Australian Competition & Consumer Commission v O'Keefe, Patrick Joseph

[1996] FCA 863

IN THE FEDERAL COURT OF AUSTRALIA                 No QG 131 of 1996
QUEENSLAND DISTRICT REGISTRY  
GENERAL DIVISION  

BETWEEN:AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Applicant

AND:PATRICK JOSEPH O’KEEFE

First Respondent

AND:ANSTAR HOLDINGS PTY LIMITED

(ACN 051 125 510)

Second Respondent

MINUTES OF ORDERS

JUDGE MAKING ORDER:  Drummond J
DATE OF ORDER:  26 September 1996
WHERE MADE:  Brisbane

THE COURT ORDERS THAT:

1.  Upon the respondents by their counsel giving the undertaking in writing, which was tendered on 23 August 1996 as exhibit 1, the applicant’s motion for interlocutory relief is dismissed.

2.  The applicant pay the respondents’ costs of the hearing of the motion for interlocutory relief.

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

IN THE FEDERAL COURT OF AUSTRALIA                 No QG 131 of 1996
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION

BETWEEN:AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Applicant

AND:PATRICK JOSEPH O’KEEFE

First Respondent

AND:ANSTAR HOLDINGS PTY LIMITED

(ACN 051 125 510)

Second Respondent

CORAM:Drummond J

DATE:26 September 1996

PLACE:Brisbane

REASONS FOR JUDGMENT

The Commission has brought proceedings against Mr O'Keeffe and a company he controls, Anstar Holdings Pty Limited, alleging breaches of various provisions of the Trade Practices Act 1974 (Cth) which are constituted by the respondents publishing what are, in effect, giveaway journals generally directed to people with interests in industrial relations or the industrial sector and the environmental and workplace health and safety sectors.  What the respondents derive from this activity is fees paid by people who place advertising with them in the journals. 

The activities of the respondents in producing these journals are said to involve breaches of various provisions of the Trade Practices Act because the respondents are alleged to solicit the advertising by misrepresenting to people who have not advertised in any of the journals that they have previously advertised and might like to continue their support for the journal, and also by issuing what are alleged to be unsolicited invoices for advertising in the journals.

The respondents concede that there is a serious question to be tried on the Commission's material as to whether the respondents have infringed the Trade Practices Act in the ways alleged by the Commission.

The issue before me has come down to a narrow one.  The Commission seeks an interlocutory injunction restraining the respondents from engaging in the conduct the Commission complains of in relation to the named journals which the respondents have been publishing and also from engaging in any similar conduct.  The respondents have, from the outset of the proceedings, offered undertakings not to engage in the conduct complained of by the Commission in relation to the named journals but have declined to go beyond that.

The Commission argues that it has made out a case for the wider interlocutory restraint that it seeks.  The Commission's case is that on the evidence before me, which is not challenged by any evidence from the respondents, the respondents have engaged in what is clearly dishonest conduct amounting to breaches of the Trade Practices Act in connection with these publications.  They are
publications which the respondents have obviously had the capacity to produce quickly.  It can be inferred that they can be produced at little cost.  The means by which income is generated consists of the respondents relying on a sales staff that is very readily recruited, at little cost to the respondents, and also trained at very little cost to the respondents and who are paid on a commission basis only.  The Commission says that the evidence indicates that the respondents are well placed, if either of them wishes to resume the sort of conduct complained of, to use different vehicles from the journals they have hitherto published.

However, Mr O'Keeffe is well aware of the Commission's interest in him.  The correspondence commencing back in early 1995 from the Commission to him culminated in his attending, under the compulsion of a s 155 notice, for examination by the Commission on 19 July last.  On that occasion he said that apart possibly from the last issue or the current issue of the Environmental Health and Safety Review, which he said was in the course of publication, he did not have any intention of continuing publication of any of the journals the subject of the Commission’s complaint in the action.  He went on to say that it was the respondents’ intention to go into another area of business entirely, the printing of things such as poker machine coin cups and restaurant coasters, as well as to continue to publish a number of other magazines about which the Commission makes no complaint.  That was in mid July 1996. 

Over two months has passed and although a large volume of material has been filed by the Commission there is nothing in the material before me to show that either respondent has engaged in the publication of similar articles in
circumstances likely to infringe the Trade Practices Act or that either respondent has made any plans to engage in that sort of activity.  There seems to me to be a lack of evidence sufficient to show such a risk that one or other of the respondents may engage in this kind of conduct in the future to justify granting a restraint in the terms sought by the Commission.

I take into account in coming to this conclusion the evidence I have referred to as to the nature of the respondents’ operations, as well as the submission made by counsel for the Commission, that the evidence is that the offending publications that have been produced in the past are only released once the advertising, sufficient to generate what is considered to be an adequate income, has been placed and the moneys received.  The evidence in that regard is that the last time anyone the Commission is aware of was actually approached on behalf of the respondents to pay for advertising in one or other of the respondents' journals was in May of this year, although there is evidence from a document obtained from the second respondent's records that it received in the month between 3 June and 4 July 1996 a substantial amount of money from several dozen payers in respect of advertising in one or other of these journals.  No attempt, however, has been made by the Commission to suggest that any of the advertisers on this list have any complaint about the circumstances in which they agreed to make these payments.

On the ground that I am not satisfied that there is such a risk shown of similar conduct being engaged in by the respondents in the future to make the undertaking offered inadequate protection in the circumstances, I refuse the
Commission's application on the basis, confirmed by counsel today, that the undertaking proffered in writing on 23 August 1996 is still offered.

The order of the Court therefore will be that, upon the respondents by their counsel giving the undertaking in writing, which was tendered on 23 August 1996 as exhibit 1, the motion for interlocutory relief is dismissed.

While ordinarily it would be appropriate to reserve to the trial judge the question of what should be done about the costs of an interlocutory hearing in which an interlocutory restraint is imposed, in this case the only issue, so far as interlocutory relief is concerned, has always been whether a wide restraint should be imposed, as the Commission contended, or a narrow restraint only, as the respondents have always been prepared to submit to.

The respondents have been successful in obtaining an outcome which results in the imposition only of the narrow restraint.  I do not accept the proposition that the matter of the question of costs should be left to the trial judge so that he will have the advantage of knowing what happens between now and the trial. That really seems to me to be no more than a means of challenging the conclusion that I have reached as to the insufficiency of the risk to justify a wider restraint.  It would be inconsistent with that conclusion, it seems to me, to accede to the Commission's submission for that reason.

I therefore propose to order that the Commission shall pay the respondents’ costs of today’s hearing.

I certify that this and the preceding five
pages are a true copy of the reasons
for judgment herein of the Honourable
Justice Drummond.

Associate:

Date:  26 September 1996