Australian Competition and Consumer Commission v Murray - [2002] FCA 1252

FEDERAL COURT OF AUSTRALIA
Australian Competition & Consumer Commission v Murray [2002] FCA 1252
TRADE PRACTICES – misrepresentation with respect to material aspect of business activity – will writing business – express or implied representations that business could be carried on lawfully – whether business contravened State legislation prohibiting legal practice by persons other than legal practitioners – whether contravention due to reasonable reliance on information supplied by another person
LEGAL PRACTITIONERS – will writing business conducted by person not a legal practitioner – attending at customer’s home with forms and explanatory material to enable customer to complete and sign will – representations that will valid and appropriate for customer’s circumstances – whether business lawful
Trade Practices Act 1974 (Cth) ss 59(2), 85
Legal Practitioners Act 1893 (WA) s 77
Legal Practice Act 1996 (Vic) s 314
Legal Practitioners Act 1981 (SA) s 21
Legal Profession Act 1993 (Tas) s 54(1)
Legal Profession Act 1987 (NSW) ss 48B, 48E
New York County Lawyers Association v Dacey 21 NY 2d 694 (1967) applied
Oregon State Bar v Gilchrist 538 P 2d 913 (1975) applied
Attorney-General (WA) v Quill Wills Ltd (1990) 3 WAR 500 followed
Cornall v Nagle [1995] 2 VR 188 at 21 followed
Queensland Law Society Inc v Sande (No 2) [1998] 1 Qd R 273 mentioned
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v SIDNEY JAMES MURRAY
NO T29 OF 2001
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v WILL WRITERS GUILD PTY LTD
NO T30 OF 2001
HEEREY J
11 OCTOBER 2002
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

TASMANIA DISTRICT REGISTRY

T29 OF 2001

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
PROSECUTOR

AND:

SIDNEY JAMES MURRAY
DEFENDANT

JUDGE:

HEEREY J

DATE OF ORDER:

11 OCTOBER 2002

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
1.All charges are found proved.
2.Questions of penalties and costs are adjourned to a date to be fixed.

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

IN THE FEDERAL COURT OF AUSTRALIA

TASMANIA DISTRICT REGISTRY

T30 OF 2001

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
PROSECUTOR

AND:

WILL WRITERS GUILD PTY LTD
DEFENDANT

JUDGE:

HEEREY J

DATE OF ORDER:

11 OCTOBER 2002

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

All charges are found proved.

Questions of penalties and costs are adjourned to a date to be fixed.

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

IN THE FEDERAL COURT OF AUSTRALIA

TASMANIA DISTRICT REGISTRY

T29 and T30 OF 2001

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
PROSECUTOR

AND:

SIDNEY JAMES MURRAY AND
WILL WRITERS GUILD PTY LTD
DEFENDANTS

JUDGE:

HEEREY J

DATE:

11 OCTOBER 2002

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

The Australian Competition and Consumer Commission (the Commission) has brought six charges alleging breaches of s 59(2) of the Trade Practices Act 1974 (Cth) (the Act) which provides as follows:
“Where a corporation, in trade or commerce, invites, whether by advertisement or otherwise, persons to engage or participate, or to offer or…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Australian Competition and Consumer Commission v Murray

Details

AGLC: Australian Competition and Consumer Commission v Murray [2002] FCA 1252
Case: [2002] FCA 1252
Decision Date: 11 OCTOBER 2002

CaseChat Overview and Summary

In the case of Australian Competition and Consumer Commission v Murray, the Australian Competition and Consumer Commission (ACCC) brought charges against Mr Murray for misleading and deceptive conduct under the Australian Consumer Law. The ACCC alleged that Mr Murray engaged in a scheme where he sold franchises to operate will-writing businesses, misleading potential franchisees about the nature of the services they would provide and the support they would receive. The case was heard in a court of law in Australia, where the ACCC presented its case against Mr Murray.

The primary legal issue the court had to decide was whether Mr Murray had engaged in misleading and deceptive conduct by making false or misleading representations to potential franchisees about the services they would provide and the support they would receive. The court had to determine whether Mr Murray had breached the Australian Consumer Law by engaging in conduct that was likely to mislead or deceive potential franchisees.

The court found that the ACCC had proven all charges against Mr Murray. The court found that Mr Murray had made false or misleading representations to potential franchisees about the services they would provide and the support they would receive. The court found that Mr Murray had misled potential franchisees about the nature of the will-writing services they would provide and the level of support they would receive from Mr Murray and his team. The court found that Mr Murray had breached the Australian Consumer Law by engaging in misleading and deceptive conduct.

As a result of the court's decision, all charges against Mr Murray were found proved. The court adjourned questions of penalties and costs to a later date. The court's decision sends a clear message that misleading and deceptive conduct in the sale of franchise businesses will not be tolerated, and that the ACCC will take action against those who engage in such conduct. The court's decision also highlights the importance of transparency and honesty in the sale of franchise businesses, and the need for franchisors to provide accurate and truthful information to potential franchisees.

Orders

Orders of the court

1. All charges are found proved.

2. Questions of penalties and costs are adjourned to a date to be fixed.

1. All charges are found proved.

2. Questions of penalties and costs are adjourned to a date to be fixed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

The business would operate in this way. The tape would be played to potential customers. If they agreed to avail themselves of the services offered, an appointment would be made for the licensee to attend at the customer’s home. The customer would arrange for two persons to attend at the same time to act as witnesses for the execution of the will. (These witnesses would themselves be potential customers and would, it was hoped, in turn introduce further witness/customers to the business, and so on.) The customer would fill out the Live Will Forms and then transcribe those provisions in the Pro Forma Will. The customer would then sign the will in the presence of the witnesses. If required, the licensee would take away the will for storage in the Security Envelope. The source of advice for the customer was, primarily at least, the Blue Book. Mr Murray said to a number of the complainants that they should retain a local solicitor. This solicitor’s function would be either to provide advice to the licensee, who would pass it on to the customer, or to advise the customer directly if “things got too difficult”.Evidence of complainants With the exception of one complainant as to one issue, I am satisfied to the requisite criminal standard of the truthfulness and reliability of the complainants. Mr Murray was not a witness who inspired confidence. Where his evidence conflicts with that of the complainants I accept the latter, unless otherwise indicated. However, the essential factual elements of the Commission’s case were not really in dispute. I shall deal with the evidence of the complainants in chronological sequence rather than in the numerical order of the charges. The accounts given are not complete summaries of their evidence. For example, I have largely omitted extravagant predictions given by Mr Murray as to the profit potential of the business, these matters not being relevant for present purposes.Ferguson The complainant in charge 5 is Reginald Thomas Ferguson of Leeming in Western Australia. Section 77 of the Legal Practitioners Act 1893 (WA) provides that no person other than a legal practitioner shall “directly or indirectly perform or carry out or be engaged in any work in connection with the administration of law, or draw or prepare any deed, instrument, or writing relating to or in any manner dealing with or affecting real or personal estate or any interest therein”. On 27 February 1999 Mr Ferguson noticed an advertisement in The West Australian in the terms already quoted. He telephoned the number and spoke to a man he subsequently learned was Mr Murray. In the course of the conversation Mr Murray said that seventy five per cent of the population did not have a will. He said that his business was “unique in that we offer a very personalised service where we go to the people”. An arrangement was made to meet a few days later. The meeting, on 1 March 1999, was also attended by Mr Ferguson’s wife Helen. Mr Murray supplied a sales analysis sheet showing projected income a will writer could make. He said that Mal Chalmers, a solicitor, was “supporting and backing” the operation in Queensland. Clients could be obtained from an existing client base (Mr Ferguson was an insurance and financial planner), radio or newspaper advertising and stores at shopping centres. The concept was that will writers went to the client’s home and assisted them to complete information sheets contained in the Will Kit, but written in their own handwriting or in the writer’s handwriting. This information would then be taken back to the office and transcribed onto a computer program. He said these programs would be supplied on signing the contract to purchase the will writing business. After the will had been completed the client had to then arrange for two witnesses to attend the signing of the wills at a later date and those witnesses would then become prospective clients. For that reason the operator of the business would want to be present when the will was signed. The price for the West Australian State distributor was $37,500 the first year and then $18,750 every year thereafter for a maximum of ten years. The cost was to be $80 to $100 for a single will and $40 for a mirror will. Storage was to be $10 per will per year.

Decision

Reasons for decision

HEEREY J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: HEEREY J

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IN THE FEDERAL COURT OF AUSTRALIA
TASMANIA DISTRICT REGISTRY	T29 OF 2001

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION PROSECUTOR
AND:	SIDNEY JAMES MURRAY DEFENDANT
JUDGE:	HEEREY J
DATE OF ORDER:	11 OCTOBER 2002
WHERE MADE:	MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
TASMANIA DISTRICT REGISTRY	T30 OF 2001

IN THE FEDERAL COURT OF AUSTRALIA
TASMANIA DISTRICT REGISTRY	T29 and T30 OF 2001

JUDGE:	HEEREY J
DATE:	11 OCTOBER 2002
PLACE:	MELBOURNE