Australian Competition and Consumer Commission v McCaskey

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FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v McCaskey [2000] FCA 1037

TRADE PRACTICES – debt collectors – undue harassment and coercion – elements of “undue harassment and coercion” – legitimate purposes of debt collectors – consent orders – principles governing grant of consent orders – compliance programmes and corrective advertising – applicable principles.

Trade Practices Act 1974 (Cth) s 52, par 53(g) and s 60
Trade Practices Revision Act 1986
Fair Trading Act 1987  (WA)

Australian Competition and Consumer Commission v Real Estate Institute of Western AustraliaInc (1999) 95 FCR 114 followed
Beckwith v R (1976) 12 ALR 333 followed
Deming No 456 Pty Ltd v Brisbane Unit Development Corp Pty Ltd (1983) 50 ALR 1 followed
Waugh v Kippen (1986) 64 ALR 195 followed
Thompson v Master Touch TV Services Pty Ltd (1977) 15 ALR 487 cited
Hall v A & A Sheiban Pty Ltd (1989) 85 ALR 503 discussed
O’Callaghan v Loder [1984] EOC 92-023 cited
Johnston v Collier (1997) 142 FLR 409 cited
Campbell v Metway Leasing Ltd (1998) ATPR 41-630 discussed

Heydon, Trade Practices Law (Law Book Co) Vol 1
Pearce and Geddes, Statutory Interpretation in Australia, 4th Edition, Butterworths

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v SHARYN McCASKEY and CASH RETURN MERCANTILE PTY LTD
W114 of 1999

FRENCH J
1 AUGUST 2000
PERTH


IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

W114 OF 1999

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
APPLICANT

AND:

SHARYN McCASKEY
RESPONDENT

AND

CASH RETURN MERCANTILE PTY LTD
(ACN 070 509 536)
SECOND RESPONDENT

JUDGE:

FRENCH J

DATE OF ORDER:

1 AUGUST 2000

WHERE MADE:

PERTH

THE COURT ORDERS THAT:

Orders in terms of the Orders set out in the Schedule to these Reasons for Judgment.

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


IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

W114 OF 1999

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
APPLICANT

AND:

SHARYN McCASKEY
FIRST RESPONDENT

And

CASH RETURN MERCANTILE PTY LTD
(ACN 070 509 536)
SECOND RESPONDENT

JUDGE:

FRENCH J

DATE:

1 AUGUST 2000

PLACE:

PERTH

REASONS FOR JUDGMENT

Introduction

  1. When Shylock in the Merchant of Venice demanded a pound of his debtor’s flesh he was confounded by the very law which he invoked.  The community attitude reflected in Shakespeare’s play is deep seated and persistent.  In today’s credit-based economy the collection of payments for goods and services is an indispensable element of trade and commerce but the use of physical force, undue harassment or coercion in connection with the collection of debts is regarded as unacceptable.  It is prohibited by the Trade Practices Act of the Commonwealth and the Fair Trading Acts of the various States.  In this case a debt collector and its employee have admitted to engaging in undue harassment and coercion as well as misleading or deceptive conduct in connection with the collection of debts.  The debt collector, Cash Return Mercantile Pty Ltd (“Cash Return”) and its employee…

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Details
Case
[2000] FCA 1037
Decision Date

CaseChat Overview and Summary

The case of Australian Competition and Consumer Commission v McCaskey involved a dispute between the ACCC and Cash Return Mercantile Pty Ltd, a debt collection agency, as well as its employee Sharyn McCaskey. The ACCC took legal action against Cash Return and McCaskey due to their admission of engaging in undue harassment, coercion, and misleading or deceptive conduct in the course of debt collection. The court was tasked with determining whether the proposed orders by way of declaration and injunction against Cash Return and McCaskey were within its power and appropriate.

The main legal issues in this case were whether the proposed orders, including a public apology, were appropriate and within the court's power. The court had to consider the nature of the conduct engaged in by Cash Return and McCaskey and determine if the proposed orders were an adequate response to their actions. The court also had to consider the impact of these orders on the parties involved and the public, as well as the potential deterrent effect of the orders on future conduct.

The court found that the proposed notice, which was an apology, was an appropriate way to draw attention to the inappropriate conduct of Cash Return and McCaskey. It was within the court's power to make such an order and it was deemed appropriate in this case. The court did, however, modify some of the proposed orders to ensure they were targeted and appropriate. For instance, the injunction was limited to conduct involving the use of telephone services. The court concluded that the proposed orders, subject to certain modifications, were within its power and appropriate.

In conclusion, the court made orders in terms of the Further Revised Minutes of Proposed Consent Orders, subject to the aforementioned modifications. The ACCC and Cash Return indicated their agreement with the proposed orders, while McCaskey, who did not appear at the delivery of the judgment, had previously consented to orders in wider terms than those which the court regarded as appropriate. The orders took effect at the expiry of seven days unless the parties requested a relisting of the directions on the basis that one or more of them would not consent to the proposed orders.

Orders

Orders of the court

Orders in terms of the Orders set out in the Schedule to these Reasons for Judgment.

Background

Background to the litigation

When Shylock in the Merchant of Venice demanded a pound of his debtor’s flesh he was confounded by the very law which he invoked. The community attitude reflected in Shakespeare’s play is deep seated and persistent. In today’s credit-based economy the collection of payments for goods and services is an indispensable element of trade and commerce but the use of physical force, undue harassment or coercion in connection with the collection of debts is regarded as unacceptable. It is prohibited by the Trade Practices Act of the Commonwealth and the Fair Trading Acts of the various States. In this case a debt collector and its employee have admitted to engaging in undue harassment and coercion as well as misleading or deceptive conduct in connection with the collection of debts. The debt collector, Cash Return Mercantile Pty Ltd (“Cash Return”) and its employee Sharyn McCaskey have been sued by the Australian Competition and Consumer Commission (“ACCC”) and have consented to the making of various orders by way of declaration and injunction against them. It is necessary now for the Court to consider whether the proposed orders are within power and appropriate.Factual Background Cash Return is a company which, until recently, carried on the business of supplying debt collection services involving the collection of payment for goods or services from consumers on behalf of its clients. Sharyn McCaskey was an employee of Cash Return engaged to recover debts from consumers on behalf of Cash Return’s clients. Incidents involving attempts by Ms McCaskey to collect payment on behalf of Cash Return from four debtors have led to the present proceedings. The facts of those incidents are reflected in statements from persons who were to be called as witnesses in the trial of this application. Those statements have each now been agreed by both Ms McCaskey and Cash Return to be true and correct. The following factual history is based upon them. The first incident arose out of the supply by Reward Consultancy Pty Ltd, trading as NetNology, of video conferencing services to TouchGold Pty Ltd. The account was unpaid because TouchGold disputed that the services provided were in accordance with the terms agreed. The rights and wrongs of the dispute are not material here. The conduct the subject of the present application so far as it relates to the TouchGold debt involved three telephone calls to Ms Byart by Ms McCaskey. In the first call on 30 January 1998, Ms McCaskey introduced herself, said she was ringing about the outstanding account with NetNology and said that she was “…sending someone around now to collect the cheque”. Ms Byart was not willing to pay until she had received a breakdown of the account. Ms McCaskey suggested an interim payment of $4,000 as a goodwill gesture for the time being and said she would send someone around to collect it. Ms Byart maintained that she wanted a breakdown of the charges. Ms McCaskey said she would check about the breakdown but again asked for a cheque for $4,000 to be ready by the following Monday. Ms Byart didn’t agree to that and said she wanted a breakdown of the charges. Ms McCaskey said: “Look, I’m warning you…I want the money paid or a summons will be issued against you."Her manner was described by Ms Byart as “very abrupt, authoritative, forceful and demanding”.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

FRENCH J
In this case the notice proposed is headed “An Apology”. Notwithstanding my reservations about the inappropriateness of orders for the publication of statements of contrition, the proposed notice is an appropriate way of drawing to the attention of those debtors whom it was sought to threaten, intimidate and abuse, that Cash Return accepts the inpropriety of that conduct. In my opinion the notice is within power and appropriate and orders will be made accordingly.Conclusion For the preceding reasons, I am prepared to make the orders set out in the Further Revised Minutes of Proposed Consent Orders subject to the following modifications: A.In relation to the first respondent – Sharyn McCaskey:1.Delete par 2(c).2.Delete par 2-B.3.Limit the injunction in par 3 to conduct involving the use of telephone services. 4.Delete par 4.5.Limit the injunction in par 5 to conduct involving the use of telephonic services.B.In relation to the second respondent – Cash Return Mercantile Pty Ltd: 1.Delete par 2(c).2.Delete par 2-B3.Delete par 4.The proposed orders will take effect at the expiry of seven days unless the parties file a request for relisting of the directions on the basis that any one or more of them will not consent to the proposed orders. ADDENDUM Upon judgment being delivered in this matter the ACCC indicated it was content with the orders proposed. The Second Respondent also indicated its agreement. The First Respondent did not appear at the delivery of the judgment but, having regard to her prior consent to orders in wider terms than those which I regard as appropriate, I was prepared to make the orders as set out in the Schedule. An order was made accordingly.

Ratio Decidendi

Legal Principle Established

Established by: FRENCH J

Full text does not contain this section.