 Such representations were false in that the recipient had not already agreed to place, or pay for advertisements. Further, the document was, in fact, an order form, and if signed, was treated by the corporate respondent as a binding order. In the event that a recipient signed and returned the document, the corporate respondent would telephone or send an invoice to the person, requesting payment. This conduct is said to be contrary to s 53(bb) of the Trade Practices Act. 6 The second category of conduct concerned the content of the document sent to each recipient. It contained representations concerning the proposed distribution of the publication in question, which representations were false. This conduct is said to be contrary to s 53(c) of the Trade Practices Act. 7 The third category of conduct is described in the statement of claim as "harassment and coercion". After receipt of the telephone call and documents, a small number of recipients were dunned for payment, using various techniques, again implicitly representing that they were legally bound to pay. This conduct is said to be contrary to ss 51AC and 60 of the Trade Practices Act. 8 The further amended statement of claim (the "statement of claim") demonstrates that there were many recipients. Mr Clifford was knowingly concerned in all of this conduct. 9 ACCC seeks pecuniary penalties pursuant to s 76E of the Trade Practices Act (Cth) now the Competition and Consumer Act 2010 (Cth) (the "Act"). Section 76E commenced on 15 April 2010. Some of the alleged infringements occurred before that date. ACCC seeks pecuniary penalties only in respect of: 17 transactions involving documents sent by Exclusive, between 15 April 2010 and 28 April 2010, to recipients identified in schedule EM-CCG to the statement of claim; 138 transactions involving documents sent by Elite, between 22 June 2010 and 19 August 2010, to recipients identified in schedule EP-CA to the statement of claim; and 134 transactions involving documents sent by Wiltshire, between 20 April 2010 and 6 July 2010, to recipients identified in schedule WP-KHS to the statement of claim. Mr Clifford was knowingly concerned in all 289 transactions. As I understand it, in each of these transactions, the relevant corporate respondent caused telephone contact to be made and the relevant documents to be sent. In four cases, there was also harassment and coercion. Exclusive and Wiltshire each engaged in such conduct on one occasion and Elite, on one occasions. Mr Clifford was also knowingly concerned in that conduct. 10 In my view, for the purpose of imposing penalties, the dealings with each recipient should be treated as comprising one transaction or course of conduct. Any harassment and coercion should be treated as a circumstance of aggravation in connection with that transaction. For a corporation, the maximum penalty for each offence is 10,000 penalty units. At the relevant time a penalty unit was $110. For a natural person, the maximum penalty is 2,000 units. 11 There are many concerning aspects about the respondents' conduct. The use of publications concerning child safety suggests a deliberate attempt to exploit a human tendency to treat that matter as worthy of support. Such exploitation may cause the community to become more sceptical, or even cynical about doing so. Further, the respondents exploited the likelihood that small business entities would not be inclined to question the assertion that they had already paid for, or agreed to pay for advertising in support of such a worthy cause. Another circumstance of aggravation is the very large number of businesses which were subjected to exploitative conduct. Although it occurred in a small number of cases the so-called harassment and coercion also constituted an exploitation of the legal system, which exploitation could well have had the effect of bringing the system into disrepute. A further circumstance of aggravation is that notwithstanding Mr Clifford's receipt of a s 155 notice, indicating that his businesses were the subject of investigation, the contraventions continued. 12 At the time of the hearing, Mr Clifford was 48 years of age. He has four children. He has worked in publishing for much of his working life and may, as a result of these proceedings face a significant disadvantage in continuing to work in that area. He has a certain physical incapacity as the result of a motor vehicle accident in 2000, but that factor seems to be only marginally relevant for present purposes. He and his companies have, to some extent co-operated with ACCC, so that a degree of leniency may be justified. 13 Mr Clifford was, for many years, involved in the publishing business with an associate, a Mr Bill England who suffered a serious injury in 2006 and was unable to continue in the business. It may be that this event in some way contributed to Mr Clifford's conduct, although that is only speculation. As far as the evidence goes, Mr Clifford and his companies have not otherwise been involved in any breaches of the law. 14 In summary, the misconduct was sustained and had the potential to affect a large number of people. The penalties which have been agreed appear to me to meet the requirements of the situation, reflecting the seriousness of the overall misconduct. The pecuniary penalties are: Exclusive $75,000 Elite $200,000 Wiltshire $125,000 Mr Clifford $100,000 15 Arrangements as to payment have been agreed. As to the other relief, the proposed declarations accurately reflect the nature of the relevant conduct and may serve a useful purpose in identifying at least one form in which deliberate breaches of the Act may occur. As to the injunctive relief, I am usually reluctant to grant such relief for two reasons. First, it is difficult to frame the injunction in terms which will provide sufficient certainty as to the proscribed conduct without unduly limiting the relevant person's capacity to pursue legitimate, gainful employment. Second, it often seems unlikely that any breach of an injunction will be detected, thus raising the possibility that it will be ignored, and so undermine the Court's authority. In the present case, ACCC seems to have dealt adequately with both problems. 16 For those reasons I made the orders to which I have previously referred. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. Associate: Dated: 14 March 2014