Commissioner for Consumer Protection v Levi - [2010] WASC 184

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: COMMISSIONER FOR CONSUMER PROTECTION -v- LEVI [2010] WASC 184

CORAM: SIMMONDS J

HEARD: 4 JUNE 2010

DELIVERED : 4 JUNE 2010

FILE NO/S: CIV 1030 of 2010

BETWEEN: COMMISSIONER FOR CONSUMER PROTECTION
Plaintiff
AND
BON LEVI
First Defendant
COLIN BURTON
Second Defendant
LEIGH CURRIE
Third Defendant

Catchwords:

Statutory interim injunction - Statutory interlocutory injunction - Contravention of requirement for business name under Business Names Act 1962 (WA) - Contravention of prohibition of misleading conduct in relation to employment in Fair Trading Act 1987 (WA) - Whether serious question to be tried - Whether discretion to make orders should be exercised - Relevant factors - Warnings of contraventions - Whether persons induced to rely - Whether persons complained - Balance of convenience - Criminal proceedings in respect of same or similar matters

Legislation:

Business Names Act 1962 (WA), s 5
Fair Trading Act 1987 (WA), s 74, s 75, s 76
Rules of the Supreme Court 1971 (WA), O 22 r 7
Trade Practices Act 1974 (Cth), s 80

Result:

Orders made

Category: B

Representation:

Counsel:

Plaintiff:     Ms L B Black & Mr M G S Crowley
First Defendant            :     In person
Second Defendant        :     In person
Third Defendant           :     No appearance

Solicitors:

Plaintiff:     Department of Consumer & Employment Protection
First Defendant            :     In person
Second Defendant        :     In person
Third Defendant           :     No appearance

Case(s) referred to in judgment(s):

Australian Securities and Investments Commission v HLP Financial Planning (Australia) Pty Ltd [2007] FCA 1868
ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248
Patrick John Walker as Commissioner for Fair Trading v Rugs a Million Pty Ltd [2006] WASC 127

SIMMONDS J: (These reasons are edited from the transcript).

The application primarily before me today is by a chamber summons for what are called interim injunctions, perhaps better called interlocutory injunctions. I say better called in light of the discussion, brief as it is, of usage in this area in Patrick John Walker as Commissioner for Fair Trading v Rugs a Million Pty Ltd [2006] WASC 127 [1] (Simmonds J).
That application is one in which there has been an appearance by the first and second defendants representing themselves. They have made substantial submissions to me in opposition to the making of orders in terms of the chamber summons. There is also before me a summons for default judgment pursuant to Rules of the Supreme Court 1971 (WA) O 22 r 7. However, the plaintiff indicated that it would not press such an application at least unless the application for interim/interlocutory injunctions was not granted.
I have determined that the application for interim/interlocutory injunctions should be granted. I believe it should be granted for the following reasons.
The injunctions applied for include ones resting upon the power to grant injunctions, sometimes called the statutory injunctions power, contained in Fair Trading Act 1987 (WA) s 75, in respect of injunctive relief respecting the name or names under which the defendants carry on business. Here there is reliance on the Business Names Act 1962 (WA) s 5. There is also reliance on s 74 in respect of advertising of a particular kind, where the foundation for the application rests on Fair Trading Act s 14.
These injunction provisions are, broadly speaking, ones that are based upon Trade Practices Act 1974 (Cth) s 80, at least as to s 74 and s 75(1). These provisions also need to be read with Fair Trading Act s 76 as I will shortly explain.
There is a substantial affidavit in two volumes of Sathamoney Tommy Moodley sworn 13 May 2010 in support of the application for interim injunctions. The total bulk of the affidavit may be judged from the fact that it runs, with its annexures, to 588 pages. With the other materials for the proceedings before me today, it was duly served, as indicated by affidavits of service on 24 May 2010, on both the first and second defendants.
There is no evidence in affidavit form from the two defendants and it was necessary at a number of points in the submissions they made to me to remind them of that fact. However, it is evident from what they put to me that there is factual material that they would wish to put before the Court in connection with the plaintiff's application. The material is, they say, such as would suggest in respect of the Business Names Act orders, that the way in which the defendants now carry on business is different from the way in which they formerly carried on business. Whether or not the way they formerly carried on business was in contravention of the Business Names Act s 5, the way in which they currently carry on business should, they say, not be so viewed.
However, as I said, I have no evidence to that effect. Rather what I have is evidence in the Moodley affidavit that the defendants have carried on what is called in the statement of claim in the underlying proceedings a massage business under a number of names. These include Bikini Girls, Bikini Girls Australia, Bikini Girls Massage and the like, which are not registered business names and which do not contain the names of the natural person or persons - or indeed if this were the case, which it appears not to be, any artificial person or persons ‑ without any addition who are in fact carrying on the relevant business. On the Moodley affidavit ‑ the only evidence before me, I stress again - those persons are the first two defendants.
The lack of registration and the character of the name represents the way in which business was carried on at or about the time of the commencement of proceedings in this matter. Furthermore, it has continued after the statement of claim in these proceedings, which set out the allegations of the plaintiff, was served on the then legal representative of the first defendant, and on the second defendant, at the address given for him in the memorandum of appearance filed in these proceedings.
The Moodley affidavit also refers to the matter of the website for Bikini Girls (the website). Text and screen dumps (images from the way in which the website presents on the internet) from this website are reproduced in the Moodley affidavit as at 8 April 2010. There is also the matter of the way in which the website presented on 11 May 2010, which is referred to in [142], the concluding paragraph of the Moodley affidavit.
The importance of those dates is that the statement of claim in these proceedings is dated 9 April 2010, and so, while the state of the website on 8 April 2010 preceded the statement of claim, the state of the website on 11 May 2010 came some little time after the statement of claim.
The importance of that is that, on the evidence in the Moodley affidavit taken as a whole, and referring now to the language of the Fair Trading Act s 75, the basis for the injunction in respect of the Business Names Act matters, there are indications that there is a person, being the just two defendants, who have engaged, are proposing to engage, and are currently involved in, a contravention described in s 75(1)(b), referring to a provision of any other legislation, here the Business Names Act, administered by the Minister.
In respect of the injunction sought under Fair Trading Act s 74, the Moodley affidavit indicates, in my view sufficiently, that there are contraventions of the Fair Trading Act s 14; that those contraventions had occurred; and that the character of the evidence in the Moodley affidavit indicates that they are currently occurring and may be expected to continue to occur.
Fair Trading Act s 14 prohibits a person in relation to employment that is to be or may be offered by the person or by another person from engaging in conduct that is liable to mislead the person seeking the employment as to the availability, nature, terms or conditions of, or any other matter relating to, the employment.
The advertisements in question are reproduced in the Moodley affidavit. Certain complaints received in respect of that advertising are included as annexures to the Moodley affidavit, and in addition there is transcript of an interview with the third defendant, proceedings against whom have been discontinued following consented to injunctions obtained against her. That transcript contains a matter (see the Moodley affidavit, page 181) by which the completeness and non misleading character of the advertising may be properly assessed.
In Rugs a Million I reviewed the authorities on the way in which misleadingness or deceptiveness for a 'mass-marketed product' for the purposes of legislation like the Fair Trading Act should be assessed: see particularly [35]. There is no doubt that the advertising here was directed at a general audience through newspaper material. There is also advertising of a similar although not identical character to be found on the website.
It is furthermore evident to me from the Moodley affidavit that that advertising has characteristics of the kind at which the restraints referred to in the chamber summons for interlocutory injunction at [1.3] and [1.4] are directed.
It is important that there be a connection between the basis upon which the injunctions are sought and the terms of the injunctive orders. The importance of that connection is to be gathered from the material referred to in Rugs a Million at [28] and in particular the reference to ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 , 267. The connection in that regard between the basis laid and the Business Names Act contraventions is rather more straightforwardly evident from the terms of the orders in the chamber summons, 1.1 and 1.2.
The evidence that I have referred to thus far is sufficient in my view to establish a serious question to be tried in accordance with the way in which that matter should be approached on the authorities in this State. A useful general introduction to that is to be found in the chapter by his Honour Owen J in Carroll R, Civil Remedies: Issues and Developments (ed, 1996) ch 8.
The serious question to be tried is, it seems to me, made out on a case of fairly significant strength; that is to say, this is a case that does not, as it were, barely get over the line, but is strongly made out. However, it is made out only on evidence from the plaintiff. I repeat again that the defendants have clearly signalled that they would wish to put further evidence before the Court which might put evidence from the plaintiff in a different light. It may or it may not. I say nothing about this at this point because the evidence is not before me in a proper form.
Therefore, what I am saying about the serious question to be tried is not a determination of whether the plaintiff has made out a case for the relief as final relief that it seeks, but only that it has put before me enough that I then proceed to the second stage of the inquiry with respect to the injunction sought, namely, whether in the exercise of the discretion of the Court I should make the orders sought. Those orders include not only those of a restraining kind that I have already referred to, 1.1, 1.2, 1.3, 1.4, but also certain orders of a mandatory kind, that is, requiring the defendants to take certain positive steps. Those orders are 1.5, 1.7, 1.9 and 1.10. Orders 1.6 and 1.8 were not pressed by the plaintiff and I would therefore leave them aside.
I will return to the considerations that specifically apply to the orders of a mandatory kind in a moment.
The inquiry is of the two part character that I have described, that is to say, is there a serious question to be tried sufficient to enliven the discretion of the court, because these are statutory injunction procedures where the injunction rests on a serious case to be tried with respect to contravention of legislation. Here, such legislation is that referred to in s 75 of the Fair Trading Act, the Business Names Act provision that I have referred to, and in s 74 of the Fair Trading Act, being s 14 of that Act that I have also referred to.
The authorities in relation to the way in which such injunctions are approached indicate to me, and Rugs a Million explains this in more detail, that once a serious question to be tried of a contravention of any of the three types in those provisions, that is to say, past, proposed or ongoing, has been established (let alone where there is a case of all three types made out) the court then must consider the exercise of the wide discretion that it possesses. For a more recent set of references than in Rugs a Million, although referring to a number of the cases referred to in Rugs a Million, see Miller R N, Annotated Trade Practices Act (31st ed, 2010) [1.80.16].
The court must in exercising its discretion consider, however, the kinds of factors that, in relation to injunctions at common law, are subsumed by the balance of convenience. It must do so mindful of the special provision in the Fair Trading Act (see s 74(2)(a)) which makes it no barrier to the grant of relief that there is no indication of future conduct of the kind complained of. That, it seems to me, has no role to play in this case given the evidence that I have described.
The Fair Trading Act makes it no barrier to relief that there is no undertaking to be provided; in the terms of s 76, the court cannot require such an undertaking.
However, it seems to me that there is authority that the court can take account of the fact no undertaking is available. Miller [1.80.250] refers to authority in that regard. However, where the serious question to be tried represents a strong case, and at least where detriment to the defendants is not of an obviously serious character, the lack of an undertaking, it seems to me, does not have a significant role to play in the exercise of the discretion I have referred to.
The exercise of the discretion is discussed in Rugs a Million: see particularly [30], [31]. Paragraph 30 talks about whether there is any evidence the defendant was aware or was warned that it was contravening the legislation, yet went ahead in any event. Here, I am satisfied there was such warning in the form of the statement of claim, and there was the conduct of the defendants subsequent to their being provided with the statement of claim and having it explained there what the concerns of the plaintiff were. Whether or not there were other explanations of that conduct is something to which I do not need to speak.
It is also relevant whether or not there was evidence that anyone was induced to act in reliance on the conduct or suffered loss as a result and whether or not there had been complaints about the conduct. As I have already indicated from the Moodley affidavit, there were indeed such acts in reliance, or at least evidence of that, and evidence of complaints from individuals about the conduct in question.
However, the discretion, it seems to me, goes further than this. The discretion also goes to detriment to the defendants from the making of the relevant orders. Here, however, the defendants explain to me that they were anxious to see to compliance with the legislation, and that they understood that the Business Names Act did not prohibit them carrying on a business, but rather went to the name or names under which the business was carried on. To put it another way, the Business Names Act does not prohibit the carrying on of massage businesses in the way described by the Moodley affidavit as making the advertisements misleading as to the context in which persons being induced to work for the business would in fact be working. Whether or not that way of conducting the business was unlawful in any other respect is not for these proceedings.
The only matters for these proceedings with respect to the way in which the business is carried on are the name or names used for the business, on the one hand, and the way in which the business seeks to recruit persons to assist it, on the other.
In respect of the former, on the basis of the Moodley affidavit, having considered the way in which the defendants carry on their business in terms of the name or names that they use, that use of names complying with the Business Names Act would seem to me to be possible. The defendants have chosen a variety of names in the past and it seems to me that a name or names within the Business Names Act would indeed be possible.
There is a difficulty of course for the defendants in working out how compliance with the Business Names Act will be achieved. It seems to me the terms of the Business Names Act are reasonably clear. The only difficulty for the defendants is what is meant by the use of the names of the persons carrying on the business without any addition, and that will involve them, I suspect, possibly considering the educational literature put out by the Commissioner, if there is such, and seeking advice if the Commissioner is in a position to give such advice. However, it is most important the defendants recognise the Commissioner is not in a position to give legal advice.
In respect of the advertising, again it seems to me to be reasonably clear from the terms of the injunctive orders sought in this case what the nature of the misleadingness is and it is an indication to the defendants that advertising suitably crafted may indeed be issued.
In that regard, Mr Burton explained to me in some detail the difficult exchanges he believed he had had with the outlets in which advertisements for the massage business had already appeared. It seems to me then that there is no question but that Mr Burton is experienced in the way in which advertisements require modification, alteration and adjustment before they are finally released. It is not evident to me that it would simply be impossible to advertise for staff to assist the business in the way that the defendants would wish, provided that the disclosure called for by the terms of the restraint is provided.
There is not, it seems to me, serious prejudice on the material I presently have before me at least, and I stress it is limited material, to set against the public interest in restraining contraventions of the kind made out on the case that has been supported by the Moodley affidavit.
There is a further matter of a discretionary kind, however, that needs to be properly taken account of here. There are criminal prosecutions presently on foot which go to matters that form the basis of the present application in the underlying proceedings, that is to say, the subject of the statement of claim, as well as the basis of the evidence the subject of the support for the present application for interim or interlocutory injunctions.
These prosecutions have to do with past carrying on of business contrary to s 5 and contraventions of s 14 of the Fair Trading Act.
That, it seems to me, is a relevant consideration of a discretionary kind for the reasons given in Australian Securities and Investments Commission v HLP Financial Planning (Australia) Pty Ltd [2007] FCA 1868 (Finkelstein J). I would particularly refer in this regard to [20] of his Honour's decision where he deals with the matter in the context of common law injunctions (in other words, other than statutory injunctions of the present kind) and [58] and [59] where he sums the matter up in relation to statutory injunctions under Trade Practices Act s 80.
It seems to me that his Honour's strictures have to do with the undesirability of a court in a civil matter granting relief in aid of, or supplementing the criminal law (as it was put in the common law authorities), or granting relief if the case is likely to end up before a criminal court (in the case of statutory relief).
Now, it may well be that his Honour's strictures do not apply with the same force to the Fair Trading Act provisions. They are certainly strictures that, as expressed by his Honour, do not bind me. However, I should note that his Honour reviews a considerable array of authorities from a variety of jurisdictions, some of which are High Court authorities, and some of which are authorities of high standing from the United Kingdom.

I would be reluctant to rapidly come to the conclusion that his Honour's strictures have no bearing on the decision I need to make today.
However, I note that the decision I am being asked to make today is of a very limited and provisional kind. The level of interference then between the decision I am being asked to make and the proceedings in a criminal court, even one before a jury, is it seems to me of a somewhat different order from the matters to which his Honour referred in ASIC v HLP.
Further, of course, his Honour was referring to and clearly acknowledged he was referring to matters of a discretionary kind. So notwithstanding there is such an interference, the order might still be made.
I must also note that the proceedings are before a magistrate and not before a jury. Even if the result of the proceedings today is one to which there is significant publicity given, it seems to me that the interference with a decision of a magistrate is of an altogether different order from interference with a decision of a jury, to the point where it seems to me that a large part, if perhaps not all, of the concern his Honour expressed is removed.
I should say that the strictures do, it seems to me, have some operation, even in relation to interlocutory injunction cases, because it is clear that although no defence has been put on (that is why the application for judgment in default of defence was made), the facts upon which the state relies are facts which the defendants hope to contest.
The fact that they have not yet contested them by putting on contrary evidence is of course a matter of significance, as I have indicated, in determining whether or not the application should be granted. Nonetheless there has not yet been a hearing in which, on proper evidence, the case the defendants wish to make is put against the case the plaintiff wishes to make. However, there is no doubting the public interest in the enforcement of the Fair Trading Act provisions that I have referred to. There is no doubt because of the provisions of Fair Trading Act s 74, s 75 and s 76 with which I began this judgment.
It seems to me that if suitable orders can be crafted that meet concerns of the kind his Honour raised in ASIC v HLP, that otherwise address the discretionary considerations that I have indicated are material to me, and that rest on a serious question to be tried of the kind that I have indicated, orders should indeed be made.
This then takes me to the terms of the orders and a further discretionary matter which is referred to in the authorities on the statutory injunction. That matter which I have already made reference to from Rugs a Million is that the injunction, to put it in the language of his Honour Gummow J, a member of the Federal Court as he then was, in ICI Australia Operations at 267, should not operate outside the boundaries of Trade Practices Act s 80, referring to 'proper limits', which in turn is to ensure that there is a proper connection between the orders made and the basis in contravention of the legislation that is laid for them.
I am satisfied there is such a basis for all the orders here, subject to certain modifications which were discussed with counsel for the plaintiff and to which the defendants had an opportunity to respond. Those modifications to 1.1 ‑ 1.2 of the orders sought in the chamber summons should be made.
However, I indicated earlier that there are orders of a mandatory kind. They are, to repeat, 1.5, 1.7, 1.9 and 1.10. It seems to me orders of a mandatory kind can be made pursuant to the power referred to in Fair Trading Act s 74 and s 75. This, it seems to me, is clear both from the use of the word 'injunction' in those provisions as well as from the terms of Fair Trading Act s 76(2), which seems to me to contemplate mandatory injunctions.
True it is that Fair Trading Act s 75(2) refers to a specific kind of mandatory injunction. In fact it may be that s 75(2) is the better justification, better than the general language of 'injunction', for the order 1.5 having to do with obscuring signage displaying the name Bikini Girls Massage at 901 Canning Highway, Applecross. Be that as it may, it seems to me to be clear from the language of Fair Trading Act s 75, s 74 and s 76, which is to be interpreted on the authorities on the corresponding provisions in the Trade Practices Act by reference to this legislation as remedial legislation (see the authorities referred to in Miller [1.80.16]), that 'injunction' picks up at least the breadth of injunctions as that is understood at common law. That breadth clearly includes mandatory orders. The mandatory orders here seem to me to be clearly in service of the bases upon which the application for the restraining interlocutory injunctions rest, the past, future and present contraventions that I have referred to.
Those orders then should also be included amongst those to be made today.
The orders also include in order 2 that the first and second defendants have liberty to apply on 7 days' notice to the plaintiff's solicitor to dissolve or vary this injunction. That particular provision is specifically drawn to the defendants' attention because it allows for matters having to do with evidence that the defendants would wish to put on and a hearing that the defendants would wish to have on such evidence brought up and also for any matters to do with the unfolding of the orders in terms of compliance with them.
In my view, the orders meet the standards for precision and clarity that are referred to in Rugs a Million. However, allowance must also always be made for the possibility that experience may prove otherwise, and the opportunity therefore must be allowed, as the orders here do allow, for the first and second defendants to come back to the Court to seek to have the orders either dissolved or varied, either on the basis of the evidence that they would wish to bring forward which they did not have before me today, or because of difficulties having to do with the terms of the orders.