Noone, Director of Consumer Affairs Victoria v Operation Smile (Australia) Inc

[2010] VSC 633

IN THE SUPREME COURT OF VICTORIA

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 2534 of 2010

DR CLAIRE NOONE, DIRECTOR OF CONSUMER AFFAIRS VICTORIA	Plaintiff
and
OPERATION SMILE (AUSTRALIA) INCORPORATED and others (according to the schedule attached)	Defendants
and
ATTORNEY GENERAL FOR THE STATE OF VICTORIA	Intervener
and
PUBLIC INTEREST LAW CLEARING HOUSE	Amicus Curiae

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JUDGE:	Pagone J
WHERE HELD:	Melbourne
DATE OF HEARING:	26 October 2010
DATE OF RULING:	26 October 2010
CASE MAY BE CITED AS:	Noone, Director of Consumer Affairs Victoria v Operation Smile (Australia) Inc & Ors
MEDIUM NEUTRAL CITATION:	[2010] VSC 633

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INJUNCTION – Application to remove interlocutory injunction – Change of circumstances – New issues raised required trial to be adjourned –Balance of convenience.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr B McCullagh with Mr S Bhojani	Solicitor to the Director of Consumer Affairs Victoria
Professor Campbell, the Fourthnamed Defendant, appeared in person on behalf of all the Defendants
No appearances were made by the Intervener or the Amicus Curiae for the hearing of the application

HIS HONOUR:

1. The defendants renew their application to vacate the orders that were made by Justice Hargrave on 17 June 2010.  His Honour granted interlocutory injunctions to restrain the defendants from making, in trade or commerce, any representation that a treatment, service, technique or procedure offered or provided by the defendants:  can cure cancer, or reverse or stop or slow its progress; can prolong the life of a person suffering from cancer; can benefit cancer sufferers; is supported by generally accepted science; is supported by published research findings; or is an evidence based therapy. The second defendant conducts a clinic, known as the Hope Clinic, which provides various unconventional treatments to cancer sufferers. The first and third defendants have related services at those premises and Dr Noel Campbell is a person responsible for administering the treatment.

1. In fairness to Dr Campbell, I should say that he has attempted to make this application before me on other occasions, but on each other occasion I declined to entertain the application.  On each other occasion when Dr Campbell sought to make the application, the hearing of the proceeding was relatively imminent and I was not prepared to consider vacating an order that had been made by another judge of this Court when the final hearing of the substantive proceeding was about to start.

1. That circumstance has substantially changed today in two respects.  It has changed in part because the provisions of the Charter of Human Rights and Responsibilities Act 2006 (Vic) requires me to consider the potential application of the Charter to the proceeding and in that context I am required to consider the possibility of making an order under s 36. That raises an additional constitutional question currently pending in the High Court about which notices have been given under s 78B of the Judiciary Act 1903 (Cth).

1. The other significant change is that the state election is soon to be held.  The fact that the state election is about to be held in this state means that I am unable to re-list the proceeding to be heard before the election.  That, in view of the other commitments of the Court immediately after the date of the election, will mean that I will not be able to hear this proceeding until the new year.

1. The first available date for me to hear the proceeding coincides with the very day in which the same constitutional issue is to be considered by the High Court.  The consequence of that is that the first practical hearing date for all of the issues in the proceeding is 14 February 2011.  This delay is not caused in any way by any of the defendants.  It is a consequence of the normal operation of the legal system in seeking to have the very significant issues that are raised in this proceeding fully and finally resolved.  I say all of that not in granting the application made by Dr Campbell, but in explaining why I have agreed to its consideration today.

1. The fundamental question I must now ask is whether the orders that his Honour made on 17 June should be maintained.  I have had the benefit of reading the reasons given by his Honour when he made the orders.  The ruling made by his Honour is informative and helpful to me in my task of considering the matter today.

1. There were a number of critical matters before his Honour which led him to the conclusion he reached.  One of them was that the proceeding about which he was making an interlocutory order was then not far off.  That fact is now different for the reasons I have explained.

1. Another matter relevant to his Honour's conclusion was the absence of Dr Campbell on the return date when his Honour was considering whether to grant the injunction sought.  In that context his Honour said:

Mr Campbell contacted my associates yesterday and sought an adjournment because of ill health.  He gave no real particulars of that although this morning the court received from him, by email, a copy of a very brief medical certificate stating that Mr Campbell has come down with a flu-like illness.  That is not an appropriate way to seek an adjournment and Mr Campbell was informed that the matter would proceed in his absence if he did not appear or make arrangements to appear. However it is for that reason that I have determined that liberty to apply should be reserved in the orders I intend to make.

The last sentence I have quoted is significant because his Honour was conscious that a different conclusion might be reached if Dr Campbell was heard.  In addition, I should mention that, unlike Dr Campbell's absence on the occasion of the interlocutory injunction hearing, he has attended before me on each and every occasion in which the matter has been listed for hearing.  He has at no stage indicated any unwillingness to participate in the proceeding, or to defend it fully.

1. His Honour was, with respect, entirely correct in his conclusion that the way in which Dr Campbell sought an adjournment was inappropriate.  The fact that Dr Campbell is not a lawyer may explain why an inappropriate method was adopted by him, but it does not of course make it appropriate.  The Court is required to apply the law, and that is what his Honour was doing. Dr Campbell cannot complain of the orders having been made in the circumstances in which they were made, notwithstanding the difficulties in which he may have found himself.  It is, however, a factor to bear in mind that Dr Campbell has in the proceedings before me, and I infer before Justice Judd, always appeared and sought to defend the proceeding fully.  Indeed, in the substantive proceeding he has filed extensive material through which he seeks to maintain that the case should be decided against the plaintiff.

1. A third factor that was significant to his Honour's decision is found in paragraph 14 of his reasons.  His Honour had been dealing in the preceding paragraphs with the delay by the Director of Consumer Affairs Victoria in commencing the proceeding.  His Honour had apparently been concerned about that delay and had raised that issue earlier in the proceeding with the Director. An explanation was given for the Director’s delay from the Bar table which his Honour described as not entirely satisfactory but understandable, namely insufficient legal resources being available to deal with the matter.  At Paragraph 14 his Honour said:

I do not think that the delay should stand in the way of injunctive relief if otherwise called for in all the circumstances.  I note that it has not been raised by the defendants and there is no evidence of any prejudice to them arising from the delay.  To the contrary, they have been able to conduct the Hope Clinic for reward during that period and continue advertising in the form under question.

Critical to that question was the absence before his Honour of any evidence of prejudice to the defendants.  Today some evidence has been given to me by Dr Campbell of prejudice arising from the injunction. 

1. I asked the Director through her counsel whether the application to lift the injunction was one that should be dealt with today or on some other day when materials might otherwise have been presented differently.  The Director through her counsel elected for the application to be heard today.  I make no criticism of that decision, but mention those matters only in relation to the fact that the application was made for the Director on material as it existed on 17 June, added to only by the evidence of Associate Professor Snyder, and the largely, indeed wholly, uncontroverted evidence of Dr Campbell about prejudice. 

1. His Honour was of the view on 17 June that the balance of convenience on the material before him was such as to require the grant of the injunction.  The material now before me points in the other direction.  I accept for present purposes, as his Honour accepted, that the evidence on the substantive proceeding is in favour of the plaintiff.  However, I am not persuaded at the moment that it is so strong that its strength outweighs the case against the grant of injunctions on the balance of convenience.  Indeed, at the moment there is material which would justify the defendants having adopted the course they did, albeit that some of it is the subject of detailed dispute about admissibility.  In any event, for present purposes I will assume that there is a prima facie case made out by the plaintiff.

1. The question for me is to determine where the balance of convenience lies.  The material that I have does not point sufficiently in favour of the injunction being maintained.  Dr Campbell has given evidence that two individuals have lost their job and that the economic returns to the centre have fallen dramatically.  I am conscious that the web site maintained by Dr Campbell is directed to individuals who are suffering and who are particularly vulnerable.  These are important facts but they were not facts that were so active or pressing as to have avoided any delay by the Director of Consumer Affairs in bringing the proceeding.  On the contrary, as his Honour observed and as counsel for the Director candidly said to his Honour, there was delay in commencing the application, and it was a delay caused by insufficient legal resources.  The charge which the defendants are likely to suffer from a continuation of the injunction is not likely to be reparable or compensable if successful at the final hearing of the proceeding.

1. There is today, in my view, insufficient material to justify the continuation of the injunction, and I propose to vacate the orders made by his Honour on 17 June.  I will, however, like his Honour, give liberty to apply because I am conscious of the fact that these are serious and difficult questions, and if the Director has material which points to harm to outweigh that about which Dr Campbell has given evidence, then I should take that into account.

1. I note also that in the orders made by his Honour the Director was not required, as indeed the Director is not required, to give an undertaking as to damages. Section 152(2) of the Fair Trading Act 1999 (Vic) makes that clear. The fact is, however, that the usual undertaking as to damages which might ordinarily provide some safeguard to a party against whom interlocutory orders are made (when considering the balance of convenience) is not available here because the Director understandably and correctly relies upon the provision and does not give the undertaking as she is not required to do so.

1. In those circumstances I propose to vacate the orders of his Honour but otherwise give the parties liberty to apply.

SCHEDULE OF PARTIES

DR CLAIRE NOONE, DIRECTOR OF CONSUMER AFFAIRS VICTORIA	Plaintiff
and
OPERATION SMILE (AUSTRALIA) INCORPORATED	Firstnamed Defendant
OPERATION HOPE PTY LTD (AUSTRALIA) (ACN 006 581 353)	Secondnamed Defendant
HOPE RESEARCH INSTITUTE PTY LTD (ACN 112 413 135)	Thirdnamed Defendant
NOEL RODNEY CAMPBELL	Fourthnamed Defendant
and
ATTORNEY GENERAL FOR THE STATE OF VICTORIA	Intervener
and
PUBLIC INTEREST LAW CLEARING HOUSE	Amicus Curiae