Commissioner for Fair Trading v Holz
[2005] WASC 202
COMMISSIONER FOR FAIR TRADING -v- HOLZ & ANOR [2005] WASC 202
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2005] WASC 202 | |
| Case No: | CIV:2765/2002 | 3 AUGUST 2005 | |
| Coram: | LE MIERE J | 14/09/05 | |
| 14 | Judgment Part: | 1 of 1 | |
| Result: | The application for interlocutory injunctions is allowed | ||
| B | |||
| PDF Version |
| Parties: | COMMISSIONER FOR FAIR TRADING RENEE-PETER HOLZ KATHARINA ISOBELL HOLZ |
Catchwords: | Injunction Interlocutory injunction Misleading conduct Section 14(1) Fair Trading Act 1987 (WA) Court's discretion to grant interlocutory injunctions Serious question to be tried |
Legislation: | Fair Trading Act 1987 (WA), s 14(1), s 74, s 76, s 82(4) |
Case References: | Nil Aaron's Reefs Ltd v Twiss [1896] AC 273 Australian Coarse Grain Pool v Barley Marketing Board (1982) 57 ALJR 425 Bullock v Federated Furnishing Trades Society of Australia (No 1) (1985) 5 FCR 464 City of Botany Bay Council v Jazabas Pty Ltd [2001] NSWSC 94; [2002] ANZ ConvR 300 Glev Pty Ltd & Glev Franchises Pty Ltd v Kentucky Fried Chicken Pty Ltd (1994) ATPR 41-299 Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 Henderson v Pioneer Homes Pty Ltd (No 2) (1980) 43 FLR 276 Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 39 FCR 546 Holz v Lane [2005] WASCA 40 Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348 Peter Isaacson Publications Pty Ltd v Nationwide News Pty Ltd (1984) 6 FCR 289 Parkdale Custom Built furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 Sterling v Trade Practices Commission (1981) 51 FLR 1 Sykes v Reserve Bank of Australia (1998) 88 FCR 511 Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 Ting v Blanche (1993) 118 ALR 543 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
RENEE-PETER HOLZ
First Defendant
KATHARINA ISOBELL HOLZ
Second Defendant
Catchwords:
Injunction - Interlocutory injunction - Misleading conduct - Section 14(1) Fair Trading Act 1987 (WA) - Court's discretion to grant interlocutory injunctions - Serious question to be tried
Legislation:
Fair Trading Act 1987 (WA), s 14(1), s 74, s 76, s 82(4)
(Page 2)
Result:
The application for interlocutory injunctions is allowed
Category: B
Representation:
Counsel:
Plaintiff : Mr P B O'Neil
First Defendant : Mr R G S Harrison
Second Defendant : Mr R G S Harrison
Solicitors:
Plaintiff : Consumer & Employment Protection Legal Services Unit
First Defendant : Tottle Partners
Second Defendant : Tottle Partners
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
Aaron's Reefs Ltd v Twiss [1896] AC 273
Australian Coarse Grain Pool v Barley Marketing Board (1982) 57 ALJR 425
Bullock v Federated Furnishing Trades Society of Australia (No 1) (1985) 5 FCR 464
City of Botany Bay Council v Jazabas Pty Ltd [2001] NSWSC 94; [2002] ANZ ConvR 300
Glev Pty Ltd & Glev Franchises Pty Ltd v Kentucky Fried Chicken Pty Ltd (1994) ATPR 41-299
Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82
Henderson v Pioneer Homes Pty Ltd (No 2) (1980) 43 FLR 276
Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 39 FCR 546
Holz v Lane [2005] WASCA 40
(Page 3)
Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348
Peter Isaacson Publications Pty Ltd v Nationwide News Pty Ltd (1984) 6 FCR 289
Parkdale Custom Built furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
Sterling v Trade Practices Commission (1981) 51 FLR 1
Sykes v Reserve Bank of Australia (1998) 88 FCR 511
Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177
Ting v Blanche (1993) 118 ALR 543
(Page 4)
1 LE MIERE J: The plaintiff applies for interlocutory injunctions to restrain the defendants from engaging in certain conduct in connection with soliciting payment for photographic or promotional services connected with modelling or potential modelling work.
Background
2 The plaintiff is the Commissioner for Fair Trading. The claim against the defendants is that they have engaged in and are proposing to engage in conduct contrary to s 14(1) of the Fair Trading Act 1987 (WA) ("the Act"). Section 14(1) of the Act provides that a person shall not, in relation to any employment that is to be, or may be, offered by the person or by another person, engage in conduct that is liable to mislead persons seeking the employment as to the availability, nature, terms or conditions of, or any matter relating to, the employment.
3 The plaintiff alleges that in carrying on their business the defendants engage in conduct in relation to employment that is misleading to persons seeking employment, as to the availability, nature and terms of employment. Specifically, the plaintiff alleges that the defendants induce members of the public to pay for photographs and promotion on the internet by leading people to believe that if they pay the defendants for their services there is a reasonable prospect that the customer will obtain paid employment as a photographic model interstate or overseas.
4 The representation is alleged to arise from the conduct of the defendants in carrying on their business, by their "get up" and by various oral and written representations, some true, some half true and some misleading in themselves. It is also said to arise from insinuation and the defendants' failure to disclose relevant information to would be customers.
5 The plaintiff claims a declaration that the defendants have breached s 14(1) of the Act and a permanent injunction prohibiting and restraining the defendants from making representations in breach of s 14(1) of the Act. Alternatively, the plaintiff claims a permanent injunction prohibiting and restraining the defendants from soliciting payment for photographic or promotional services in any way connected or associated with modelling or potential modelling work, without first disclosing in writing to any such person from whom payment is solicited certain information. The information relates to the number of people who have obtained modelling work as a result of the defendants or either of them providing services and the nature and extent of that work.
(Page 5)
Statement of Claim
6 The plaintiff pleads that the defendants have, at all material times, jointly carried on a photographic business and have falsely held themselves out as carrying on a model promotion business variously entitled "IFMO – Profoto", "IFMO", and/or "International Freelance Models Organisation" from a residence in Westfield.
7 The plaintiff pleads that between December 1997 and December 1998 the first respondent made certain false or misleading representations to five specified persons. On 31 May 2000 the first defendant was charged in the Perth Court of Petty Sessions with five counts of having breached s 14(1) of the Act by making representations as to the availability of employment as a photographic model to each of the five specified persons. On 29 January 2001, Mr Malone SM found that each of the charges was proved and convicted the first defendant of each of those five charges. On 20 June 2002, Wheeler J dismissed an appeal by the first defendant against those convictions. On 11 March 2005 the Full Court dismissed an appeal from the decision of Wheeler J.
8 The plaintiff then goes on to plead that between April 2001 and January 2003 the defendants made various representations to ten named people to the general effect that if they paid the defendants for photographic and promotional services there was a realistic and not fanciful chance that they would obtain employment as a model interstate or overseas. The plaintiff pleads that each of the representations were false in that there was no realistic as opposed to fanciful chance that modelling work might be gained as a result of the payment of fees to the defendants. The plaintiff pleads that each of the defendants has, in the manner indicated, engaged in conduct that is liable to mislead persons seeking employment as to the availability and remuneration of that employment contrary to s 14(1) of the Act.
9 The plaintiff goes on to plead that by summons dated 25 September 2002 each of the defendants was charged in the Perth Court of Petty Sessions with several counts of having breached s 14(1) of the Act on occasions between August 2001 and January 2002.
The Evidence
10 In support of his application the plaintiff formally read 16 affidavits. The principal affidavit is an affidavit of Anthony James Mazza sworn 11 May 2005. Mr Mazza is a lawyer employed by the Department of Consumer and Employment Protection. Mr Mazza annexes to his
(Page 6)
- affidavit copies of extracts of the transcript of the proceedings against the defendants in the Perth Court of Petty Sessions in respect of the complaints brought against them in October 2003 that, in effect, they made representations as to the availability of prospective employment as a photographic model interstate and internationally whilst not having reasonable grounds to make such representations contrary to s 14(1) of the Act.
The Statutory Power to Grant an Interlocutory Injunction
11 Sections 74 and 76 of the Act confer power on the Court to grant injunctions, including interlocutory injunctions, to restrain breaches or attempted breaches of the consumer protection provisions of the Act, including s 14.
Orders Sought
12 The plaintiff seeks interlocutory injunctions in the following terms:
1. The defendants and each of them be restrained from soliciting payment for photographic or promotional services in any way connected or associated with modelling or potential modelling work, without first:
(a) giving to a potential customer a copy of the letter annexed to the chamber summons; and
(b) having the customer sign a second copy of the letter to be retained by the defendants.
2. The defendants and each of them be restrained from representing or describing themselves or each other, whether orally or in writing, as "model consultants" or "talent scouts".
3. The defendants and each of them be restrained from identifying themselves to members of the public by means of identification cards or otherwise, as being affiliated in any way with the "International Freelance Model Organisation" of the United States of America, or with any other international organisation.
4. The defendants and each of them be restrained from representing, whether orally or in writing, that any modelling agent or person who genuinely intends to employ models will ever look at the defendants' website.
(Page 7)
- 5. the defendants and each of them be restrained from representing, whether orally or in writing, to anyone that advertisements for models from other websites are "job or employment opportunities".
13 A copy of the letter annexed to the chamber summons is annexed to these reasons for decision.
14 On 17 June 2005 the defendants gave written undertakings to the Court. The written undertakings are in the same terms as pars 2, 3 and 5 of the orders sought by the plaintiff. Accordingly, the injunctions that are sought by the plaintiff and opposed by the defendants are those sought in pars 1 and 4 of the plaintiff's chamber summons.
Principles for Grant of Interlocutory Injunctions
15 The principles applicable to granting interlocutory injunctions under s 74 and 76 of the Act are not in dispute. The court has a very wide discretion in relation to the grant of interlocutory injunctions. That discretion must, however, be exercised in accordance with equitable principles. The court must be satisfied that there is a serious question to be tried. If there is a serious question to be tried then the court must consider the balance of convenience. Once the court is satisfied that there is a serious question to be tried, the strength or weakness of the plaintiff's case may become a relevant factor touching on the balance of convenience or the exercise of the discretion.
Is there a Serious Question to be tried?
16 The defendants do not admit that the plaintiff has established that there is a serious question to be tried. The defendants acknowledge that the first defendant was convicted on 29 January 2001 of five counts of misleading aspiring models. They admit that further charges were brought against them and the further charges have been heard by Mr Packington SM but as yet no decision has been handed down. The defendants specifically refer to the evidence of Kenneth Chai-Lam Low and Leon Barradell who are two of the persons to whom the plaintiff alleges the defendants made misleading representations. The defendants submit that the plaintiff relies significantly on the evidence of Mr Low and Mr Barradell. The defendants do not admit the truth of the allegations made by Mr Low and Mr Barradell.
17 The plaintiff has put forward a great deal of evidence from a large number of persons that the defendants made representations to them concerning employment as a model. If their evidence is accepted it is
(Page 8)
- likely to be found that the defendants impliedly represented to them that if they paid the defendants for photographic and promotional services there was a realistic and not fanciful chance of obtaining interstate or overseas employment as a model for substantial remuneration.
18 Counsel for the defendants submitted that persons aspiring to be models are pursuing not only employment but also a particular lifestyle and image. Any words or conduct of the defendants was likely to be processed subjectively in the minds of the aspiring models. The defendants further submitted that the issue of whether conduct is misleading is a question of fact which must be examined against the context in which the conduct takes place and the surrounding facts and circumstances.
19 The prohibition of misleading or deceptive conduct as opposed to misleading or deceptive representations imports a wider ambit to s 14(1) of the Act than the common law action of misrepresentation. Conduct is considered in context as a totality. It is necessary to look at the whole of the transaction and circumstances and not only at one aspect of it. An overall misleading impression or representation may be created by a series of statements, acts, gestures or silences. It may be composed of a number of separate representations, some true, some half true, some ambiguous and some false.
20 In the case of persons who carry on conduct as partners in a business, the conduct of an agent of that person, within the scope of their actual or apparent authority, is deemed for the purposes of the Act to have been engaged in also by that first person: see s 82(4). In this case the court is entitled to look at the conduct of both defendants towards any particular prospective customer as evidence of the conduct of each.
21 I take into account the context and circumstances in which the alleged representations were made by the defendants to the aspiring models. I take into account the persons, or class of persons, if aspiring models be such a class, to whom the representations were made. Having full regard to all those matters I am satisfied that the plaintiff has made out a strong case that the defendants impliedly represented to the various persons referred to in the pleadings, and to Mr Low and Mr Barradell, that if they paid the defendants for photographic and promotional services there was a realistic and not fanciful chance that they would obtain interstate or overseas employment as a model for substantial remuneration.
(Page 9)
22 The plaintiff pleads that the representations which he complains of were false in that there was no realistic as opposed to fanciful chance that modelling work might be gained as a result of the payment of fees to the defendants. The plaintiff relies upon the evidence of the defendants given in the course of defending the charges against them in the Court of Petty Sessions in December 2004 and May 2005 to support that aspect of their case.
23 The transcript annexed to the affidavit of Mr Mazza discloses that in the course of cross-examination of the second defendant prosecuting counsel referred to the proceedings in this Court in which the plaintiff seeks an injunction and in response to a question from counsel the second defendant agreed that she knew that in this case it was said that the defendants hold out a false hope that people are going to get paid for modelling work. A little later in the cross-examination the second defendant agreed with prosecuting counsel that "you" have never found a paid modelling assignment for someone overseas or a paid modelling assignment for someone interstate. That cross-examination took place in December 2004. The second defendant was further cross-examined at the resumed hearing in March 2005. On that occasion the following exchange occurred between prosecuting counsel and the second defendant in the course of her further cross-examination:
"Q: Listen to my question carefully, Mrs Holtz; so far as you are aware, no-one has actually obtained paid modelling work as a result of being promoted on your website?
A: There have been offers, but not paid work as such."
24 In March 2005 the first defendant was cross-examined in the course of the prosecution in the Court of Petty Sessions. The first defendant was asked whether there was anything he disagreed with in the second defendant's evidence. He replied that she got confused a couple of times about questions that were put a different way round two or three times. He was then asked whether in general terms he agreed with what she said. He said that he did. On the hearing of this application counsel for the plaintiff made the point that neither of the defendants were re-examined in the course of the Court of Petty Sessions proceedings about any customer having obtained any modelling work as a result of being promoted by the defendants or as a result of the services provided to them by the defendants.
(Page 10)
25 On the hearing of this application counsel for the defendants conceded that in the proceedings before Mr Packington SM the defendants had not put forward any evidence of work having been obtained by customers of the defendants as a result of the services provided to them by the defendants. However, the defendants relied upon an affidavit sworn by the first defendant on 2 August 2005, that is the day before the hearing, and in particular upon material concerning the Ditlove Group. Counsel for the plaintiff did not oppose the tendering of the affidavit notwithstanding late service. However, counsel for the plaintiff cross-examined the first defendant.
26 The first defendant deposed as follows. Since about 1995 the defendants have been referring aspiring models to the Ditlove Group Inc. The Ditlove Group is a photography and video maker group located in Chicago, Illinois. Michel Ditlove is the president of the Ditlove Group. Michel Ditlove is familiar with all of the IFMO website information and he accesses details of models who are promoted by IFMO. Since 1995 16 specified persons who have been promoted by IFMO have been referred to Michel Ditlove by the defendants and in turn have been referred by Michel Ditlove to model agents and model management companies in the United States and Japan. Annexed to the first defendant's affidavit is an e-mail dated 30 September 2002 apparently from Michel Ditlove to the first defendant. In the e-mail Mr Ditlove says as follows. Mr Ditlove has had an informal association with IFMO Australia since 1995 and has referred several models to model agents and model management companies in the United States and Japan. The Japanese contacts were third party dealings and usually came about from dealings with Japanese companies through their US advertising agents allowing them to be aware of Mr Ditlove's existence and his taste in booking models for photographic projects. In the past couple of years he has referred 13 named persons to model agents and model management companies in the US and Japan. Since he acts only in a referral or "finder" manner, Mr Ditlove has no further contact with either the model or client after making the initial contact with either.
27 The cross-examination was narrow in scope and relatively brief. I should not make any final findings of fact on this interlocutory hearing. However, the cross-examination cast doubt upon the credibility of the first defendant and upon the reliability of the information contained in the e-mail.
28 The first defendant agreed that he knew that one of the issues in the prosecution before Mr Packington SM was whether or not anyone has
(Page 11)
- ever obtained paid modelling work because of the defendants' internet promotion. He said he did not mention Mr Ditlove in the Court of Petty Sessions proceedings because he was told by his lawyer not to mention Mr Ditlove because he could not produce Mr Ditlove in Perth. The lawyer is now overseas. The first defendant said that he had told his present counsel, Mr Harrison, about Mr Ditlove many years ago. Then the first defendant said that he had shown Mr Harrison the e-mails and all the correspondence he had with Mr Ditlove a couple of weeks ago. Next he said he had shown Mr Harrison the e-mails at least two weeks ago, maybe a month ago. In re-examination Mr Harrison asked the first defendant when he had first shown Mr Harrison the e-mail from Mr Ditlove. The first defendant said it was a couple of days ago. When Mr Harrison put to the first defendant that it was only yesterday, the first defendant agreed. There was further cross-examination that cast doubt on the first defendant's credibility.
29 In any event, the e-mail from Mr Ditlove, if it was indeed from Mr Ditlove, does not establish that any customer of the defendants obtained any paid modelling work as a result of promotion by the defendants or as a result of services provided by the defendants. That was acknowledged by counsel for the defendants.
30 In the end, I find that there is a strong case that the defendants were not aware of any person having obtained paid modelling work as a result of promotion by the defendants on their internet website.
31 There is some evidence before me concerning the accessibility of the defendants' website to potential employers of models or aspiring models. Of course, anyone who knows the website address is able to access the site. Furthermore, anyone may come across the website in the course of searching for models or photographic models. However, there is no evidence before me that persons who wish to employ models seeks out the defendants' website for that purpose.
The First Order Sought by the Plaintiff
32 The plaintiff has made out a serious question to be tried, indeed a strong case, that the defendants have engaged in misleading conduct contrary to s 14(1) of the Act by engaging in conduct that impliedly represented to customers or prospective customers that if they paid the defendants for photographic and promotional services there was a realistic chance they would obtain interstate or overseas employment as a model for substantial remuneration where such implied representations were false in that there was no realistic as opposed to fanciful chance that
(Page 12)
- modelling work might be gained as a result of the payment of fees to the defendants. The plaintiff has made out a serious question to be tried, indeed a strong case, that at the trial of this action the court will grant injunctive relief to restrain the defendants from continuing to engage in such conduct.
33 The balance of convenience favours granting interlocutory relief to restrain the defendants from engaging in such conduct. There is evidence before the court that a significant number of people have been induced to part with sums of money in excess of $1,000 as a result of the defendants' conduct. There is a significant public interest in restraining the defendants from engaging in such conduct pending the trial of this action.
34 The defendants have given the undertakings to which I have earlier referred. However, the plaintiff submits that the further orders sought are necessary to protect the public. Counsel for the defendants raised no strenuous objection to the defendants being required to supply a letter to prospective customers as provided for in par 1 of the orders sought by the plaintiff. However, the defendants object to the terms of the letter. The plaintiff does not press par 5 of the letter. The defendants object to pars 1, 2 and 3 of the letter. I will consider each in turn.
35 The first paragraph reads: "No one has ever been paid for modelling work as a result of promotion on the internet by the Holzs or IFMO since 1996". In my view a proper view of the evidence is that the defendants concede that they are not aware of anyone having been paid for modelling work as a result of promotion on the internet by them or IFMO since 1996. In my view it would be appropriate for a sentence to that effect to be included in the letter.
36 Paragraph 2 reads: "No one has ever been paid for modelling work overseas as a result of promotion by the Holzs or IFMO since 1991". On a proper view of the evidence the defendants concede that they are not aware of anyone having been paid for modelling work overseas as a result of promotion by them or IFMO since 1991. It would be appropriate for a sentence to that effect to be included in the letter.
37 The third paragraph reads: "No one has travelled overseas or interstate for modelling work as a result of promotion by the Holzs or IFMO since 1991". Again, a proper view of the evidence is that the defendants are not aware of anyone who has travelled overseas or interstate for modelling work as a result of promotion by them or IFMO
(Page 13)
- since 1991. It would be appropriate for a sentence to that effect to be included in the letter.
38 If the letter is modified in the form I have indicated then it would be appropriate for an order to be made in terms of par 1 of the plaintiff's summons.
39 Paragraph 4 of the summons seeks an order that the defendants be restrained from representing that any modelling agent or person who genuinely intends to employ models will ever look at the defendants' website. In my view the evidence does not establish that that is correct. It is not appropriate to grant an interlocutory injunction in those terms. In any event, an injunction in terms of par 1 of the plaintiff's chamber summons together with orders or undertakings in the form of the undertakings given by the defendants on 17 June 2005 appropriately protects the public interest pending the trial of this action.
Conclusion
40 For the reasons stated I will grant an interlocutory injunction in the terms of par 1 of the plaintiff's chamber summons with the letter modified as I have indicated in these reasons. I will hear the parties as to the precise form of the order. I will also hear from the parties whether I should make orders in terms of pars 2, 3 and 5 of the plaintiff's chamber summons or whether the undertakings given by the defendants on 17 June 2005 should continue.
(Page 14)
ANNEXURE A
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