Australian Competition and Consumer Commission v Danoz Direct Pty Ltd - [2003] FCA 881

FEDERAL COURT OF AUSTRALIA
Australian Competition & Consumer Commission v Danoz Direct Pty Ltd
(ACN 003 546 709) [2003] FCA 881
TRADE PRACTICES – where electronic muscle stimulation device – where advertised on television, website and in catalogue – where representations made in advertisements – whether representations constituted misleading or deceptive conduct or were likely to mislead or deceive – whether had reasonable grounds – whether made inadequate qualifications on opinions or predictions – whether representations showed performance characteristics, uses or benefits the device did not have – whether false or misleading representation with respect to price – whether individuals aided, abetted, counselled or procured contraventions – whether individuals knowingly concerned in contraventions – corrective advertising – declarations – injunctions – trade practices compliance programme – power to order refunds.
Trade Practices Act 1974 (Cth) ss 6(3), 51A, 51A(2), 52, 53, 53(c), 53(e), 75B, 75B(1), 75B(1)(a), 75B(1)(c), 80, 80(1), 80(4), 80(5), 80A, 86C, 86C(2)(b), 86C(3), 86D, 87, 87(2)(c)
Australian Securities and Investments Commission Act 1989 (Cth)
Trade Practices Revision Bill (1986)
Australian Competition & Consumer Commission v Universal Sports Challenge Ltd [2002] FCA 1276 considered
Kellcove Pty Ltd v Australian Motor Industries Ltd & Anor [1990] FCA 306 (Woodward J, unreported judgment, delivered 6 July 1990) cited
Cummings v Lewis & Ors (1993) 41 FCR 559 cited
Phoenix Court Pty Ltd & Ors v Melbourne Central Pty Ltd (1997) ATPR (Digest) 46-179 cited
Blacker v National Australia BankLtd [2000] FCA 681 cited
City of Botany Bay Council v Jazabas Pty Limited (2001) ATPR (Digest) 46-210 cited
Ting & Anor v Blanche & Anor (1993) 118 ALR 543 cited
Australian Competition and Consumer Commission v IMB Group Pty Ltd (1999) ATPR 41-704 cited
Yorke & Anor v Lucas (1985) 158 CLR 661 considered
Medibank Private Ltd v Cassidy (2002) ATPR 41-895 followed
Oxford Dictionary of Sports Science and Medicine (1994)
The Shorter Oxford English Dictionary
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v DANOZ DIRECT PTY LTD (ACN 003 546 709), MOSHE OZANA, MICHAEL WILLIAM RONALD QUINN AND AARON SCHERECK
Q 77 OF 2002
DOWSETT J
22 AUGUST 2003
BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

Q 77 OF 2002

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
APPLICANT

AND:

DANOZ DIRECT PTY LTD (ACN 003 546 709)
FIRST RESPONDENT

MOSHE OZANA
SECOND RESPONDENT

MICHAEL WILLIAM RONALD QUINN
THIRD RESPONDENT

AARON SCHERECK
FOURTH RESPONDENT

JUDGE:

DOWSETT J

DATE:

22 AUGUST 2003

PLACE:

BRISBANE

REASONS FOR JUDGMENT
BACKGROUND

The first respondent is a retailer which engages in intensive promotion of its products on television, by post and using a website. It favours two particular forms of television promotion, namely the “advertorial” and the “infomercial”. The advertorial usually involves a person acting as host (an employee of the relevant television station) interviewing another person (in this case an employee of the first respondent) about a particular product. Other participants may demonstrate it. Such a programme communicates information about the product in a way which suggests that it is not a paid advertisement. An advertorial generally lasts for about four minutes. It is pre-recorded and usually approved in advance by the television station’s legal advisers. Nonetheless it appears to the viewer to be broadcast “live”. The infomercial resembles an ordinary advertisement, save that it lasts for about twenty-eight and a half minutes and is, to some extent, repetitive. The first respondent usually receives pre-recorded infomercials from the suppliers of its products. Where necessary, it “Australianizes” the infomercial to appeal to local tastes. Relevantly, the first respondent also promotes products on its website and in its catalogues.
The second respondent, Moshe Ozana, is a director and chief executive officer of the first respondent. The third respondent, Michael William Ronald Quinn, was, at relevant times, the general manager of the first respondent. His major function appears to have been preparing and appearing in advertorials. Aaron Schereck, the fourth respondent, was the first respondent’s executive producer. He was concerned in the marketing of products, including writing scripts for advertorials and the adaptation of infomercials.
THE “ABTRONIC”
The word “AbTronic” is apparently a registered trademark. It describes a device which consists of a pad in the shape of a trapezium, about twenty-four centimetres at its longest point and about twelve centimetres wide. The pad is made of rubber and vinyl. Concealed within the pad are electrodes which, when the pad is applied to the human body, transmit electronic stimulation into the body. The electrodes are fed from a small plastic fitting containing a battery. The fitting is attached to one side of the pad. It has three control buttons and two indicator lights. The pad may be attached to a web belt using Velcro patches. The web belt can be tied around the trunk of the body or around a limb. The purpose of the device is to provide electronic stimulation to a muscle, causing it to contract.
THE CONDUCT
The applicant claims that in promoting the AbTronic on television, its website and in its catalogues, the first respondent contravened the Trade Practices Act 1974 (Cth) (the “Trade Practices Act”). The applicant also claims that:
•each of the second, third and fourth respondents was, pursuant to s 75B of the Trade Practices Act, involved in the first respondent’s alleged contraventions; and
•the third respondent, by his own conduct, contravened the Trade Practices Act by virtue of its extended operation pursuant to subs 6(3).
It is conceded that all of the relevant conduct occurred in trade or commerce.
The impugned conduct is identified in pars 15 - 29 of the statement of claim. Broadly speaking, it is alleged that the first respondent represented that use of the AbTronic would cause weight loss, reduce body fat and improve the “tone” of musculature. Such representations are said to have been misleading or deceptive or likely to mislead or deceive. It is also said that the first respondent misrepresented the usual price at which the device was offered for sale. This conduct is said to have been in breach of s 52 and/or s 53 of the Act. The respondents have admitted that certain of its statements were misleading, in particular:
•that use of the AbTronic for ten minutes is the “equivalent” of up to 600 sit-ups without any effort;
•that the AbTronic has a fat and cellulite blaster setting, designed to work on fat cells, not on muscles;
•that the AbTronic will flatten the stomach “once and for all”;
•that the AbTronic firms, tones and tightens a person’s love handles, that term describing fat deposits in the area of the hip;
•that the AbTronic can provide a vigorous work-out to such love handles; and
•that the AbTronic is normally sold for $220.
THE CENTRAL ISSUE
The primary remaining issue concerns the capacity of the AbTronic to “work” and/or to “tone” muscles. The matter is complicated by disagreement amongst the experts as to the meaning of the expression “tone” in this context. The case involves two major factual questions, namely:
•whether the use of electronic muscle stimulation (“EMS”) on healthy muscle will provide improved muscle tone, size, strength or other similar benefits (apart from weight loss or fat reduction); and
•whether, assuming that EMS has any such beneficial effects when applied to healthy muscle, the AbTronic is capable of providing that effect.
SCIENTIFIC EVIDENCE CONCERNING THE USE OF EMS AND THE ABTRONIC WITH HEALTHY MUSCLE
Professor John Hemsley Pearn is a medical practitioner and is presently Professor of Paediatrics and Child Health in the University of Queensland. He has worked, researched and published over many years, with a particular focus on paediatric and genetic neuromuscular conditions. In his evidence, Professor Pearn referred to “adaptation” of a human muscle. This term denotes increase in muscle size and strength, possibly accompanied by change in muscle definition. The term “muscle definition” refers to the appearance of the muscle, which appearance may be affected by size and shape, but also by any overlay of fat, subcutaneous tissue and/or skin. In Professor Pearn’s view, adaptation of a muscle occurs in a normally functioning person when the muscle is contracted against resistance. In the absence of contraction against resistance, no adaptation will occur. In general, the greater the resistance against which the muscle contracts, the greater the muscle adaptation achieved.
Resistance can be provided by one or more of the following:
•the mechanical task of the moment;
•agonist/antagonist muscle action; and
•gravity.
The expression “agonist/antagonist muscle” can be explained by reference to the biceps and triceps muscles in the upper arm. According to Professor Pearn:
When a person contracts their biceps muscle without moving their forearm (flexing the biceps), the biceps muscle is the agonist muscle. At the same time as the biceps is contracted, the triceps muscle (running along the underside of the upper arm) also contracts. By contracting this antagonist muscle at the same time as the agonist muscle, the forearm is held stationary (in a muscle-flexing pose).
The experience of astronauts demonstrates that, in the absence of gravity, human muscle wastes. In that situation, muscles used for normal human movement contract against insufficient resistance to cause muscle adaptation. Without performing compensatory agonist/antagonist muscle exercises in which there is resistance to muscle contraction, an astronaut’s muscle size and strength will decrease over time.
Abdominal muscle adaptation is of particular importance in this case. Professor Pearn said that the abdominal muscles are in distinct layers as follows:
•the rectus abdominis, which is closest to the skin, running vertically down the torso;
•the external obliques, the next layer of muscle, running diagonally downward from the chest to the waist;
•the internal obliques, lying underneath the external obliques and running diagonally downward from the pelvis; and
•the transverse abdominis, running horizontally across the abdomen.
Of these muscles, the outline of the rectus abdominis is most easily seen through the skin. The size and strength of the abdominal muscles can be increased by contracting them against resistance. The long spinal muscles in the back act as antagonist muscles and provide resistance by bracing against abdominal muscle contraction. This is the process by which a person performing “sit-up” exercises increases the size and strength of the abdominal muscles. If the back is held straight during a sit-up, the weight of the torso being lifted off the ground and the bracing of the abdominal muscles against the spinal muscles provide the substantial resistance required to cause adaptation of the abdominal muscles. Professor Pearn considers that local involuntary contraction of the abdominal muscles (which I understand to be his perception of the effect produced by the AbTronic) will not generally cause the spinal muscles to brace. In the absence of such bracing against the contraction of the abdominal muscles, there will be no resistance to the abdominal muscle contraction and therefore no adaptation of the abdominal muscles, even over a period of time.
In cross-examination, Professor Pearn agreed that he had not conducted any research into the capacity of EMS to cause muscle contraction or as to the effect of contractions which are “... at a low level of maximal voluntary … contraction … induced by electrical stimulation”. He had performed only a superficial review of the literature concerning the subject. However he has some experience in the use of electrical stimulation of muscles in children suffering from certain neuromuscular conditions such as cerebral palsy. He has no experience in using such treatment with “normal individuals”.
The other scientific witnesses, Professor De Domenico, Dr Wilson and Dr Coombes prepared a joint report and also provided individual statements of evidence. I will deal with their evidence as follows:
•Firstly, by summarizing their respective backgrounds and experience;
•Secondly, by summarizing their joint report;
•Thirdly, by summarizing the evidence of Professor De Domenico whom I consider to be the respondents’ primary witness in this area; and
•Fourthly, by summarizing the evidence of Dr Wilson and Dr Coombes.
Professor Giovanni De Domenico is a Doctor of Philosophy and also holds a Graduate Diploma in Physiotherapy and the degree of Master of Science. He is presently Professor and Chairman of the Department of Physical Therapy in the School of Allied Health Sciences within the University of Texas Health Science Centre at San Antonio, Texas in the United States of America. That university is large and prestigious. It provides professional training in physiotherapy and associated clinical services. Professor De Domenico has published extensively in the area of EMS over a period of twenty years and has carried out research in that area. He also has clinical experience and expertise. Some of his work has dealt with the theory and application of electrical stimulation to human muscle. He has been invited to speak on the subject and has conducted continuing education courses.
In cross-examination, Professor De Domenico agreed that in recent years he has been principally involved in administration and teaching rather than research. He has published only one paper in the last twelve years and has made two presentations in the last eight years. In 1997 he published as joint author, a textbook, the fourth edition of Beard’s Therapeutic Massage. Professor De Domenico claims that his relevant knowledge is still current. EMS is an area in which he presently teaches.
Dr Gregory Wilson is a Doctor of Philosophy and also holds the degree of Bachelor of Physical Education. He has published extensively in the field of assessment and development of human muscular function using various training devices with healthy subjects. He has been a power lifter, representing Australia at world championships. In that capacity, he has had substantial practical experience in strengthening and conditioning. He has also trained elite athletes in a number of sports and has supervised a university student in a research project examining the use of EMS. He uses EMS as an integral component of his personal training business. He teaches health and fitness modules at TAFE colleges in New South Wales and strength and conditioning courses for the Australian Sports Commission. In these programmes he gives detailed consideration to the use of EMS and the merits of such use.
Dr Jeff Scott Coombes is a Doctor of Philosophy and holds the degrees of Bachelor of Education, Bachelor of Applied Science and Master of Education. He is a senior lecturer in exercise science in the University of Queensland. He teaches and conducts research in areas such as exercise physiology, nutrition and exercise and muscle physiology. He has published a number of studies concerning the use of EMS and has worked in the health and fitness industry for over ten years as a fitness assessor, personal trainer and gymnasium manager.
In their joint report, Professor De Domenico and Drs Coombes and Wilson agree that:
•The term “muscle definition” relates to the physical appearance of the outline of the muscle, or more accurately, of the skin over the muscle. This depends upon a combination of factors including tension in the muscle, muscle size and the amount of subcutaneous fat lying over the muscle.
•The terms “muscle firmness” and “muscle hardness” are interchangeable. When a muscle is not being voluntarily contracted, its firmness or hardness depends upon:
– its contractile protein density;
–characteristics of the components of its elastic tissue (such as collagen and elastin) within the muscle;
–amount of, and characteristics (eg density) of fat within and around the muscle; and
– resting level of neural activity.
•The term love handles, used in some of the relevant publications, refers to fat stored above or near the iliac crest at the side of the waist.
Apart from these areas of agreement, the joint report also identifies areas of disagreement. Professor De Domenico and Dr Wilson consider that the term “muscle tone” can be defined as the amount of tension in a muscle. They refer to the Oxford Dictionary of Sports Science and Medicine (1994) where “tone” is defined as:
A state of tension, such as that caused by a sustained, partial muscle contraction.
This implies that tone describes the state of a contracted, or partially contracted muscle. Dr Coombes agrees “in principle” but asserts that in lay usage, the term “muscle tone” is synonymous with muscle definition, and is generally used by lay people to refer to muscles in a resting state rather than in contraction. Professor De Domenico and Dr Wilson consider that muscle tone is most accurately quantified by the strength of the muscle, with a stronger muscle capable of exerting greater tension when contracted, and therefore exhibiting more tone. Dr Coombes considers that, in lay terms, that view is incorrect because the term “muscle tone” describes muscle in a resting state.
Professor De Domenico and Dr Wilson agree that continued use of the AbTronic is likely to increase abdominal muscle strength and size. Dr Coombes disagrees. Professor De Domenico and Dr Wilson summarize their reasons for so concluding as follows:
… the human body is an adaptive organism and will tend to adapt to the level of stress imposed upon it. This is known as the ‘training principle of overload’, and is one of the fundamental training principles that exercise science is based upon. The Abtronic will cause the muscles to repeatedly contract at a level of intensity, and for a period of time, that is greater than that usually experienced by the individual, particularly untrained individuals, and over time this will force the body to adapt to the training stimulus causing the stimulated muscles to increase in strength.
Dr Coombes gives the following reasons for his contrary view:
Firstly, the Abtronic does not cause muscles to contract against a substantial resistance. Therefore the muscles are doing little or no work. For muscles to improve in strength they need to contract against resistance so they can adapt and become stronger. With no resistance there will be little or no adaptation.
Secondly, the Abtronic is not capable of causing substantial muscle contraction. It will cause muscles near the surface of the body to contract but will not have the power (or people will not be able to tolerate the pain involved) in trying to cause a significant amount of the muscle to contract. Furthermore many individuals with large amounts of fat around the abdomen will not be able to get the abdominal muscles to contract as the electrical power will be dissipated in the fat.
Professor de Domenico and Dr Wilson refer to various studies in support of their views. Dr Coombes considers many of these studies to be inappropriate. It is fair to say that his view has changed over time. In particular, he originally excluded the possibility that the use of EMS on healthy muscle could ever contribute to improvement in muscle tone or definition. He now accepts that there is evidence suggesting that EMS may, in some circumstances, make such a contribution. He does not agree with that view and, in particular, asserts that the AbTronic cannot do so.

The overall conclusions reached by Professor De Domenico and Dr Wilson are as follows:
In many areas of science there is considerable debate and discussion about different points of view, and often many instances of different experimental findings on various issues. The area of EMS is similar in that there exists scientific evidence supportive of, and dismissive of, the effectiveness of this modality. However, in overall balance and on the basis of reasonable probabilities, (Professor de Domenico and Dr Wilson) … find that:
•There is a reasonable amount of scientific support for the majority of representations made by Danoz Direct in relation to the Abtronic device. These representations are:
(a)it generates pulses that activate a person’s underlying motor nerves, causing a person’s muscles to contract and relax, just like normal exercise;
(b)       it is a brilliant training and toning tool;
(d)it firms, tones and tightens the upper abs, lower abs, and/or a person’s love handles with no sweat; (provided the reference to love handles is deleted)
(e)       it will tone and firm muscles;
(f)it can provide a vigorous workout for the abdominal region, the love handles, arms, buttocks, thighs; (provided the reference to love handles is deleted)
(h)       it can work out and tone different muscle groups;
While there exists strong support for the majority of representations made by Danoz Direct, there are some claims that (Professor de Domenico and Dr Wilson) … do not believe can be supported at the present time and thus should be withdrawn. These representations are:
(c)10 minutes of it is equivalent of up to 600 sit-ups without any effort;
(g)it has a fat and cellulite blaster setting that is designed to work on fat cells, not on muscles;
(i)        it will flatten your stomach once and for all.
As I have said the respondents accept that these “unsupported statements” were misleading. The rather curious references to “love handles” flow from a previous disagreement concerning the meaning of the term, which disagreement has been resolved.
Dr Coombes concludes that:
The scientific evidence supplied by (Professor De Domenico and Dr Wilson) … is inappropriate when looking at the representations made by Danoz Direct in regards to the Abtronic. There are hundreds of published research studies using EMS however these should not be simply applied to the Abtronic. Overall there is insufficient scientific evidence to support any of the representations listed in this document. Furthermore, my own testing of the device (as outlined in previous affidavit, in September 2002) showed no benefits of using the Abtronic.
I turn now to consider the individual expert reports provided by these three witnesses.
Professor De Domenico considers that:
There is no doubt that properly administered, electrical stimulation can be a powerful tool in strengthening human muscles. In fact, the evidence reviewed in the studies cited above, shows that as few as 15 to 30 strong but well tolerated contractions, performed 3 to 5 times a week for as little as 3 to 5 weeks, can be effective. The strength gains seen with these short-term stimulation protocols are said to be ‘neural’ in nature, rather than morphologic. This means that the increases in strength are due to an increased ability of the subject to make the muscle in question contract (activate the appropriate motor nerves), rather than by the muscle becoming larger in size. Morphologic changes require much longer stimulation protocols, in the order of 10 to 12 weeks or longer. … These concepts have now been incorporated into standard texts on electrotherapy … .
At p 3 of his report he observes:
When a muscle contracts, whether by voluntary effort or under electrical stimulation, the same neural and metabolic pathways are activated and, given an appropriate regime of exercise, there is every reason to expect similar training effects. I have personally been involved in several studies that have investigated this question under carefully controlled circumstances. Two of these studies … are relevant to the question of how much contraction force is needed in order to gain significant strength gains under electrical stimulation. Lai, De Domenico and Strauss (1987) used a carefully graduated training protocol of EMS to the anterior thigh muscle (Quadriceps Femoris), stimulating five times a week for three weeks. One group (Low Intensity) of subjects used EMS to produce a training contraction force equal to 25% of his or her maximal voluntary isometric contraction (MVIC) force. A second group (High Intensity) used 50% of MVIC training contraction level. A third group acted as controls for the study and received no training.
The entire protocol was repeated by Szeto, Lai and Strauss, in a follow-up study using voluntary exercise, instead of EMS … . The results from both studies were almost identical. In both cases, training at either 25% or 50% of MVIC produced significant strength gains. There were no differences between the EMS and the voluntary groups. These two studies indicate that significant strength gains can be achieved with relatively low contraction levels of EMS (25% Of MVIC). However, as expected, the largest and most significant improvements in strength were seen at the higher training levels. Similar results have been reported by other investigators … .
Another important issue concerning EMS relates to the type of stimulation used and whether one form is more effective than another. … (A) commonly addressed question concerned the issue of how much force could be produced in a muscle during electrical stimulation and whether there were significant differences between stimulators. I have personally been involved in another carefully controlled and comprehensive study …, reported by Strauss and De Domenico in 1986. In this study, seven different types of stimulator were compared. Some of the stimulators were large and ‘powerful’ units, while others were very small, battery powered, portable devices. Results showed no significant differences in muscle torque produced by each of the seven types of stimulator. The small, portable, battery powered units were just as powerful as the much larger clinic models.
Under the right conditions, electrically stimulated muscle contractions can be an effective method of conditioning and strengthening human muscles. While most of the studies on EMS have involved the quadriceps muscle, there is no reason to believe that other muscles in the body (including the abdominal muscles) will produce different results. In fact, a number of well controlled studies have investigated the direct effects of exercise … and EMS on the abdominal and other trunk muscles of healthy subjects. In general, these studies also report significant improvements in strength and/or endurance … of the abdominal muscles.
Professor De Domenico refers to various studies and then concludes at p 4 of his report:
Taken together, these studies provide persuasive evidence that statistically significant increases in the strength of the abdominal muscles, can result from the use of electrical stimulation delivered over a relatively short period of time (3 to 4 weeks). The results also suggest that daily stimulation is likely to result in greater strength improvement. Most importantly, these increases in strength were produced using contraction forces ranging from the minimally perceived level, to the maximally tolerated. This strongly suggests that any level of contraction force produced by electrical stimulation can induce strength changes in the abdominal muscles. Lower force levels however, may need a stimulation protocol lasting several hours each day. Since this type of protocol does not require strong contractions, it seems particularly suitable for a small stimulator worn in direct contact, under everyday clothing and used throughout the day. Both high and low levels of muscle contraction can be produced by the Abtronic stimulator and for this reason I believe it is well suited to take advantage of such protocols.
Professor De Domenico then refers to a number of the specific representations made by the first respondent. I will deal with these matters at a later stage.
In his oral evidence, Professor De Domenico was asked to comment upon an article by Dr Alon and others concerning the effects of electrode size in EMS. The paper is ex 8. Professor De Domenico said that the paper demonstrated that the size of the electrode used to stimulate a muscle should reflect the size of the muscle. Merely to use a larger, rather than a smaller electrode provides no extra benefit. The important factor in determining the size of the electrode is the size ratio appropriate to the individual muscle to be stimulated. Professor De Domenico said that the positioning of the electrodes in ex 7 (part of an earlier report by Alon and others which is ex 12) could be effectively replicated using the AbTronic. He also said that gel, which is applied between the electrode pads and the skin in using the AbTronic, would tend to extend the area over which the electrical stimulation was provided, creating the effect of a larger electrode. Professor De Domenico stated that the instructions given on pg 11 of the AbTronic instruction manual (ex 11) as to location of the electrodes were appropriate to achieve the relevant purpose.
Professor De Domenico asserts in his report that numerous studies have demonstrated that normal and atrophied muscles can gain significant increases in strength from a suitable EMS regime. In cross-examination, it was suggested to him that one of the four articles cited in support of that proposition, (by Kramer and Mendryk), does not support it. Apparently the authors of that review article conclude that “…insufficient scientific evidence currently exists to warrant either the acceptance or rejection of electrical stimulation as a strength improvement technique.” Professor De Domenico said that review articles assemble information from various sources. Some of those sources may support a proposition while others do not. He included the article for the sake of completeness. Professor De Domenico agreed that in order to induce strength changes in abdominal muscles, it might be necessary to apply the AbTronic for several hours each day, possibly in two different locations.
In the course of cross-examination he demonstrated a phenomenon to which he refers in his report, namely the capacity of a human being to use abdominal muscles to hold in intestinal content, thus creating a “slimmer” appearance. He offered the view that electrical stimulation is helpful in facilitating improved control over the muscles to enable production of this effect. Professor De Domenico said that fat deposits are not themselves significant obstacles to the penetration of electrical stimulation. He said that the greatest barrier to penetration is the skin. Fat deposits might make it difficult to position the electrodes accurately but would not significantly impair the flow of current. However he later seemed to concede that fat layers might pose problems by increasing the distance over which the current must pass to reach the target muscle.
Dr Wilson considers that there has been an enormous amount of scientific research into the area of EMS, particularly over the last thirty years. He considers that “… the overwhelming majority of research in this area has demonstrated positive effects on the human body from the use of EMS”. EMS can be used effectively to increase the size, strength and function of muscle. It is effective because the human body is an adaptive organism which adapts to the stresses imposed upon it. The various EMS devices cause muscles to contract repeatedly at a level of intensity, and for a period of time that is greater than that usually experienced by the person in question, particularly a sedentary person. The body adapts to the increased workload, resulting in muscular adaptation, including increased muscular strength, size, tone, function and expenditure of energy. Dr Wilson conducted tests using a number of people as subjects, including himself. He says that the AbTronic is capable of repeatedly producing strong contractions of underlying muscle. He asserts that EMS, plus diet and voluntary exercise, can aid in a number of ways including:
•Strengthening, shaping and toning muscle;
•Improving posture;
•Reducing incidence of low back pain and injury;
•Reducing muscular aches and pains in a variety of bodily regions;
•Improving diet;
•Increasing the amount of voluntary exercise;
•Losing body weight and body fat;
•Reducing blood pressure, total cholesterol and blood sugar levels; and
•Improving overall health and self esteem.
I am not sure how EMS can improve diet. In any event, many of these assertions are beyond the ambit of the current proceedings, given the respondents’ concessions as to weight loss, fat reduction and exercise equivalence.
In the course of Dr Wilson’s cross-examination he said that in lay terms, muscle tone is affected by strength and “feeling” of the muscle (its firmness or hardness), appearance, size of the muscle and degree of contraction at the relevant time. If one muscle is flexed and another not, the flexed muscle may well exhibit more tone. Stronger muscle is capable of exerting greater tension. It therefore exhibits more tone. Dr Wilson appears to accept that in lay usage, the word “tone” is somewhat imprecise. He also says that current thinking suggests that although early changes as a result of EMS may be neural, morphological changes may also occur within four weeks. As previously mentioned Professor De Domenico has a different view.
Dr Coombes considers that the AbTronic will not achieve the primary goals of changing body shape or improving muscle firmness and tone. To change body shape requires a loss of fat or an increase in muscle size. Tests carried out by Dr Coombes demonstrated that the AbTronic does not significantly affect the metabolic rate and therefore will not result in the additional energy expenditure necessary to decrease body fat. This is conceded. He considers that the AbTronic, used in accordance with the instruction manual, will not result in an increase in muscle size. The applicant does not plead inadequacy of such instructions in its pleadings, although counsel raised the matter on a number of occasions in cross-examination and in addresses. I do not understand the case to have been conducted on that basis. If the applicant wishes to seek further findings in this respect, it may apply after the publication of these reasons.
As Dr Coombes considers that the term “muscle tone”, in common usage, describes the ability to visualize muscles through the skin, he also considers that improvement in muscle tone depends primarily upon a decrease in body fat. AbTronic will not facilitate this. In clinical usage, the term “muscle tone” denotes the activity of the alpha motor neurons. It is “plausible” that the AbTronic may affect the activity of the alpha motor neurons while the device is being used and for about half a second afterwards. This will not result in any change to body shape or to the appearance of the muscles through the skin.
Dr Coombes considers that for muscle fibre to become thicker (hypertrophy), there must be an increase in the amount of protein within the cell. In his first report, he asserts that there is no evidence that the use of EMS devices such as the AbTronic will result in such increase. For hypertrophy to occur, the load against which the muscle is working must be large enough to elicit a response in order to produce additional muscle protein. When using an EMS device, the muscles contract against little or no resistance. It is therefore unlikely that any such stimulus will result in increased muscle size. He refers to a report (Porcari and others, 2002) in which the authors report that subjects who underwent EMS training over a particular period had no change in body weight, body fat, girth, isometric or isokinetic strength or appearance, and that “… claims relative to the effectiveness of EMS for apparently healthy individual are not supported by the findings of the study”.
In his first report Dr Coombes concludes (at pp 42 and 43) that:
There is very little evidence that EMS using a device such as the Abtronic will significantly increase muscle size in normally active individuals. It is important not to be confused with the effects of EMS on musculoskeletal rehabilitation patients. There is much scientific evidence that EMS will decrease muscle loss (atrophy) in immobilised or injured muscle. This may be described as causing muscle hypertrophy (increasing muscle size) and although this definition is technically correct, the term muscle hypertrophy is much more commonly used in describing the increase in muscle mass from a resting level due to a resistance training program. A resistance training program, by definition, requires muscles to contract against resistance. The resistance is usually provided either by the persons (sic) body weight (e.g. abdominal sit-up) or equipment (e.g. gym equipment or free weights). When a device such as the Abtronic stimulates muscle to contract it is not causing the muscle to generate sufficient force such that an adaptation, such as hypertrophy, would occur. To summarise, an EMS device such as the Abtronic, may increase the size of a muscle that has wasted away but there is no evidence that muscle size can be increased in active healthy muscle.
Dr Coombes also observes that EMS will not cause any increased hardness in resting muscle. He considers that there is no significant increase in energy expenditure associated with the use of EMS. Representations to the effect that using such devices is equivalent to performing conventional exercise are incorrect.
In his second report, Dr Coombes deals with some of the reported studies relied upon by Professor De Domenico and Dr Wilson. He asserts that such studies are generally inapplicable to the AbTronic regime. It is important, in considering Dr Coombes’ evidence, to keep in mind the distinction between the two issues which I have previously identified, namely:
•the efficacy of EMS; and
•the efficacy of the AbTronic in delivering EMS.
One reason for Dr Coombes’ view concerning the AbTronic is the lack of any significant resistance to muscle contraction when the AbTronic is used. He says that in the studies, the relevant limbs were restrained during stimulation, thus providing resistance. He also considers that the AbTronic is not capable of producing contractions to the extent used in the studies. Many of the studies were carried out using the quadriceps muscle which is much thicker than the muscle tissue in the abdominal region and therefore offers greater opportunity for muscle adaptation.
Dr Coombes also asserts that some of the studies relied upon by Professor De Domenico and Dr Wilson involved protocols which were completely different from those appropriate to the AbTronic. Some used larger electrodes placed in optimal locations on large muscle groups. Some involved contraction against substantial resistance. However, in his second report, Dr Coombes agrees that “… there is evidence which supports the assertion that EMS used under specific conditions will have an effect on muscle size, strength and functional characteristics …”. He considers this to be different from muscle tone.
In cross-examination Dr Coombes agreed that his experiments with the AbTronic were concerned only with its capacity to reduce weight or body fat. Although he has previously conducted research into use of EMS in animals for the purpose of measuring fatigue, his views concerning the AbTronic are based primarily upon his review of the literature. He agrees that EMS will assist in slowing or arresting atrophy in diseased, injured or inactive muscle but does not believe that it will assist in producing strength gain or hypertrophy in healthy muscle. He concedes that there is evidence supporting the contrary view. He remains of the view that the AbTronic cannot do so.

One reason which he gave for dismissing studies relied upon by Professor De Domenico and Dr Wilson was that such studies had involved restraint of the muscle, typically the quadriceps muscle, during EMS. Such restraint would have resulted in the muscle contraction being against resistance. One study of some importance for present purposes is described in these reasons as “Alon (1987)”. It is ex 6. Dr Coombes commenced his oral evidence by conceding that he had originally misread this report. He had understood it to involve the application of EMS to restrained limbs. He now understands that those participants who were subjected to EMS were in an “isometric curl up position” whilst they received such stimulation. As I understand it, this would still have involved contraction of the muscles against resistance in raising the head and trunk from the ground and holding that position for a period of time. That activity would have constituted exercise of the abdominal muscles. Such a reading of the Alon (1987) report would undermine its value as a basis for the De Domenico/Wilson view. In argument the applicant also sought to undermine this report upon the basis that it was unclear. It is necessary to consider the report in some detail in order to ascertain its meaning.
It is entitled the Comparison of the Effects of Electrical Stimulation and Exercise on Abdominal Musculature. The following passages on the first page of the exhibit are of some significance:
Retardation of disuse atrophy or recovery of muscle strength following trauma or disease is a major goal of orthopaedic rehabilitation. Electrical stimulation has been found to retard atrophy of the quadriceps femoris muscle in patients recovering from knee ligament surgery and enhance strength gain in patients with chondromalacia patellae. Eriksson and Haggmark found that muscle re-education programs based on electrical stimulation superimposed on volitional isometric contractions minimized muscle atrophy and facilitated succinate dehydrogenase activity.
…
In muscles functioning at normal levels of strength, electrical stimulation has been shown to further enhance contractile strength.
…
Numerous other investigators used different protocols, and a wide range of electrical stimulation waveforms, phase durations, and pulse rates, as well as different contraction-relaxation ratios. Despite the variance, most studies performed on muscles functioning at normal levels of strength resulted in similar strength gains.
On page 2 of the exhibit the following passage appears:
Repetitive electrical stimulation over several weeks of training may not only alter the effectiveness of muscle contraction but also the response of noncontractile tissue. Several studies reported that subjects required more current output as training progressed. No study could be found where quantification of the changes in electrical stimulation variables were documented.
The purpose of this investigation was to examine the effectiveness of electrical stimulation, volitional exercise, and electrical stimulation superimposed on volitional exercise on the abdominal musculature with respect to muscle strength and endurance. In addition, voltage, current, and tissue resistance were measured to determine if changes occurred in electrical variables during training.
The authors then describe their methodology. Clearly, the experiment concerned healthy muscle, but potential subjects who displayed strong abdominal muscles were excluded. Participants were divided into four groups, a control group (C), a group which underwent volitional exercise (E), a group which was subjected to electrical stimulation (S) and a group which performed volitional exercise with concurrent electrical stimulation (ES). The study reported a surprising increase in abdominal strength in the C group which had undergone neither voluntarily exercise nor electronic stimulation. The ES group reported the greatest increase in strength of all groups. The S group demonstrated a significantly greater increase in strength that did either the E group or the C group. It is obviously curious that the C group should have reported strength increase. However, for present purposes, the report at least suggests that EMS may contribute to increases in abdominal strength, an outcome which offers support for the respondents’ position, subject to the criticisms to which I have referred.
Although I experienced some initial difficulty in understanding the report, I have concluded that its meaning is reasonably clear. The methodology appears under the heading “METHODS” on pages 568 to 570, which are pages 2 to 4 of the exhibit. It was as follows:
•All potential subjects were screened by being asked to assume a supine position without support. They then performed a five second voluntary abdominal curl (raising the trunk and head from the ground), followed by a five second period of rest. The cycle was repeated for as long as the subject could lift part of the body to a pre-identified position. Subjects who were able to perform more than thirty repetitions of this process were deleted from the trial upon the basis that they had strong abdominal muscles.
•The remaining subjects were divided into groups as previously described, orientated to the testing procedure and then tested. There were two aspects to the test. The first was mechanical measurement of strength whilst voluntarily contracting the abdominal muscles. This was done by using a force transducer. Figure 1 illustrates that this involved restraining the subject during testing. The second aspect was as to endurance. The subject lay supine, with knees flexed to ninety degrees and feet unsupported. The subject was then asked to raise the head and trunk and hold them as high as possible, but at not greater than forty-five degrees of flexion. For this test, the subject was not restrained.
•Thereafter all subjects participated in “their respective training regimes” three times per week for four consecutive weeks. All subjects “… used the previously described position for training”.
•The reference to “training regimes” is, in the case of the S group, a reference to periods of EMS. In the case of the E group, it is a reference to an exercise regime, namely a series of five second “curls”. In the case of the ES group, it is a reference to both the exercise and the stimulation regimes.
•The statement that “All subjects used the previously described position for training” refers to the initial position adopted for endurance measurement, namely lying supine with the knees flexed to ninety degrees and feet unsupported. In the case of the S group stimulation was applied to subjects whilst they were in that position. Whether the ES group received stimulation whilst in that position or whilst in the curl position is not disclosed.
I reject the suggestion by Dr Coombes that electrical stimulation was provided to the S group whilst each subject had head and trunk raised from the ground. In my view that is not a fair reading of the report. To ask members of the S group to adopt such a position before each stimulation would be to mix exercise with the stimulation regime. This would have been contrary to the purpose of the study. It is even more unlikely that the group would have been asked to adopt that position and maintain it for the time taken to carry out the whole of a session of EMS.
The respondents submit that the way in which Dr Coombes dealt with this study demonstrates that he is prejudiced against any possibility that EMS or the AbTronic can strengthen muscles. There is substance in this submission.
Dr Coombes now agrees that there is evidence that muscle adaptation may be achieved using EMS (as opposed to the AbTronic) when the subject is not secured or exerting force against resistance. He agrees that in a number of studies, subjects were secured during stimulation in order to permit measurement of the force of the contraction produced by the stimulation rather than to provide resistance against contraction. He agrees that a number of research studies have reported significant results from EMS when applied to a subject who was not secured. There are seven or eight such studies.
As to the capacity of the AbTronic to produce sufficiently strong contractions to stimulate muscle growth or strength, Dr Coombes suggests that the positioning of the electrodes on the AbTronic is not such as to produce strong enough contractions and that the pads of the electrodes are too small to stimulate enough muscle to give the required effect. In cross-examination Dr Coombes conceded that he had no particular expertise in the design of such equipment and that he had not conducted research into, or experiments as to comparative designs. As to the capacity of the AbTronic to produce contractions, his experiments with it were conducted using the “Fat Blaster” programme. He appears to have assumed this to be the most intensive of the programmes and likely to produce the strongest contractions. However it seems that the “Fat Blaster” setting produces one long contraction at a quite low level of intensity. Dr Coombes’ experiments were therefore irrelevant to his opinion. He has done no experimentation comparing the performance of the AbTronic with those of other electronic muscle stimulants. His views are based on a review of the literature.
Concerning the relative size of the electrodes on the AbTronic, Dr Coombes said that the electrodes used in the Alon (1987) study were “huge”. He derived this information from another Alon study (ex 12), part of which is ex 7. It will be recalled that Professor De Domenico gave evidence concerning this study. It considers the use of two surface electrodes, each of which had a surface area of 100 cm² in surface area. Dr Coombes considers that size of the electrode has a direct relationship to effectiveness in stimulating the relevant muscle. He offered no real basis for that opinion. He said that he may have based it upon something that Professor De Domenico had written, but he was not sure about this. He did no specific research into the matter. The extent of his research was limited because of time and cost constraints. He said that the AbTronic pad is about 50 cm² in surface area. It was suggested to him that the surface area was 50 to 60 cm². The difference probably does not matter much. He pointed out that in the ex 7 study, two electrodes were used, giving a total surface are of 200 cm² as compared to the 50 or 60 cm² of the AbTronic.
Dr Coombes was shown another paper by Alon and others entitled “Effects of Electrode Size on Basic Excitatory Responses and on Selected Stimulus Parameters” (1994) (ex 8). The authors propose that:
… the concept that selecting an excessively large electrode size may not add to optimal excitation. Furthermore, it is likely to decrease stimulation efficiency by requiring more electrical energy, by stimulating undesired muscle groups, and by increasing cost since larger electrodes cost more. We infer from these findings that selecting optimal electrode size so that discomfort is minimized and force of contraction is maximized may depend to a large extent on the size of the muscle(s) targeted for contraction.
This conclusion is similar to the view offered by Professor De Domenico in evidence.
Dr Coombes’ initial perception of the capacity of the AbTronic was wrong in another relevant aspect. In par 77 of his first report, dealing with statements by Professor De Domenico and Dr Wilson, he stated:
The Response states that an article by Shenton et al. 1986 shows that EMS provides similar metabolic demands to conventional exercise. In the Shenton article, wrist flexors were electrically stimulated to contract using a stimulation protocol of 10 x 6 second at 70 Hz tetanic contractions with a 10 second rest between each contraction. The authors reported that the depletion on phosphocreatine in the muscles being contracted was similar to when the wrist was voluntarily contracted. The important difference between this study and the use of EMS devices such as the Abtronic is that the muscle is being stimulated to contract to move the limb (in this case to flex the wrist). Therefore the muscles are doing work and will therefore need to replenish ATP (in this case by using phosphocreatine as it is a short lasting activity). When an individual uses an EMS device such as the Abtronic there is no movement of any limbs. This is primarily due to the inability of devices such as the Abtronic being able to deliver the type of stimulus that result in movement and the inability of people to tolerate the amount of electrical stimulation required to move a limb.
Dr Coombes now concedes that if the AbTronic is used on the wrist, it can cause the wrist to flex. Used on the biceps, it can produce a contraction which is strong enough to move the arm.
Dr Coombes’ current reasons for thinking that the AbTronic will not cause muscle adaptation is that it does not cause contraction “against substantial resistance” and that it is not capable of causing a “substantial muscle contraction”. I should say that he has consistently advanced the first of these reasons. It may be that the second has evolved over time, but that is not necessarily a ground of criticism.
In his second report, Dr Coombes suggests that muscle adaptation requires a contraction of about 25 to 50 per cent of maximum voluntarily contraction capacity. He agreed in cross-examination that there was support in the literature for the view that adaptation can be achieved at much lower levels of contraction. He was asked to describe the volume of literature on this subject and replied:
I think there is an extremely large volume of literature to say that electrical muscle stimulation, when used under appropriate conditions, will improve strength.
He stressed the need for appropriate conditions, suggesting that there was a substantial body of opinion supporting his view that the contraction had to be between 25 - 50 per cent of voluntary capacity. He has not looked at articles to contrary effect, to which articles he was referred in the course of preparing the joint report. He said that there might be five articles which took a contrary view.
He also agreed that:
… data has been published in highly respected journals that using battery powered portable low frequency electrical muscle stimulators, which are similar to the Abtronic in that sense, or in those specifications, attached to subjects while freely moving around, have reported that such devices are capable of activating a large portion of the muscle and producing positive muscular adaptations.
It was suggested to him:
… so there is a significant volume of opinion, … that devices … which are portable and low frequently stimulators can produce the positive muscular adaptations that you say the Abtronic cannot produce… .
Dr Coombes said that he did not consider the articles to which he had been referred to be a significant body of evidence. However he agreed that the articles in question were written by people who claimed to have carried out research work which he had not.
Dr Coombes says in his second report that he maintained a view expressed in his first report that a study by Porcari “… is the most applicable published scientific evidence pertaining as to the effects of … the Abtronic”. This study (ex 10) reports no significant weight loss or strength improvement in a number of subjects following a regime of EMS. In cross-examination Dr Coombes conceded that the regime used in the Porcari study involved 100 seconds of stimulation in each session, three times per week over eight weeks, a total of forty minutes. This is substantially less than the period of contraction prescribed for use of the AbTronic. It was pointed out to Dr Coombes that he had not considered this factor which seems to be a reasonable basis for distinguishing between the Porcari study and the AbTronic regime. He considered that it was not necessary to do so because he assumed that Porcari used the relevant device in accordance with instructions provided by the manufacturer. In other words he treated Porcari’s findings as to the efficacy of the regime prescribed for use with that machine (whatever it was) as indicative of the likely worth of the AbTronic regime, notwithstanding the greater period of time involved in the latter regime and the different equipment used. In the course of re-examination it was drawn to Dr Coombes’ attention that the prescribed regime in the Porcari study provided for increases in the periods of stimulation after the first four weeks. However that appears not to have been a matter which was at the forefront of his mind when he classified the Porcari study as being “most applicable” for present purposes.
In re-examination, Dr Coombes also said that EMS would produce strength increases in certain circumstances, namely:
… you have to get a large amount of the muscle contracting, and that can be done by having larger electrodes, and larger stimulus, where a person can put up with more pain than someone else, so - and then the last one is over time. I mean, there are good animal studies showing that if you can keep a muscle contracting for days, then it is going to really increase in strength, so time and the amount of muscles - the amount of the muscle that you can actually contract are the two most important variables.
He said that another relevant factor is the intensity of the signal which will be affected by the extent of the interface between the electrode and the skin. Use of a gel may extend the interface. Large fat deposits may also prevent the signal from reaching the target muscle.
Concerning the probative value of scientific studies, Dr Coombes said that an individual study is of little probative value in itself. The purpose of a review article is to analyse and summarize individual studies so that researchers can understand the “state of play” in the area. A review article is of more weight than a single study. He has read over 200 articles concerning the effects of low intensity EMS, including single studies, review articles and abstracts.
OBSERVATIONS CONCERNING THE SCIENTIFIC EVIDENCE
I accept Professor Pearn’s evidence as reflecting the received view within the medical profession concerning EMS. He has some experience with the use of electrical stimulation of muscles in children with neuromuscular conditions. Other evidence suggests that the use of EMS to remedy atrophy in muscles is well-recognized. From a lay point of view, one is inclined to suspect that if EMS is of value with damaged muscle, then there may be reason to believe that some benefit will be derived from its use with healthy muscle. Unfortunately, that line of thinking was not pursued with Professor Pearn, nor was he asked to comment upon the very substantial body of evidence given by Professor De Domenico, Dr Wilson and Dr Coombes. Professor Pearn’s view, probably representing that of the medical profession generally, does not exclude the possibility of a respectable body of opinion to the contrary, either within the medical profession or in “para-medical” professions such as those practised by the other scientific witnesses.
Professor De Domenico’s evidence is of particular importance. Like Professor Pearn, he occupies a senior position in a large university and is very experienced in his field. Both Dr Wilson and Dr Coombes are also highly qualified and no doubt entirely competent in their areas of expertise. Professor De Domenico and Dr Wilson consider that a device such as the AbTronic has a role to play in training healthy muscle. Dr Coombes now seems to concede that there is support for such a view, but he considers that the AbTronic cannot fulfil such role. I accept that these views are all honestly held. I have drawn attention to certain attitudes and changes of position by Dr Coombes. They lead me to conclude that he was unlikely to be dissuaded from a view which he had formed at an early stage as to the capacity of the AbTronic. With Professor De Domenico and Dr Wilson, it is not so easy to point to aspects of their evidence which demonstrate any such preconception. However I was left with the distinct impression that both men were firm and long-standing supporters of the use of EMS. They were probably also unlikely to change their views.

I do not believe that this conflict of opinion concerning EMS can be resolved by my preferring one view to another. It can only be resolved by extensive research over time. It may well be that Dr Coombes is correct in suggesting that the bulk of publications favours his position rather than that adopted by Professor De Domenico and Dr Wilson. Nonetheless he was unable to discredit the Alon (1987) article or to demonstrate in any persuasive way that it did not support their position. That article does not stand alone. Professor Pearn did not deal with the body of opinion of which it is part. As to the capacity of the AbTronic, Dr Coombes’ criticism of its capacity are not substantiated by his testing it (other than as to weight loss and fat reduction) and inconsistent with views expressed by Professor De Domenico and Dr Wilson.
It is appropriate that I say something about the expression “muscle tone”. I agree with Dr Coombes that in lay terms, the expression has much to do with the appearance and feel of the muscle through the skin and that this will be affected by actual muscle size and the presence or absence of fat. However tension in a contracted or partly contracted muscle must also be relevant. We are all familiar with the image of the flexed male bicep being admired by a woman. The appearance and feel of the contracted muscle is as much a part of the notion of tone as is the appearance of the muscle when uncontracted. The concept is imprecise and does not necessarily mean the same thing to all people. It may not always mean the same thing to any one person. Such imprecision makes it all the more difficult to prove that the statements concerning tone in the promotional material were misleading. In any event, even accepting Dr Coombes’ narrower view of the term, the De Domenico/Wilson view is that EMS can cause increase in muscle size and firmness, and therefore in tone.
I am satisfied that there is a significant body of opinion amongst physiotherapists and persons specializing in exercise and development of the body (such as Drs Wilson and Coombes) that EMS may assist in strengthening, enlarging and toning muscles. Of course Dr Coombes does not hold this view. I am unable to resolve the conflict between it and the view expressed by Professor Pearn. I am satisfied that the AbTronic is capable of producing strong contractions in large muscles. Both Professor De Domenico and Dr Wilson have said as much. Because of my inability to resolve the dispute as to the benefit of EMS when used with healthy muscle, I am not satisfied that the AbTronic can provide the benefits claimed for it; nor that it lacks such capacity.
It is unfortunate that in a case of this kind, to which substantial resources have been devoted, neither side has conducted appropriate testing of the device in question. Although limited testing was done by both Dr Wilson and Dr Coombes, it was far from exhaustive and demonstrated virtually nothing about the capacity of the AbTronic other than in connection with weight loss and fat reduction.
EVIDENCE FROM USERS
About 100,000 AbTronics were sold by the first respondent, of which fewer than 8,000 were returned. There are affidavits from a number of purchasers, complaining that they used the AbTronic as directed, but to no effect. Some complained of experiencing pain. Two purchasers attested to having achieved success by using it. Obviously, this anecdotal evidence is of little value in assessing the capacity of the device for present purposes.
CAUSES OF ACTION
The statement of claim raises numerous different causes of action, resulting in its being somewhat difficult to understand. I have, on previous occasions, suggested that proceedings of this kind would benefit from careful consideration of the objects sought to be achieved by them and of the best way of achieving such objects. I doubt whether the present diffuse collection of different causes of action serves any useful purpose.
There is nothing unusual about suggesting that a litigant should identify his or her true case and not simply try to run every possible formulation of it. For most litigants, scarcity of resources is a primary incentive for taking that step. Whether or not availability of resources is a problem for the present applicant I do not know. It is certainly a problem for the Court and, I assume, for the respondents. Unless reasonable care is taken in identifying the case to be mounted, a respondent may suffer a very serious penalty simply as a result of involvement in the proceedings and regardless of the outcome. This risk may lead respondents to let such matters go by default, in which case public perceptions of the significance of proceedings such as these and of Court orders generally will be undermined.
Before going to the pleadings in detail, I should dispose of one matter. Paragraphs 16, 18, 20, 22 and 23 allege that certain visual images in the promotional material made “before and after” representations concerning use of the AbTronic. These matters were not mentioned in the course of the trial. I treat them as abandoned. Any party requiring findings concerning these matters may apply.
The alleged misrepresentations with which these proceedings have been mainly concerned are set out in the statement of claim at pars 15 (the advertorials and infomercial), 17 (the first respondent’s website), 19 (the first respondent’s catalogues) and 21 (the representation as to price). It is alleged in par 24 that the representations in pars 15, 17 and 19 were as to future matters within the meaning of s 51A of the Act. I will return to that matter at a later stage. In par 25 it is alleged that:
•representations in pars 15, 17 and 19 were opinions or predictions concerning the performance, characteristics, use and/or benefit of the AbTronic;
•they conveyed the representation that the first respondent had reasonable grounds for them; and
•to the extent that the third respondent published them in the advertorials, they also conveyed the representation that he had such grounds.
I will return to this matter at a later stage.
In par 26 it is alleged that:
The representations set out in paragraphs 15, 17, 19, 22 and 23 were false, misleading and deceptive in that:
(a)the Abtronic did not have the performance characteristics, use and/or benefit of:
(i)exercising, toning, firming or tightening the abdominal region, “love handles”, arms, thighs, hips, bustlines and buttocks without any effort by the user;
(ii)       eliminating or reducing fat cells and cellulite;
(iii)      flattening the user’s stomach without any effort by the user;
(iv)giving the results of up to 600 sit-ups in 10 minutes without any effort;
(b)the use of the Abtronic by a person would not bring about the results referred to in paragraph (a) hereof;
(c)       the Abtronic did not exercise any part of the user’s body;
(d)the sending of small electrical signals to muscles is not how a muscle gets exercise which tones the body and eliminates or reduces fat cells and cellulite.
Paragraphs 27 and 28 allege that:
•the various implied representations as to reasonable grounds for opinions or predictions (par 25) were misleading because there were no such grounds; and
•such opinions or predictions were misleading because they should have been qualified or more extensively qualified.
In par 29 it is alleged that the representation as to price was misleading.
The following breaches of the Trade Practices Act are then alleged:
By the first respondent:
•of s 52 (par 32 - as to AbTronic functions);
•of subs 53(c) (par 34 - as to AbTronic functions);
•of subs 53(e) (par 36 - as to price);
•of s 52, by virtue of s 51A (par 37 - as to AbTronic functions); and
•of s 52 (par 39 - representations as to grounds and inadequate qualification of opinions/predictions).
By the third respondent:
•of s 52 by virtue of subs 6(3) (television) (par 33 - as to AbTronic functions);
•of subs 53(c) by virtue of subs 6(3) (television) (par 35 - as to AbTronic functions);
•of s 52 by virtue of subs 6(3) (television) and s 51A (par 38 - as to AbTronic functions); and
•of s 52 by virtue of subs 6(3) (television) (par 40 - representations as to grounds and inadequate qualification of opinions/predictions).
By the second, third and fourth respondents:
•involvement in the first respondent’s contraventions by aiding, abetting, counselling or procuring such contraventions, and/or being knowingly concerned in them (pars 42 - 44).
It is appropriate to consider the statutory regime which has permitted, and perhaps encouraged such a Byzantine muddle. Section 52 proscribes specific conduct. Section 53 also proscribes conduct, much of which will almost invariably also be caught by s 52. Subsection 6(3) extends the operation of the Trade Practices Act (which, for constitutional reasons, is largely limited to the conduct of corporations) to the conduct of natural persons when using electronic media. Section 75B attacks the conduct of natural persons who are involved in corporate contraventions.
Section 51A was adopted as a result of early experience with the operation of s 52. There were difficulties in applying it to opinions or statements of expectation which were honestly expressed and therefore not misleading. The legal profession developed the technique of alleging an implied representation as to reasonable grounds (as raised in pars 25 and 27 of the current statement of claim) and the idea of inadequately “qualified” opinions or predictions (raised in par 28). Then Parliament intervened, introducing s 51A. That section provides that a representation as to a future matter, if made without reasonable grounds, is deemed to be misleading for the purposes of Div 1 of Pt V. Subsection 51A(2) places an onus upon the representor at least to lead evidence of such grounds.
The Explanatory Memorandum which accompanied the introduction of the Trade Practices Revision Bill (1986), inserting s 51A, stated in pars 75 - 78:
75.Difficulties have occurred in relation to the ability of relevant provisions of Division 1 of Part V to deal with false or misleading statements, representations or predictions about future matters. The circumstances surrounding these representations are often matters within the knowledge of the person or corporation making the representation, and it has therefore been difficult to obtain conclusive proof of dishonesty or recklessness from the surrounding circumstances without an admission of guilt from the defendant.
76.These problems were highlighted in Thompson v Mastertouch TV Services Pty. Ltd. (1977) 15 A.L.R. 487, in which Franki J. held that:
….. ‘a prediction or statement as to the future is not false within the words of [s. 59(1)] if it proves to be incorrect unless it is a false statement as to an existing or past fact which may include the state of mind of the person making the statement or of a person whose state of mind may be imputed to the person making the statement.’ (Page 495)
77.Accordingly, a promoter’s promise or prediction as to the performance or profitability of a business opportunity is not presently caught unless it is based on existing or past facts. Another problem identified in that case was that a promoter’s promise or prediction is not caught by the Act unless it can be shown that the defendant ‘did not believe that the forecast or prediction would be satisfied or was recklessly indifferent concerning the forecast or prediction.’ (Ibid., page 495)
78.The new s. 51A deems a prediction made by a corporation in relation to matters specified therein to be misleading for the purposes of Division 1 of Part V (including s. 52) unless the corporation making the prediction has reasonable grounds for making the prediction. The onus is on the corporation to establish on the balance of probabilities that it had reasonable grounds for the belief.
One might have thought that the adoption of s 51A would have obviated the need to rely upon implied representations as to reasonable grounds or the absence of adequate qualifications upon opinions and predictions. It is therefore surprising that in the present case, the applicant has sought to adopt so many different approaches in impugning the same conduct. Whilst there are circumstances in which the prosecution of alternative cases is advisable, that course is not always necessary or advisable. It is similarly difficult to understand why subs 53(c) should be invoked when the relevant conduct clearly falls within the proscription contained in s 52 (with or without the aid of s 51A). Similarly, proceedings against the third respondent relying upon subs 6(3) add little, if anything, to the proceedings based upon his alleged involvement in the first respondent’s conduct pursuant to s 75B. Finally, one might have hoped that the applicant would have decided whether each of the representations was or was not as to a future matter so that s 51A could be invoked or abandoned. Instead, the s 52 case was run both with, and without the assistance of that section. This multiplicity of proceedings has had a substantial effect upon the length and cost of the trial and upon the time involved in writing the judgment. Unless a claim is abandoned, the Court must consider it in detail, even if it concludes that there is no need for a final determination of it. I will return to this matter at a later stage.
FALSE STATEMENTS OF FACT - THE S 52 CASE WITHOUT RELIANCE ON S 51A
The meaning of a statement depends upon the context in which it occurs. It is therefore necessary to consider each alleged misrepresentation in its context. The website and the catalogues do not present any great difficulty in that regard. However the infomercial was a lengthy publication, involving related statements by a number of people. It is not easy to determine the effect which a particular statement may have had on a viewer. The advertorial presents similar problems and a further difficulty. There were five versions of it, run on consecutive days. Although I have a script, it bears only limited resemblance to what was actually said. It is necessary that I set out in some detail the content of the infomercial and the various versions of the advertorial.
THE INFOMERCIAL
The thrust of the infomercial was quite different from that of the advertorial in that the former was more explicit about predicted results than was the latter. The infomercial commenced with a “voice over” asking “What would you do to flatten your stomach once and for all?” It then asked whether the viewer was tired of exercising on the floor, causing injury and producing no results. Three people, apparently using the AbTronic for the first time, commented on the way in which it seemed to be “working” the abdominal muscles. The AbTronic was then introduced as a fitness system which “does all the work for you”. The user could relax and watch the various parts of his/her body improve in appearance, obtaining results equivalent to “up to 600 sit-ups in just ten minutes”.
A man and a woman then appeared as joint presenters. It was said that a person had only to fit the AbTronic and then “get ready for the greatest set of abs that you’re ever going to see, with no sweat”. The AbTronic was shown, fitted to the female presenter. Her abdominal area was vibrating under the effect of it. It was said that:
•the AbTronic would provide the equivalent of 600 sit-ups in ten minutes;
•it would provide the most advanced electronic workout which the viewer would ever receive while he/she remained passive;
•he/she would lose inches and weight around the mid section; and
•in a matter of days the AbTronic would firm and tighten the muscles and make the stomach flatter.
A user then claimed to have lost three inches from the waist and two inches from the hips after three weeks of use. Another woman claimed to have started using the AbTronic because injury prevented her from visiting the gymnasium. She had lost five inches from her waist and three inches from the hips in about two-and-a-half months. It was then said that “You can go about your normal business while AbTronic slims, trims and firms your upper abs, your lower abs and/or your love handles with no sweat”. A user then observed that she had previously performed her cardiovascular workout and then worked on her muscles, using other equipment. She implied that she could now save time because, using the AbTronic, she did not have to spend time on exercising her muscles. It was said that the AbTronic would tone and firm the muscles around the stomach “in no time”, that “Soon you will have results you only dream about” and that “You are going to have abs that you won’t believe”. There was then a suggestion that the AbTronic would remove cellulite and flabbiness in women.
At this point Dr Garcia, a cosmetic surgeon, was introduced. I will deal with his evidence separately. It was then said that:
You only need to use the AbTronic fitness system for ten minutes, two to three times a day to put yourself in bathing-suit shape. Remember, ten minutes with the AbTronic and you’re doing 600 sit-ups.
The male presenter said that he had never liked getting down on the ground to exercise his abdominal muscles, using equipment. With the AbTronic he could do so whilst watching television or pursuing other activities. Users then spoke of this aspect of the AbTronic’s appeal. The male presenter then said that this was an opportunity to get one’s abdominal muscles “strong, firm and toned”. Later, the presenters stated that many people blamed their shapeless waistlines on excessive weight when the real culprit was lack of muscle tone. This suggests that use of the AbTronic tightens muscles in much the way that Professor De Domenico demonstrated. A user then said that using the AbTronic led to much clearer muscle tone and loss of inches. A number of users referred to muscle definition.
I have previously mentioned Dr Garcia, a cosmetic surgeon who appeared at various stages during the infomercial. He was introduced as being well-respected amongst his peers. He observed that whilst people might lose substantial amounts of body fat, their muscle tone still showed no definition. He referred to young men and women with “six pack” or “washboard” abdomens, again saying that despite weight loss, if the underlying muscle tone was not good, “you’re not going to have a washboard abdomen”. Weight loss plus stimulation of abdominal muscles, causing “firming and toning” of them, will give better muscle definition and “better cosmetic improvement”.
On his second appearance, Dr Garcia observed that we all wish to maintain muscle mass in the interests of good health, particularly as we age. He suggested that the advantage of the AbTronic is that one does not have to go to a gymnasium to exercise with weights in order to achieve that result, a particular advantage where medical problems prevent the performance of usual forms of exercise. The contractions produced by using the AbTronic will improve muscle tone and maintain muscle mass without such exercise. A person who uses it will be healthier and look better for the rest of his or her life. In his third appearance, Dr Garcia suggested that the AbTronic could be used by men and women, young or old. It will give them a “sleek”, not a “muscled kind of, gymnasium-type … (or) bulky” appearance; a “healthy yet toned appearance”. In his fourth appearance Dr Garcia observed that the AbTronic will cause a firm contraction of the muscle, stimulating it, and that:
… whether you want to or not … you’re going to get that muscle tone, maintain that muscle mass … and you’re healthier and look better for the rest of your life.

Subject to one qualification, I consider Mr Schereck to have been a generally honest witness. I accept that he had no relevant involvement in writing the script for the advertorial, nor in preparation of the website or the catalogues. The qualification upon my acceptance of Mr Schereck’s evidence concerns the assertion in par 15 of his written statement that he received the supportive scientific evidence provided by Thane but that:
… apart from observing that it seemed to be in some detail, I did not consider it further. I did not really attempt to understand what it was saying, as I do not have a scientific background. However, it appeared to me that the Abtronic could do what the advertising was claiming it could.
As with Mr Quinn, the statement seems to be designed to be both factual and misleading. Mr Schereck must have read the scientific material in order to conclude that it contained some detail and suggested “… that the Abtronic could do what the advertising was claiming it could”. In other words, he was saying, as Mr Quinn did, that he had read it superficially, without fully understanding it, but in sufficient detail to form a view as to its content. In particular, he was able to identify the extent to which that material supported the claims. As I have previously observed, whilst the scientific material raises the possibility that EMS may have some beneficial results when used with healthy muscles, it by no means establishes that it has such beneficial results. No reasonably intelligent lay person could have come to any other conclusion. Mr Schereck also read the instruction manual. He had no reason to believe that the first respondent had any other material supporting the representations in the infomercial. He may have considered Thane to be a reliable source of information, but he had also to take into account the material which Thane had provided. In my view the evidence does not support the finding that Mr Schereck was involved in any of the first respondent’s conduct other than that concerning the infomercial. That conduct is particularized in subpars 15(g) to 15(k) of the statement of claim.
(g) “flatten your stomach once and for all”;
This statement implies a capacity to reduce weight or body fat and to tone muscles. There is nothing in any of the scientific material to justify the implication as to weight and fat. Mr Schereck had read the instruction manual and must have seen the inconsistency to which I have previously referred. His reading of the scientific material must also have disclosed to him the equivocal nature of any support for the use of EMS with healthy muscle. He was knowingly concerned in this conduct and therefore involved in it.
(h) “You just sit, relax and watch your abs tighten, your love handles disappear and your thighs and bottom firm up - with no sweating involved”;
As to the love handles, there is certainly no suggestion in the scientific material that EMS would assist in removing them. The picture on p 10 of the instruction manual, under the heading “LOVE HANDLES/WAIST”, suggests that it “tucks in the girth”. On p 14, under the heading “BODY TONING”, it is suggested that the AbTronic will “work on” the love handles. However in the next paragraph, and again on p 15, the author disavows any capacity to cause weight loss. On p 16, it is said that the AbTronic, with a controlled calorie diet, will help in reducing fat. If the reference to working on love handles implies a capacity to reduce fat, then it is inconsistent with the disavowal of any capacity to reduce weight. If the claim is that it will “tone” the love handles, such a positive statement was inconsistent with the equivocal statements in the scientific material. None of the material provided any other grounds for these statements. Mr Schereck had no reason to believe that the first respondent had any other grounds for the statements. He was knowingly concerned in this contravention and was therefore involved in it.
As to the other aspects of the statement, the scientific material offers some support for the proposition that EMS can bring about such results but does not support the proposition that it can certainly do so. The representation, cast in this absolute way, was without reasonable grounds. Mr Schereck must have been aware of that. He was knowingly concerned in this contravention and therefore involved in it.
(i) “Get the results of up to 600 sit-ups in just 10 minutes without any effort”;
Very little in the scientific information supports the proposition that the AbTronic can, by itself, provide the equivalent of exercise. The primary suggestion is that it may operate as an adjunct to exercise programmes. I can see nothing in the scientific material which would justify the representation. For reasons previously given I consider that Mr Schereck must have been aware that there was nothing in the material available to the first respondent which would justify such a positive statement. He was knowingly concerned in this contravention and therefore involved in it.
(j) “Get ready to firm, tone and tighten your upper abs, lower abs and love handles with no sweat”;
I have, in effect, already dealt with this matter. Mr Schereck must have been aware that the representation was made without reasonable grounds. He was involved in the contravention.
(k) “Watch as your ab muscles contract as if you’re doing the sit-up - your muscles are moving - but you’re not”.
This statement is factually correct and reflects the scientific material. I accept that there were reasonable grounds for it.
OTHER EVIDENCE AND ISSUES
TELEVISION STATIONS AND CAD
There is evidence concerning the terms upon which relevant television stations broadcast advertorials and perhaps, other advertisements and as to the functioning of CAD. This evidence relates to the extent to which any of the respondents may have believed that either CAD or the relevant television stations had assumed responsibility for ensuring that the content of advertising material was correct. I have dealt with this matter, taking into account such evidence. The second category is evidence concerning the willingness of broadcasters to broadcast remedial advertising pursuant to any order made in these proceedings. I need not address that material in detail.
MARKETING EVIDENCE
There is a substantial body of evidence which might be described as “marketing evidence”. It concerns television viewing habits and surveys as to the extent of public knowledge of EMS devices, including the AbTronic. There is also evidence from marketing specialists, primarily seeking to identify an appropriate advertising regime designed to correct any false impressions concerning the AbTronic and its capacity. The evidence concerning viewing habits and surveys is designed to support the opinions of the marketing specialists, including Dr George Ramsay Beaton who was called by the applicant. He was asked to advise as to the extent and nature of advertising necessary to correct the effect of any misrepresentations made in the first respondent’s promotion of the AbTronic. He offered the view that:
Consumers buy - and form relationships with - brands rather than products per se. For the consumer, the product is only part of the overall brand. In this context, by ‘product’ I mean the consumer good and/or the service that delivers benefits to the consumer. …
The brand is the main, and usually dominant, method of differentiation of products. Consumers rely on brands when they are making choices. The brand is designed to identify the product and differentiate it from its competitors in such a way that the consumer’s attention is attracted, the brand is recognised, recalled, preferred and purchased. The ABTRONIC brand is the means by which the advertiser, DANOZ DIRECT, and the consumer refer to the ABTRONIC product. The ABTRONIC brand is more than the physical product and its functionality to the consumer. It is also the set of associations the consumer has in their mind as a result of, for example, exposure to the advertising and/or use of the product and/or materials and information in which the product is packaged and/or what the consumer has heard from others by word-of-mouth.
This overall concept of brand identity was described by Dr Beaton as the brand’s “gestalt”. Dr Beaton considered the extent of promotion of the AbTronic and concluded that:
… the ABTRONIC product received very significant television exposure across a wide geographic area and spread across the day and night, weekdays and weekends and during each month of the year.
At par 81 of his report, he observed:
In my opinion, the components of a promotional program to correct the impact of the First Respondent’s promotion will need to be tailored to meet the specific objectives of any such correction. I have assumed for present purposes that the objective - in several parts would be to:
81.1correct within memory;
81.2each of the relevant misrepresentations as well as the overall impression;
81.3held by the majority of consumers;
81.4in each part of the population previously exposed, either by way of promotion or word-of-mouth.
81.5I note that this objective does not include:
(a)persuading consumers to buy the product; nor
(b)informing consumers as to how to order and how to pay.
He suggested that for present purposes the planning of any advertising campaign to correct false impressions might involve the following steps:
•How many advertising exposures (total number of screenings) are required;
•To deliver a given total number of exposures of the target audience for the advertising;
•Thus delivering a given number of the target audience who have attended to and processed the advertisement or advertisements; and
•Which in turn delivers a given number of prospects with full communication effects and brand position established in their minds.
In order to identify this number, Dr Beaton referred to research concerning the period over which a residual positive effect, flowing from advertising, might endure. Some studies suggest that the effect may last for months. However Dr Beaton suggested that even when the advertisement itself had been forgotten, the “gestalt” of the brand might still be implanted in the memory and enlivened by external stimuli such as word of mouth. Dr Beaton opined that:
… the appropriate corrective response to meet the specified objective would require:
90.1reaching the same audiences previously exposed to the misleading and deceptive messages, including audiences reached previously by way of promotion as well as by way of word-of-mouth;
90.2with such reach and frequency … of promotion commensurate with the objectives specified … above, taking into account the “objective and task” method of advertising, planning and budgeting.
He suggested that to achieve this result it would be desirable to advertise in such a way as to provide, in effect, a viewing audience of between 50 and 75 per cent of that originally exposed to the advertising programme through all its various publications, using the same media, advertising during the same programmes and employing an even distribution over the same times and days as were adopted by the first respondent. To be fair to Dr Beaton, he did not assert that his conclusions were other than matters of judgment. He tried to use scientific method in an area in which, as I am sure he would readily concede, there are so many variables that scientific objectivity and certainty is unachievable. Even the objectives of his proposed campaign were unclear. It would have been very difficult for him to be precise about them until such time as this case had been substantially resolved. Further, there is no evidence as to the likely endurance, at the present time, of any impact created by the first respondent’s advertising campaign. Such evidence as has been obtained is now quite dated.
It is of considerable importance that, at the beginning of this trial, the first respondent gave an unconditional undertaking permanently to refrain from distributing the AbTronic. There is no evidence to suggest that anybody else is doing so, or is likely to do so. There is therefore little risk that anybody will buy an AbTronic. If Dr Beaton’s focus upon the AbTronic brand and its associated “gestalt” is correct, then there is very little risk of anybody buying any other similar device as a result of the AbTronic promotion. It follows that there is little or no need for corrective advertising in order to minimize such risks. I will say a little more about other devices at a later stage.
Mr Michael John St Aubin Brazier, another marketing expert, was called by the respondents. He considered that there was an “industry practice” of using newspapers for apologies to consumers, regardless of the medium in which the relevant product was advertised. Such an advertisement should appear in the earlier pages of a newspaper, preferably on the right hand side. The practice is to advertise once only. Because newspapers will not accept full page advertisements for earlier pages, any advertisement will necessarily be in what is described as “broken space”, in other words it will occupy less than a full page. Mr Brazier considered that a similar approach should be taken in corrective advertising. Mr Brazier said that negative publicity associated with the AbTronic, some of which occurred as late as May 2002, should be taken into account in assessing the likely continuing effect of the first respondent’s advertising campaign which ceased in March 2002. Dr Beaton had also given some consideration to this matter. Mr Brazier was of the view that much of the first respondent’s advertising campaign had been wasteful in terms of its likely effect.
Dr Beaton challenged the proposition that there was an industry standard for corrective advertising. Mr Brazier subsequently justified his view by reference to a guide, apparently formulated by the applicant in connection with recall notices. It describes the publication of recall notices in newspapers as “The traditional way of publicising recalls …”. The guide also raises the possibility of other means of communication, depending upon the risk associated with the reason for recall. Mr Richard Steven Wilson, also a marketing expert, considered that “… the level of remedial advertising that may possibly now be required, is no more than a notification to the public that the Abtronic fails to deliver on claims made”.
I have been somewhat selective in my summary of the evidence in this area. In particular, I have omitted reference to much of the reasoning which led to the various conclusions. Unfortunately, the volume of this evidence is not justified by its value for present purposes. It goes little beyond intuitive perceptions. To the extent that it goes further, it raises matters of judgment.
The first respondent conducted an extensive advertising campaign over many months. Much of it occurred in daytime television and late night television. For those who viewed it repeatedly, its impact may have been significant. There is nothing unlikely about Dr Beaton’s proposition that the effect of such advertising may last for some considerable time thereafter and may be refreshed by quite casual external stimuli. However this must be seen in light of the first respondent’s undertaking not to market the AbTronic. Whilst it is theoretically possible that another person could market it, one assumes that these proceedings and the orders which are likely to flow from them will discourage any substantial investment by another prospective distributor. Of course that view highlights the need for some publicity concerning these proceedings.
ORDERS
ADVERTISING
I am unpersuaded that any significant number of persons might, in the future, buy an AbTronic as a result of the first respondent’s advertising campaign. Common sense suggests that much of its effect would, by now, be spent. To the extent that any vestigial effect remains, the undertaking not to sell will make it impossible to obtain the AbTronic in the manner advertised, that is from the first respondent. That there is no substantial risk does not mean that there is no risk. Nevertheless it is difficult to conclude that the magnitude of the risk would justify the extensive regime of advertising suggested by Dr Beaton.
The power to order advertising pursuant to the Trade Practices Act is now found in s 86C which provides that the Court may order a person who has contravened that Act:
•to disclose information in his or her possession; or
•to publish at his or her expense, and in the way specified in the order, an advertisement.
Subsection 86C(3) provides that the relevant provisions do not limit the Court’s power under any other provision of the Act. This qualification may be designed to give full effect to s 86D which contemplates advertising in circumstances which are not presently relevant. It is also possible that an appropriate order under s 87 might involve advertising. The applicant submits that s 80 also authorizes an order for advertising. I doubt whether that is so. Section 80 is concerned with injunctions. In my view the proper purpose of an injunction under that section is to enforce an existing obligation or to vindicate an existing right. I do not understand the section to confer a power to create new rights or obligations. Much of the relevant conduct in the present case occurred after the commencement of s 86C (26 July 2001). However similar advertising might previously have been ordered pursuant to s 80A. I do not understand the change in statutory regime to have any present significance.
Presumably, advertising must be related in some way to the contravening conduct or any damage caused, or likely to be caused by it. At one stage in the course of argument, it seemed that the applicant was seeking orders for advertising designed to discourage members of the public from purchasing equipment similar to the AbTronic. This perception arose largely out of the applicant’s persistence in seeking such relief in the face of the first respondent’s undertaking not to distribute the AbTronic and the absence of any reason to believe that anybody else would do so. It would be inappropriate for the Court to make orders designed to interfere in the marketing of other products. These proceedings are between the applicant and the various respondents and concern the AbTronic only. If it is alleged that any other product of a similar kind has been marketed in a way which contravenes the Act, then that matter must be resolved in proceedings involving the appropriate parties. If any other person wishes to market the AbTronic, he or she is entitled to do so, provided that such marketing involves no contravention of the Act. My findings may, inevitably, reflect upon other products and other businesses, but the advertising should not be designed to accentuate that effect. These are not, as it were, proceedings in rem.
The legitimate purposes which might be served by advertising include informing purchasers of the misleading nature of the first respondent’s conduct so that they:
•will not continue to expect benefits from use of the Abtronic; and
•may seek refunds where it can be shown that a particular purchase was the result of contravening conduct.
If at all possible, the parties should agree upon the content of the advertising and upon the broadcasting programme. However I will make some observations as to my views in the hope of assisting them to reach agreement.
Content
Any advertising should accurately record such of the findings or orders as the applicant reasonably considers to be appropriate. It should not be necessary to set out all findings of fact or orders, particularly where there is overlap or repetition. It will be more effective if the spirit of the findings and orders can be captured. The advertisement should also advise purchasers that they may be entitled to return their purchases and obtain refunds. It might advise them to seek legal advice or (if the applicant desires it) to contact the applicant at an identified contact point. The length of the advertisement will depend upon the amount of information to be communicated and the views of relevant television stations.
Media

I am inclined to the view that the advertisement should be broadcast on the same television stations as were used by the first respondent in promoting the AbTronic. An advertisement should also be inserted in The Australian newspaper and appear on the first respondent’s website and in its catalogues.
Schedule
Television stations
The advertisement should be broadcast over a two week period on each day on which the advertorial or infomercial was broadcast, and at about the same times.
Website
The advertisement should remain on the website for a period of fourteen days.
Catalogues
The advertisement should appear in the edition of the first respondent’s catalogue issued next after agreement is reached as to the form of advertisement or any order for such advertisement is made. I do not know how long a catalogue remains current. My intention is that the advertisement should appear in a current catalogue for a period of not less than two weeks.
The Australian
The advertisement should be inserted in the early pages of The Australian, on a right hand page, on two days in each week, of which one is to be a Saturday and in two consecutive weeks.
Other matters concerning the advertisement
The applicant has sought to involve Mr Quinn in the advertisement. I doubt whether I have power to compel such personal involvement. Even if there were such power, I would be reluctant to so order. To compel the personal performance of a physical act is an extreme step, a step which the courts do not readily take. In any event I am far from convinced that Mr Quinn’s involvement would serve any useful purpose. Further, Mr Quinn no longer works for the first respondent.
The above views concerning advertising are proposals only. Should any party wish to advance a different view, I am quite willing to receive submissions.
OTHER RELIEF
Declarations
The declaration is a relatively recent remedy. The courts are jealously protective of it, resisting attempts to resort to it where there is no real dispute to be resolved. In my view we must ensure that this very useful device is not deprived of its efficacy by over-use or inappropriate use. I do not mean to imply that declaratory relief is inappropriate in the present case. However it is important that any declaration be framed so as to convey a limited and accurate message to those who have an interest in its subject matter. It is unlikely that any good purpose will be served by numerous declarations which merely reflect the various misrepresentations and the various occasions on which they were made. The most effective form of declaration will accurately reflect the impugned conduct in a concise way. Complete accuracy is essential. I would prefer it if the parties were to agree upon the forms of the declarations. A suitable formula might be:
That the conduct of Danoz Direct Pty Ltd, in connection with the promotion of the AbTronic, an electronic muscle stimulation device, was misleading or deceptive or likely to mislead or deceive contrary to s 52 of the Trade Practices Act 1974 (Cth), such conduct being the broadcasting on Channels ……… between ……… and ………, of statements to the following effect:
…
Similar declarations might be made concerning the website and the catalogues. As to the claims arising under s 75B, the form of declaration might be as follows:
The Court declares that ……… was knowingly concerned (or involved) in the conduct of Danoz Direct Pty Ltd in its promotion of the AbTronic (an electronic muscle stimulation device), particulars of such conduct being as follows:
…
Again, these are merely suggestions designed to assist the parties in their negotiations.
Injunctions
The first respondent has undertaken that it will not continue to market the AbTronic. There is no reason to doubt that this undertaking will be honoured. Neither the third nor the fourth respondent is now employed by the first respondent. There is no reason to believe that either will again be involved in marketing the AbTronic. It is therefore difficult to see any real point in restraining any of the respondents from future contraventions of the Act. Any injunction would necessarily be limited to conduct in connection with promotion of the AbTronic. As with declaratory relief, the courts have always been anxious to defend the efficacy of the injunction by avoiding its use in inappropriate or unnecessary circumstances or where it will be difficult to enforce. It is in the public interest that such efficacy not be undermined. I take into account the provisions of subss 80(4) and 80(5). However those provisions do not mandate injunctive relief in all cases. It is my present view that in this case, declarations will provide sufficient vindication of the legislation without injunctive relief. If any party takes a different view, I will receive further submissions.
Trade Practices Compliance Programme
Pursuant to par 86C(2)(b), the Court may make a probation order for a period of no longer than three years. The expression “probation order” suggests an order of the kind frequently made in criminal proceedings. In the present context, the meaning is a little different. The term “probation order” is defined in s 86C to mean:
… in relation to a person who has engaged in contravening conduct, … an order that is made by the Court for the purpose of ensuring that the person does not engage in the contravening conduct, similar conduct or related conduct during the period of the order, and includes:
(a)an order directing the person to establish a compliance program for employees or other persons involved in the person’s business, being a program designed to ensure their awareness of the responsibilities and obligations in relation to the contravening conduct, similar conduct or related conduct; and
(b)an order directing the person to establish an education and training program for employees or other persons involved in the person’s business, being a program designed to ensure their awareness of the responsibilities and obligations in relation to the contravening conduct, similar conduct or related conduct; and
(c)an order directing the person to revise the internal operations of the person’s business which lead to the person engaging in the contravening conduct.
It is common ground that at least some relevant conduct occurred after the commencement of s 86C. However I do not understand that this causes any problem for present purposes. It is also common ground that the first respondent has already introduced an appropriate compliance programme. The applicant seeks no further order in that regard. However the applicant seeks an order that an independent external auditor be appointed to report to the applicant the extent of the first respondent’s compliance with the programme. The first respondent does not oppose the appointment of an auditor but objects to the auditor’s reporting to the applicant. It also submits that the probation period should be for less than three years.
As I understand it, the existing compliance programme is exhibited to the affidavit of Rosana Celina Tyler. The programme consists of a “Code of Practice” for a company called TVSN Ltd with which the first respondent is now associated. There is also a series of standard operating procedures. The two documents deal with many matters of relevance to a compliance programme, including standards to be observed in selecting and marketing products, but say very little about enforcement. The code refers to “The Australian Programming Committee (“APC”)” which appears to be a mechanism for dealing with complaints. There is also to be some scrutiny of promotional material. However there is little or no discussion of staff training or preventative measures designed to avoid unacceptable conduct, as opposed to dealing with such conduct after it has occurred.
In my view a compliance programme should focus on education and prevention. Such a focus provides a basis for developing objective guidelines as to performance. For example, it might be reported that a certain percentage of the staff have attended a specified number of programmes lasting for identified periods of time. The content of such programmes might also be reported. There could be a system of random audits of steps taken by staff to ensure compliance with the code and standard operating procedures. The first respondent could itself report the extent of compliance to the applicant. I consider that some external reporting is desirable.
As to the period of the probation order, one would hope that the first respondent would maintain the compliance programme permanently, regardless of the duration of any such order. If orders are to be made, and I consider it appropriate to do so in this case, the period of three years is appropriate. The evidence of Mr Ozana, Mr Quinn and Mr Schereck suggests that in the first respondent’s operation, little attention was paid to ensuring the accuracy of promotional material. Corporate culture cannot be changed overnight nor, in my view, can it be changed in a twelve month period. The period necessary to design, implement and enforce an appropriate programme to establish a culture of compliance is probably not much less than three years. I ask the parties to give further consideration to the compliance programme and to the proposed system for ensuring implementation.
Orders for Refund
Paragraph 13 of the amended application seeks orders pursuant to subs 80(1) of the Trade Practices Act to the effect that the first respondent pay to each person:
… who, during a period of 6 months commencing on the date on which the corrective advertisements … are first telecast … submits a written claim to the First Respondent asserting that he or she was misled when he or she purchased the Abtronic:
(a) the amount paid for the purchase of the Abtronic; and
(b)the costs (including, but not limited to, postage and packaging) associated with the return of the Abtronic,
such refund to be made within 21 days … .
In other words, the Court is asked to determine that any purchaser who claims to have been misled by any of the promotional material is to be accepted at face value. The first respondent is to be deprived of any opportunity to cross-examine as to such reliance. Further, even a purchaser who believes that he or she has derived benefit from using the AbTronic is to be entitled to a refund. These considerations suggest that I should be reluctant to make such an order. However there is a more compelling reason for declining to do so.
In Medibank Private Ltd v Cassidy (2002) ATPR 41-895, the Full Court considered analogous provisions in the Australian Securities and Investments Commission Act 1989 (Cth) (“the ASIC Act”). In so doing, the Court examined the history of provisions in the Trade Practices Act, including s 80. The Court (Sundberg, Emmett and Conti JJ) concluded that s 80, as it then was, did not authorise an order that a corporation pay compensation to unidentified persons who were not parties to the proceedings. Their Honours pointed out that s 87 deals with compensatory orders in favour of parties to proceedings, including persons on whose behalf the applicant has commenced such proceedings. Section 87 was amended in 1977 to provide that compensation could only be awarded to parties. The reasons for this amendment were said to be “constitutional”. In Cassidy, the Court concluded that given such history, it was unlikely that Parliament had intended that s 80 would authorize compensatory orders in favour of persons who were not parties (presumably including persons on whose behalf the applicant had brought proceedings). Sections 80 and 87 are now in somewhat different forms from those considered in Cassidy, but I do not understand the amendments to undermine the applicability of the decision. The High Court has declined special leave to appeal from the decision in Cassidy, largely because the order at first instance was interlocutory. See M176 of 2002, 20 June 2003.
The applicant seeks to distinguish Cassidy on the ground that the relief sought in that case was “compensatory” whilst the relief sought in the present case is “restorative”. This seems to mean that the orders sought in Cassidy involved the award of damages whilst the applicant now seeks the refund of purchase moneys. Whilst in some circumstances that distinction may be relevant, I doubt that it is for present purposes. Section 87 speaks of an order which will “compensate” the relevant person “… in whole or in part for the loss or damage or will prevent or reduce the loss or damage”. Those words are wide enough to include refunds. As I understand it, the applicant’s point is that “compensation” involves the substitution of something for something else. The word “compensate” is defined in The Shorter Oxford English Dictionary as follows:
Counterbalance, make amends for … Serve as a recompense or adequate substitute (for); make up for … Make amends to, recompense.
We often distinguish between relief in the form of an award of damages as compensation for breach of contract and relief designed to remedy such breach by permitting or recognizing rescission (returning the parties to their original positions, to the extent possible) or by enforcing the contract. Rarely, if ever, does the innocent party receive precisely that for which he or she bargained. Save in a small number of cases, there is at least substantial delay in vindicating claims. Any order will almost always be compensatory in the sense of offering something to take the place of the benefit which would have flowed from compliance with the contract, even if only in the sense of offering delayed performance in place of timely performance.
In the present case, any refund of the purchase price will not “restore” a purchaser to precisely the position he or she would have been in had there been no contravention in the sense urged by the applicant. He or she will still have incurred the trouble of ordering the machine, being out of pocket for the cost, spent time and effort in using it and incurred further trouble in returning it. In that sense the order would be “compensatory” in that it would offer something in lieu of that which has been lost. The other subsections of s 87 suggest that the section deals with a broader range of orders than the applicant submits. Indeed, an order for refund would probably fall squarely within par 87(2)(c).
In my view, the decision in Cassidy should be followed. The Court has no power to make an order for refund in favour of a person who is neither a party nor a person on whose behalf the applicant has claimed pursuant to the Trade Practices Act. In these proceedings the applicant has not purported to so claim. I will make no orders as to refunds.
I adjourn the matter to enable the parties to formulate any requests for further findings of fact and to make submissions concerning appropriate relief and costs.

I certify that the preceding two hundred and seventy-six (276) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.

Associate:
Dated: 22 August 2003

Counsel for the Applicant:

Mr P O’Shea SC

Ms S Brown

Solicitor for the Applicant:

Corrs Chambers Westgarth

Counsel for the Respondent:

Mr DJS Jackson QC

Mr R Jackson

Solicitor for the Respondent:

Morgan Lewis Alter

Dates of Hearing:

28 & 29 October 2002

19, 20, 21, 24, 25 & 31 March 2003

1 & 2 April 2003

Date of Judgment:

22 August 2003

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q 77 OF 2002

JUDGE:	DOWSETT J
DATE:	22 AUGUST 2003
PLACE:	BRISBANE

Counsel for the Applicant:	Mr P O’Shea SC Ms S Brown
Solicitor for the Applicant:	Corrs Chambers Westgarth
Counsel for the Respondent:	Mr DJS Jackson QC Mr R Jackson
Solicitor for the Respondent:	Morgan Lewis Alter
Dates of Hearing:	28 & 29 October 2002 19, 20, 21, 24, 25 & 31 March 2003 1 & 2 April 2003
Date of Judgment:	22 August 2003