Australian Competition and Consumer Commission v Giraffe World Australia Pty Ltd
[1999] FCA 937
•29 JUNE 1999
FEDERAL COURT OF AUSTRALIA
Australian Competition & Consumer Commission v Giraffe World Australia Pty Ltd [1999] FCA 937
AUSTRALIAN COMPETITION & CONSUMER COMMISSION v GIRAFFE WORLD AUSTRALIA PTY LIMITED & ORS
NG 421 OF 1998
LINDGREN J
29 JUNE 1999
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NG 421 OF 1998
BETWEEN:
AUSTRALIAN COMPETITION & CONSUMER COMMISSION
ApplicantAND:
GIRAFFE WORLD AUSTRALIA PTY LIMITED
First RespondentAKIHIKO MISUMA
Second RespondentROBIN HAN
Third RespondentMARK SCOTTE
Fourth Respondent[Rui Hua Zhang, removed as a party]
Fifth RespondentLUCILLE ORR
Sixth Respondent
JUDGE:
LINDGREN J
DATE:
29 JUNE 1999
PLACE:
SYDNEY
THE COURT DECLARES THAT:
The first respondent is guilty of contempt of the Court in that on 23 April 1999 it made the following representations in a “Happiness Circle” meeting held at Level 15, 477 Pitt Street, Sydney:
“1. The Mat generates or emits negative ions.
4.The use of the Mat will relieve any or any particular ailment or health condition.
5. The use of the Mat will promote health.”
and in that on 20 May 1999 it made the following representations at a “Happiness Circle” meeting held at Level 15, 477 Pitt Street, Sydney:
“1. The Mat generates or emits negative ions.
4.The use of the Mat will relieve any or any particular ailment or health condition.”
and in that on 12 May and 7 June 1999 it made the following representation on its website:
“1. The Mat generates or emits negative ions”.
The Court orders that:
1.The first respondent pay the applicant’s costs of the motion for contempt on an indemnity basis.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NG 421 OF 1998
BETWEEN:
AUSTRALIAN COMPETITION & CONSUMER COMMISSION
ApplicantAND:
GIRAFFE WORLD AUSTRALIA PTY LIMITED
First RespondentAKIHIKO MISUMA
Second RespondentROBIN HAN
Third RespondentMARK SCOTTE
Fourth Respondent[Rui Hua Zhang, removed as a party]
Fifth RespondentLUCILLE ORR
Sixth Respondent
JUDGE:
LINDGREN J
DATE:
29 JUNE 1999
PLACE:
SYDNEY
REASONS FOR JUDGMENT
Introduction
There is before the Court an amended notice of motion and an amended statement of charge in respect of alleged contempt of this Court by the first respondent (“Giraffe World”). An administrator was appointed to Giraffe World and the administrator, through his solicitor, has appeared to acknowledge having been served with the amended notice of motion and the amended statement of charge and to inform the Court that there is no objection to the matter proceeding to a hearing, although the administrator does not wish to make any submissions. At the administrator’s request I excused him from further attendance.
General
In dealing with the charge I must bear in mind therefore that no evidence has been led on behalf of Giraffe World and that no submissions have been made on its behalf.
On 23 April last in the course of a hearing of the substantive proceeding, Giraffe World gave an undertaking to the Court. The undertaking was that pending delivery of judgment and such further order as the Court might make, Giraffe World would not, by itself or knowingly by its employees or members, make the following representations concerning the Giraffe Ion Mat (“the Mat”) with which the present proceeding has been largely concerned:
“1. The Mat generates or emits negative ions.
2. The Mat generates or increases negative ions in the human body.
3.The use of a Mat will cure any or any particular ailment or health condition.
4.The use of the Mat will relieve any or any particular ailment or health condition.
5. The use of the Mat will promote health.
6.Any Australian or other Government approvals of the Mat provide endorsement for the capacity of the Mats to influence health.”
The evidence led in support of the motion is of three kinds. First, there is evidence of things said at a “Happiness Circle” meeting on the evening of 23 April 1999 at Giraffe World’s business premises at Level 15, 477 Pitt Street, Sydney. It will be noted that this was the evening of the day on which the undertaking was given to the Court. Second, there is evidence of what was said at a further Happiness Circle meeting on 20 May last at the same premises. Third, there is evidence of what was displayed on the Giraffe World website on 12 May and on 7 June.
Out of the various things that were said at the meetings and stated on the website, the applicant (“the ACCC”) identifies certain material as showing that contrary to its undertaking to the Court, Giraffe World made representations 1, 4 and 5 above.
I do not think it necessary to give a detailed account of all of the things that were said at the Happiness Circle meetings or stated on the website. I will however, give a brief summary.
An affidavit of Raymond John Brookes sworn 7 June 1999, shows that Mr Brookes went to a Happiness Circle meeting on the evening of 23 April at the Giraffe World premises and that at the meeting a Giraffe World “presenter” made the following statement:
“You get positive ions every day from computer screens, televisions, electronic equipment and general office environment. The mattress produces negative ions while you sleep. The negative ions counteract the positive ions produced each day, and reduce the effects of ageing.”
I think that this evidence shows that representations 1 and 4 were made (I will use the numbers of the 6 representations referred to in the undertaking).
At the same meeting the presenter said:
“By using the negative ion mat, you can cure diabetes, high cholesterol, allergies and heart disease.”
Again, this was representation 4 and representation 5.
This evidence shows that Giraffe World breached its undertaking on the evening of the day on which it had given the undertaking to the Court. As I indicated in the course of the hearing, it is conceivable that the terms of the undertaking did not, for some reason, reach the relevant personnel of Giraffe World in time for that night’s meeting. This would not prevent the commission of a contempt of the Court, but it would be relevant to any penalty to be imposed. Be this as it may, in the absence of any evidence from Giraffe World I can only speculate as to such matters and will refrain from doing so.
The evidence in relation to the further Happiness Circle meeting is found in an affidavit of Jacqueline Musgrave sworn 9 June 1999. Ms Musgrave refers to her attendance at a Happiness Circle meeting at the premises of Giraffe World on 20 May 1999. In her affidavit she refers to a person known as “Jamie”. According to evidence given in the course of the substantive hearing which was re-tendered on the hearing of the present motion, Jamie was apparently the branch manager of Giraffe World. Ms Musgrave testifies that Jamie made various statements. For example, he stated:
“This product can rejuvenate body cells. It can help increase our strength, and oxygenise the blood so muscles can operate.”
Jamie claimed that he was a doctor and that by using the Mat persons had been cured of diabetes and high cholesterol levels. He said, for example:
“In one night you are receiving all the negative ions you need to neutralise all the unhealthy ions. We call negative ions healthy ions.”
After the seminar concluded, “Sue”, a woman present at the meeting, said:
“Since I have been using the mat I have not fainted.”
I would not find a contempt based on this last assertion of personal experience but I think that the earlier ones to which I have referred amount to representations 1 and 4.
I turn last to the evidence as to the website. This is found in affidavits of Kirsty May Ferguson Ruddock sworn 7 June, 1999 and Jacqueline Steward Reid sworn on the same date. Ms Ruddock is a solicitor employed by the Australian Government Solicitor’s office in Sydney and assists in the conduct of the present proceeding on behalf of the ACCC. Ms Reid is the proprietor of “Webwitch Internet Consultancy” (“Webwitch”), a business in the Australian Capital Territory. The primary activity of Webwitch is the design and maintenance of commercial websites.
Again I do not need to recount the evidence in detail. It establishes that Giraffe World requested “Webwitch” to devise a website for Giraffe World and that this was done. The relevant part of the material on the website occurs under the heading “The Product”. As at 12 May and 7 June 1999 it stated:
“The Giraffe World Ion Mat has a negative Ion producing device which produces 380 volts of negative charge. This voltage is said to be beneficial to the human body.”
The first sentence was representation 1.
There may have been other classes of representation contained in the website, although I note that the person who prepared it was careful to use such words as “may” in statements of the kind:
“The latest high tech research has shown that negative ion therapy may assist in the following areas.” (emphasis supplied)
I do not need to resolve finally whether any more representations were made on the website because it is clear that the undertaking to the Court was breached at least in the form of the making of representation 1.
I find that the first respondent is guilty of contempt of the Court in that on 23 April 1999 it made the following representations in a “Happiness Circle” meeting held at Level 15, 477 Pitt Street, Sydney:
“1. The Mat generates or emits negative ions.
4.The use of the Mat will relieve any or any particular ailment or health condition.
5. The use of the Mat will promote health.”
and in that on 20 May 1999 it made the following representations in a “Happiness Circle” meeting held at Level 15, 477 Pitt Street, Sydney:
“1. The Mat generates or emits negative ions.
4.The use of the Mat will relieve any or any particular ailment or health condition.”
and in that on 12 May and 7 June 1999 it made the following representation on its website:
“1. The Mat generates or emits negative ions.”
I note that the ACCC seeks only a finding of contempt and an order for costs and does not seek the imposition of any other penalty. Accordingly, in addition to the findings of contempt just made I order that the first respondent pay the applicant’s costs of the motion for contempt on an indemnity basis.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate:
Dated: 9 July 1999
Counsel for the applicant: Mr B R McClintock SC with Mr S T White Solicitor for the applicant: Australian Government Solicitor Counsel for the first respondent: No appearance Solicitor for the first respondent: No appearance Date of Hearing: 29 June 1999 Date of Judgment: 29 June 1999
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