Australian Competition and Consumer Commission v Chopra (No 2)

[2017] FCA 729

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Chopra (No 2) [2017] FCA 729

File number:

VID 722 of 2014

Judge:

O'CALLAGHAN J

Date of judgment:

28 June 2017

Catchwords:

CONTEMPT OF COURT – sentencing – where respondent pleaded guilty to two charges of breaching orders and injunctions – where parties agree only a sentence of imprisonment is appropriate – whether any such sentence should be wholly or partially suspended    

Legislation:

Competition and Consumer Act 2010 (Cth), Sch 2 (“Australian Consumer Law”) ss 18, 29(1)(m), 36(4)

Cases cited:

Australasian Meat Industry Employees’ Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98

Australian Building Construction Employees’ and Builders Labourers’ Federation v Commonwealth of Australia (1986) 161 CLR 88

Date of hearing: 

14 June 2017

Registry: 

Victoria

Division:

General Division

National Practice Area:

Commercial and Corporations

Sub-area:

Regulator and Consumer Protection

Category:

Catchwords

Number of paragraphs:

41

Counsel for the Applicant:

Ms R Orr QC

Solicitor for the Applicant:

Norton Rose Fulbright Australia

Counsel for the Respondent:

Mr C Carr

Solicitor for the Respondent:

Tony Hargreaves & Partners Lawyers

ORDERS

VID 722 of 2014
BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	DHRUV CHOPRA Respondent

JUDGE:	O'CALLAGHAN J
DATE OF ORDER:	28 JUNE 2017

THE COURT ORDERS THAT:

1.On the two charges of contempt in the further amended statement of charge dated 19 April 2017, to which the respondent pleaded guilty on 19 April 2017, the following sentences be imposed on the respondent:

(a)On charge 1, 3 months.

(b)On charge 2, 3 months.

2.The sentences referred to in order 1 be served concurrently.

3.The respondent serve an actual term of imprisonment of one month, with the balance of the sentence referred to in order 1 to be suspended on the conditions set out below.

4.A warrant issue for the respondent’s committal to prison for a period of one month.

5.A further warrant for the respondent’s committal to prison for a further period of two months issue, with said warrant to lie in the Registry of this Court with the intent that it not be executed, provided that the respondent, for a period of five years from the date of this order:

(a)refrain from contravening any of the orders in paragraphs 4 to 6 of the orders made in this proceeding by Justice Middleton on 11 May 2015;

(b)also refrains from knowingly being involved in conduct by any other person which if engaged in by the respondent would constitute a contravention of any of the orders in paragraphs 4 to 6 of the orders made in this proceeding by Justice Middleton on 11 May 2015.

6.The respondent pay the applicant’s costs in respect of this proceeding on an indemnity basis.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

O’CALLAGHAN J:

1. This is the penalty phase of the hearing of the further amended statement of charge against the respondent, Mr Dhruv Chopra (Mr Chopra), dated 19 April 2017.

   BACKGROUND

2. At a hearing before Middleton J on 11 May 2015, Mr Chopra admitted that, for at least six months, he had engaged in misleading or deceptive conduct in contravention of ss 18 and 29(l)(m) of the Australian Consumer Law (ACL) (which is contained in Sch 2 to the Competition and Consumer Act 2010 (Cth) and applied under Subdiv A of Div 2 of Pt XI of that Act). The conduct giving rise to the relevant contraventions involved the making of various false representations to consumers on his website – (Electronics Bazaar website) – in relation to, among other things, the circumstances in which refunds, replacement goods or repairs were to be available to consumers who purchased goods through the website.

3. Mr Chopra also admitted that he had contravened s 36(4) of the ACL by, after accepting payment for goods on the Electronics Bazaar website, not supplying those goods within the statutorily mandated time on four separate occasions. Middleton J found, among other things, that:

   (1)the contraventions were deliberate;

   (2)Mr Chopra’s business did not have a culture of compliance; and

   (3)Mr Chopra did not cooperate with the applicant before it commenced the proceeding against him. 

4. His Honour made declarations in respect of the contraventions alleged, granted injunctions restraining Mr Chopra from engaging in like conduct, imposed pecuniary penalties in the amount of $60,000 in respect of the s 29(l)(m) contraventions and $40,000 in total in respect of each of the four contraventions of s 36(4). His Honour also made a training order and a costs order.

5. Given the nature of this proceeding, it is appropriate to set out Middleton J’s orders of 11 May 2015 in full:

   THE COURT DECLARES THAT:

   1In the period from at least 21 May 2014 to 24 August 2014, the Respondent (Mr Chopra), in trade or commerce:

   (a)engaged in conduct that was misleading or deceptive or likely to mislead or deceive, in contravention of section 18 of the Australian Consumer Law (ACL), being Schedule 2 to the Competition and Consumer Act 2010 (Cth); and

   (b)in connection with the supply or possible supply of goods or the promotion of the supply or use of goods, made false or misleading representations concerning the existence, exclusion or effect of conditions, warranties, guarantees, rights or remedies, in contravention of section 29(1)(m) of the ACL,

   by, in statements on the website (EB Website), making representations to consumers as follows:

   (i) that consumers who purchased goods through the EB Website that were no longer under express warranty were not entitled to a refund, replacement or repair in relation to those goods when in fact under Division 1 of Part 3-2 and Part 5-4 of the ACL (collectively, the Consumer Guarantee Provisions), a consumer could be entitled to a refund, replacement or repair in relation to goods supplied through the EB Website in certain circumstances following the expiry of any express warranty in respect of those goods; and

   (ii) that consumers who purchased goods through the EB Website did not have any rights or guarantees under the ACL in respect of those goods when in fact a consumer who purchased goods using the EB Website had rights and guarantees under the Consumer Guarantee Provisions in respect of goods that were supplied (or to be supplied) to the consumer using the EB Website, which could not be excluded, restricted or modified by a term of a contract.

   2In the period from 25 August 2014 to date, Mr Chopra, in trade or commerce:

   (a)engaged in conduct that was misleading or deceptive or likely to mislead or deceive, in contravention of section 18 of the ACL; and

   (b)in connection with the supply or possible supply of goods or the promotion of the supply or use of goods, made false or misleading representations concerning the existence, exclusion or effect of conditions, warranties, guarantees, rights or remedies, in contravention of section 29(1)(m) of the ACL,

   by, in statements on the EB Website, making representations to consumers as follows:

   (i)    that consumers who purchased goods through the EB Website were not entitled to a refund for those goods unless the goods were faulty upon arrival or out of stock, or where a replacement was unavailable, when in fact under the Consumer Guarantee Provisions,  a consumer could be entitled to  a refund in relation to goods supplied using the EB Website in certain circumstances where:

   (A)there was a fault with the goods that was not apparent at the time that the consumer received the goods;

   (B)the goods were in stock; or

   (C)a replacement product was available;

   (ii)   that consumers who purchased goods through the EB Website were not entitled to return the goods and receive a refund  where the goods had been used,  were not in original condition or were not in their original packaging when in fact under the Consumer Guarantee Provisions,  a consumer could be entitled  to  a refund in relation to goods supplied using the EB Website in certain circumstances where the goods had been used, were not in original condition or were not in their original packaging;

   (iii)  that consumers who purchased goods through the EB Website were not entitled to a refund outside of a specified time period when in fact under the Consumer Guarantee Provisions, a consumer could be entitled to a refund in relation to goods supplied using the EB Website outside a specified time period in certain circumstances; and

   (iv)  that consumers who purchased goods using the EB Website would be entering into an agreement for supply with a company called “Unreal Technologies Private Limited” or “Unreal Technology Private Limited” and therefore the consumer’s rights or remedies would exist against that company as the supplier when in fact, from at least 25 August 2014 to date:

   (A)there was no company named “Unreal Technologies Private Limited” or “Unreal Technology Private Limited”;

   (B)consumers who purchased goods using the EB Website were not entering into an agreement with a company as the supplier;

   (C)consumers who purchased goods using the EB Website were entering into an agreement with Mr Chopra as the supplier; and

   (D)consumers who purchased goods using the EB Website had rights and remedies under the ACL, including under the Consumer Guarantee Provisions, which existed against Mr Chopra as the supplier and which did not exist against a company named “Unreal Technologies Private Limited” or “Unreal Technology Private Limited”, or any other company, as the supplier.

   3.In the period from June 2012 to July 2014, Mr Chopra, in trade or commerce, engaged in conduct in contravention of section 36(4) of the ACL on four separate occasions, by, after accepting payments for goods, not supplying those goods within:

   (a)the period specified by or on behalf of Mr Chopra at or before the time the payment was accepted; or

   (b)a reasonable period, where no period was specified at or before the time payment was accepted.

   THE COURT ORDERS THAT:

   Injunctions

   4.Mr Chopra be restrained for a period of 5 years from the date of this order, whether by himself, his servants, his agents or otherwise, in trade or commerce in connection with the supply or possible supply of goods, or in connection with the promotion of supply or use of goods, from making any representation to the effect that:

   (a)consumers who purchase from Mr Chopra or any entity controlled by Mr Chopra goods that are no longer under express warranty, are not entitled to a refund, replacement or repair in relation to those goods;

   (b)consumers who purchase goods from Mr Chopra or any entity controlled by Mr Chopra do not have any rights or guarantees under the ACL in respect of those goods;

   (c)consumers who purchase goods from Mr Chopra or any entity controlled by Mr Chopra are not entitled to a refund for those goods unless the goods are faulty upon arrival, out of stock, or where a replacement is unavailable;

   (d)consumers who purchase goods from Mr Chopra or any entity controlled by Mr Chopra are not entitled to return the goods and receive a refund where the goods have been used, are not in original condition or are not in their original packaging;

   (e)consumers who purchase goods from Mr Chopra or any entity controlled by Mr Chopra are not entitled to a refund outside of a specified time period; or

   (f)consumers who purchase goods from Mr Chopra or any entity controlled by Mr Chopra are:

   (i)    not purchasing goods from Mr Chopra; or

   (ii)   purchasing the goods from a company.

   5.Mr Chopra be restrained for a period of 5 years from the date of this order, whether by himself, his servants, his agents or otherwise, from representing that goods that are to be supplied by Mr Chopra will be supplied within a specified time frame in circumstances where Mr Chopra is unable to supply those goods within the specified time frame.

   6.Mr Chopra be restrained for a period of 5 years from the date of this order, whether by himself, his servants, his agents or otherwise, from accepting payment or other consideration for goods from a consumer in circumstances where Mr Chopra has specified a time frame for the supply of those goods and Mr Chopra is unable to supply those goods to the consumer within that specified time frame.

   Pecuniary penalties

   7.In respect of the contraventions of section 29(1)(m) of the ACL referred to in paragraphs 1 and 2 above, Mr Chopra pay to the Commonwealth of Australia a pecuniary penalty of $60,000 within 28 days of the date of this order or such other period as is agreed between the Applicant and Mr Chopra.

   8.In respect of the contraventions of section 36(4) of the ACL referred to in paragraph 3 above, Mr Chopra pay to the Commonwealth of Australia a pecuniary penalty of $40,000 within 28 days of the date of this order or such other period as is agreed between the Applicant and Mr Chopra.

   Other orders

   9.Mr Chopra, at his own expense:

   (a)within 3 months of the date of this order, attend and undertake a training session on the responsibilities and obligations under sections 18, 29 and 36 of the ACL;

   (b)ensure that the training referred to in paragraph (a) is administered by a suitably qualified compliance professional or legal practitioner with expertise in the ACL; and

   (c)provide to the Applicant a written statement or certificate from the person conducting the training referred to in paragraph (a), within 14 days of completion of the training, verifying that such training has occurred.

   10.Mr Chopra pay the Applicant’s costs of, and incidental to, this proceeding.

6. Mr Chopra told the Court at the hearing on 11 May 2015 that he had shut down the Electronics Bazaar website.  Middleton J explained the meaning and effect of the injunctions to Mr Chopra, and in particular explained to Mr Chopra that he was “not allowed to go and make representations of the type…which brought you to court…through another medium or through another entity”.  Mr Chopra told Middleton J that he understood and that he fully appreciated the serious consequences that could follow were he to breach the terms of the orders made.

   CIRCUMSTANCES OF THE CONTEMPTS

7. About two months after the hearing before Middleton J, the applicant discovered that Mr Chopra had set up a new website – (PV Direct website) – and was conducting a business identical to that conducted on the Electronics Bazaar website. 

8. On 29 July 2015, the applicant’s solicitor wrote to Mr Chopra and told him that it considered that various statements he made on the new website about the circumstances in which a consumer was entitled to a refund or to return goods were in breach of the injunctions made by the Court on 11 May 2015.  The applicant told Mr Chopra that “[t]he consequences of this apparent new conduct are potentially serious” and that, among other things, “the ACCC may potentially be able to…take action for contempt against you for disobeying [the order of the Court], which could result in punishments which include imprisonment”.  The applicant asked Mr Chopra to remove from the website the statements identified in its letter and to provide an explanation in writing for his conduct.  Mr Chopra took down the statements about refunds and return goods almost immediately after receiving the applicant’s 29 July 2015 letter. 

9. By early September 2015, Mr Chopra had not paid the pecuniary penalties (and they remain unpaid today) or completed the training required by the Court’s 11 May 2015 order. At that time, the applicant found out that Mr Chopra had again accepted payment for goods on the PV Direct website and had not supplied those goods within the statutorily mandated time, in contravention of s 36(4) of the ACL and in further breach of the Court’s 11 May 2015 injunction.

10. On 7 September 2015, the applicant’s solicitors again wrote to Mr Chopra, setting out what it had discovered and warning Mr Chopra in the following terms:

    The ACCC’s position is that it appears that you have not complied with paragraphs 4, 5, 6, 7, 8 and 9 of the Order [of Middleton J].  Your non-compliance with many of those orders is ongoing.

    The ACCC regards your non-compliance with the Order as a matter of significant concern.

    The consequences of your non-compliance with the Order are potentially serious.

    In our letter dated 29 July 2015, we noted that the ACCC may take an action for contempt against you for disobeying parts of the Order, which could result in punishments which include imprisonment.

    The ACCC is considering taking an action against you for contempt.  The ACCC is also progressing towards enforcing the order against you for costs in paragraph 10 of the Order, and potentially bankruptcy proceedings against you.

    The ACCC requests that you respond… without delay.

11. Mr Chopra filed for bankruptcy not long afterwards (in mid-September 2015) and remains an undischarged bankrupt.

12. Not long thereafter, the applicant learned that, from 30 June 2016 onwards, Mr Chopra had set up another website – (Dream Kart website) – and that he had made misleading claims about the conditions on which refunds would be made or goods would be returned.  These were the same misleading claims that Mr Chopra had agreed to remove from the PV Direct website and which had been the subject of (some of) the contraventions concerning the Electronics Bazaar website to which Mr Chopra had admitted before Middleton J .

13. The applicant had by this time, understandably enough, lost patience with Mr Chopra. It did not ask him in writing again to comply with Middleton J’s orders or again to explain himself. Instead, it issued contempt proceedings. Subsequent to the issue and service of those proceedings on Mr Chopra, in early November 2016, the applicant became aware that Mr Chopra had again accepted payment for goods, this time on the Dream Kart website, and had not supplied those goods within the statutorily mandated time, in contravention of s 36(4) of the ACL and in further breach of the Court’s 11 May 2015 orders.

14. The applicant added a second charge to the original statement of charge.  The applicant also amended the statement of charge by extending the periods for the charges.  In February 2017, the applicant served an amended interlocutory application and amended statement of charge on Mr Chopra’s solicitors.  In early March and April, the applicant served an outline of submissions dealing with the second charge.  Each document reinforced the seriousness with which the applicant viewed Mr Chopra’s conduct and the possibility that it could result in a sentence of imprisonment.

15. The amended statement of charge alleged as follows:

    You are charged with contempt of court in that:

    1.In the period from 30 June 2016 to 14 March 2017, you breached paragraph 4 of the order made by the Honourable Justice Middleton on 11 May 2015 in this proceeding (the Order) by making representations, yourself or by an agent or employee or otherwise, on the website at (the Dream Kart Website) contrary to that order.

    Particulars

    a.Particulars regarding the Order are contained in Schedule 1 [omitted]…

    b.You were present in Court when the Order was made on 11 May 2015, and have had knowledge of the Order since 11 May 2015.

    c.Furthermore, a sealed copy of the Order was sent to you by email on 13 May 2015.  A further sealed copy of the Order, containing a notice on the first page, was personally served on you on 28 September 2016.

    d.During the period from 28 April 2015 to 12 October 2015, you were the sole director and shareholder of Photo Video Direct Pty Ltd ACN 602 034 328 (PVD), and furthermore you continued to be the sole shareholder of PVD from 13 October 2015 to date.

    e.        During the period from 19 May 2016 to date:

    i.“Dream Kart” was the business name registered to the trustee of the Chopra Family Trust, being a trading trust;

    ii.PVD was registered as a representative for the “Dream Kart” business name;

    iii.PVD was the registered holder of the domain name of the Dream Kart Website; and

    iv.you carried on the business, in trade or commerce, of supplying electronic goods and related accessories to consumers through the Dream Kart Website and the Chopra Family Trust, using the “Dream Kart” business name.

    f.In the period from 30 June 2016 to 14 March 2017, you published to the public, in trade or commerce in connection with the supply or possible supply of goods, or in connection with the promotion of supply or use of goods, the following statements on the Dream Kart Website:

    i.on a page entitled “Refund & Return Policy”, the following statement, which conveyed the representation described in subparagraph 4(a) of the Order:

    “Is there any warranty, if the supplied goods are imported model?

    Ans.  All the goods sold by Dream Kart carry 1 year RTB - warranty against any manufacturing defects in this warranty we get it repaired.”

    ii.on a page entitled “Terms and Conditions”: the following statements, which conveyed the representations described in subparagraphs 4(c), (d) and (e) of the Order:

    “Refund and Return

    We assure you that all products sold on our website are brand new and 100% genuine. In case the product you have received is 'Damaged', 'Defective' or 'Not as Described', our Easy Returns promise has got you covered.

    Returns are easy, simply follow these steps

    - Contact us and provide Order Number details.

    - Customer Support will confirm the return request and will inform you about the return process.

    - Please ensure that product is in unused and original condition.  Original packing and invoice along with the product.

    There are certain scenarios where it is difficult for us to support returns

    - Return request is made outside the specified time frame

    - Product is damaged because of use or Product is not in the same condition as you received it

    -Defective products which are covered under the manufacturer’s warranty

    -Items that are returned without original packaging.

    We work to provide online shopping stress free. You are covered and your money safe.

    Refunds are issued when

    -We cannot provide replacement

    -In-line with Buyer Protection, when a dispute has been ruled in your favor.

    - When the item is no more in stock”

    iii.also on the page entitled “Terms and Conditions”, the following statements, which conveyed the representation described in subparagraph 4(f) of the Order:

    (A)“The domain name (hereinafter referred to as “Website”) is owned by DreamKart a company incorporated under the rules and regulations governed by the Consumer Law with its registered office at Level 4, 25 Claremont Street, South Yarra, Victoria, 3141.”;

    (B)“You shall be contracting with Dream Kart and these terms and conditions including the policies constitute your binding obligations, with (DreamKart)”; and

    (C)“To deliver the products you have purchased from us”.

    2.On or about 2 May 2016, you breached paragraphs 5 and 6 of the Order by making representations, yourself or by an agent or employee or otherwise, to Dr Debra Saunders contrary to paragraph 5 of the Order, and by accepting payment, yourself or by an agent or employee or otherwise, from Dr Debra Saunders contrary to paragraph 6 of the Order.

    Particulars

    a.        The particulars at paragraphs 1(a) to (e) above are repeated.

    b.On 2 May 2016, Dr Debra Saunders of Cook, ACT purchased the following six items on  the Dream Kart Website (the Items).

    c.        The Items were as follows [omitted]…

    d.Dr Saunders purchased the Items for $2,850.10 plus $46.00 for fast shipping and handling, with delivery to be made within 3-7 working days of her order.  She paid for those items on 2 May 2016 using her credit card.

    e.        Dr Saunders ordered the Items after she had, on 2 May 2016:

    i.been able to add the Items to the shopping cart on the Dream Kart Website, without any indication that any of the Items were out of stock; and

    ii.selected “fast shipping and handling” to ensure the goods were delivered within 3-7 working days of her order.

    f.You were unable to supply the Items within the specified timeframe, being 3-7 working days from the date of the order.

    g.Dr Saunders did not receive any of the Items within 3-7 working days of her order, that is, on or before 11 May 2016.

    h.        On 27 May 2016, Dr Saunders received part of Item 1, and Item 4.

    i.        On 30 May 2016, Dr Saunders received the remaining part of Item 1.

    j.        On 17 June 2016, Dr Saunders received Item 6.

    k.        On 20 June 2016, Dr Saunders received Item 3 and Item 5.

    I.On 30 January 2017, Item 2 had still not been delivered to Dr Saunders.  She sent an email to DreamKart asking for a refund for Item 2 and the postage expenses associated with it.

    m.On 31 January 2017, Dr Saunders received a refund of $156.05 from Dream Kart for Item 2 and the postage expenses associated with it.

1. The contempt charges were heard by Middleton J on 19 April 2017.  Mr Chopra did not remove the representations about refunds and returns the subject of charge 1 from the Dream Kart website until around that date.  At the hearing before Middleton J on 19 April 2017, Mr Chopra pleaded guilty to both charges and confirmed that he accepted the particulars to each of those charges.

2. Middleton J made declarations on that day that:

   (1)Mr Chopra is guilty of contempt of this Court for breaching paragraph 4 of the order made by the Honourable Justice Middleton on 11 May 2015, by engaging in the conduct referred to in paragraph 1 of the Further Amended Statement of Charge; and

   (2)Mr Chopra is guilty of contempt for breaching paragraphs 5 and 6 of the order made by the Honourable Justice Middleton on 11 May 2015, by engaging in the conduct referred to in paragraph 2 of the Further Amended Statement of Charge.

3. The proceeding was then referred to my docket, and I must now sentence Mr Chopra in respect of those two contempts.

   CONSIDERATION

4. The parties agree that the contempts to which Mr Chopra has pleaded guilty are serious and that in all the circumstances only a period of imprisonment is appropriate.  The applicant says that it would be insufficient wholly to suspend any sentence of imprisonment.  Counsel who appeared for the contemnor before me submitted that the Court should wholly suspend such sentence of imprisonment as may be imposed.

   General principles of law applicable

5. In Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 (Mudginberri) at 107, Gibbs CJ, Mason, Wilson and Deane JJ said the following about the rationale and purpose of the contempt power:

   … the underlying rationale of every exercise of the contempt power … [is] that it is necessary to uphold and protect the effective administration of justice.  Although the primary purpose in committing a defendant who disobeys an injunction is to enforce the injunction for the benefit of the plaintiff, another purpose is to protect the effective administration of justice by demonstrating that the court’s orders will be enforced.  As the authors of Borrie and Lowe’s Law of Contempt, 2nd ed (1983) say, at p. 3:

   If a court lacked the means to enforce its orders, if its orders could be disobeyed with impunity, not only would individual litigants suffer, the whole administration of justice would be brought into disrepute.

6. Later in their judgment (Mudginberri 161 CLR 98 at 115) their Honours said this about the nature of the Court’s power to deal with and punish contempt of court:

   These are considerable powers, resort to which imposes a heavy responsibility upon a court confronted with a determined challenge to its authority.  The propriety of their exercise cannot be measured solely by reference to the established procedures attending the prosecution of ordinary breaches of the law.  Contempt of court is a distinctive offence attracting remedies which are sui generis…It is required of the chosen remedy that it be effective, no more but no less.  For, if it is not effective, serious and lasting damage to the fabric of the law may result. 

7. In Australian Building Construction Employees’ and Builders Labourers’ Federation v Commonwealth of Australia (1986) 161 CLR 88 at 112-113, Gibbs CJ, Mason, Wilson and Deane JJ said:

   …lying behind punishment for a contempt which involves wilful disobedience to a court order, is the very substantial purpose of disciplining the defendant and vindicating the authority of the court.  In our view…a deliberate commission or omission which is in breach of an injunctive order or undertaking will constitute such wilful disobedience unless it be casual, accidental or unintentional.

   Mr Chopra’s personal circumstances

8. Mr Chopra, you are 36 years old.  You grew up in Mirzapur, a small town in India.  Your father retired from the navy when you were young.  Your mother was a principal of a college for girls.  You finished school in India, and came to Australia in the year 2000, when you were 19 years old.  You studied hospitality for one year, then business marketing. You met your now wife at that time.  During your education in Australia you supported yourself through menial jobs in the hospitality industry.  After obtaining your diploma of marketing in 2003, you returned to India, before coming back to Australia.  You worked in sales for two years.  In 2007, you married.  Around 2008, you conducted a business involving the promotion and sale of electronic goods and related accessories to consumers through the  Electronics Bazaar website.  That business was initially successful, but soon began to struggle as competition from overseas websites increased.  By the time you were before this Court in May 2015, you had accumulated significant debts, and your business was failing.

9. In February 2015, your daughter was born.  Your wife testified that you often look after your child when she is at work and that she works irregular hours, including in the evenings and on weekends. 

10. Following this Court’s decision in May 2015, you had insufficient funds to pay the penalty imposed.

11. Around the time of your bankruptcy, you commenced working with a friend in a digital marketing firm, providing search engine optimisation services. 

12. Your psychologist provided a report to the Court that states that you meet the criteria for a diagnosis of “Adjustment Disorder – with depressed mood and mixed anxiety”.  Your symptoms are said to be due to the stress associated with these proceedings and your financial problems.  The psychologist’s report indicates that you require treatment and that you would be at significant risk of deterioration if incarcerated.  The report also says that you would be vulnerable in custody.

13. Your counsel has also tendered into evidence a number of character references from members of your family and close friends, among others, attesting to your good character and that you are sorry for what you have done.  Your wife gave evidence that you are “morally a good person” and that you are an excellent father and husband. The Court also received a letter of apology dated 8 June 2017, which you signed on the morning of the hearing before me, on 14 June 2017.

14. You have no prior convictions of any kind.

    Sentencing considerations

15. Your counsel accepts that the imposition of a fine would be an inappropriate penalty, given the seriousness of your offending, and given that you are an undischarged bankrupt who has not paid, and will likely never pay, the penalties imposed by the Court in respect of the contraventions of the ACL which you admitted in May 2015. Your counsel also accepts that general deterrence must be taken into account and that specific deterrence “must also play a role, because of the duration of the contempts, and them occurring or continuing after [you were] warned about the consequences of non-compliance” with the Court’s 11 May 2015 orders.

16. Your counsel also accepts that a term of imprisonment is the only appropriate sentence in the circumstances of your case, but submits that any sentence of imprisonment should be suspended.

17. Your counsel concedes that he can proffer no good explanation for why you repeatedly breached this Court’s orders, other than to say, as your wife testified, that you are inclined to “bury your head in the sand”.  He submits that the letter which you wrote to the Court on the day of the hearing before me demonstrates that you do appreciate, albeit belatedly, the seriousness of what you have done; that you are determined to make amends, to the extent that you can; and that you are determined to avoid any repetition of your unlawful conduct in the future.  You are a dedicated family man and any term of imprisonment will impact on your wife’s ability to care for your young child, particularly whilst working in her current role.  I also accept that you are otherwise of good character, and that any term of imprisonment will be onerous on you.  I take into account that you pleaded guilty to the two counts of contempt.  I also take into account that you meet the criteria for a diagnosis of “Adjustment Disorder – with depressed mood and mixed anxiety”, although it seems that these symptoms are due to the stress associated with these proceedings and your financial problems, which are causes of your own making.

18. I have given anxious consideration to whether I should wholly suspend any term of imprisonment, but I am satisfied that part of your sentence must be served. You understood the seriousness of the orders made by the Court in May 2015. You told the judge that you understood the seriousness of the orders and the applicant repeatedly reminded you that breaching the Court’s orders might result in you being imprisoned for contempt of court. Despite having told the Court in May 2015 that you had shut down the Electronics Bazaar website, within a matter of two months you had set up a new website which offered goods for sale on terms that you knew contravened the ACL and the injunctions imposed on you by the Court. Although you took down the offending statements about refunds and return goods when the applicant confronted you about it, within a couple of months of doing that you contravened the Court’s injunction against you restraining you from accepting payment for goods in circumstances where they were not supplied within the statutorily mandated time. When the applicant discovered that, you set up the Dream Kart website, on which you yet again defied the authority of the Court’s orders against you. In the case of the statements in respect of the terms and conditions upon which goods could be returned or repaired, despite everything, you kept those offending statements on the website until around the time that you pleaded guilty to the two charges of contempt.

19. Although your counsel sought to persuade me otherwise, I have no doubt that the contempts you committed, which are the subject of the charges and to which you pleaded guilty, are criminal in nature.  They involved an attitude of defiance, a deliberate and contumacious determination to defy the Court and a direct intention to disobey the Court’s order.  Alternatively, they are criminal contempts because the substantial purpose of the contempt application is to punish those breaches of the 11 May 2015 orders alleged in the statement of charge.  You have also told the Court that it is likely that you will resume conducting an online retail business in the near future.  That is relevant to the question of conditions, to which I will turn shortly.

20. Mr Chopra, would you please stand.

    ORDERS

21. I sentence you to serve the following terms of imprisonment:

    (1)On charge 1, 3 months.

    (2)On charge 2, 3 months.

22. I order that the sentences be served concurrently.

23. You shall serve an actual term of imprisonment of one month in any event.  The balance of the sentence, that is, two months, will be suspended from execution, on the conditions set out below.

24. A warrant shall issue for your committal to prison for a period of one month.  

25. A further warrant shall issue for your committal to prison for a further period of two months, with said warrant to lie in the Registry of this Court with the intent that it not be executed provided that you, for a period of five years from the date of this order:

    (1)refrain from contravening any of the orders in paragraphs 4 to 6 of the orders made in this proceeding by Middleton J on 11 May 2015; and

    (2)also refrain from knowingly being involved in conduct by any other person which if engaged in by you would constitute a contravention of any of the orders in paragraphs 4 to 6 of the orders made in this proceeding by Middleton J on 11 May 2015.

26. I also order that you pay the applicant’s costs in respect of this proceeding on an indemnity basis.

I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice O’Callaghan.

Associate:

Dated:        28 June 2017