Department Fair Trading v Monaghan

[2002] NSWSC 1021

Reported Decision: (2003) Aust Contract Reports 90-169
(2003) ATPR 41-912

New South Wales

Supreme Court

CITATION:	DEPARTMENT FAIR TRADING v MONAGHAN & ANOR [2002] NSWSC 1021
FILE NUMBER(S):	SC 12823/02
HEARING DATE(S):	15 and 18 October 2002
JUDGMENT DATE:	30 October 2002
PARTIES :	Plaintiff: Department of Fair Trading First Defendant: Joanna Monaghan Second Defendant: David James Harold Darby
JUDGMENT OF:	Hulme J at 1

COUNSEL :	Plaintiff: Mr P Lakatos; Mr D Strickland Defendants: Mr A Diethelm
SOLICITORS:	Plaintiff: DI Catt Solicitor Department Fair Trading Defendants: The Hargreaves Practice
CATCHWORDS:	Consumer Protection - Fair Trading Act SS42 & 43 - Injunctions - form
DECISION:	Application for interlocutory injunctions dismissed.

- 20 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

HULME J

Wednesday 30 October 2002

12823/02

DIRECTOR-GENERAL DEPARTMENT OF FAIR TRADING v JOANNA MONAGHAN AND 1 OR
JUDGMENT

1 HULME J: By Summons filed on 15 October 2002 the Plaintiff seeks orders:-

1. An injunction pursuant to s65 of the Fair Trading Act 1987, directing the First and Second Defendants by themselves their servants or their agents to cease to engage in conduct which constitutes a breach of sections 42 and 43 of the Fair Trading Act.
2. Until further order of the Court an order pursuant to s72 of the Fair Trading Act 1987 that the first and Second Defendants by themselves their servants and agents be restrained from dealing with, the exception of reasonable business expenses, transferring, withdrawing or disposing of any monies whether by way of cheque, cash or credit cards and voucher received or held by any person or institution in relation to the business Liberty Network.
3. Until further order of the Court an order pursuant to s72 of the Fair Trading Act 1987 that the First and Second Defendants by themselves their servants and agents not enter any new contracts with any persons in relation to the business Liberty Network.
4. Until further order of the Court an order pursuant to s72 of the Fair Trading Act 1987 that the First and Second Defendants by themselves, their servants and agents not engage in taking any further monies from any persons in relation to existing contracts.
5. An order that the First and Second Defendants provide to the Plaintiff written advice by 5.00pm Friday 18 October 2002. The written advice is to comprise the following:-
1) Account number.
2) The name of the account holder.
3) The name and address of the financial institution for all accounts maintained by the Defendants with any financial institution (whether within the jurisdiction or elsewhere).

2 The matter came before me on 15 October. Although the Defendants were represented they had received virtually no notice of the proceedings and the orders made were directed to limiting any disposition of assets by the Defendants and requiring that any conduct of the business they were engaged in was on terms as to record keeping and the production of records. The matter was adjourned to 18 October.

3 On that day the matter proceeded as an interlocutory application, affidavits being read on behalf of the Plaintiff and Defendants. Counsel for the Plaintiff pressed the orders in the Summons also urging that at the very least, orders limited to ensuring the preservation or creation of a fund adequate to compensate two persons, Messrs Daniels and Hammond-Burns, who had paid money to the Defendants.

4 One or both of the Defendants – there is some conflict in the evidence and for present purposes it does not matter – carries on a business of an introduction agency under the name “Liberty Network Introduction Agency”. For its services the Agency charges a fee or fees. It has a scale of fees in the following terms:-

$5,500 Full 12mths VIP service 1st reviewed when female requests Personal Consultant.
$3,300 Full 12mths MARRIAGE service 2nd reviewed when female requests Personal Consultant.
$1,590 4mths PRIORITY service 6mth backup 3rd reviewed when female requests Personal Consultant 1st 4 mths
$880 4mths EXECUTIVE service 6mth backup 4th reviewed when female requests.
$550 4mths TELEPHONE service 6mth backup 5th reviewed when female requests.
$220 6mths basic/backup service File reviewed last in order of priority and only when requested.

5 Members of the public are invited to provide to the Agency details of themselves and some attributes of persons they would wish to meet or establish a relationship with, to the intent, one may infer, that the Agency will provide an introduction or at least a telephone number of someone else on its books who may be suitable. Although prior to the proceedings before me, the Agency produced to one of the Plaintiff’s investigators, a Mr Anderson, a document “Methods of Introductions” as one of the documents outlining its methods of business, neither that document or any other produced at that time provides any clear indication on what the Agency’s obligations to its clients, in return for their payments, are.

6 The evidence indicates that generally males are charged fees and females are not. The evidence and the terms of the scale would suggest that when a female contacts the Agency looking for an introduction, any males who have paid for the “VIP” service and are judged potentially suitable have their contact details provided first, and only if there are no such persons in the “VIP” group do those who have paid for the “MARRIAGE” service have their particulars reviewed and, if judged suitable, have their contact details provided. Those who have paid $220 for the “basic/backup” service seem to have their file reviewed only if all else, in the sense of those in the first five groups, fails. The evidence of Messrs Daniels and Hammond-Burns suggests that the Agency will provide to males, or at least to those in the upper scales, contact details of females. It may be that males on the bottom scale also have this benefit although, as the First Defendant said to one of the Plaintiff’s investigators, a Mr Anderson, “they don’t get much of my time”. Evidence from one of the apparently internal accounts in Mr Daniel’s file indicating that the Agency apparently charged, at least internally, $175 per hour for its staff time, in addition to commission, provides some support for this.

7 The First Defendant gave evidence to the effect that the male clients’ book contains some 1400 paying male clients and 400 non-paying male clients enrolled since the opening of business in April 2000 and the female clients’ book contains about 50 paying and 1400 non-paying female clients acquired during the same period. The evidence does not make it clear whether these numbers include all persons enrolled during the period or whether the numbers could be said to represent clients who are current. There is in evidence a list of male clients acquired since about May last. There are 242 on the list. Sixty-three have paid nothing. About 67 have paid the basic $220. Four have paid more than $5,500. The largest amount paid has been $18,200. The First Defendant also said that of the last 200 female clients, none have been paying clients. The evidence does not reveal over what period these 200 were acquired.

8 Attention should also be given to the Agency’s conception of a non-paying client. Such clients comprise:-

(a) any person who supplies a name and address and who requests promotional material and a personal particulars form to be posted out to them; and
(b) any person inquiring who is deemed suitable to meet a paying client who is already on the books; and
(c) any person who wishes to be placed on the “free list”, that is, a person who is prepared to wait for a suitable paying client to come onto the business’s books and be introduced to them.

9 The evidence shows that on Anzac day this year Mr Daniels saw an advertisement for Liberty Network Introductions in the personal columns of the Daily Telegraph. In his affidavit he said that he was a long term sufferer of an anxiety and depression disorder. Early in 2002 he split up from his wife and children and by the time Anzac day arrived he was lonely. He contacted the Agency, was interviewed, filled out an application form, had his picture taken and paid $220. He was told to contact the Agency periodically to check on results.

10 Not having heard anything during the next few days or so, he made an appointment and attended for a further interview. The interviewer’s name was Gina. An affidavit from Gina was read. In it she denies a deal of what Mr Daniels had to say. Nevertheless, it should be recounted. According to Mr Daniels, he asked “Have I got a date on the weekend?” There was some little other conversation and then Gina asked him “How much money would you like to spend on finding the right lady?” And “How much have you got?” Shortly after he answered this question Gina said to him “You should use that money with us to help change your life.” and produced some photograph albums featuring women. Soon after someone who Gina introduced as her boss, Cindy, came into the room and showed Mr Daniels a photograph and, inter alia, the following conversation ensued (In this and later paragraphs where I quote conversation, I do not purport to quote all of any conversation deposed to in the affidavits):-

Cindy: I want $5,280 to introduce (you) to Marina (indicating the photograph).
Mr Daniels You want $5,280 from me for the introduction?
Cindy: Yeah, this is the VIP service. How would you like that on your arm and show your ex-wife? (again indicating the photograph)…
Cindy: The VIP service cost more by the you are given first option to the ladies we have on our books (sic)…


You’ve got all this money in the bank and we can change your life in 6 months. If you want to change your life, we can set up a date with Marina for this weekend for you but you have to come in with the money tomorrow.

11 According to Mr Daniels the two women then began to make comments including the following:-

“You’re not getting any younger, we can change your life around for you.”
“That money is not going to help you in the bank, you’re going to die with the money.”
“We can give you a woman who will make you feel young and make life worth living.”

12 After what Mr Daniels says was more than half an hour, he felt confused and finally relented and agreed to obtain the $5,280. His attention was again directed to the photograph and he was asked “how would you like to cuddle up next to Marina?” He was given a contract which he signed on 10 May 2002.

13 The document was described as a “GUARANTEE OF SERVICE” by Liberty Network. Liberty agreed to enter into it “for the purpose of providing MONEY BACK guarantee”. It contained a number of “conditions” the first four of which constituted acknowledgments, warranties or promises by the client and the fifth of which provided:-

“In the event that all possibility has been exhausted LIBERTY NETWORK will refund to the client the monies paid (not including administration or international phone call fees).”

14 On the following day, 9 May, Mr Daniels obtained and then attended Liberty Network’s office with a bank cheque for $5,280. He was told that arrangements had been made to meet Marina on the next weekend. He was told to come in for a photo session on the following day, a Friday. When he attended on that day he was told that his photo didn’t match Marina’s liking “but you’ve got all that money in the bank and will can (sic) help you with a new Russian bride.”

15 A photograph of someone called Larissa was produced. Mr Daniels was told “We’re gonna get you married darling.” But he was also told the cost was going to be $35,000, that sum including “$30,000 in government security and $5,000 to cover the airfare and immigration cost in Russia and Australia”.

16 By this time, according to Mr Daniels, there were four women apparently from Liberty Network in the room talking to him in terms which may be said to be calculated to induce him to pursue the prospect of a Russian bride. Mr Daniels recounts being told, inter alia, “It’s the gentlemanly thing to do”, “You’re not getting any younger.” “This is the right thing for you to do.” “We’re your friends, we’re here to help you.” “What’s the money doing in the bank?” “You’re not happy now.” “You’re gonna die alone.” and “This is a true chance at happiness.”

17 According to Mr Daniels he was under so much pressure he could not take any more and agreed to spend the $35,000 on a new Russian bride. Mr Daniels said he was told to get the money in that day so things could get started. He was accompanied to the bank by one of the Agency staff and the $35,000 was transferred. Staff also took him shopping to buy some better clothes and, it would seem, a hair cut. The clothes were paid for by the Agency staff. He returned to the Agency but was feeling exhausted and left.

18 Within a day or two Mr Daniels returned to the Agency requesting the return of his money. He asserted that Gina tried to persuade him against this course saying, inter alia, “if you pull out of this deal I will lose my job and that will be your fault”. He was also told that arrangements should be made for him to get a mobile phone so he could have private conversations and so that his father didn’t know what he was doing. He was then taken by Agency staff to a phone shop where a phone was purchased, again being paid for by the Agency. His requests then and on the next attendance were refused but he was told that if he wasn’t married in six months he could receive his money back. In fact in late May he wrote a letter to a person the Agency had selected. He was told some details of a reply and wrote a second letter to this person. On a later occasion he was told that the woman was not interested and another one had been selected. Not long afterwards he was admitted to a psychiatric unit.

19 After his release he and his father approached the Agency. There were discussions and on 13 August last the Agency agreed to repay $30,000 in weekly instalments of $300. The first Defendant gave evidence which was not challenged that 10 payments had been made, but that one cheque had not, at the time of her affidavit, been presented.

20 As I have said, an Affidavit of an Agency employee by the name of Gina was also read. While not disputing the broad chronology of events to which Mr Daniels had deposed she denied that there had ever been more than two women present at any time she was with Mr Daniels, and the conversations suggestive of pressure to which I have referred. She denied that Mr Daniels had brought the $5,280 cheque to the office. She denied she had introduced him to Cindy, saying that, according to the file, it was Cindy who had first interviewed him. She also deposed to having said, “$35,000 will cover all legal costs for immigration, airfares, wedding, wedding dress, ceremony, the priest, visas, passports and also set up an apartment for him, will be looking to lease and furnish apartment at Croydon Park area and will give you full account and receipts if where the money been expended, including suitable clothing change of appearance (nice hair cut) and mobile phones so the perspective wife can contact you.” (sic).

21 Neither she nor Mr Daniels was cross-examined. Annexed to her Affidavit were photocopies of diary notes from Mr Daniels’ file. They cover two pages and extend from 10 May to 13 August 2002.

22 On behalf of the Plaintiff there was also read an affidavit of Mr Hammond-Burns. He said he was shy and introverted and also asserted he had been suffering from a depressive illness. He saw a Liberty Network advertisement in February and attended for an interview with a person named Gina on 6 March. He was given the scale of fees and initially said he would just have the $220 joining membership. Conversation then ensued which included the following:-

Gina: This is the basic joining fee. You get six months dating service. The further up the service you go, the better the service. I have clients on the books for you. What sort of money are you prepared to spend to ensure your happiness?
Gina: How much would you like to spend on finding a lady?
Mr HB: I could go to $3000 if it was necessary and it I more that I had been prepared to spend (sic).
Gina: Where do you have your money?
Mr HB In various investments.
Gina: How much money have you got tied up in investments?
Mr HB: Respectfully that’s none of your business.
Gina: You will meet more ladies as you go up the scale. I have ladies now. You could be going out on this Friday or Saturday night if you wish.
Gina: You shouldn’t let money hold back your happiness. We can change your life. It’s up to you. The higher plan level you take the more personal service we give your situation and the more contacts we give you…

23 Mr Hammond-Burns agreed to the $3,300 membership plan. He was given a name Margaret and a phone number. He paid $220 at the time and another $1,000 by Visa card later that day. Gina recommended he raise the credit limit on his Visa card. A few days later he paid two other instalments of $1,000.

24 According to Mr Hammond-Burns, prior to these two payments he went out with Margaret. Other tentative dates with her fell through, she telling him that their relationship had no future and that she was currently in a de facto relationship. Mr Hammond-Burns complained to Gina about this latter fact and was given another phone number and name, Nicole.

25 When contacted, Nicole said she was ill and couldn’t go out. Mr Hammond-Burns was given details of Susan. She couldn’t go out due to sporting and family commitments. Mr Hammond-Burns again complained.

26 In early April he was given a contact, Connie. When contacted she said she had no time for a relationship. Later Mr Hammond-Burns appears to have gone out with Nicole but, he said, it appeared that Nicole only wanted to get married to fulfil legal requirements to receive an inheritance. A few further contacts did not work out.

27 In early May Mr Hammond-Burns attended the Agency and was attended to by Cindy. He was advised to try his luck with Russian women of whom, according to Cindy, there were three or four in Melbourne. It was suggested that he go to Melbourne to meet them at a cost of $4,000.

28 Mr Hammond-Burns’ evidence of subsequent discussion with Cindy on this topic indicates a deal of reluctance to spend this further money but he finally agreed, paid the $4,000, was given contacts and went to Melbourne. There he met three ladies. One Mr Hammond-Burns found unsuitable for reasons I need not recount. A second could not speak English and dinner was had with an interpreter present. Mr Hammond-Burns felt positive about the third. When he returned to Sydney, Cindy told him that his feelings about this last woman were not reciprocated. Cindy encouraged him to again attend on the Agency. When he did, contact with some Russian women in Russia was advocated. He was shown photographs and responded “this one Elena appeals to me”. The cost was said to be another $12,700 “to cover all airfares, immigration, visas, inoculations, children’s fares and if it doesn’t work out, her and the children’s return airfares to Russia”.

29 After some reflection, Mr Hammond-Burns agreed. He was then asked to sign a “GUARANTEE OF SERVICE” in the terms of which I have referred to above. On 22 May he did so and by the end of the month he paid the further $12,700.

30 Since 23 May, Mr Hammond-Burns has been corresponding with Elena exchanging, he thinks, about 10 letters each. He has also been given another local contact, Suzi but who indicated she was too busy. A promise by Cindy to provide contact details of another woman was not kept. In July, Mr Hammond-Burns contacted the Plaintiff and was advised to suspend dealing with the Agency until the matter was looked into.

31 Also in evidence was the Agency’s file relating to Mr Hammond-Burns. It contains brief diary notes covering the period from 2 April to 24 September of events such as phone calls, letters and remarks of Agency staff about Mr Hammond-Burns and events. The file contains letters of complaint by Mr Hammond-Burns about the quality of the service provided by the Agency but also contains copies of some 10 letters over the period 22 May to 8 October between Mr Hammond-Burns and a woman apparently in Russia to whom he had been introduced by or through the Agency. There is also a further letter from Mr Hammond-Burns, dated 20 September 2002, phrased for what seems to be the benefit of immigration authorities, inviting the woman to Australia in order for the two to meet.

32 The third affidavit read on behalf of the Plaintiff was by Mr Anderson. In the affidavit Mr Anderson recounted conversation he had had with the Defendants. To most of this it is unnecessary for present purposes to refer. Mr Anderson did tell them however that the Department had received 3 complaints in 2000, 3 in 2001 and 15 in 2002. Except insofar as they may have related to Messrs Daniels and Hammond-Burns, the details of these were not in evidence. It would seem from a response of the First Defendant that some of these have been dealt with by some tribunal, presumably the Consumer, Trader & Tenancy Tribunal or one of its predecessors. As relevant to the grant of relief, it might be noted also that a company Liberty Network Pty Limited seems to have been registered with the Defendants as directors.

33 There was also in evidence financial information concerning the affairs of the Agency. It showed that the Agency made a significant profit in the year to 30 June 2001, a profit 2½ times as high in the year to 30 June 2002 but in the period I July to 16 October 2002 a loss approximately equal to the profit in 2000-2001. Its income in the period since 1 July was well in excess of $150,000. As at 30 June 2002 there was a deficiency in proprietor’s funds to an extent of some tens of thousands of dollars, a figure which, despite the profit for the year, was substantially higher than the deficiency to 30 June 2001. The 30 June 2002 deficiency did include $30,000 for “Client Refunds Payable” which is likely to represent the arrangement with Mr Daniels but this does not, I think, explain the discrepancy. And there was no attempt otherwise to do so.

34 The first Defendant gave evidence of having some $7,500 in bank accounts (of her own or the business) and of debts owing (to her or the business) in the sum of about $4,000. She gave evidence that the Second Defendant was not owed any money and had bank accounts in credit to the extent of some $3,000.

35 It is also apparent from the evidence which was before me that moneys received by the Agency have just been treated as income and available to be used for any business purposes. Thus, although it would seem that Mr Daniels for example has received much less by way of services than the Agency contemplated providing, in no way have the moneys he paid been set aside to enable the provision of those services. Assuming no future contribution of capital by one or other of the Defendants, if these services were to be provided now, they would be paid for out of moneys provided by new clients. If any funds were required to be set aside to meet any liability to Messrs Daniels or Hammond-Burns, on the existing state of the evidence, they would have to come out of the moneys in the bank to which reference has been made, insofar as they have not been used by now, income since the hearing before me or future income derived from other clients or some fresh capital contribution or loan.

36 In an affidavit of the First Defendant which was read, she said that she intended to implement in the Agency the following code of practice immediately:-

(i) There will be a full “disclosure statement” setting out the respective rights and obligations of both the client and the business. It will be explained to each client at the outset and incorporated into the initial documentation given to each client.
(ii) There will be a “cooling off period” under which any payment in excess of $3,300 received from a client will be refunded on request up to the close of business on the third day on which the business is open after payment.
(iii) Any money paid by a client on account of future disbursements e.g. fares, accommodation, visa applications and translation services will be paid into a separate disbursement account and not used except for agreed disbursements. A separate receipt will be issued for such moneys, identifying their purpose.

37 Before I turn to the relief sought, it is appropriate to reflect on the significance of the evidence to which I have referred against the background of the statutory provisions on which the Plaintiff primarily relies. Sections 42 of the Fair Trading Act proscribes conduct which is misleading or deceptive, or likely to mislead or deceive. Insofar as a representation relates to any future matter, the onus of showing that there were reasonable grounds for making it lies on the maker. Section 43 proscribes conduct which is unconscionable. Where a decision has to be made whether any conduct is unconscionable the section invites attention to a number of matters listed in paragraphs (a) to (e) of sub-section 2, including the relative strengths of the bargaining positions of the supplier and customer and whether any undue influence or pressure was exerted on , or any unfair tactics used against, the customer.

38 Within the evidence to which I have referred, there is clear evidence of a breach of both s42 and 43. Mr Daniels’ evidence of what he was told about Marina suggests a breach of s42. His evidence also suggests a breach of s43. Clients of the Agency are likely to be emotionally vulnerable and there is certainly evidence Mr Daniels was. His evidence also indicates that the Agency suffered from no such handicap. At a prima facie level its bargaining strength was much greater than his. Furthermore, his account of the persuasion to which he was subjected is clearly indicative of undue pressure and, given his situation, unfair tactics. I do not suggest that the mere establishing of one or more of the matters referred to in paragraphs (a) to (e) necessarily leads to the conclusion that there has been unconscionable conduct but, at least at a prima facie level, the matters to which I have referred, if Mr Daniels’ evidence is accepted, lead to the conclusion that there was.

39 Again in the case of Mr Hammond-Burns there is a prima facie case of both misleading and unconscionable conduct. The statements attributed to Gina “I have ladies now”, “more personal service” and “more contacts” and the “MARRIAGE’ service for which he paid suggests a much greater availability of female prospects in any meaningful sense of that term, than Mr Hammond-Burns’ experience would indicate the Agency had available.

40 The speed with which both Mr Daniels and Mr Hammond-Burns were introduced to the prospect of relationships with women resident in Russia itself suggests that, despite the number of female “clients” in fact there were very few that could in any sense be regarded as available for introduction. However, although the First Defendant was cross-examined, little or no attention was given to this. Of course, one should recognise that an alternative explanation for the early reference to this prospect, and one which does not so argue for the existence of misleading conduct, is that, by virtue of the distance and complications obviously inherent in Russian women, they provided an opportunity to ask from both Mr Daniels and Mr Hammond-Burns a very large fee. The questions which both Mr Daniels and Mr Hammond-Burns say were asked as to the extent of their assets, certainly suggest that there was interest on the part of the Agency’s staff on the topic of how great a fee could be obtained. The First Defendant gave evidence that the women named above who interviewed Mr Daniels were commission sales people and agreed that they had “a financial incentive to extract as much money as possible”.

41 Another matter to which attention should be given is the “guarantee of service”. Its terms are clearly directed to providing some assurance to those to whom it is offered that if, despite their best endeavours, they do not obtain a future partner, the Agency will refund them “the monies paid (not including administration or international phone call fees).” There was no comprehensive statement as to the financial situation of the Defendants, and in particular of the First Defendant who claims to be the proprietor of the Agency. However such information as there is, and which I have summarised above, suggests that those guarantees were worth little. It would seem clear that at the time both were signed there was a deficiency of proprietor’s funds and the loss since 30 June last makes the Agency’s ability to make any such refunds even more doubtful.

42 In reflecting on the weight to be given to the above, I do not forget that a deal of Mr Daniels’ evidence was denied by Ms Gina Mohamad and that, as neither was cross-examined and the hearing was interlocutory, it is not possible to reach final conclusions of the factual disputes between them. Nevertheless the evidence to which I have referred does indicate to a prima facie level that the terms of s42 and 43 have been breached. The Agency is dealing with the public and, as I have said, emotionally vulnerable members of it. These facts argue in favour of injunctive relief directed to preventing any future conduct which amounts to a breach of s42 or 43.

43 I turn to the relief sought by the Plaintiff. In sections 42 and 43, the Fair Trading Act proscribes conduct which is misleading or deceptive, likely to mislead or deceive, or unconscionable. S62 of the Act, which provides that a person who contravenes a provision of the Act is guilty of an offence expressly excepts ss42 and 43 from its operation in this regard and there is no other provision of the Act which imposes a criminal sanction for breach of ss42 or 43. The terms of the first order sought are calculated to impose one by rendering any future misleading or unconscionable conduct, whether or not of the kind the subject of evidence before me, a contempt of court and thus to impose a criminal sanction on it, notwithstanding Parliament has elected not to do so.

44 I do not for a moment deny that, in the case of defined conduct, that may be an appropriate course or result. Indeed the terms of s42, 43, and 65 clearly envisage that it is. However, the Plaintiff has eschewed any particularity in the first order sought here. It is clear law that “injunctions should be granted in clear and unambiguous terms which leave no room for the persons to whom they are directed to wonder whether or not their future conduct falls within the scope or boundaries of the injunction.” – ICI v Trade Practices Commission (1992) 38 FCR 248 at 259 and “a final injunction should bear upon the case alleged and proved against a defendant, and should indicate that conduct which is enjoined or commanded to be performed, so that the defendant knows what is expected of him as a matter of fact” – Commodore Business Machines Pty Ltd v Trade Practices Commission (1990) 92 ALR 563 at 575. Observations in Heydon, “Trade Practices Law”, Vol 2, para. 18.920 are to similar effect.

45 The passage cited from Commodore Business Machines Pty Ltd v Trade Practices Commission does refer to final injunctions and at times the need for urgent relief may justify somewhat less precision. However, as a general proposition, I would regard the substance of the remarks and the considerations which inspired them as just as applicable to interlocutory injunctions.

46 Because the terms of the first order sought are so wide, and offend the principles to which I have just referred, it is not appropriate that an order in those terms be made. I have given consideration to the question whether, within the spirit of the first prayer, some lesser or qualified relief would be appropriate. Quite apart from general principles, the terms of s65 are clearly drawn so as to give maximum flexibility in this regard. However, except insofar as it was sought to obtain a fund from which Messrs Daniels and Hammond-Burns could be recompensed, no significant attention was given by the Plaintiff to the possibility of some more limited form of the first prayer or to the imposition of terms and conditions calculated to address repetition of any of the conduct which is arguably misleading. And it is a possibility to which both evidence and address by both parties might be appropriate. Certainly, I am unable to conceive of any satisfactory form of order within the ambit of the first prayer which does not breach the principles as to the form of injunctive relief to which I have referred or require proper notice to the Defendants.

47 So far as the second prayer is concerned, the Plaintiff faces a major difficulty in that there is no substantial evidence to suggest that either of the Defendants has been disposing of any monies of the business other than in the ordinary course. Although the difference between the results to 30 June 2002 and the period since may well give cause for enquiry, the difference of itself is not enough to indicate any relevantly untoward payments.

48 As I have indicated, during the hearing counsel for the Plaintiff pressed for orders calculated to ensure the preservation or creation of a fund adequate to compensate Messrs Daniels and Hammond-Burns. It is unnecessary for me to consider whether such an order is sufficiently close to that sought in the second prayer as to make it a legitimate claim though not pleaded because the claim falls on more substantial grounds. The moneys paid by the persons mentioned were not paid on any sort of trust. And even if one had at some time been able to impute some sort of trust arising from the circumstances in which the Agency received moneys from them, it is an inevitable inference from the financial documents and the timing of Messrs Daniels’ and Hammond-Burns’ payments that their funds have been long since dissipated. The moneys held by the Agency at the time the proceedings were before me were clearly those paid by other clients. There is just no basis for appropriating those moneys to either of Messrs Daniel’s and Hammond-Burns and hamstring or certainly make more difficult, the Agency fulfilling its obligations to later clients. Similar reasoning applies to deny the Plaintiff any right to have future clients’ payments appropriated to establish a fund for Messrs Daniels and Hammond-Burns.

49 The terms of the third and fourth orders sought are, as counsel appearing for the Plaintiff conceded, calculated – a term I use in contradistinction to “designed” - to shut down the operations of the Agency, and to do so as a result of interlocutory proceedings. I do not deny the power in the Court to so act but it would be proper to exercise such a power only in an extreme case or perhaps one where a business was so close to its commencement that it could fairly be said that such an injunction was virtually preserving the status quo.

50 Although there is, in the evidence to which I have referred, evidence that in the course of its business activities, the Agency has breached the terms of ss42 and 43 in its dealings with 2 of its clients and may well do so in the case of all of those with whom the “guarantee of service” is used, the fact that it is only 2 paying clients of the over 1000 paying clients that the business has had is also a relevant factor. To close the business down on the basis primarily of the evidence of these two, and by doing so effectively deprive the balance of the clients who are still current of the benefits they were expecting to receive, and to do so on the basis of only an interlocutory hearing, argues strongly against the injunctions sought in prayers 3 and 4. Of course, those injunctions do not, in terms, require the closure of the business but it is clear that if those orders were made, the limited assets which the business has would mean that the orders would have that practical effect.

51 I need not concern myself with the fifth prayer. The relief sought in it was substantially provided in orders made on the first occasion the matter was before me or in evidence provided by the First Defendant. Accordingly the Plaintiff’s application for interlocutory injunctions is refused.

52 In arriving at the conclusions I have, I do not forget that in seeking the relief it does, the Plaintiff relies on the terms of ss65 and 72 of the Fair Trading Act, rather than on the traditional principles governing the grant of injunctions. However, it does not seem to me that, given the evidence and the issues as they were defined during the hearing, there is anything in the terms of the sections mentioned to justify an approach different from that which I have taken in deciding to refuse the Plaintiff the relief sought.

53 That said, there is enough revealed by the evidence to inspire concern at the Agency’s business practices, when considered against the background of the terms of ss 42 and 43 of the Fair Trading Act. Counsel appearing for the Plaintiff indicated that the Plaintiff could be ready for a final hearing in a period of 2 to 3 weeks. Counsel for the Defendant indicated his client could be ready within 2 to 3 weeks thereafter. I am not in a position to decide at this stage whether the competing demands of other cases in the Court will allow a hearing of the matter this year but on the material I have seen the matter is clearly one where a final hearing should occur as soon as possible. To that intent, it would seem to me proper to make orders along the following lines:-

That the matter proceed by way of affidavit evidence.
That the Plaintiff file and serve within … weeks from today all further affidavit evidence upon which it seeks to rely in its case in chief.
That the Defendants file and serve within … weeks from today all further evidence upon which they seek to rely.
That the matter stand over for mention and return of any subpoenae until … November before me

54 However before the making of any such orders, the parties should have an opportunity of considering these Reasons and addressing them. Accordingly the matter will stand over until later today or this week for mention.

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Last Modified: 10/31/2002