Australian Competition and Consumer Commission v Michigan Group Pty Ltd (ACN 065 378 029)

[2002] FCA 1627

FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v Michigan Group Pty Ltd (ACN 065 378 029) [2002] FCA 1627

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v MICHIGAN GROUP PTY LTD (ACN 065 378 029), RODNEY MONTAGUE LASKI, CHARLES CAMERON, IMOBILIARE PTY LTD (ACN 063 501 208), PETER SEMOS, GEORGE SEMOS, DARYL FRANCIS DOHERTY, YEPPOON PTY LTD (ACN 081 944 112), LINDA CAROL MORETTO AND PROSPERO FRANZESE

Q 105 OF 2000

DOWSETT J
20 DECEMBER 2002
BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q 105 OF 2000

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
APPLICANT

AND:

MICHIGAN GROUP PTY LTD (ACN 065 378 029)
FIRST RESPONDENT

RODNEY MONTAGUE LASKI
SECOND RESPONDENT

CHARLES CAMERON
THIRD RESPONDENT

IMOBILIARE PTY LTD (ACN 063 501 208)
FOURTH RESPONDENT

PETER SEMOS
FIFTH RESPONDENT

GEORGE SEMOS
SIXTH RESPONDENT

DARYL FRANCIS DOHERTY
SEVENTH RESPONDENT

YEPPOON PTY LTD (ACN 081 944 112)
EIGHTH RESPONDENT

LINDA CAROL MORETTO
NINTH RESPONDENT

PROSPERO FRANZESE
TENTH RESPONDENT

JUDGE:

DOWSETT J

DATE OF ORDER:

20 DECEMBER 2002

WHERE MADE:

BRISBANE

THE COURT ORDERS THAT:

1.The second respondent be restrained by his servants, agents or otherwise howsoever, in connection with the sale to any person of, or other investment by any person in orange juicing machines or other dispensing machines to be located at retail outlets (the “machines”), or rights, licences, products or equipment associated with such machines, from making representations involving the use of postal, telegraphic or telephone services, or being knowingly concerned in a corporation making representations to the effect that:

(a)the second respondent or any corporation has any agreement, contract or arrangement with any other person (including but not limited to supermarket chains, fruit and vegetable stores or other retailers), for the use by that other person of the machines;  or

(b)the second respondent or any corporation will have, expects to have, or is likely to obtain or procure any agreement, contract or arrangement with any other person (including but not limited to supermarket chains, fruit and vegetables stores or other retailers), for or relating to the use by that other person of the machines; 

unless at the time of making any such representations:

(i)in relation to par 1(a), there exists such an agreement, contract or arrangement; or,

(ii)in relation to par 1(b), there exists to the second respondent’s knowledge reasonable grounds for making the representation.

2.The second respondent be restrained by his servants, agents or otherwise howsoever, in connection with the sale to any person of, or other investment by any person in orange juicing machines or other dispensing machines to be located at retail outlets (the “machines”) or rights, licences, products or equipment associated with such machines, from making representations involving the use of postal, telegraphic or telephonic services, or being knowingly concerned in a corporation making representations to the effect that:

(a)       the machines are already being used by any other person (including but not limited to supermarket chains, fruit and vegetable stores or other retailers); or

(b)the machines will be used by any other person (including but not limited to supermarket chains, fruit and vegetable stores or other retailers); or

(c)specified levels of sales, turnover or profits are being made by or in connection with the use of the machines; or

(d)specified levels of sales, turnover or profits will be able to be made by or in connection with the use of the machines; or

(e)the investment made will or can be recovered within a certain time;

unless, at the time of making any such representations:

(i)in relation to pars 2(a), 2(c) and 2(e), those matters are true; or

(ii)in relation to pars 2(b) and 2(d), there exists, to the second respondent’s knowledge, reasonable grounds for making the representation.

3. The fifth respondent be restrained by his servants, agents or otherwise howsoever, in connection with the sale to any person of, or other investment by any person in orange juicing machines or other dispensing machines to be located at retail outlets (the “machines”), or rights, licences, products or equipment associated with such machines, from making representations involving the use of postal, telegraphic or telephone services, or being knowingly concerned in a corporation making representations to the effect that:

(a)the fifth respondent or any corporation has any agreement, contract or arrangement with any other person (including but not limited to supermarket chains, fruit and vegetable stores or other retailers), for the use by that other person of the machines;  or

(b)the fifth respondent or any corporation will have, expects to have, or is likely to obtain or procure any agreement, contract or arrangement with any other person (including but not limited to supermarket chains, fruit and vegetables stores or other retailers), for or relating to the use by that other person of the machines; 

unless at the time of making any such representations:

(i)in relation to par 3(a), there exists such an agreement, contract or arrangement; or,

(ii)in relation to par 3(b), there exists to the fifth respondent’s knowledge reasonable grounds for making the representation.

4.The fifth respondent be restrained by his servants, agents or otherwise howsoever, in connection with the sale to any person of, or other investment by any person in orange juicing machines or other dispensing machines to be located at retail outlets (the “machines”) or rights, licences, products or equipment associated with such machines, from making representations involving the use of postal, telegraphic or telephonic services, or being knowingly concerned in a corporation making representations to the effect that:

(a)       the machines are already being used by any other person (including but not limited to supermarket chains, fruit and vegetable stores or other retailers); or

(b)the machines will be used by any other person (including but not limited to supermarket chains, fruit and vegetable stores or other retailers); or

(c)specified levels of sales, turnover or profits are being made by or in connection with the use of the machines; or

(d)specified levels of sales, turnover or profits will be able to be made by or in connection with the use of the machines; or

(e)the investment made will or can be recovered within a certain time;

(f)there are warehousing facilities available for use in connection with the machines; or

(g)there will be warehousing facilities available for use in connection with the machines;

unless, at the time of making any such representations:

(i)in relation to pars 4(a), 4(c) and 4(f), those matters are true; or

(ii)in relation to pars 4(b), 4(d), 4(e) and 4(g), there exists, to the fifth respondent’s knowledge, reasonable grounds for making the representation.

5.The matter be adjourned to 4 February 2003 for further hearing on the question of declaratory relief;

6.The applicant pay the seventh respondent’s costs of these proceedings;

7.The second and fifth respondents pay the applicant’s costs of these proceedings.

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

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q 105 OF 2000

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
APPLICANT

AND:

MICHIGAN GROUP PTY LTD (ACN 065 378 029)
FIRST RESPONDENT

RODNEY MONTAGUE LASKI
SECOND RESPONDENT

CHARLES CAMERON
THIRD RESPONDENT

IMOBILIARE PTY LTD (ACN 063 501 208)
FOURTH RESPONDENT

PETER SEMOS
FIFTH RESPONDENT

GEORGE SEMOS
SIXTH RESPONDENT

DARYL FRANCIS DOHERTY
SEVENTH RESPONDENT

YEPPOON PTY LTD (ACN 081 944 112)
EIGHTH RESPONDENT

LINDA CAROL MORETTO
NINTH RESPONDENT

PROSPERO FRANZESE
TENTH RESPONDENT

JUDGE:	DOWSETT J
DATE:	20 DECEMBER 2002
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1. The circumstances of this case are, as I have remarked on a number of occasions, so complex and diverse that the formulation of appropriate orders to reflect my findings and to vindicate the operation of the legislation is a difficult task. Whilst the power to grant an injunction conferred by s 80 of the Trade Practices Act 1974 (Cth) (the “Act”) is a very wide one, injunctive relief has limits. It is designed to vindicate and enforce existing rights and obligations, not to create new rights and obligations. Further, it has long been recognised that it is generally inappropriate to make injunctions which will serve no useful purpose or in terms which will be difficult for the enjoined party to understand and obey and, in the end, difficult to enforce. It is necessary to weigh up the applicant’s views as to what is appropriate in the public interest and these various considerations. Other relevant factors are the public interest in enforcement of the Act and the need to maintain public confidence in remedies available in the judicial process of which the injunction is one of the most important.

2. Where conduct in contravention of the Act is punishable in criminal proceedings, it will rarely be appropriate to grant an injunction. If a statutory prohibition will not prevent a person from engaging in particular conduct, then nor will an injunction. Further, it is, in my experience, easier to obtain a conviction for a discrete criminal offence than to prosecute successfully an alleged contempt.

3. I have considered all of these factors in the course of the submissions made by Mr Couper on behalf of the applicant.  I have also given consideration to the fairly general complaints made by Mr Laski concerning the orders which are now sought.  It is, I think, difficult to draw the injunction in terms which will be efficacious in protecting the public and, at the same time, make them sufficiently clear.  Mr Laski particularly complained about the fact that the order as proposed extends not only to orange juicing machines, which were the subject matter of these proceedings, but also to other dispensing machines which were not.  He says that the expression, “other dispensing machines”, is unclear.

4. In the course of argument, Mr Couper accepted that the reference to “other dispensing machines” and, indeed, to “orange juicing machines”, should be limited to machines to be located at retail outlets. That more precisely reflects the subject matter of these proceedings. It would, in my view, be quite artificial to limit the injunction to orange juicing machines. The purpose of the injunction is to prevent similar breaches of the Act. The gravamen of the proven misconduct is the supply of vending machines for location at retail outlets.

5. In the circumstances, I will make an injunction in the following form: 

   That the second respondent be restrained by his servants, agents or otherwise howsoever, in connection with the sale to any person of, or other investment by any person in orange juicing machines or other dispensing machines to be located at retail outlets (the “machines”), or rights, licences, products or equipment associated with such machines, from making representations involving the use of postal, telegraphic or telephone services, or being knowingly concerned in a corporation making representations to the effect that:

   (a)the second respondent or any corporation has any agreement, contract or arrangement with any other person (including but not limited to supermarket chains, fruit and vegetable stores or other retailers), for the use by that other person of the machines;  or

   (b)the second respondent or any corporation will have, expects to have, or is likely to obtain or procure any agreement, contract or arrangement with any other person (including but not limited to supermarket chains, fruit and vegetables stores or other retailers), for or relating to the use by that other person of the machines; 

   unless at the time of making any such representations:

   (i)in relation to par (a), there exists such an agreement, contract or arrangement; or,

   (ii)in relation to par (b), there exists to the second respondent’s knowledge reasonable grounds for making the representation.

6. There will be a further injunction to the effect that the second respondent be restrained by his servants, agents or otherwise howsoever, in connection with the sale to any person of, or other investment by any person in orange juicing machines or other dispensing machines to be located at retail outlets (the “machines”) or rights, licences, products or equipment associated with such machines, from making representations involving the use of postal, telegraphic or telephonic services, or being knowingly concerned in a corporation making representations to the effect that:

   (a)the machines are already being used by any other person (including but not limited to supermarket chains, fruit and vegetable stores or other retailers); or

   (b)the machines will be used by any other person (including but not limited to supermarket chains, fruit and vegetable stores or other retailers); or

   (c)specified levels of sales, turnover or profits are being made by or in connection with the use of the machines; or

   (d)specified levels of sales, turnover or profits will be able to be made by or in connection with the use of the machines; or

   (e)the investment made will or can be recovered within a certain time;

   unless, at the time of making any such representations:

   (i)in relation to pars (a), (c) and (e), those matters are true; or

   (ii)in relation to pars (b) and (d), there exists, to the second respondent’s knowledge, reasonable grounds for making the representation.

7. I have made those injunctions but the question of declaratory relief is adjourned to 4 February 2003.  I think it will have to be on the basis that no further costs will be recoverable against the second respondent for the adjourned hearing.

8. With the exception that subparagraph 7(f) and 7(g) of the draft are included in the injunction against Mr Peter Semos, there will be injunctions against Mr Peter Semos in forms similar to those against Mr Laski.

9. The fifth respondent is to pay the applicant’s costs of these proceedings.

1. The question of declarations against the fifth respondent will be adjourned over on the same basis as to any further costs.

I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.

Associate:

Dated:             3 January 2003

Counsel for the Applicant:	Mr S Couper QC Mr A Duffy
Solicitor for the Applicant:	Corrs Chambers Westgarth
The First Respondent did not appear.
The Second Respondent appeared in person.
The Third Respondent did not appear.
The Fourth Respondent did not appear.
The Fifth Respondent did not appear.
The Sixth Respondent did not appear.
The Seventh Respondent did not appear.
The Eighth Respondent did not appear.
The Ninth Respondent did not appear.
Date of Hearing:	20 December 2002
Date of Judgment:	20 December 2002