Hipages Group Pty Ltd v Reach Aussie Pty Ltd

Link copied
Case Copied 49 min read

FEDERAL COURT OF AUSTRALIA

Hipages Group Pty Ltd v Reach Aussie Pty Ltd [2017] FCA 112

File number(s): NSD 946 of 2016
Judge(s): PERRY J
Date of judgment: 7 February 2017
Catchwords: CONSUMER LAW - alleged misleading and deceptive conduct contrary to s 18, Australian Consumer Law - application for default judgment under rule 5.23 Federal Court Rules 2011 - receipt of evidence in support of appropriateness of grant of relief – application granted  
Legislation:

Competition and Consumer Act 2010 (Cth), Schedule 2, s 18

Corporations Act 2001 (Cth), ss 461(1)(k), 462(2)(b), 462(4), 470 467A 109X, 201A, 205B and 205D(1), 601AH(2)

Evidence Act 1995 (Cth), s 136

Federal Court of Australia Act 1976 (Cth), s 21

Trade Practices Act 1974 (Cth), s 801

Federal Court Rules 2011 (Cth), rr. 5.22, 5.23, 7.22
Cases cited:

Australian Competition and Consumer Commission v Adata (Vic) Pty Ltd (No 3) [2015] FCA 583

Australian Competition and Consumer Commission v Dermalogica Pty Ltd [2005] FCA 152

Australian Competition and Consumer Commission v dataline.net.au Pty Ltd (In Liq) [2007] FCAFC 146

Australian Competition and Consumer Commission v dataline.net.au Pty Ltd [2006] FCA 1427

Australian Competition and Consumer Commission v Phoenix Institute of Australia Ltd [2016] FCA 1246

Australian Securities & Investments Commission v Centro Financial Synergy Group  [2007] FCA 2084

Australian Securities & Investments Commission v International Unity Insurance Pty Ltd  [2004] FCA 1059

Australian Securities & Investments Commission v Stone Assets Management Pty Ltd [2012] FCA 630

Commissioner of Taxation v Simionato Holdings Pty Ltd [1997] FCA 25

Director of Consumer Affairs v Nightingale Electrics Pty Ltd [2016] FCA 279

Foster v Australian Competition and Consumer Commission [2006] FCAFC 21

Macquarie Bank Ltd v TM Investments Pty Ltd [2005] NSWSC 608

Re London and County Coal Company (1866) 3 LR Eq 355

Searson v Salmon [2014] FCA 748

Speedo Holding BV v Evans (No 2) [2011] FCA 1227

The Roy Morgan Research Centre Pty Ltd v Wilson Market Research Pty Ltd (1996) 14 ACLC 925

Titan Support Systems Inc v Nguyen [2014] FCA 884
Date of hearing: 6 February 2017
Registry: New South Wales
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: Regulator and Consumer Protection
Number of paragraphs: 85
Counsel for the Applicants: Mr R Yezerski
Solicitor for the Applicants: Whittens and McKeough
Counsel for the Respondents: The Respondents did not appear

ORDERS

NSD 946 of 2016
BETWEEN:

HIPAGES GROUP PTY LTD ABN 112 872 009

First Applicant

HIPAGES.COM.AU PTY LTD ACN 109 996 134

Second Applicant
AND:

REACH AUSSIE PTY LTD ACN 605 460 400

First Respondent

TRADE PAGES PTY LTD ACN 612 962 606

Second Respondent

VINOD ROGER

Third Respondent

JUDGE:

PERRY J

DATE OF ORDER:

2 FEBRUARY 2017

THE COURT ORDERS THAT:

1.Judgment be entered in favour of the Applicants pursuant to Rule 5.23 of the Federal Court Rules 2011 (Cth) against the first, second and third respondents.

UPON ADMISSIONS WHICH THE FIRST, SECOND AND THIRD RESPONDENTS ARE TAKEN TO HAVE MADE CONSEQUENT UPON THEIR NON-COMPLIANCE WITH ORDERS OF…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Hipages Group Pty Ltd v Reach Aussie Pty Ltd and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2017] FCA 112
Decision Date

CaseChat Overview and Summary

Hipages Group Pty Ltd, a company operating an online directory of tradespeople and building and renovation service providers, brought proceedings against Reach Aussie Pty Ltd, Trade Pages Pty Ltd, and Mr Vinod Roger for alleged misleading and deceptive conduct under section 18 of the Australian Consumer Law. The case was heard in the Federal Court of Australia. The central issue was whether the respondents were in default and whether the Court should grant default judgment and relief as sought by Hipages.

The Court found that Reach Aussie, Trade Pages, and Mr Roger were in default due to their failure to file defences or appear in the proceedings. The Court also determined that the claim was sufficient on its face and that it was appropriate to grant the relief sought by Hipages. The Court relied on the affidavits and exhibits provided by Hipages to support its decision. The evidence demonstrated that Reach Aussie and Trade Pages had misrepresented themselves as being associated with Hipages to solicit payments from Hipages' customers, which constituted misleading and deceptive conduct.

The Court granted judgment in default under Rule 5.23 of the Federal Court Rules 2011 and declared that Reach Aussie and Trade Pages engaged in misleading and deceptive conduct. The Court further ordered that Vinod Roger aided and abetted this conduct. Additionally, the Court restrained the respondents from representing any association with Hipages and using similar names. It ordered the winding up of Reach Aussie and Trade Pages and appointed an official liquidator. The respondents were also ordered to pay Hipages' costs.

Orders

Orders of the court

1. Judgment be entered in favour of the Applicants pursuant to Rule 5.23 of the Federal Court Rules 2011 (Cth) against the first, second and third respondents.

UPON ADMISSIONS WHICH THE FIRST, SECOND AND THIRD RESPONDENTS ARE TAKEN TO HAVE MADE CONSEQUENT UPON THEIR NON-COMPLIANCE WITH ORDERS OF THE COURT, IT IS DECLARED THAT:

2. The first respondent, Reach Aussie Pty Ltd (ACN 605 460 400) (Reach Aussie), and the second respondent, Trade Pages Pty Ltd (ACN 612 962 606) (Trade Pages), engaged in conduct that was misleading and deceptive, or likely to mislead or deceive, within the meaning of s 18 of Schedule 2 to the Competition and Consumer Act 2010 (Cth) (the Australian Consumer Law) by contacting customers of the Applicants and purporting to represent or to be associated with the Applicants and by seeking to obtain funds from the Applicants’ customers on that basis.

3. Vinod Roger aided, abetted, counselled or procured, or was knowingly concerned in or party to, the misleading and deceptive conduct of Reach Aussie and Trade Pages Pty Ltd by causing or permitting those companies to engage in such conduct.

THE COURT FURTHER ORDERS THAT:

4. Pursuant to s 232 of the Australian Consumer Law, each respondent, by itself or by its servants, employees or agents, be restrained from:

(a) claiming to represent, or in any way be associated with, either or both of hipages Group Pty Ltd ACN 112 872 009 and hipages.com.au Pty Ltd ACN 109 996 134;

(b) using in conjunction with the sale or promotion of their services or those of others the names “hipages”, “Home Improvement Pages” or any other name substantially identical with or deceptively similar thereto; and

(c) advertising, promoting, selling, offering to sell, supplying or offering to supply their services or those of others under or by reference to the names “hipages”, “Home Improvement Pages” or any other name substantially identical with or deceptively similar thereto.

5. Each of Reach Aussie and Trade Pages be wound up pursuant to s 461(1)(k) of the Corporations Act 2001 (Cth).

6. Anthony Elkerton, official liquidator, be appointed to Reach Aussie and Trade Pages.

7. The respondents are to pay the applicants’ costs of these proceedings as agreed or assessed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

For the reasons that follow, I consider in the exercise of discretion that judgment should be given in default under r 5.23. I also consider that it is appropriate to grant the relief sought by the applicants. 2. BACKGROUND2.1 Overview of the proceedings Hipages Group is the sole shareholder of the second applicant and the registered owner of the trademarks “HIPAGES”, “HIPAGES.COM.AU” and “HOME IMPROVEMENT PAGES”. The second applicant, Hipages.com.au, operates an online directory of tradespeople and building and renovation service providers. On 15 June 2016, Hipages commenced proceedings against two respondents, Australian Web Management Pty Ltd (Australian Web Management) (the then first respondent) and Reach Aussie alleging that Australian Web Management and Reach Aussie were engaged in misleading and deceptive conduct contrary to the Australian Consumer Law (ACL) contained in Schedule 2 to the Competition and Consumer Act 2010 (Cth) (CCA). An interlocutory injunction against Australian Web Management and Reach Aussie was granted by Rares J on 16 June 2016, and was subsequently extended on 20 June 2016 until further order. On 18 August 2016, orders were made in separate proceedings (NSD1224 of 2016) pursuant to FCR rr 7.22(1) and 7.22(2)(c) for Hipages to ascertain the description of certain prospective respondents. Subsequently, an amended statement of claim (ASOC) was filed on 27 October 2016 seeking relief against two additional respondents, Trade Pages and Mr Vinod Roger. Leave to discontinue the proceedings against Australian Web Management was granted on 30 November 2016 with no order as to costs, upon that company being deregistered by the Australian Securities and Investments Commission (ASIC) on 27 November 2016. Hipages allege that Reach Aussie and Trade Pages have engaged in a pattern of misleading and deceptive conduct whereby they have asserted that they are associated with Hipages and are offering services by or on behalf of Hipages in order to solicit monies from consumers. The applicants’ case against Mr Roger is that he is the natural person who, at all material times, controlled the activities and affairs of Reach Aussie and Trade Pages and, prior to its deregistration, Australian Web Management, and that he aided or abetted in the alleged misleading or deceptive conduct. I note with respect to Australian Web Management that the ASOC was not further amended following disjoinder of that party. However, counsel for Hipages confirmed that, despite the ASOC still containing allegations against Australian Web Management, those allegations cannot be relevant to a consideration of this application as that entity is no longer a party. Counsel for the applicant submitted that this was subject to a qualification, namely, that to the extent that the Court might require greater comfort on the question of whether relief should be granted in the exercise of discretion, the pattern of conduct alleged against Mr Roger can take into account material relating to Australian Web Management, as well as Aussie Web Tech which has also been deregistered 2.2 Participation in the proceedings by the respondents

Evidence

Evidence Before The Court

On 2 February 2017, Mr Roger sent a further email in response to a communication from the Court relating to the re-scheduling of the hearing. In that email, Mr Roger requested an adjournment of at least two weeks for personal reasons. However, the Court indicated that in the absence of any appearance by Mr Roger being filed and any evidence in support of the request for the adjournment, the application would remain listed for 6 February 2017. As at the date of this judgment, Mr Roger has not filed a notice of appearance or notice of address for service. 3. EVIDENCE Hipages sought to rely upon a number of affidavits in support of its application for default judgment. First, the applicants relied upon the following evidence with respect to proof of service and default for the purposes of FCR rule 5.23:(1)the affidavit of Alistair Gregory McKeough sworn 15 December 2016 (filed 16 December 2016) (McKeough 15 December 2016)(2)the affidavit of Andrew Smorchevsky sworn 16 June 2016 (filed 16 June 2016) (Smorchevsky 16 June 2016);(3)the affidavit of Steven Turnbull, process server, sworn 17 June 2016 (filed 20 June 2016);(4)the affidavit of Andrew Smorchevsky sworn 20 January 2017 and the exhibit thereto (filed 20 January 2017) (pages 1-74 inclusive of the exhibit being relied upon on the issue of service and default together with pages 184 to 187); and(5)the affidavit filed on 2 February 2017 of Andrew Smorchevsky sworn and filed on 2 February 2017. These affidavits were taken as read and the exhibit received as Exhibit A1. Secondly, the applicants sought to rely upon the following evidence with respect to the appropriateness of the grant of the relief sought:(1)the affidavit of Alistair Gregory McKeough sworn 25 October 2016 (filed 26 October 2016) (McKeough 25 October 2016) and its exhibit (received as exhibit A2); (2)the affidavit of Alistair Gregory McKeough sworn 30 November 2016 (filed 20 January 2017) (McKeough 30 November 2016); (3)the affidavit of Andrew Smorchevsky sworn 20 January 2017 (filed on the same day) together with pages 75 to 187 inclusive of exhibit A1;(4)the affidavit of Donna Victoria Hole affirmed 14 June 2016 (filed 15 June 2016) (Hole 1) and its exhibit (contained within exhibit A3); (5)the affidavit of Donna Victoria Hole affirmed 16 June 2016 (filed 16 June 2016) (Hole 2); and (6)the affidavit of Donna Victoria Hole affirmed 25 October 2016 (filed 26 October 2016) (Hole 3) together with its exhibits (contained within exhibit A3). As mentioned, the applicants relied upon this second category of evidence as relevant to establishing that it is appropriate for the Court, in the exercise of discretion, to award the relief sought in the ASOC. I permitted the affidavits and parts of the exhibits referred to at [15] above to be read limited to that use under s 136 of the Evidence Act 1995 (Cth), in accordance with the principles explained at [20]-[25] below.4. CONSIDERATION4.1 Relevant Principles Rule 5.23(2) relevantly provides that:If a respondent is in default, an applicant may apply to the Court for:…(c)if the proceeding was started by an originating application supported by a statement of claim, or if the Court has ordered that the proceeding continue on pleadings—an order giving judgment against the respondent for the relief claimed in the statement of claim to which the Court is satisfied that the applicant is entitled; or(d)an order giving judgment against the respondent for damages to be assessed, or any other order; or(e)an order mentioned in paragraph (b), (c) or (d) to take effect if the respondent does not take a step ordered by the Court in the proceeding in the time specified in the order.Note 1: The Court may make any order that the Court considers appropriate in the interests of justice—see rule 1.32.Note 2: An order or judgment under this Division may be set aside or varied.

Decision

Reasons for decision

Furthermore, as the applicants submit, it is apparent that Trade Pages and Mr Roger are in fact aware of the proceedings given the filing and later withdrawal of an appearance by solicitors for Trade Pages and the email correspondence from Mr Roger to the Court to which I have already referred (see above at [9]-[11]). I also note that Mr Roger was specifically advised by the Court of the need to enter an appearance following receipt of his email on 13 January 2016 but has not done so. 4.4 Conclusion on defaults by the respondents I am satisfied that each of the three respondents are in default for the purposes of FCR rr 5.22 and 5.23 by reason of their failure to file defences in accordance with Court orders and to defend the proceedings with due diligence. Accordingly, the discretion to award judgment in default under r 5.23(2)(c) is enlivened. 4.5 Is the pleaded claim sufficient?4.5.1The allegations against Reach Aussie As against Reach Aussie, Hipages plead that on a number of occasions in the period from about March 2016 to date, Reach Aussie contacted customers of Hipages.com.au and represented that they were servants, agents, employees or representatives of Hipages Group or Hipages.com.au and attempted to solicit that customer to provide their credit card details or otherwise make a payment to Reach Aussie (ASOC at [10]) (the Reach Aussie representations). The applicants plead that those representations were made in trade and commerce (ASOC at [11]). They further plead at ASOC [12] that the Reach Aussie representations were misleading or deceptive or likely to mislead or deceive in that they caused or were likely to cause people to think or assume that:(1)Reach Aussie was associated with either Hipages Group or Hipages.com.au;(2)either Hipages Group or Hipages.com.au have requested that Reach Aussie make contact with them or other persons on behalf of Hipages Group or Hipages.com.au; (3)Reach Aussie was offering services by or on behalf of Hipages Group or Hipages.com.au; and/or alternatively(4)information supplied by the customer to Reach Aussie was being provided to Hipages Group or Hipages.com.au; and(5)payments made by way of credit card or otherwise using the payment details provided by Reach Aussie were being made to Hipages Group or Hipages.com.au. However, the applicants plead at ASOC [13] that, contrary to the representations:(1)Reach Aussie is not and has never been associated with either Hipages Group or Hipages.com.au;(2)neither Hipages Group nor Hipages.com.au has at any time requested that Reach Aussie make contact with its customers or any other person on its behalf;(3)Reach Aussie has never had authority or permission to offer services by or on behalf of Hipages Group or Hipages.com.au; (4)information collected by Reach Aussie from customers was not provided to Hipages Group or Hipages.com.au; and(5)payments made by way of credit card or otherwise using the payment details provided by Reach Aussie were not made to Hipages Group or Hipages.com.au.

Ratio Decidendi

Legal Principle Established

As mentioned, the applicants relied upon this second category of evidence as relevant to establishing that it is appropriate for the Court, in the exercise of discretion, to award the relief sought in the ASOC. I permitted the affidavits and parts of the exhibits referred to at [15] above to be read limited to that use under s 136 of the Evidence Act 1995 (Cth), in accordance with the principles explained at [20]-[25] below.4. CONSIDERATION4.1 Relevant Principles Rule 5.23(2) relevantly provides that:If a respondent is in default, an applicant may apply to the Court for:…(c)if the proceeding was started by an originating application supported by a statement of claim, or if the Court has ordered that the proceeding continue on pleadings—an order giving judgment against the respondent for the relief claimed in the statement of claim to which the Court is satisfied that the applicant is entitled; or(d)an order giving judgment against the respondent for damages to be assessed, or any other order; or(e)an order mentioned in paragraph (b), (c) or (d) to take effect if the respondent does not take a step ordered by the Court in the proceeding in the time specified in the order.Note 1: The Court may make any order that the Court considers appropriate in the interests of justice—see rule 1.32.Note 2: An order or judgment under this Division may be set aside or varied. Rule 5.22 sets out the circumstances in which a party is in default namely: A party is in default if the party fails to: (a)do an act required to be done, or to do an act in the time required, by these Rules; or (b) comply with an order of the Court; or (c) attend a hearing in the proceeding; or (d) prosecute or defend the proceeding with due diligence. The power to grant relief under r 5.23(2) is discretionary: Speedo Holding BV v Evans (No 2) [2011] FCA 1227 at [20]. The requirement in r 5.23 that the Court be satisfied that the applicant is entitled to the relief claimed does not require proof by way of evidence. Rather, it is necessary to demonstrate that there is a claim for the relief sought on the face of the statement of claim: Australian Competition and Consumer Commission v dataline.net.au Pty Ltd (In Liq) [2007] FCAFC 146; (2007) 161 FCR 513 (Dataline (FCAFC)) at [42] (the Court); Searson v Salmon [2014] FCA 748 (Searson) at [6]; Titan Support Systems Inc v Nguyen [2014] FCA 884 (Titan) at [4]. Accordingly, the Court must be satisfied that the claim falls within its jurisdiction and each element of the relevant civil wrong must be properly and discreetly pleaded: Titan at [4]. As I explained in Titan: 5. The reason why in general it is not appropriate to lead evidence on a default judgment is that the allegations contained in the statement of claim are taken to be admitted. Therefore considerations of fairness require that the admission of evidence to supplement the statement of claim be, in general, refused: ACCC v Dataline (2006) 236 ALR 665 at 678 [48] Kiefel J. It follows that it would not be appropriate to allow reliance upon evidence that would alter the pleaded case or add to it where the matters which are the subject of evidence ought properly to have been pleaded: Dataline (FCAFC) at [42]; Australian Competition and Consumer Commission v dataline.net.au Pty Ltd [2006] FCA 1427; (2006) 236 ALR 665 (Dataline (FCA)) at [50]-[51] (Kiefel J); Titan at [6].