Microwave Safety Systems Pty Ltd v Commissioner for Fair Trading, Department of Commerce
[2008] NSWSC 37
•5 February 2008
CITATION: Microwave Safety Systems Pty Ltd v Commissioner for Fair Trading, Department of Commerce [2008] NSWSC 37 HEARING DATE(S): 2-5 October, 5 November 2007
JUDGMENT DATE :
5 February 2008JUDGMENT OF: Harrison J DECISION: Declare that the warrant issued by the second defendant on 17 April 2007 and executed by the first defendant on 19 April 2007 at Croydon is invalid. CATCHWORDS: SEARCH WARRANT – validity – whether investigator had belief on reasonable grounds that there was evidence of a breach of a provision of the Fair Trading Act 1987 – facts material to decision to issue or to decline to issue warrant – whether disclosure in application for warrant of reasonable grounds for a belief as to contravention – invalid issue of warrant. LEGISLATION CITED: Fair Trading Act 1987
Law Enforcement (Powers and Responsibilities) Act 2002CATEGORY: Principal judgment CASES CITED: Ballis v Randall [2007] NSWSC 422
Bartlett v Weir [1994] FCA 1143; (1994) 72 A Crim R 511
Beneficial Finance Corporation v Commissioner of Australian Federal Police [1991] FCA 92; (1991) 31 FCR 523
Bradrose Pty Ltd v Commissioner of Police; Ex parte Bradrose Pty Ltd [1989] Qd R 304
Chong v Schultz [2000] FCA 582; (2000) 112 A Crim R 59
Commissioner for Fair Trading v Microwave Safe Australia Pty Ltd and Another [2006] NSWSC 287
Commissioner of Police v Barbaro [2001] NSWCA 57; (2001) 51 NSWLR 419
Coward v Allen [1984] FCA 53; (1984) 52 ALR 320
Dunesky v Elder [1994] FCA 1006; (1994) 54 FCR 540
George v Rockett [1990] HCA 26; (1990) 170 CLR 104
Karina Fisheries Pty Ltd v Mitson [1990] FCA 154; (1990) 26 FCR 473
Lego Australia Pty Ltd v Paraggio [1994] FCA 1286; (1994) 52 FCR 542
Ousley v The Queen [1997] HCA 49; (1997) 192 CLR 69
Parker v Churchill [1986] FCA 88; (1986) 9 FCR 334
R v Curran [1983] 2 VR 133
R v Tillett (1969) 14 FLR 101
State of New South Wales v Corbett [2007] HCA 32
Williams v Keelty [2001] FCA 1301; (2001) 111 FCR 175
Wright v Queensland Police Service [2002] QSC 46; [2002] 2 Qd R 667PARTIES: Microwave Safety Systems Pty Ltd (Plaintiff)
Commissioner for Fair Trading, Department of Commerce (First Defendant)
Narelle Tyerman (Second Defendant)FILE NUMBER(S): SC 12074 of 2007 COUNSEL: J E Richards with K A Stern (Plaintiff)
M C Bracks (First Defendant)SOLICITORS: Axis Legal (Plaintiff)
Office of Fair Trading, Department of Commerce (First Defendant)
IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
PROGRESSIVE LISTHARRISON J
5 February 2008
JUDGMENT12074 of 2007 Microwave Safety Systems Pty Ltd v Commissioner for Fair Trading, Department of Commerce and Narelle Tyerman
Introduction
1 On 17 April 2007 Robert Leslie Laughton, a Senior Investigator with the New South Wales Office of Fair Trading, applied for a search warrant to enter premises at 2 Cromwell St Croydon ("the premises"). Mr Laughton said that he had reasonable grounds for believing that certain matters justified the application. These matters were then set out under the heading "DESCRIPTION OF OFFENCES". That material included the following paragraphs:
"3.1 On and around 20 February 2007 contained a document entitled "Microwave Oven Radiation Leakage Limits - Guidelines" that was in the nature of an official information bulletin sourced from and approved by bodies such as ARPANSA, Standards Australia and the National Health and Medical Research Council and was designed solely to assist employers meet their workplace safety obligations, rather than being an advertisement for Microwave Safety Systems Pty Ltd. Such representation constitutes a contravention of section 44 (f) of the Fair Trading Act, 1987 . . .
3.3 During the period 12 January 2007 to 17 April 2007 there appeared statements on that claim that employers, in order to meet their duty of care towards employees, needed to have microwave ovens in the workplace tested regularly for radiation leakage. Such representation constitutes a contravention of section 44(j) of the Fair Trading Act, 1987 . . .
3.4 During the period 12 January 2007 to 17 April 2007 contained a document styled Fact Sheet, and then titled "Standards/Guidelines" that is in the nature of an official information bulletin sourced from and approved by bodies such as ARPANSA, Standards Australia, Worksafe Victoria and the National Health and Medical Research Council and was designed solely to assist employers meet their workplace safety obligations, rather than being an advertisement for Microwave Safety Systems Pty Ltd. Such representation constitutes a contravention of section 44 (f) of the Fair Trading Act, 1987. . .
3.5 During the period 12 January 2007 to 17 April 2007 there appeared statements on that claimed that Australian Standards relating to microwave ovens (being AS/NZ 60335.2.25) required such ovens used in the workplace to be tested for radiation leakage beyond the testing required for the approval of such items for sale by retail. Such representation constitutes a contravention of section 44(j) of the Fair Trading Act, 1987. . .
3.11 On 5 February 2007 Microwave Safety Systems Pty Ltd . . . made false or misleading representation [sic] to the New South Wales Medical Board concerning the need for the company's services. The correspondence was signed by Carole Sandham, National Office Manager, "Microwave Safety Systems". Such representation constitutes a contravention of section 44(j) of the Fair Trading Act, 1987 . .
3.12 On 6 February 2007 Microwave Safety Systems Pty Ltd . . . made false or misleading representation [sic] to the NSW Office of Fair Trading concerning the need for the company's services. The correspondence was signed by Carole Sandham, National Office Manager, "Microwave Safety Systems". Such representation constitutes a contravention of section 44(j) of the Fair Trading Act 1987 . . ."
2 Mr Laughton's application also indicated that he sought to be able to perform the following specific functions on entry:
"To search for, examine and seize documents and things including:
· Business records including letters, memoranda, reports, facsimiles, customer files, advertising copy, sales and purchase records, correspondence to or from any person in relation to advertising or publishing, contracts, agreements or offers related in any way to advertising or publishing, internal correspondence, training manuals and information sheets, including "scripts" and other instructions to staff, business cards, records of meetings, invoices, receipts, accounting, diaries, telephone message pads, banking and financial records, contractor contracts and employment records.
· Electronic data and storage equipment including, emails, computer software, computer records, computer systems, peripherals, electronic devices and electronic and storage media containing information or used (or intended to be used) and documents and information on the use and operation of computer systems, peripherals, electronic devices, and electronic and storage media.
· Correspondence to and from ARPANSA, Standards Australia, Worksafe Victoria and the National Health and Medical Research Council with respect to radiation safety and any publication produced by such organisations.
· Test reports including those relating to the testing of clients’ microwave ovens and the verification of test equipment used by Microwave Safety Systems Pty Ltd."
3 At 10.13am on 17 April 2007 the second defendant, having considered the application, found that there were reasonable grounds for issuing the warrant and issued it. The relevant particulars of the grounds on which she relied to justify the issue of the warrant appear to correspond to the particulars of further information required by her and which Mr Laughton provided orally. Those particulars are set out in handwriting at the foot of the application and are as follows:
"One suspect, Jason Sotirios, will be charged with contempt of Supreme Court orders and an imprisonment term will be sought. All the offences are not indictable but schedule 2 of the Law Enforcement (Powers and Responsibilities) Act 2002 give authority to issue search warrants under s. 19A of the Fair Trading Act 1987. The matters came to the attention of the Department of Fair Trading when an employee of Microwave Safety Systems P/L contacted departmental legal offices to obtain permission to use the official information in their advertising. Department officers told the company not to use the information. The company is not cooperative and will not produce documents or required material to the Department of Fair Trading. The unlawful conduct continues as at 17.4.07. I am satisfied the items to be searched for are at the subject premises."
4 The plaintiff contends that the issue of the warrant was flawed by jurisdictional error and/or error of law on the face of the record and is liable to be quashed or declared invalid. The basis of that contention was the alleged failure by Mr Laughton to comply with the requirements of s 19A of the Fair Trading Act, 1987 ("the Act") and the Law Enforcement (Powers and Responsibilities) Act 2002 ("LEPRA 2002"). In particular, the plaintiff alleged that Mr Laughton: -
4.1 failed to comply with s 19A (2) of the Act;
4.2 repeatedly relied upon asserted contraventions of offences in the application without including any material that could support the existence of reasonable grounds for believing there to be a contravention of the Act;
4.3 acted unreasonably in making the application and in a manner that no reasonable investigator would have acted in the circumstances;
4.4 failed to state explicitly or implicitly in the application that he believed on reasonable grounds that evidence of the asserted contraventions of the Act upon which he relied was on the premises to be searched.
5 At the heart both of the matters giving rise to Mr Laughton's application for the issue of the warrant in the first place, and the matters that form the basis for the plaintiff's contention that the issue of the warrant was invalid in the second place, is a significant dispute about whether or not what is known as "the MORLL document", and which became exhibit B, appeared on the plaintiff's website between 12 January 2007 and 17 April 2007. The first defendant asserted that it had. The plaintiff maintained that it had not. That dispute needs to be resolved as a preliminary issue. The factual basis for each of the other descriptions of offences in the application for the warrant will be examined after that.
6 Exhibit B is a document entitled "Microwave Oven Radiation Leakage Limits" ("MORLL"). It is important to record the terms of that document in full as follows:The MORLL document and communications concerning it
Microwave Oven
Radiation Leakage Limits
GUIDELINES
The Radiation Health Committee has set limits for allowable levels of radiation leakage from microwave ovens. This limit is also outlined in the Australian Standard AS 60335.2.25"The Radiation Health Committee retains the role of setting the allowable limit for microwave leakage from microwave ovens (50W/m2 at 0.05 m)" (5mW/cm2)
Tests have confirmed that it is possible for microwave ovens that show no obvious signs of physical damage to emit radiation levels that exceed the emission limit.
The most practical way to accurately determine whether the above limit are [sic] being met is to have the microwave ovens tested in accordance with The National Health & Medical Research Council – 'Procedures the Testing Microwave Ovens (1985)'.
Although not mandatory, many organisations undertake microwave oven radiation testing as part of a Preventative Maintenance or Risk Management program to ensure compliance with the above limit.
With offices throughout Australia, compliance inspections may be arranged through Microwave Safety Systems , Australia's only ISO 9001 Accredited Quality Endorsed specialist microwave radiation testing organisation, whose many Government and Corporate clients have been undertaking inspections since 1995.Small leakage detectors used by many electricians should not be used as they do not comply with Australian Standard and National Health & Medical Research Council Guidelines.
To arrange inspections or for further information callPh: 1300 305 303MICROWAVE
SAFETY SYSTEMS
or visit
7 At 12.49pm on 11 January 2007, Marie McAuley sent an internal email to Robert Laughton on the subject of Microwave Safe. It was in the following terms:
"A Dennis Derizo [sic] . . . rang Legal on the 11 January. His company has bought the assets from Microwave Safe and he now wants to advertise them. He wants to check the contents of the advertisement with the Office of Fair Trading.
He said the advertisement had been approved by DIPNR in Western Australia and he is checking with each state.
Kit suggested that you would be the best person to deal with this."
8 At 12.05pm the following day Dennis Dorizas sent an email to Robert Laughton in reference to "advertising material", which was in the following terms:
"Thank you for your time on the phone today.
As mentioned during our conversation, we purchased the assets of the former Microwave Safe Australia last year after it went into liquidation. During this time we have managed to get our organisation ISO 9001 Accredited and Quality Endorsed.
As part of the purchase we obtained copies of the legal documents that were part of the court case such as the court judgment and various affidavits. We then passed these on to our lawyers together with some older advertising material so they could amend it to ensure it is in line with what the judge had ordered. Our lawyers then came back to us and it has been amended to what is attached.
The Microwave Safety Systems Branch in WA has sent the attached to your office in Western Australia (Department of Consumer and Employment Protection) who have said that the advertising is in line with their consumer protection laws.
As our organisation is Accredited and Quality Endorsed, we would like to ensure that the advertising does not breach any fair-trading laws in NSW.
If at your convenience, you could review the attached brochure and outline if it breaches any laws that would be greatly appreciated.
Thank you for your consideration in this matter. It is greatly appreciated."
9 References in that email to "the attached" and "the attached brochure" are references to a copy of exhibit B.
10 At 12.20pm on the same day, Robert Laughton replied to that email in the following terms:
"Thanks Mr Dorizas.
On the face of this, I have real concerns with the form and content of this statement. It appears to be very similar to the "Workplace Bulletin" issued by Microwave Safe Australia Pty Ltd and I therefore caution you on your company's use of the document. The document has many aspects common to MSA’s promotion. OFT convinced the Supreme Court of NSW that MSA's approach was false or misleading.
I need further information from you as to how you intend to distribute the document in order for Fair Trading to probably (sic) appraise it.
For the record, the NSW Office of Fair Trading has no connection with the WA Department of Consumer and Employment Protection.
As I previously suggested, it may be worth your while to meet with OFT investigators before your company makes any representations with respect to the testing of microwave ovens in the workplace."
11 This email was followed by a second at 12.41pm as follows:
"Further to my previous email to you, the document you provided to me (and your email) identifies the trader’s name as "MICROWAVE SAFETY SYSTEMS" - please note that this name is not a registered business name in New South Wales.
*****
I would also be grateful if you would explain the use and reference to and provide to me any information from ARPANSA, WorkCover Authority and Standards Australia to which you rely upon (sic)."12 Mr Dorizas replied to Mr Laughton by email at 2.04pm that day. That reply was in the following terms:
"Thank you for your response. It is much appreciated.
We have yet to distribute any material as were [sic] thought we would firstly get approval from your office, even though our lawyers had approved it.
I will take this back to my lawyers and give them an earful. As you can appreciate they have charged us a considerable sum of money to amend this material and if it breaches certain fair trading acts, then I feel they have some explaining to do.
Also, thank you for your information regarding the business registration. I just called the business registrations department of your office and they advised me that seeing our organisation is a Pty Ltd company there is no need to register it as a business. If this is incorrect, your advice would be appreciated.
Regarding the domain name, this was purchased as part of the assets following liquidation.
Thank you for your knowledge and expertise on this matter. I will be in contact next week."
13 At 8.59am on 15 January 2007, Mr Laughton replied to Mr Dorizas' email three days earlier. That reply was in the following terms:
"I am happy to discuss further with you. It is important to us both that you get this business operating correctly from the start.
I need to clarify the information you received from OFT. It is true that you do not need to register a business name in New South Wales, if you are trading as a company. However, you must identify the full name of the company in ALL applications of the name, including advertising, invoicing etc. In your company's case, it is illegal for it to trade as "MICROWAVE SAFETY SYSTEMS". You have two options; 1. Identify the name "MICROWAVE SAFETY SYSTEMS PTY LTD", or register "MICROWAVE SAFETY SYSTEMS".
Sorry for the confusion."
14 At some stage Mr Laughton made a file note of a telephone conversation he had with Mr Kalde, the solicitor for the plaintiff. That document is as follows:
FILE NOTE
MICROWAVE SAFETY SYSTEMS PTY LTD
Rob Kalde
KQ Lawyers
4862 2020
0419272981Mr Kalde rang me on 14 March 2007 and left a voicemail message on my telephone. The message stated:
"My instructions from my client, Microwave Safety Systems, is that their marketing plan is undergoing a wholesale revision and will take entirely fresh angles. They are going back to first principles. Therefore they do not need to meet with you on Friday. What they presented to you won't be occurring so they don't see a great requirement to meet with you, unless you have a different prospective (sic)".
Robert Laughton
Senior Investigator
Fair Trading Investigations15 Affidavit and oral evidence was given about these emails. Mr Laughton insisted that he found a copy of exhibit B on the plaintiff's website on about 11 January 2007. Evidence given on behalf of the plaintiff was that a copy of exhibit B was never on the website but was provided to Mr Laughton by email. This dispute becomes evident from a review of the affidavit evidence and the transcript of the proceedings before me.
16 Rozy Dorizas is the sole director of the plaintiff, which was incorporated on 14 June 2006. She said "The MORLL document has never been on MSS's website": see par 6 of her affidavit sworn 13 July 2007.
17 At par 8 of the same affidavit Ms Dorizas said:
"On 12 January 2007 MSS sent an electronic version of the MORLL document to Mr Laughton as an attachment to an email. I wanted to obtain some feedback from the New South Wales Office of Fair Trading before the MORLL document was used in New South Wales. The MORLL document has not been used in New South Wales."
18 At par 12 of her affidavit she continued in the following terms:
"MSS sent a soft copy of the MORLL document to Mr Laughton. It was sent to Mr Laughton as an electronic file attached to an email. It was necessary for MSS to send the MORLL document to Mr Laughton because there was no copy of that document on MSS's website."
19 Ms Dorizas also said at par 16 that she was not contacted at any stage by Mr Laughton or any other person employed by the Office of Fair Trading in relation to any concerns that Mr Laughton, or any other person employed there, may have had prior to the execution of the warrant on 19 April 2007.
20 Robert Kalde is a solicitor who has acted for Rozy Dorizas and the plaintiff from time to time. Sometime in early January 2007 he received an email from the plaintiff attaching marketing materials that the plaintiff intended to send to its clients. He telephoned Robert Laughton sometime in late February 2007 to discuss the material which included exhibit B. Mr Laughton said to him:
"I don't like it. It looks exactly the same as the material from Microwave Safe Australia. I think Mr Dorizas should come in for a meeting so we can talk about it."
21 Mr Kalde then asked Mr Laughton specifically what aspect of the material offended the Act. Mr Laughton replied:
"There are all sorts of problems with it. It's the whole thing and it would be better if you just come in for a meeting."
22 Although Mr Kalde did not have instructions to commit to a meeting, he said Mr Laughton "earmarked" a date in mid-March 2007 for a proposed meeting, which he recalled was to be on about 16 March 2007. Mr Laughton telephoned him a few days prior to the date of the proposed meeting. Mr Kalde told him, "A meeting won't be necessary because Microwave Safety Systems is going to have a fresh look at its material before anything goes out to the public". Mr Laughton’s file note confirms this.
23 Mr Kalde said that at no stage during that conversation did Mr Laughton indicate that he was uncomfortable with the explanation as to why no meeting would be necessary, or that there would be any problems for the plaintiff. At no stage after that telephone conversation did Mr Kalde speak to Mr Laughton about a complaint or proposed complaint against the plaintiff from either Mr Laughton or anyone else on behalf of the first defendant.
24 Jason Crosson is employed part-time by the plaintiff as its operations manager. Mr Crosson had previously been a defendant in legal proceedings commenced by the first defendant. Dennis Dorizas is the sole shareholder of the plaintiff. On about 9 January 2007, at the request of Rozy Dorizas, Mr Dorizas consented to Mr Crosson describing himself as "Dennis Dorizas" when communicating with the first defendant. Rozy Dorizas formed the view that if Jason Crosson gave his own name, the enquiry may not be dealt with fairly.
25 Jason Crosson is married to Rozy Dorizas. On 11 January 2007 he telephoned the first defendant and left a message that "Dennis Dorizas" had called. He left the plaintiff's telephone number. On 12 January 2007 he became aware that Mr Laughton had left a telephone message for Dennis Dorizas. In response, Mr Crosson telephoned Mr Laughton at approximately 10.35am and had a conversation with him posing as Dennis Dorizas. In his affidavit of 18 July 2007, Mr Crosson deposed to the following conversation:
"Mr Crosson: Hello Robert, my name is Dennis Dorizas from Microwave Safety Systems. Thank you for returning my call.
Mr Laughton: That's okay.
Mr Crosson: Robert, last year MSS bought the assets of a company Microwave Safe Australia which I believe the OFT had a few problems with.
Mr Laughton: Yes. We had many problems with Microwave Safe Australia. I don't know if you are familiar with these?
Mr Crosson: Yes I'm familiar with these and that is why I am calling you. Since MSS bought the assets from MSA, the company has managed to get itself ISO accredited and prior to doing any advertising in NSW we would like to get approval from the OFT that the advertising does not breach any Fair Trading laws.
Mr Laughton: Is Mr Crosson involved in the new company?
Mr Crosson: He comes in on a part-time basis and does work on the computers. What we want to ensure Robert is that MSS gets off on the right foot in NSW.
Mr Laughton: Well I am happy that you are coming to us regarding this instead of us coming to you. May I suggest that it might be worth your while coming to see us.
Mr Crosson: It would be Rozy who would attend any meeting as she is the director. However, she has just had a baby so any proposed meeting may take some time.
Mr Laughton: Okay.
Mr Crosson: Firstly what we would like to do is make sure that any advertising material that MSS intends on sending out in NSW is correct and not in breach of any Act. Would you mind if I email you a copy of the proposed material?
Mr Laughton: That would be fine. My email address is [email protected].
Mr Crosson: Thank you. I will get something off to you shortly."
26 Mr Crosson said that neither he nor Mr Laughton referred to the plaintiff's website nor was any aspect of the website discussed during that conversation. Mr Crosson said that Mr Laughton did not say that he was looking at the plaintiff's website during the conversation. Mr Crosson said that exhibit B was not on the plaintiff's website when he spoke to Mr Laughton on 12 January 2007. He denied telling Mr Laughton that the document was ever on the plaintiff's website. Mr Crosson said that exhibit B has never been on the plaintiff's website. Mr Crosson said that at 12.05pm on 12 January 2007 he emailed a copy of exhibit B to Mr Laughton as an attachment. The terms of that email are set out above at par [8].
27 On about 25 January 2007 Mr Crosson telephoned Mr Laughton and identified himself as Dennis Dorizas. He told Mr Laughton that the plaintiff's lawyers, who had advised it about the brochure based on the judgment in the MSA proceedings, would be contacting him to discuss the matter further. Mr Laughton told Mr Crosson that he was happy to have a chat with the plaintiff's solicitors at any time on the following Monday. Other than that, Mr Crosson had no contact with Mr Laughton after receiving his email of 15 January 2007, referred to above at par [13].
28 Mr Laughton swore an affidavit on 27 June 2007. Mr Laughton said that on 11 January 2007 he received the email that is referred to above at par [7]. Mr Laughton said that he immediately telephoned Mr Dorizas and had a conversation. That conversation is set out at paragraph 10 of his affidavit. Mr Crosson said that Mr Laughton's version of that conversation was not accurate. Mr Laughton's version of the conversation is as follows:
"Mr Laughton: Mr Dorizas, our Legal Services Branch told me that you had called seeking our approval for some advertising. What is the name of your business?
"Mr Dorizas": It's Microwave Safety Systems (MSS). The advertisement is posted on our website.
Mr Laughton: What is your website?
"Mr Dorizas": It's on our website at
Mr Laughton: I found a document titled Microwave Oven Radiation Leakage Limits - is that the one?
"Mr Dorizas": Yes
Mr Laughton: I have only had a quick look at the document. I should caution you because the document bears a striking similarity to the Workplace Safety Bulletin that was distributed by MSA in 2005/2006 and is the subject of Court orders. I was the investigator involved in the investigation of the conduct of MSA during that time, which led to declarations and orders being made against the company. Are you aware of those proceedings and if so have you read the judgment?
"Mr Dorizas": Yes, I know all about that, but our lawyers have given us advice that the document is okay. They have checked the document against the judgment. Your office in Western Australia has approved the wording and we are seeking your approval also.
Mr Laughton: In any event it is up to you to seek your own legal advice - Fair Trading will not give approval for such things. I am again cautioning you that this document contains statements that were deemed by the Supreme Court to be misleading or deceptive and I am concerned about it. I suggest that you come into my office and we’ll discuss it. That will give me time to look at it closely.
"Mr Dorizas": We paid our lawyers big money and I am annoyed that they may have got it wrong. I will go back to them. We don't need to meet at this time."
29 Mr Laughton did not keep a note of that conversation "because it was done by emails". Mr Laughton said that the first person that rang him identified himself as Dennis Dorizas and that he had no reason to believe that he was any other person. He agreed that that person told him that he had some advertising material on which he wanted some comment from the Office of Fair Trading and that that person said he would send it to him by email. He agreed with the suggestion that he provided his email address for that purpose. Mr Laughton insisted that he had already seen a copy of exhibit B the day before - that is to say, 11 January 2007.
30 I asked Mr Laughton, "Why was it necessary for him to email it to you if you had access to it from the day before?" Mr Laughton replied, "I have no idea . . . He sent it to me quite by surprise". Mr Laughton agreed that he did not indicate any surprise in his two emails sent in response to the one attaching a copy of exhibit B. Mr Laughton's computer was rebuilt subsequently in a way that precluded the production of electronic records that could confirm whether or not he viewed a copy of exhibit B on the plaintiff's website on 11 or 12 January 2007.
31 Mr Laughton agreed in cross-examination that in none of the emails sent by him did he refer to the fact that he had located a copy of exhibit B on the plaintiff's website. For example, at page 68 of the transcript:
"Q. You don't make any comments having seen it on the internet at all, do you?
A. No, I don't, not in that email, no I don't.Q. You don't make any such comment in any email, do you?
A. I don't actually say what I am doing.HIS HONOUR
Q. Well, the answer the question is "no"?
A No, I don't."32 Mr Laughton agreed that he had asked "Mr Dorizas" in his email how he intended to distribute the document. It was put to him that that was because he was not then aware of any distribution of it. Mr Laughton gave an answer that included, "I suspected they were going to distribute it in the wider area".
33 Mr Laughton again gave evidence that he had seen the document on the plaintiff's website on 11 January 2007 and that he thought there were problems with it. The following questions and answers then appear at transcript page 71:
"Q. Did it not occur to you to make reference to the fact that you say you saw it on the website?
A. Well, at this particular part in the discussions with MSS I had no more - I had no immediate concern about the matter than that this was a business that may be unaware of the ramifications of that, the judgment Justice Studdert. I gave them the benefit of the doubt. I am also an investigator and I don't always give things away."*******
"Q. If you thought on 12 January that MSS may not have understood the judgment, why did you not in this email state expressly if you had seen it on the website that that was advertising or something that you thought was in breach of the Fair Trading Act?
A. Again, I didn't think it was important in terms of - well, I will repeat what I said before. I am an investigator and I don't give up all information to people I investigate. Whilst it was important in terms of my ongoing investigation at that time, I wasn't overly concerned that it was on the website. I thought we could fix it.HIS HONOUR
Q. It was on the website and you thought you could fix it?
A. With the company, together with the company.Q. But isn't the fact that on your evidence it was on the website already that formed the basis of the application for the issue of the warrant?
A. Yes, but by that stage your Honour I had formed a view that they had ceased communicating with me. They were unwilling to come in and talk to me about their operations so it went on from there."34 I then asked Mr Laughton some questions about the words "before your company makes any representations with respect to the testing of microwave ovens in the workplace" as they appear in his email sent at 12.20pm on 12 January 2007. I suggested to Mr Laughton that one reading of those words indicated that in his view at that time the plaintiff had not made any representations with respect to the testing of microwave ovens in the workplace. Mr Laughton said, "In hindsight that is how it could be read". He went on to say, "That is not what I meant to say".
35 Mr Laughton said that he had precisely the same conversation with "Mr Dorizas" on 12 January 2007 as he had had the day before. At page 81 of the transcript he described it as a "similar conversation". However, Mr Laughton did not refer in his affidavit to the second conversation. He was asked about it as follows:
"Q. Is the conversation on the 12th conversation that you have only recalled in the course of being cross-examined on your affidavit?
A. No, no. I decided that when I was putting that affidavit together that it served no purpose. The affidavit was already getting quite substantial and there was areas [sic] in it that I thought were starting to impact on the investigation rather than the matter before the Court at this time."
36 Mr Laughton did not recall whether he printed anything, including a copy of exhibit B, off the plaintiff's website on either 11 January or 12 January 2007. However, he did recall printing a copy of exhibit B from the attachment to "Mr Dorizas'" email on 12 January 2007.
37 Mr Laughton was then taken to the terms of his email sent on 15 January 2007. This appears at transcript pages 88-89 as follows:
"Q. Could you turn to page 60 of exhibit A please? That is the email response to your last email at page - that is your response to the writer of the email appearing at page 58 of exhibit A, isn't it?
A. Yes.Q. You raise no concerns about anything that was, to your understanding, on the MSS web site in that email, do you?
A. No, I don't, because I took it on face value that the lawyers were going to deal with it and MSS was taking on board my comments hence their comment that "we will talk to our lawyers about it." I am happy with that.Q. You were happy with this email?
A. I was happy with their comment in the previous email that they were going to talk with their lawyers about it.Q. You were also happy to discuss further the contents of the document at page 53 of exhibit A with MSS, weren't you?
A. Yes, of course I was.Q. At this point in time on 15 January there was nothing suggested to you that MSS was doing anything other than getting advice from its lawyers about the advertising, is that correct?
A. Yes.Q. At that point in time you had no concern with MSS, is that correct?
A. Of course I had concerns but I believed that they were dealing with it and taking it on board. As I said I believed they were a new company at this time and I was trying to help them.Q. Well, why didn't you mention the website in this email or any of your other emails?
A. I didn't see it as necessary because he had already directed me to the document on the website."38 Mr Laughton was extensively cross-examined on several other areas as well. It is unnecessary to refer to this material in detail.
39 The plaintiff and the first defendant each lead evidence from an appropriately qualified expert with a view to establishing, if it could be established, that a copy of exhibit B either was, or was not, on the plaintiff's website when Mr Laughton said he saw it and subsequently. Mr Daniel gave affidavit evidence for the plaintiff and Mr Carson gave affidavit evidence for the first defendant. In addition, both gentlemen gave evidence concurrently before me.
40 This procedure operated very effectively in this case. However, it did not provide a conclusive answer to the enquiry one way or the other. That emerges from the following evidence at page 162 of the transcript:
"HIS HONOUR: I note you both agreed, in fact, with Mr Carson's opinion expressed at paragraph 36 of his affidavit that the evidence is not conclusive to make a statement of certainty one way or another. Is it possible, without guessing or speculating but relying upon whatever information you have, to express an opinion about the probabilities, or is it a question of we either know it is there from the material, or the material is insufficient for us to form a view about anything else?
WITNESS CARSON: I would say the material is insufficient to form a view.
WITNESS DANIEL: I would also agree with that. I feel if there was other information that we could be provided, that we would have a stronger opinion on that.
HIS HONOUR: Is a fair summary of the material you've reviewed this: that if the inadequacies you've both identified were eradicated and you could be satisfied you had all the material, then clearly enough you would have a certain answer?
WITNESS DANIEL: Yes.
HIS HONOUR: But in the absence of some of the material, it's only speculation about what that other material my reveal?
WITNESS DANIEL: That's correct.
WITNESS CARSON: That's correct.
Was the MORLL document on the plaintiff's website?
41 In my view, the evidence is strongly weighted in favour of the conclusion, and I find, that a copy of exhibit B never appeared on the plaintiff's website. There are a number of reasons for this.
42 First, the terms of the internal email from Marie McAuley to Robert Laughton on 11 January 2007 reflect an enquiry by Dennis Dorizas made in advance of the placing of an advertisement rather than after it had been placed. Ms McAuley's words "he now wants to advertise them" strongly support that view.
43 Secondly, the making of the enquiry at all suggests caution on the part of the plaintiff. The result in the previous litigation would have been well known to Mr Crosson. The similarity between exhibit B and the document that had come under unfavourable notice in the previous litigation was obvious. It was certainly obvious to Mr Laughton. I find it difficult to accept that the representatives of the plaintiff would not also have been aware of the similarity even notwithstanding assurances to the contrary allegedly given to the plaintiff by its legal advisers. It seems unlikely in those circumstances that a document in the form of exhibit B would have been posted on the plaintiff's website if there were any possibility that it would attract further unfavourable attention of the first defendant.
44 Thirdly, the terms of the email sent to Mr Laughton at 12.05pm on 12 January 2007 attaching a copy of exhibit B suggest that it was provided to Mr Laughton for his consideration, particularly because he did not already have it. The words, "If at your convenience, you could review the attached brochure and outline if it breaches any laws" are more consistent, in my view, with the provision of a document that Mr Laughton did not already have than with the alternative.
45 Fourthly, and similarly, that email is, in effect, a note or memorandum of the conversation to which it refers. It makes no reference to the fact that Mr Laughton already had a copy of exhibit B downloaded by him from the plaintiff's website and in fact makes no reference to the website at all.
46 Fifthly, the terms of Mr Laughton's email sent at 12.20pm on the same day also strongly suggest that Mr Laughton was telling the plaintiff what it should or should not do with exhibit B, and do not in any sense in my view amount to, or reflect, a concern about what had already been done. The words, "it may be worth your while to meet with OFT investigators before your company makes any representations" hardly seem consistent with any other view. Earlier words such as, "I need further information from you as to how you intend to distribute the document" give a similar impression.
47 Sixthly, Mr Laughton's subsequent email at 12.41pm refers to "the document you provided to me". Although those words are not incapable of standing with a suggestion that Mr Laughton also downloaded the document from the plaintiff's website, they sit more comfortably with the proposition that Mr Laughton's only copy of exhibit B was the one sent to him electronically on behalf of the plaintiff earlier that day.
48 Seventhly, the words of the email sent to Mr Laughton at 2.04pm that day in terms suggest that the copy of exhibit B had not by then been placed on the plaintiff's website. The words, "We have yet to distribute any material" support this. This is particularly so, in my opinion, having regard to the fact that if that statement were untrue, it was capable immediately of being refuted by reference to the website. It seems highly unlikely, and plainly illogical, for Mr Crosson, even in the guise of Mr Dorizas, to have made a false statement in those circumstances.
49 Eighthly, none of Mr Laughton's emails refers specifically to him having discovered a copy of exhibit B on the plaintiff's website, and no reading of them, in the absence of a specific reference, gives rise to an inference that he did so. Given the fact that, on Mr Laughton's evidence, the existence of a copy of exhibit B on the plaintiff's website so significantly excited his interest and attention, it is difficult to accept that no hint of that fact would be found in what he wrote. This is so even notwithstanding Mr Laughton's protestations that, as an investigator, he was inclined when appropriate to withhold information. The role being performed by Mr Laughton between 11 January and 15 January 2007 was in response to enquiries made on behalf of the plaintiff and was hardly investigative.
50 Ninthly, Mr Laughton made no separate diary note or record of having discovered a copy of exhibit B on the plaintiff's website. If it was sufficiently important to support Mr Laughton's subsequent application for a search warrant, it is difficult to understand why in the circumstances he did not make some contemporaneous note of its discovery.
51 Tenthly, it seems to me to be inherently improbable that Mr Crosson, or indeed anyone, on behalf of the plaintiff would ask the first defendant, and Mr Laughton in particular, for approval for advertising that was potentially contentious if it had already been posted on the plaintiff's website. That is precisely the effect of Mr Laughton's version of the conversation he said he had with Mr Crosson, referred to above at par [28]. I reject that version of the conversation.
52 Finally, both Rozy Dorizas and Jason Crosson gave evidence that a copy of exhibit B had never been posted on the plaintiff's website. I have no reason to reject that evidence and I specifically accept it. I am particularly fortified in that view by the absence of a specific reference by Mr Laughton to his having discovered a copy of exhibit B on the plaintiff's website in any of his emails to the plaintiff.
Further alleged representations
53 The description of offences in the application for the warrant also included reference to a letter to the New South Wales Medical Board received by it on 5 February 2007, and a letter in similar terms to Fair Trading – Renting Services received on 6 February 2007. Those letters are respectively in the following relevant terms:
" 1. NSW Medical Board
Just a reminder to advise that the radiation test results on your microwave ovens, regarding compliance with Radiation Health Committee limits, expires next month.
As per our 2 or 3 year contract with your organisation, one of our radiation technicians will be in contact with you next month to undertake the inspections."
*****
"Microwave Safety Systems once again looks forward to providing you with an ISO Accredited Quality Endorsed Service.2. Fair Trading - Renting Services
Just a short note to remind you that the test results on your microwave ovens regarding compliance with the radiation leakage limits set by the Radiation Health Committe e, will expire next month.
Should your organisation wish to ensure it is still compliant with the above limits, please review the following information, amend any incorrect details and sign as indicated.
. . . Microwave Safety Systems looks forward to providing you with an ISO Accredited Quality Endorsed Service."
54 On 7 March 2007 the New South Wales Medical Board wrote to the first defendant regarding the first of these letters in the following terms:
"The NSW Medical Board had received a letter from Microwave Safety Systems advising that they had taken over the services provided by Microwave Safe Australia. Attached is a copy of the letter and with compliments slip for your information.
The Board noted in the Sydney Morning Herald on 20 April 2006 that Fair Trading had a successful prosecution against Jason Crosson's company Microwave Safe Australia Pty Ltd, with Justice Timothy Studdert 'agreeing that employers reading the bulletin would think there was a legal requirement for regular testing for radiation leaks, but there was no such duty'.
A technician from Microwave Safety Systems arrived at the Board's office on 2 March 2007 to test the two microwaves. When challenged he advised that the contact person at his company was Jason (later confirmed to be Jason Crosson) following a telephone call to the company. A person called John then telephoned the Board and advised the testing was required to comply with the Radiation Health Committee limits. He was advised the Board would discuss this matter with their own electricians and the Board would not authorise testing to occur by Microwave Safety Systems.
This information is brought to your attention in the public interest.
55 The second of these letters was forwarded to the first defendant and came to the attention of Mr Laughton in due course.
56 Mr Laughton said in his evidence that s 8 of the Fair Trading Act enabled the Office of Fair Trading to accept complaints and to make the appropriate inquiries in respect of those complaints. He said that he "took the matter to be formal complaints". However, he conceded at transcript page 107 that the application made no reference to complaints. That evidence is as follows:
"Q. And you do not refer to any complaint in your application do you?
A. No I don't."Plaintiff’s alleged lack of cooperation
57 Mr Laughton's application for the issue of the warrant also relied upon an allegation that the plaintiff had failed to cooperate with him in his enquiries and investigations. He deposed at paragraph 34 of his affidavit to a conversation he had with the second defendant at the time he was applying for the issue of the warrant. That conversation is as follows:
"Second defendant: Have you asked Microwave Safety for these documents? Have they been cooperative?
Mr Laughton: Yes I have asked them for certain documents to support their claims and they have ignored me. I have had many discussions and correspondence with them to encourage them to meet with me, but they don't feel it necessary. I'll point out to you that the Fact Sheet that I referred to in the Application is still published on Microwave Safety Systems website this morning when I checked. I came to the view that they are uncooperative and I am concerned about the continuing risk to the public."
58 According to the plaintiff's submission, Mr Laughton misrepresented to the second defendant that the plaintiff had been "not cooperative": see above at par [3]. The plaintiff submitted that this was misleading and invalidated the warrant. According to the plaintiff, the only matter possibly amounting to lack of cooperation that Mr Laughton could point to was that the plaintiff did not provide him with the things that he requested in his email sent at 12.41pm on 12 January 2007: see above at par [11]. No further materials or documents were ever requested by Mr Laughton or anyone else at the first defendant. Moreover, the plaintiff was not told not to use any information, with the limited exception of the caution expressed by Mr Laughton in his email sent at 12.20pm on 12 January 2007: see above at par [10].
59 The application also relied upon " numerous meetings with Dennis Dorizo [sic] and his lawyer. Conduct continues as at 17.4.07 ". The plaintiff submits that this is a further material misrepresentation. This is because the last communication by telephone from Mr Kalde, after various attempts on both sides to arrange a face-to-face meeting between Mr Laughton and the plaintiff, indicated (even on Mr Laughton's own note) that he did not see the need to meet with Mr Laughton at that time and that Mr Laughton should tell him if he did not agree with this view. Mr Laughton did not do so. In the plaintiff's submission it cannot, therefore, be open to him later to suggest any lack of cooperation from the plaintiff or its solicitor.
60 The plaintiff made further detailed submissions on this topic to which it is unnecessary to refer. It is sufficient to observe that the plaintiff's contention is that there were no reasonable grounds upon which Mr Laughton could have formed a belief that the plaintiff had been uncooperative in any way at all.
61 I agree. In my opinion, "uncooperative" in the relevant sense incorporates notions of obstruction, avoidance, and unresponsiveness and often also an inappropriate lack of candour. None of these elements was, in my opinion, evident in the present case. The fact that Mr Laughton was unable, without the assistance of the plaintiff, easily to satisfy himself about all matters that troubled him, is not necessarily coextensive with a lack of cooperation on the part of the plaintiff. The fact that Mr Crosson masqueraded as Mr Dorizas does not alter my opinion in this regard.
Relevant legislation
62 Section 19A of the Fair Trading Act, 1987 is in the following relevant terms:
(1) In this section:" 19A Powers of search and seizure under search warrant
"authorised officer" has the same meaning as in the Law Enforcement (Powers and Responsibilities) Act2002 .(2) An investigator may apply to an authorised officer for the issue of a search warrant if the investigator believes on reasonable grounds that there is evidence of a contravention of a provision of this Act on any place or land.
(3) An authorised officer to whom such an application is made may, if satisfied that there are reasonable grounds for doing so, issue a search warrant authorising any investigator:
(a) to enter the place or land specified in the warrant, and
(b) to search for evidence of a contravention of a provision of this Act, and
(c) to exercise the powers of an investigator under subsection (4).
*****
(7) Division 4 of Part 5 of the Law Enforcement (Powers and Responsibilities) Act 2002 applies to a search warrant issued under this section.(8) Nothing in this section limits any of the other functions that may be exercised by an investigator under this Division.
63 Sections 44 (f) and (j) of the Act as follows:
" 44 False representations
A person shall not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:
(f) represent that the person has a sponsorship, approval or affiliation the person does not have,
(j) make a false or misleading representation concerning the need for any goods or services,
Applicable law
64 The plaintiff relied upon the following principles:
64.1 First, the courts have, from the earliest days, insisted upon a rule of strict construction of the law governing search warrants given the intrusion into privacy thereby authorised – see most recently Kirby J in State of New South Wales v Corbett [2007] HCA 32 at [15].
64.2 Secondly, strict compliance with the statutory conditions governing the issue of search warrants is insisted upon – George v Rockett [1990] HCA 26; (1990) 170 CLR 104 at 110-111.64.3 Thirdly, a warrant issued by a subordinate authority should disclose jurisdiction on its face – R v Tillett (1969) 14 FLR 101 at 106.
64.4 Fourthly, the information upon which the warrant is issued must set out the matters upon which the application, and warrant, relies. It will not be sufficient merely to set out a summary or set of conclusions from such material - R v Tillett (supra) at 108.
64.5 Fifthly, it is a condition precedent to the exercise of the power to issue a warrant that the statutory conditions are satisfied – R v Tillett (supra) at 108. In this case, s 19A(3) requires that the issuing officer is satisfied that there are reasonable grounds for issuing the warrant, which in turn requires satisfaction that the investigator believes on reasonable grounds that there is evidence of a contravention of a provision of the Act on the place to be searched.
64.6 Sixthly, in order to be valid, a warrant must refer to a particular offence and authorise seizure by reference to that offence. Seizure cannot relate to offences in general, or even offences under a particular provision, in general - R v Tillett (supra) at 113.
64.7 Seventhly, it is by reference to the means of identification of the object of the search that the sufficiency of reasonable grounds for believing must be judged - the broader and less specific the description of things to be searched for, the more difficult it is likely to be to satisfy the requirement of reasonable grounds for believing that a thing answering the description will provide evidence of commission of an offence – George v Rockett (supra) at 117-118.
64.8 Eighthly, the purpose of the statement of the offence in the warrant is to set the bounds to the area of search that the warrant authorises – Beneficial Finance Corporation v Commissioner of Australian Federal Police [1991] FCA 92; (1991) 31 FCR 523 at 533-534.
64.9 Ninthly, the issuing officer must reach her own conclusion on the material before her – R v Tillett (supra) at 106.
64.10 Finally, a search warrant may be set aside on the basis of misrepresentation, which would include a half-truth – Lego Australia Pty Ltd v Paraggio [1994] FCA 1286; (1994) 52 FCR 542 at 555F-G.
66 Secondly, the application should summarise the relevant facts concisely, consistently with the need to satisfy the issuing officer that there are reasonable grounds for believing that a contravention of the relevant legislation has occurred: George v Rocket (supra) at 114-115. The notion of "reasonable" grounds for believing imports an objective test, but "reasonable" involves a value or normative judgment. The court is not entitled to substitute its own opinion as to what comes within the term "reasonable" for the opinion of the issuing officer, unless the decision of the issuing officer could not lawfully have been reached on the materials presented: Williams v Keelty [2001] FCA 1301; (2001) 111 FCR 175 at 213.65 The first defendant submitted that the following principles were also relevant. First, an applicant for a search warrant must disclose to the issuing officer all facts that are material to the decision to issue or decline to issue a search warrant: Karina Fisheries Pty Ltd v Mitson [1990] FCA 154; (1990) 26 FCR 473 at 481. A fact will be material to the decision to issue or decline to issue a search warrant if it may affect the exercise of that discretion: R v Curran [1983] 2 VR 133 at 150-151.
67 Thirdly, a search warrant should describe the offence with reasonable particularity, so as to enable persons to know the exact object of the search: Bradrose Pty Ltd v Commissioner of Police; Ex parte Bradrose Pty Ltd [1989] Qd R 304 at 307, 314. The offence, however, need not be described with the particularity of an indictment: Chong v Schultz [2000] FCA 582; (2000) 112 A Crim R 59 at 60. What is necessary is sufficient precision to enable the executing officer to know what to look for, and for persons in the subject premises to know what is required of them: Coward v Allen [1984] FCA 53; (1984) 52 ALR 320.
68 Fourthly, an incorrect citation of a section does not invalidate a search warrant that otherwise clearly sets out the substance of the alleged offence: Parker v Churchill [1986] FCA 88; (1986) 9 FCR 334 at 335, 350. Nor does an incorrect description of the statute necessarily invalidate a search warrant: State ofNew South Wales v Corbett [2007] HCA 32.
69 Fifthly, subject to compliance with statutory conditions, it is not impermissible to describe the object of the search in a broad and non-specific fashion: Dunesky v Elder [1994] FCA 1006; (1994) 54 FCR 540 at 555. According to McHugh J in Ousley v The Queen [1997] HCA 49; (1997) 192 CLR 69 at 107-108:
". . .subject to any statutory provision to the contrary, a warrant issued by a subordinate authority is bad unless it is apparent that it was issued by a person with jurisdiction to issue it or if it fails to record the ground or grounds upon which it was issued or is so vaguely worded that a person affected by it cannot know the object of the search or fails to show that an offence has been committed or is suspected of having been committed or fails to recite the information which was the basis of its issue or fails to state an essential basis of jurisdiction or fails to specify the person who is to execute the warrant or indicates that the issuing authority has not addressed the right question or, in the case of a search warrant, fails to specify precisely the place to be searched." (Citations omitted).
70 Sixthly, before issuing a search warrant, the issuing officer must be satisfied that the application provides reasonable grounds for the belief held by the applicant that an offence has been committed: Bartlett v Weir [1994] FCA 1143; (1994) 72 A Crim R 511. The validity of a search warrant is to be determined as at the date of its issue and the manner of its execution cannot influence its initial validity: Ballis v Randall [2007] NSWSC 422; Williams v Keelty (supra) at 211.
71 Finally, there is a need, in the interest of public security and protection, to ensure that powers of investigation are not unduly impeded by an excessive insistence on correctness in every detail, however minor: Wright v Queensland Police Service [2002] QSC 46; [2002] 2 Qd R 667 at 678. An "hypercritical" approach to warrants should not be adopted: Commissioner of Police v Barbaro [2001] NSWCA 57; (2001) 51 NSWLR 419 at 422.
Findings and conclusions
72 With respect to paragraph 3.1 of the application for the warrant, I have already found that the MORLL document was never present on the plaintiff’s website. Reference to it in the description of offences was therefore erroneous and it inappropriately formed part of the application for the warrant.
73 With respect to paragraph 3.3 of the application for the warrant, Mr Laughton agreed when asked in cross-examination with the proposition that the words "duty of care" did not appear anywhere other than in quotes on the Fact Sheet (referred to below). Mr Laughton first asserted that there were other references but later conceded, "that [it] is possibly true" that there was none. Only when pressed did Mr Laughton eventually say that he did not know. Mr Laughton did not point to any place where the words "duty of care" appeared other than on the Fact Sheet. Mr Laughton also conceded that he used the term "duty of care" (as it appears in the application for the warrant) "loosely". His precise words were as follows:
"A. Yes. Well, I use the term duty of care loosely in terms of it being something that MSS was using in terms of a person's duty of care under occupational health laws, occupational safety and health legislation. I am not quoting duty of care as in terms of what was said in the web site."
74 The plaintiff submitted that the reference to "duty of care" on the Fact Sheet did not convey the representation set out in paragraph 3.3 and Mr Laughton could not have had reasonable grounds for believing that it did. The plaintiff also submitted that there was no basis upon which it could be said, either upon the material within the application for the warrant or otherwise, that the asserted misrepresentation had been made by the plaintiff. According to the plaintiff, that was a material misrepresentation, which invalidated the warrant. Furthermore, the application did not disclose reasonable grounds for a belief as to a contravention but merely set out an asserted conclusion as to contravention.
75 I agree with this submission. It is simply inaccurate to say that a quoted recommendation "that employers comply with the relevant standards . . . in order to demonstrate that they have met their general duty of care under the Act" is a statement that "in order to meet their duty of care towards employees, [employers] needed to have microwave ovens in the workplace tested regularly for radiation leakage ". Moreover, and in my opinion not insignificantly, paragraph 3.3 of the application refers to "statements" on the website, indicating more than one and, without the provision of any details one way or the other, potentially many more than one. This was inaccurate and misleading.
76 With respect to paragraph 3.4 of the application for the warrant, paragraph 19 of Mr Laughton's affidavit indicates that on 13 March 2007 he examined and found a document entitled "Fact Sheet" which he accessed through a link called "Standards". Mr Laughton said, "I immediately noticed that this document was different to the [MORLL document] that had been previously at this link". At paragraph 20 of his affidavit Mr Laughton said that he closely examined the Fact Sheet and compared it with certain paragraphs of the judgment of Studdert J in Commissioner for Fair Trading v Microwave Safe Australia Pty Ltd and Another [2006] NSWSC 287.
77 The burden of Mr Laughton's concerns, outlined in his affidavit, was that the document described as a "Workplace Safety Bulletin", reproduced at par [24] of his Honour's judgment, was not substantially different in content from the Fact Sheet located by him on 13 March 2007 on the plaintiff's website, and presumably that it would be appropriate for him to treat it in the way that Studdert J had approached it. With respect to the Workplace Safety Bulletin, Studdert J had earlier come to the following conclusion at par [66]:
"[66] It seems to me that the ordinary reasonable recipient of the bulletin could reasonably have read this bulletin as meaning that the Standards did call for regular testing for radiation leakage, and I am satisfied that they did not. Hence, I consider the bulletin complained of offends against s 42."
78 Later, at par [170] of his judgment, Studdert J referred to the following:
"[170] Mr Renehan submitted that the evidence referred to above could occasion the Court some concern as reflecting the second defendant's present attitude to the content of advertising material. It seems to me that there is substance in that submission because selective quoting, such as is contained in the bulletin appearing at p 168, has the capacity to mislead."
79 It was Mr Laughton's concern that the Fact Sheet also selectively quoted from various publications and was therefore actually or potentially misleading. The Fact Sheet observed by Mr Laughton on 13 March 2007 was on the letterhead of the plaintiff and was otherwise in the following format:
FACT SHEET
Standards/GuidelinesThe Radiation Health Committee retains the role of setting the allowable limit for microwave leakage from microwave ovens (50W/m2 at 0.05m) (5mW/cm2 at 5 cm).
"Radiation Health Committee - Radiation Health Series Publication No 17 – ARPANSA -Australian Government"."The microwave leakage at any point 50mm or more from the external surface of the appliance shall not exceed 50W/m2 (5mW/cm2)."
TI: AS/NZ 60335.2.25 (AS/NZ 3350.2.25) - Australian and New Zealand Standard 2004 SO: Standards Australia/Standards New Zealand"The power density of microwave radiation emerging from any microwave oven used in a restaurant, a canteen, a hospital, a self-service heating unit, a home and the like shall not exceed 5 milliwatts per square centimetre at any 5 centimetres or more from the external surface of the unit.
Compliance with the 5mW/cm2 limit should be determined using a microwave survey instrument, having specifications outlined below, to measure microwave power density with the probe detector located at 5 cm and further from the outer surface of the microwave oven".
TI: Procedures for Testing Microwave leakage From Microwave Ovens
SO: National Health and Medical Research Council, Seventy Third Session, 1985 Recommendations on Microwave Ovens . Australian Government Publishing Service, Canberra pp 17-18Radiation leakage from electronic equipment presents special problems because the energy source is not clearly defined . . . The location of the leakage source has to be found by trial and error.
TI: AS/NZ 2772.2. "Radio-frequency fields part 2: Principles and methods of Measurement SO: Standards Australia/Standards New Zealand"Exposure to sufficiently high levels of microwaves will cause heating. In the case of human tissue, excessive heating could have serious health effects, such as deep tissue burns and hyperthermia. The purpose of the Australian Standards is to avoid all adverse health effects by limiting exposure levels to levels below those at which heating occurs".
"This Standard applies to ovens designed for domestic applications, even if used in a workplace".
SO: ARPANSA (Australian Radiation Protection and Nuclear Safety Agency - Australian Commonwealth), 2006"The owner of a microwave oven which is used other than [sic] domestic or scientific purposes shall not operate it, or permit it to be operated or used, unless the oven has within the previous 3 years passed a compliance test"
SO: WA Legislation - Radiation Safety Regulations, 1983"Worksafe Victoria recommends that employers comply with the relevant standards, such as Australian/New Zealand Standard and the National Health & Medical Research Council Standards, in order to demonstrate that they have met their general duty of care under the Act".
SO: Worksafe Victoria - State Government Victoria - "2002"80 The plaintiff submitted that, on its face, paragraph 3.4 of the application for the warrant failed to disclose any grounds for believing that any evidence of a breach of s 44(f) of the Act existed, as there was nothing that the application described that might comprise such a breach. The plaintiff submitted that as with paragraphs 3.1 and 3.3, it set out a conclusion as if it were reasonable grounds for belief. The plaintiff submitted that the application was invalid on this ground also.
81 I must confess to having some difficulty understanding how or in what way the Fact Sheet could be understood to be a representation that the plaintiff had a sponsorship, approval or affiliation that it did not have. The document appears to be no more than a series of quotations attributed to a various range of sources. It forms part of the plaintiff's website, unlike the document that was the subject of a mail-out in government envelopes in the proceedings before Studdert J. I cannot accept that paragraph 3.4 of the application discloses any grounds for a reasonable belief that the plaintiff may have breached s 44(j) of the Act. Nor, in my opinion, is there any material upon the basis of which Mr Laughton could have held such a view.
82 With respect to paragraph 3.5 of the application for the warrant, the plaintiff submitted that there were no matters in the application that supported the asserted conclusion as to contravention. In particular, the website did not in fact contain any such statement. The plaintiff submitted, therefore, that this was a further material misrepresentation invalidating the application.
83 I also agree with this submission. I did not understand the first defendant to argue that the website did in fact contain a statement in or to the effect that microwave ovens used in the workplace had to be tested for radiation leakage beyond the testing required for approval of such items for sale by retail. In the absence of such a statement, the factual matters underpinning paragraph 3.5 of the application for the warrant do not exist.
84 With respect to paragraph 3.11 of the application for the warrant the plaintiff submitted that nothing is described that could constitute a breach of s 44(j) of the Act. According to the plaintiff, Mr Laughton merely asserted a contravention rather than setting out any reasonable grounds for a belief that a contravention had occurred.
85 The plaintiff made similar submissions with respect to paragraph 3.12 of the application to the warrant. According to the plaintiff, the application merely asserted a conclusion but did not reveal any reasonable grounds for a belief that there had been a breach of s 44(j) of the Act.
86 The letters do not, in my opinion, contain any material that could constitute a representation "concerning the need for any goods or services". Presumably Mr Laughton's concern was that the letters suggested that the New South Wales Medical Board or Fair Trading Renting Services required the services of the plaintiff in order to avoid risking the possible consequences of non-compliance of its microwave ovens with "Radiation Health Committee limits". The letters are certainly a clumsy attempt to attract the attention of the recipients to the prospect that they should pay money to the plaintiff for something that was patently unnecessary. The letters do not, in my opinion, make any form of representation about their need to do so.
87 The application also made reference to an alleged contempt of court by Jason Crosson. However, a warrant can only be issued in relation to a contravention of the Act. Reference to an alleged contempt of court by Mr Crosson is clearly not a contravention of the Act. The first defendant submitted that to the extent that contempt of court proceedings and imprisonment of Mr Crosson were mentioned, they were either irrelevant at worst or simply part of additional information that was provided to the second defendant pursuant to Mr Laughton's duty of disclosure at best, but that they were neither critical to the decision to issue the warrant nor evidence of an ulterior purpose in any event.
88 Reference to Mr Crosson appears to me to be wholly irrelevant and to some extent gratuitous. However, it is unnecessary to speculate about the reasons or purposes for Mr Laughton's reference to Mr Crosson. It would not in my opinion invalidate the application for the issue of the warrant.
89 I am also satisfied (as discussed above) that the plaintiff did not fail in any relevant sense to cooperate with the first defendant. It follows, in my opinion, that Mr Laughton's written statement to the second defendant that the plaintiff was uncooperative was incorrect and potentially, if not actually, misleading.
" Belief on reasonable grounds "
90 Mr Laughton gave specific evidence that he had reasonable grounds to believe that the plaintiff was committing offences at paragraphs 25 and 26 of his affidavit. Those paragraphs of are as follows:
"25 In and around March 2007 I decided that I had reasonable grounds to believe that MSS was committing offences under sections 44(f) and (j) of the FT Act. I was concerned that I had been unable to convince MSS to meet with me to have a fair and open discussion about its business practices. I had experienced a similar attitude from MSA during the previous investigation and I therefore believed that I had progressed as far as possible in this matter at that time. Because of my experience with MSA, the nature of the correspondence received by Renting Services Branch and the Medical Board . . . indicated to me that MSS had been actively soliciting business from unsuspecting businesses and Government agencies. I recall MSA conducting business in a similar manner by targeting particular industries and Government agencies and mailing unsolicited advertising, reminders and/or documents styled in the nature of an official information bulletin sourced from and approved by bodies. MSA’s targets included nursing homes, aged care facilities, schools, State Government Departments and registered clubs. Paragraph 125 of the Judgment of Studdert J. . . indicates that in 2002 MSA targeted 8729 businesses in one mail-out alone.
26 Because of my concerns expressed in paragraphs 19 and 20 of my affidavit, I sought a meeting with the Manager, Legal Services Branch, Manager Fair Trading Investigations and Investigator Michelle Siney to discuss the continuing risk to the public of MSS's conduct and my belief that such conduct was in breach of the false representation provisions of the FT Act, specifically sections 44(f) and (j). I asked the meeting to discuss strategies to deal with the matter, including the use of section 20 FT Act Notices and section 19 FT Act powers. I presented the meeting with background related to the matter, including the history of the business, MSA and MSS's attitudes, possible risks to unsuspecting business customers and the layout of the business premises. I informed the meeting that surveillance of the Croydon premises over a period satisfied me that the premises were typical business premises that contained computers, desks, telephones, staff and filing cabinets and that MSS signage directed customers to the office. Surveillance confirmed that Carole Sandham. . . worked in the office and answered the telephone, "Microwave Safety Systems, this is Carole" [one of these occasions was on 4 April 2007]. As such I had reason to believe that the records of the business would be held at the Croydon premises. The merits and disadvantages of each enforcement tool available to investigators to obtain evidence of breaches of fair trading legislation were discussed at length. It was decided that the important issue was the ongoing risk to the public and the use of the statutory options would not provide immediate results, nor might that identify the natural persons behind the conduct or any accessory to the conduct. The meeting agreed that MSS's conduct was serious enough to execute a search warrant under section 19 A of the FT Act and that such action would be appropriate in the circumstances."
91 It is reasonably clear from this material, but is not relevantly in dispute, that Mr Laughton was intimately involved in the earlier proceedings against the plaintiff's predecessor. It also seems reasonably clear that Mr Laughton harboured certain concerns about the relationship between the plaintiff and MSA, and about the identity of the controlling personnel behind each organisation. However, in my opinion, this led him into error in the way that he formulated the material that he included in the application for the issue of the warrant. For example, statements such as, "my experience with MSA . . . indicated to me that MSS had been actively soliciting business" cannot, or should not, be promoted to the level of reasonable belief about the plaintiff. The same can be said of statements such as "I recall MSA conducting business in a similar manner". Similarly, statements such as "I presented the meeting with background related to the matter [sic], including the history of the business [sic], MSA and MSS's attitudes" suggest either a conscious or unconscious failure by Mr Laughton to separate, or to distinguish, what he knew about MSA on the one hand from what he might reasonably have believed or suspected about the plaintiff on the other hand. The second defendant would appear to have been the unsuspecting beneficiary of this confusion.
92 The requirement that Mr Laughton believed on reasonable grounds that there was evidence of a contravention of a provision of the Act on any place or land carries with it the logically anterior requirement of a belief on reasonable grounds that there has been a contravention of a provision of the Act. A belief on reasonable grounds about the location of evidence of a contravention could hardly exist in the absence of some belief about the existence of the contravention itself. In my opinion, no person in the position of Mr Laughton could have held a belief on reasonable grounds that evidence of a contravention of a provision of the Act could have been found at the premises. According to my finding, the MORLL document had never been on the plaintiff's website. There were no statements on the plaintiff's website that employers needed to have microwave ovens in the workplace tested regularly for radiation leakage in order to meet their duty of care towards employees. The Fact Sheet could not reasonably have been construed as a document containing a representation that the plaintiff had a sponsorship, approval or affiliation that it did not have. The plaintiff's website did not contain statements claiming that Australian Standards relating to microwave ovens required such ovens used in the workplace to be tested for radiation leakage beyond the testing required for the approval of such items for sale by retail. The plaintiff's letters to the New South Wales Medical Board and to the Fair Trading Renting Service did not make false or misleading representations concerning the need for any goods or services.
93 The plaintiff also complains that the range of documents and things to be searched for was too wide. As discussed in George v Rockett , this is critical to a determination of whether or not Mr Laughton held the requisite belief on reasonable grounds - that is to say, that all of the material was evidence of a contravention of the Act. No particular items referred to are listed, only classes, and the items are not limited to those that could provide evidence of any specific identified offence. There is nothing in the application for the issue of the warrant that could have satisfied the second defendant that there were reasonable grounds for the issue of a warrant of that breadth.
94 The warrant is defective for similar reasons. The non-specific hand written reference to "false representations s 44F [sic] Fair Trading Act 1987" is wholly inadequate as a means of limiting the breadth of the search, contrary to Beneficial Finance Corporation v Federal Police (supra) at 533-534. It amounted in effect to the issue of a general warrant, contrary to R v Tillett (supra) at 113. It did not enable any person receiving the warrant to understand or ascertain the scope of the search that it authorised.
Orders
95 By its amended statement of claim filed in court on 2 October 2007, the plaintiff claimed a wide range of relief, including declarations, orders in the nature of certiorari against each defendant, an injunction and other orders, as well as damages. One of the plaintiff's heads of damage included an allegation that it lost the opportunity to sell its business at a particular price as the result of bad publicity flowing from the issue of the warrant that is the subject of these proceedings. The plaintiff indicated at the commencement of the hearing that it was not in a position to prove that loss for the reason that the potential purchaser of its business was said to be awaiting the outcome of this litigation before considering whether or not to proceed further. In those circumstances, it was my opinion that it would be unsatisfactory to have embarked upon an assessment of damages of only part of the plaintiff's claim if the plaintiff otherwise satisfied me that the issue of the warrant was invalid. Counsel for the plaintiff conceded that that would be an appropriate course and counsel for the first defendant did not oppose it. In those circumstances, I embarked upon the hearing of the matter, limited to the issue of liability, with damages (if appropriate) to be assessed at a later time.
96 I mention these matters for the reason that much of the relief sought by the plaintiff is directed to the question of damages and associated issues. Limited only to the question of liability, and subject to such further submissions as the parties may wish to make, my present inclination would be to confine the grant of any relief to the making of a declaration that the warrant issued by the second defendant on 17 April 2007 and executed by the first defendant on 19 April 2007 at 2 Cromwell St, Croydon is invalid. I will hear the parties on such further or other orders, including costs, for which they may respectively contend on the issue of liability, and on the making of such orders or directions as may be required for the further conduct of the proceedings, on a date convenient to all parties by arrangement with my Associate.
***********
0
19
2