Australian Competition and Consumer Commission v Imagine Essential Services Limited (No 2)

[2008] FCA 446

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission
v Imagine Essential Services Limited (No 2) [2008] FCA 446

Trade Practices Act 1974 (Cth)

Australian Consumer & Competition Commission v Econovite Pty Ltd [2003] ATPR 41-959
Australian Consumer & Competition Commission v Target Australia Pty Ltd [2001] ATPR 41-840
Australian Securities & Investment Commission v Rich (No 2) (2004) 22 ACLC 1232
BMI Ltd v Federated Clerks Union of Australia (NSW) Branch (1983) 51 ALR 401
Gramophone Co Ltd v Magazine Holder Co (1911) 28 RPC 221
Metzger v Department of Health and Social Security [1977] 3 All ER 444
NW Frozen Foods Pty Ltd v Australian Consumer & Competition Commission (1996) 71 FCR 285
Termijtelen v Van Arkel [1974] 1 NSWLR 525
Wallersteiner v Moir [1974] 3 All ER 217
Williams v Powell [1894] WN (Eng) 141

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v IMAGINE ESSENTIAL SERVICES LIMITED (ACN 104 433 098), RICHARD EVANS AND THE TRIUMPHANT GROUP PTY LTD (ACN 101 493 403)
VID 578 OF 2007

GORDON J
2 APRIL 2008
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 578 OF 2007

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
Applicant

AND:

IMAGINE ESSENTIAL SERVICES LIMITED (ACN 104 433 098)
First Respondent

RICHARD EVANS
Second Respondent

THE TRIUMPHANT GROUP PTY LTD (ACN 101 493 403)
Third Respondent

JUDGE:	GORDON J
DATE OF ORDER:	2 APRIL 2008
WHERE MADE:	MELBOURNE

THE COURT DECLARES THAT:

Earnings Representations

1.By making each of the following representations, as marketing and promotional agent engaged by the First Respondent, in the period November 2004 to January 2006 (“the relevant period”):

1.1that the Imagine licensing system would enable a licensee to develop a $10,000 per month passive income within 2-3 years of becoming a licensee;

1.2that within 2 years of part time effort, a trailing income of over $100,000 per annum would realistically be achievable by a licensee,

where, during the relevant period, there were no reasonable grounds for making the representations, the Third Respondent in trade and commerce engaged in conduct that was misleading and deceptive (or likely to mislead or deceive) in contravention of s 52 of the Trade Practices Act 1974 (Cth) (“the Act”) and made representations with respect to the profitability, risk and a material aspect of the Imagine licensing system which was misleading in a material particular, in contravention of s 59(2) of the Act.

Accountant Representations

2.By making each of the following representations, as marketing and promotional agent engaged by the First Respondent, in the relevant period:

2.1that, for the Imagine licence fee, a licensee received a minimum of
300 members by way of an associate agreement;

2.2that access to either 300 non-active members or attachment to an associate with a minimum of 300 clients available for membership was included in the Imagine licence fee; and

2.3that there were hundreds of accountants ready to recommend Imagine licensees;

where, during the relevant period:

2.4the First Respondent had a limited number of agreements or understandings with accountants relating to the introduction of licensees to members;

2.5very few individual licensees had been referred by the First Respondent to an accountant who provided the licensee with 300 members or had 300 clients to whom the licensee was introduced; and

2.6 there were otherwise no reasonable grounds for making the representations,

the Third Respondent in trade and commerce engaged in conduct that was misleading and deceptive (or likely to mislead or deceive) in contravention of s 52 of the Act.

Supplier Agreement Representations

3.By making each of the following representations, as marketing and promotional agent engaged by the First Respondent, in the relevant period:

3.1that the First Respondent had direct agreements in place with the following essential service suppliers in relation to telephone, gas, water and electricity services, agreements that enabled licensees to procure for members substantial savings on the cost of obtaining essential services:

3.1.1AGL;

3.1.2Energy Australia;

3.1.3M8 Telecom;

3.1.4Optus;

3.1.5Primus Telecom;

3.1.6Telstra;

3.1.7Hutchinson Telecom or Hutchinson 3;

3.1.8Vodafone;

3.2that the First Respondent could procure savings on behalf of members of at least the following percentages in respect of the services described as:

3.2.1telephone (landlines) – 20%;

3.2.2telephone (mobile) – 10%;

3.2.3electricity – 5%;

3.2.4gas – 5%;

3.2.5fuel – 2.5c/litre;

3.2.6internet – 4%;

3.3that the First Respondent would enable licensees to often save members between 30-40% on their bills for essential services; and

3.4that with a national buying group, the First Respondent was able to offer members additional benefits at cheaper prices than they would otherwise be able to access on their own;

where, during the relevant period:

3.5the First Respondent did not have direct agreements in place with the suppliers of essential services referred to in paragraph 3.1 above and any access to their products occurred through agreements or understandings with agents, brokers or intermediaries;

3.6the First Respondent did not have the bulk purchasing power that allowed all licensees to access deals that were not normally available to small/medium sized businesses, in that the First Respondent was not able to procure on behalf of members, substantial savings in the prices of essential services compared with the prices that a consumer or business could normally obtain by their own endeavours, from (at least) the following suppliers of essential services:

3.6.1Westnet;

3.6.2NAS Insurance Brokers;

3.6.3Ezepos;

3.6.4Vodafone;

3.6.5Telstra;

3.7there were otherwise no reasonable grounds to make the representations,

the Third Respondent in trade and commerce engaged in conduct that was misleading and deceptive (or likely to mislead or deceive) in contravention of s 52 of the Act and in connection with the supply of services and in connection with the promotion of the supply of services, represented that the services had approval and benefits that they did not have, in contravention of s 53(c) of the Act.

Association Representations

4.By making each of the following representations, as marketing and promotional agent engaged by the First Respondent, in the relevant period:

4.1that Imagine licensees would become accredited by the Essential Service Advisors Association (ESAA);

4.2that Imagine licensees would become accredited by the Telecommunications and Technology Industry Advisor Association (TIAA);

where:

4.3the ESAA or the TIAA had not become operational in the relevant period such as to enable licensees to become members of, or accredited by, the ESAA or the TIAA;

4.4.as the representations referred to in 4.1 and 4.2 above were with respect to a future matter, there were no reasonable grounds to make the representation,

the Third Respondent in trade and commerce engaged in conduct that was misleading and deceptive (or likely to mislead or deceive) in contravention of s 52 of the Act.

THE COURT ORDERS THAT:

Earnings Representations

5.The Third Respondent, whether by itself or its officers, employees and/or agents or otherwise howsoever, be permanently restrained until further order from making the following representations in trade and commerce in Australia:

5.1that the Imagine licensing system will enable a licensee to develop a $10,000 per month passive income within 2-3 years of becoming a licensee;

5.2that within 2 years of part time effort, a trailing income of over $100,000 per annum is realistically achievable by an Imagine licensee; and

5.3any other representation to the same purport or effect as those referred to above,

in circumstances where the Third Respondent has no reasonable grounds for making the representations.

Accountant Representations

6.The Third Respondent, whether by itself or its officers, employees and/or agents or otherwise howsoever, be permanently restrained until further order from making the following representations in trade and commerce in Australia:

6.1that, for the licence fee, an Imagine licensee receives a minimum of
300 members by way of an associate agreement;

6.2that access to either 300 non-active members or attachment to an associate with a minimum of 300 clients available for membership is included in the Imagine licence fee;

6.3that there are hundreds of accountants ready to recommend Imagine Licensees;

6.4any other representation to the same purport or effect as those referred to in para 6.1, 6.2 and 6.3 above,

in circumstances where:

6.5the First Respondent has a limited number of agreements or understandings with accountants relating to the introduction of licensees to members;

6.6very few individual licensees have been referred by the First Respondent to an accountant who provided the licensee with 300 Members or had 300 clients to whom the licensee was introduced;

6.7there are otherwise no reasonable grounds for making the representations.

Supplier Agreement Representations

7.The Third Respondent, whether by itself or its officers, employees and/or agents or otherwise howsoever, be permanently restrained until further order from making the following representations in trade and commerce in Australia:

7.1that the First Respondent has direct agreements in place with the following essential service suppliers in relation to telephone, gas, water and electricity services, which agreements enable Imagine licensees to procure for members substantial savings on the cost of obtaining essential services:

7.1.1AGL;

7.1.2Energy Australia;

7.1.3M8 Telecom

7.1.4Optus;

7.1.5Primus Telecom;

7.1.6Telstra;

7.1.7Hutchinson Telecom or Hutchinson 3;

7.1.8Vodafone;

7.2that the First Respondent can procure savings on behalf of members of at least the following percentages in respect of the services described as:

7.2.1telephone (landlines) – 20%;

7.2.2telephone (mobile) – 10%;

7.2.3electricity – 5%;

7.2.4gas – 5%;

7.2.5fuel – 2.5c/litre;

7.2.6internet – 4%.

7.3that the First Respondent will enable licensees to often save members between 30-40% on their bills for essential services;

7.4that with a national buying group, the First Respondent is able to offer members additional benefits at cheaper prices than they would otherwise be able to access on their own;

7.5any other representation to the same purport or effect as those referred to in paras 7.1 to 7.4 above,

in circumstances where:

7.6the First Respondent does not have direct agreements in place with suppliers of essential services referred to in para 7.1 above and any access to their products occurs through agreements or understandings with agents, brokers or intermediaries;

7.7the First Respondent does not have the bulk purchasing power that allows all licensees to access deals that are not normally available to small/medium sized businesses, in that the First Respondent is not able to procure on behalf of members, substantial savings in the prices of essential services compared with the prices that a consumer or business could normally obtain by their own endeavours;

7.8there are otherwise no reasonable grounds for making the representations.

Association Representations

8.The Third Respondent, whether by itself or its officers, employees and/or agents or otherwise howsoever, be permanently restrained until further order from making the following representations in trade and commerce in Australia:

8.1that Imagine licensees will become accredited by the ESAA;

8.2that Imagine licensees will become accredited by the TIAA;

in circumstances where:

8.3the ESAA or the TIAA have not become operational such as to enable licensees to become members of, or accredited by, the ESAA or the TIAA; or

8.4there are no reasonable grounds to make the representation.

Notices

9.Within 14 days of the date of this Order, the Third Respondent, at its own expense, publish:

9.1at and

9.2on the homepage of any other website owned or controlled by Triumphant,

a notice in the terms set out in Annexure A to this Order, such notice to remain conspicuously and continuously in place for a period of 90 days.

Compliance program

10.If the Third Respondent commences again to conduct business in Australia after the date of this Order then it shall:

10.1within three months of re-commencing business, establish a Compliance Program for employees or other persons involved in its business:

10.1.1which is designed to ensure an awareness of a corporation’s responsibilities and obligations under ss 52, 53 and 59 of the Act; and

10.1.2subject to the Compliance Program being tailored to the Third Respondent’s circumstances, which is consistent with the Australian Standard on Compliance Programs AS3806;

10.2within one month of re-commencing business, appoint a person with experience in trade practices law to advise the Third Respondent as to the content of the Compliance Program;

10.3implement and administer the Compliance Program for a period of three years from the date it re-commences business; and

10.4within six months of re-commencing business, provide a written report to the Applicant on the content of the Compliance Program, and provide a further report to the Applicant on the implementation and administration of the Compliance Program at the conclusion of each period of twelve months during which the program is being implemented and administered.

Costs

11.There be no order as to costs of the proceeding as between the Applicant and the Third Respondent.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

Annexure A

ACCC legal action against The Triumphant Group Pty Ltd resolved

In June 2007 the Australian Competition and Consumer Commission (“ACCC”) commenced legal action against Imagine Essential Services Limited (“Imagine”), its former CEO, Richard Evans and The Triumphant Group Pty Ltd (trading as Triumphant Events) (“Triumphant”) for alleged contraventions of the Trade Practices Act 1974 (Cth) (“the Act”).

The ACCC alleges that Imagine sold licences to operate a system involving agreements that Imagine claimed to have negotiated with essential service suppliers.  It is alleged by the ACCC, amongst other things, that Imagine represented these agreements could provide small to medium businesses savings off their bills for their essential services such as electricity, gas, water and telephone.

The ACCC alleged Triumphant was engaged by Imagine to promote the sale of licenses at Imagine’s seminars and workshops and that in this capacity, Triumphant made representations that were false or misleading with regard to:

·The profitability of the Imagine licensing system;

·The existence of agreements between Imagine and suppliers of essential services;

·Agreements that Imagine had with accountants; and

·The existence of, and membership to, the Essential Services Advisory Association and the Telecommunications Technology Industry Advisory Association.

Triumphant has agreed to settle the ACCC’s proceeding against it. The Federal Court of Australia has declared by consent that Triumphant, by engaging in the above conduct, contravened the Act. The Court also made orders by consent restraining Triumphant from engaging in the offending conduct in the future.

The ACCC’s action against Triumphant is now concluded.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 578 OF 2007

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
Applicant

AND:

IMAGINE ESSENTIAL SERVICES LIMITED (ACN 104 433 098)
First Respondent

RICHARD EVANS
Second Respondent

THE TRIUMPHANT GROUP PTY LTD (ACN 101 493 403)
Third Respondent

JUDGE:	GORDON J
DATE:	2 APRIL 2008
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

introduction

1. On 29 February 2008, the proceeding as between the Australian Competition and Consumer Commission (“the ACCC”), Imagine Essential Services Limited (ACN 104 433 098), the First Respondent, (“Imagine”) and Richard Evans, the Second Respondent, (“Evans”) was resolved and those parties applied to the Court for the making of consent orders including declarations and injunctions.  On 4 March 2008, Orders were made and reasons for decision were published recording why, in my view, it was appropriate for the Court to grant declarations and make orders in terms of the proposed consent declarations and orders submitted by those parties.

2. The ACCC has now resolved the proceeding with the Third Respondent,
   The Triumphant Group Pty Ltd (ACN 101 493 403) (“Triumphant”) and has applied to the Court for the making of consent orders including declarations and injunctions.

3. Imagine sold licences to operate a system involving agreements that Imagine claimed to have negotiated with essential service suppliers.  The proceeding against Imagine concerned representations made by Imagine in the promotion of the sale of those licences at seminars and workshops conducted by Imagine in the period between November 2004 and June 2006 (“the relevant period”).  There were four groups of representations:  Earnings Representations, Accountant Representations, Supplier Agreement Representations and Associations Representations (“the Representations”).

4. By application dated 29 June 2007, the ACCC alleged that Imagine, by making the Representations, engaged in conduct in contravention of the Trade Practices Act 1974 (Cth) (“the Act”). In particular, the ACCC alleged that Imagine contravened:

   (1)ss 52 and 59(2) of the Act in relation to the Earnings Representations;

   (2)ss 52 and 53(d) of the Act in relation to the Accountant Representations;

   (3)ss 52, 53(c) and (d) of the Act in relation to the Supplier Agreement Representations; and

   (4)s 52 of the Act in relation to the Associations Representations.

   The ACCC also alleged that Evans aided and abetted, and was directly or indirectly knowingly concerned in and party to, Imagine’s conduct. 

5. The ACCC’s proceeding against Triumphant was, in some important respects quite different to its proceeding against the First and Second Respondents. First, the nature of the activities; Triumphant was engaged by Imagine as the marketing and promotional agent to assist in the sale of the licences. Secondly, the time period about which the ACCC complained was more limited; the conduct about which the ACCC complained in relation to Triumphant was said to be only “up to January 2006”. Thirdly, not all of the Representations made by Imagine were said to have been made by Triumphant although the ACCC alleged that at least some of the representations in each of the four groups were made by Triumphant. Fourthly, the ACCC sought declarations that the conduct of Triumphant contravened ss 52, 53(c) and 59(2) and alternatively, that Triumphant aided, abetted, counselled or procured Imagine to engage in the conduct, and was directly or indirectly knowingly concerned in or party to Imagine’s conduct.

6. The ACCC and Triumphant have now agreed to compromise the proceeding and submitted to the Court declarations and orders which the parties sought by consent. 

1. As a general principle, a court does not make declarations on matters relating to public rights by consent or on admissions, unless it is satisfied by evidence: Australian Securities & Investment Commission v Rich (No 2) (2004) 22 ACLC 1232 at [10]; Williams v Powell [1894] WN (Eng) 141; Gramophone Co Ltd v Magazine Holder Co (1911) 28 RPC 221 at 225–227; Termijtelen v Van Arkel [1974] 1 NSWLR 525; Wallersteiner v Moir [1974] 3 All ER 217; Metzger v Department of Health and Social Security [1977] 3 All ER 444 at 451; BMI Ltd v Federated Clerks Union of Australia (NSW) Branch (1983) 51 ALR 401; Young P W, Declaratory Orders (2nd ed, 1984) [601].

2. The evidence adduced in support of the resolution of the proceeding on the terms of the proposed Declarations and Orders was as follows:

   (1)       Earnings Representations – the affidavit of Paul David Marsland affirmed 22 November 2007 (“Marsland affidavit”) and, in particular, Exhibit “PM-1”;  the affidavit of Allison Beswick sworn 23 November 2007 (“Beswick affidavit”) and, in particular, Exhibits “AB-2”, “AB-3” and “AB-6”;

   (2)Accountant Representations – Exhibits “AB-2”, “AB-8” and “AB-10” to the Beswick affidavit;

   (3)       Supplier Agreement Representations – Exhibits “AB-2”, “AB-6”, “AB-10” and

   
   

   “AB-11” to the Beswick affidavit; and

   (4)       Association Representations – Exhibit “PM-4” to the Marsland affidavit and Exhibit “SG-18” to the affidavit of Shane Christopher Grosser sworn 23 November 2007 (“the Grosser affidavit”).

3. These reasons for decision record why, in my view, it is appropriate for the Court to grant declarations and make orders in terms of the proposed consent declarations and orders.

   facts

4. The case against Triumphant, like the case against Imagine and Evans, is largely documentary.  The documents referred to above and relied upon by the ACCC are documents produced at the seminars and workshops in the relevant period to promote the sale of licences or email communications from Triumphant to potential purchasers of the licences. 

5. The ACCC submits that during the relevant period Triumphant (as the marketing and promotional agent engaged by Imagine) made representations at the seminars and workshops.  In particular:

   (1)       Earnings Representations that:

   (a)       the Imagine licensing system would enable a licensee to develop a $10,000 per month passive income within 2-3 years of becoming a licensee;

   (b)       with 2 years of part time effort, a trailing income of over $100,000 per annum would realistically be achievable by a licensee;

   (2)       Accountant Representations that:

   (a)       when a licensee acquired a licence, a licensee would receive a minimum of 300 members by way of an associate agreement;

   (b)       when a licensee acquired a licence, a licensee gained access to either

   
   

   300 non-active members or attachment to an associate with a minimum of

   
   

   300 clients was included in the Imagine licence fee;

   (c)there were hundreds of accountants ready to recommend Imagine licensees;

   (3)       Supplier Agreement Representations that:

   (a)       Imagine had direct agreements in place with the following named essential service suppliers in relation to telephone, gas, water and electricity services, agreements that enabled licensees to procure for members substantial savings on the cost of essential services:

   (i)AGL;

   (ii)Energy Australia;

   (iii)M8 Telecom;

   (iv)Optus;

   (v)Primus Telecom;

   (vi)Telstra;

   (vii)Hutchison Telecom or Hutchison 3;

   (viii)Vodafone;

   (b)       Imagine could procure savings on behalf of members of at least the following percentages in respect of the services described:

   (i)        telephone (landlines) - 20%;

   (ii)       telephone (mobile) - 10%;

   (iii)      electricity - 5%;

   (iv)      gas - 5%;

   (v)       fuel - 2.5c/litre;

   (vi)      internet - 4%;

   (c)Imagine would enable licensees to often save members between 30-40% on their bills for essential services;

   (d)      with a national buying group, Imagine was able to offer members additional benefits at cheaper prices than they would otherwise be able to access on their own;

   (4)       Association Representations that:

   (a)Imagine licensees would become accredited by the Essential Service Advisors Association (“ESAA”);

   (b)       Imagine licensees would become accredited by the Telecommunications and Technology Industry Advisor Association (“TIAA”).

   (“the Triumphant Representations”).

6. Before turning to the question of whether the Triumphant Representations were conveyed, it is necessary to consider the role of Triumphant, and further, the role of Daniel Priestley (“Mr Priestley”) in the activities of Triumphant.  The company historical extract obtained from the Australian Securities and Investments Commission for Triumphant records that at all relevant times Mr Priestley was the sole director.  In addition, Triumphant did not assert that the contents of the Beswick and Marsland affidavits were inaccurate.  In general terms, those affidavits disclosed that the two day workshops were organised and run by Triumphant and that during the course of the two day workshops, Mr Priestley introduced himself as being from Triumphant and presented particular aspects of the two day seminar.

7. I have carefully reviewed the documents listed in para [8] above and have sought to assess the likely effect of their contents on potential purchasers of the Imagine licensing system. I am satisfied that that the Triumphant Representations were conveyed in those documents as summarised in the Attachment to these Reasons for Judgment.

8. The ACCC also submits that the Triumphant Representations were false, misleading or deceptive.  Falsity was established by the Beswick and Marsland affidavits and Exhibit “SG-5” to the Grosser affidavit.  Triumphant has agreed to settle the proceeding against it on the basis that:

   (1)by making the Earnings Representations, it engaged in conduct in contravention of ss 52 and 59(2) of the Act;

   (2)by making the Accountant Representations, it engaged in conduct in contravention of ss 52 of the Act;

   (3) by making the Supplier Agreement Representations, it engaged in conduct in contravention of ss 52 and 53(c) of the Act; and

   (4)by making the Association Representations, it engaged in conduct in contravention of s 52 of the Act.

   orders

9. The proposed orders provide for declarations and injunctions in relation to Triumphant’s contraventions of ss 52, 53(c) and 59(2) of the Act. In my view, it is appropriate for there to be orders published in accordance with the minute of proposed orders. The orders are within power and otherwise appropriate: Australian Consumer & Competition Commission v Target Australia Pty Ltd [2001] ATPR 41-840 at [24] and Australian Consumer & Competition Commission v Econovite Pty Ltd [2003] ATPR 41-959 at [12]. Moreover, in the circumstances, it is in the public interest that these proceedings between the ACCC and Triumphant are settled: see Kiefel J in NW Frozen Foods Pty Ltd v Australian Consumer & Competition Commission (1996) 71 FCR 285 at 291.

10. In the circumstances, I will make orders substantially in accordance with the minute of proposed orders.

I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon.

Associate:

Dated:       2 April 2008

Counsel for the Applicant:	M Moshinsky SC A Dinelli
Solicitor for the Applicant:	Australian Government Solicitor
Solicitor for the Third Respondent:	Gadens Lawyers
Date of Written Submissions:	27 March 2008
Date of Hearing:	2 April 2008
Date of Judgment:	2 April 2008

ATTACHMENT

Document	Page or part and content	Representations Conveyed
Ex “PM-1”            (flyer)            Triumphant logo appears at the foot of the page on the right.	Page 1            “Together we will take a look at:            … ·    Our plan for developing a $10k per month passive income in 2-3 years.	Earnings Representations
Ex “PM-4” (Folder and handouts provided at the 2 day workshop)	Page 7            “The Licensee receives training on each new product.  They then educate Members of the features and benefits of imagine and competitors’ products and services, helping them choose the best one to suit their needs.            The training involves the Licensee becoming a licensed Member of the Essential Services Advisors Association (ESAA).            Becoming a Member of ESAA qualifies a Licensee to operate, and advise Members on technologies, telecommunications and essential services products.  Dealing with a qualified ESA reassures Members that they are getting professional advice and the best rates in their essential services.”            Page 9            “Included in this fee is:            ..            >>      Membership to the ESAA and the TTUA Associations (for the first two years) and ...”	Association Representation (ESAA)
Ex “AB-2”            (Version of slides shown at 2 hour seminar)	Page 4            “A clear plan for you to create a passive income of over $100K in 24-30 months”	Earnings Representations
Page 18            Page 26            Example of Saving’s to SME/Homes … ·    The average SME spends $540 per month on landline calls alone !!!! ·    Landline calls                 --         20% ·    Mobile Phones                --         10% ·    Power*  5% ·    Gas*  5% ·    Fuel  2.5c ·    Internet  4%            Many thousands of dollars $$$$$$            * Not available in all states currently, due to staged de-regulation.            Page 34	Supplier Agreement Representations
Page 30            An example of What an Advisor Earns (Telco only) 300 Businesses … >>           each with an average call spend of $300 per month on their landlines. 600 Homes … >>           each with an average call spend of $90 per month. 300 Mobiles … >>           each with an average call spend of $100 per month. 300 Internet … >>           each with an average plan spend of $40 per month.            Page 31            Income after 2 years. Business Landlines >>           $24,000.00 in upfront payments >>           $4,500.00 per month in trail income Home Landlines >>           $10,800.00 in upfront payments >>           $2,700.00 per month in trail income Mobiles >>           $3,000.00 in upfront payments >>           $700.00 per month in trail income Internet >>           $1200.00 per month in trail income.             Page 32            Income Summary Upfront Payments >>           $37,800.00 Trail Income >>           $109,200.00 *Not to mention a Trail-Income on … >>           Power >>           Gas >>           Fuel / Parts & Servicing >>           Technology products >>           and much more	Earnings Representations
Page 37            “Minimum 300 members via associate agreement”	Accountant Representations
Ex “AB-3” (Flyer handed out to participants at the 2 hour seminar)	Page 3            2 DAY EVENT            …            “How you can build a business quickly and enjoyably to create a $100K+ Passive income with month by month projections …            BOOK TODAY            Bookings are absolutely essential.  If you have any friends, family or colleagues who you feel would also benefit from this event – reserve your seats by calling our event management partner, Triumphant Events, on 1800 501 200”	Earnings Representations
Ex “AB-6” (Overview email from Triumphant including Triumphant logo)	Page 2            “Make no mistake, this is a real opportunity for people looking to tap into a massive market using a system that sets them up with a passive income stream.  Our conservative financial estimates show that within 2 years of part time effort, a trailing income of over $100,000 per annum is realistically achievable”	Earnings Representations
Page 3 third dot point            “How can we save our members up to 30-40% on their essential services bill at no cost to them?”	Supplier Agreement Representations
Ex “AB-8” (Imagine folder handed out at 2 day seminar)	Page “Overview”            “Either 300 non-active Members or attachment to an Associate with a minimum 300 clients available for Membership”	Accountant Representations
Ex “AB-10” (Version of slides shown at 2 hour seminar)	Page 16            Page 37            Eg “Our supplier agreements are setup so there is no incentive for Licensed Advisors to choose any one supplier over another.  This allows them to offer an independent analysis of a number of different providers and tailor an offering to the needs of their client.  This is because we can advise across multiple industries comprised of multiple suppliers.”            Page 39            “… With a national buying group, we are able to offer our members additional benefits at cheaper prices, than they would otherwise be able to access on their own.”	Supplier Agreement Representations
Ex “AB-10” (Version of slides shown at 2 hour seminar)	Page 15            “Member Acquisition Strategies            …            Centers of influence via Accountants etc            18,000 accountants managing the 1.2 million SME’s            Why do accountants recommend our advisors?            Now there are hundreds of them!”            Page 28            “History of Imagine            Late 2004 …            >>      Triumphant Events teams up with Imagine to handle all licensee acquisition, enabling Image Management to focus on systems, training and suppliers.            >>      Imagine begins negotiations with a number of energy companies to pioneer trailing incomes from these services – something that has never been offered before!            >>      Large accounting networks sign off on aggregator system …”            Page 38            “Acquisition through a trusted aggregator vs traditional forms of marketing ·    We are introduced into businesses through their accountants or other advisors. ..”	Accountant Representations
Ex “AB-11” (Version of slides shown at 2 day seminar)	Page 20            “Providers ·               Primus Telecom -               Residential services launched 1997 -               Quality at competitive rates ·               Services -               Local, National & International -               Capped calls to mobiles -               Broadband -               Secure DSL”            Page 23            “Providers ·               M8 Telecom -               Over 100 outlets nationally -               Most progressive netw -               Innovative tariffs -               Via Optus ·               Services -               Mobile phones and services”	Supplier Agreement Representations
Ex “SG-18” (Version of slides shown at 2 hour seminar conducted by Imagine and Evans)	Page 18            “Creation of a New Industry            … Ø             Imagine is the first of its kind, therefore, Imagine has created a new industry …       … The industry of “Essential Services Advisors” Ø             We have founded the Essential Service Advisors Association. Ø             All licensees become accredited by the association Setting … Ø             … A New industry benchmark of Professional Advisors”	Association Representations (ESAA)