The Commissioner for Consumer Protection v Armstrong

[2012] WASC 206

THE COMMISSIONER FOR CONSUMER PROTECTION -v- ARMSTRONG [2012] WASC 206

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2012] WASC 206
Case No:	CIV:1611/2012	Heard:	12 JUNE 2012
Coram:	BEECH J	Delivered:	21/06/12
No of pages:	12	Judgment Part:	1 of 1
Result:	Injunctions and other orders granted
Category:	B
PDF Version

Parties:	THE COMMISSIONER FOR CONSUMER PROTECTION FAY MARIE ARMSTRONG
Catchwords:	Consumer protection Enforceable undertaking given to regulator Application by regulator for orders enforcing the undertaking Turns on own facts
Legislation:	Australian Consumer Law (WA), s 218
Case References:	Australian Competition and Consumer Commission v StoresOnline International [2007] FCA 1597 Rural Press Ltd v Australian Competition and Consumer Protection (2003) 216 CLR 53

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA CITATION : THE COMMISSIONER FOR CONSUMER PROTECTION -v- ARMSTRONG [2012] WASC 206 CORAM : BEECH J HEARD : 12 JUNE 2012 DELIVERED : 21 JUNE 2012 FILE NO/S : CIV 1611 of 2012 BETWEEN : THE COMMISSIONER FOR CONSUMER PROTECTION

Plaintiff

AND

FAY MARIE ARMSTRONG
Defendant

Catchwords:

Consumer protection - Enforceable undertaking given to regulator - Application by regulator for orders enforcing the undertaking - Turns on own facts

Legislation:

Australian Consumer Law (WA), s 218

Result:

Injunctions and other orders granted

(Page 2)

Category: B

Representation:

Counsel:

Plaintiff : Mr M G S Crowley
Defendant : No appearance

Solicitors:

Plaintiff : Department of Commerce
Defendant : No appearance

Case(s) referred to in judgment(s):

Australian Competition and Consumer Commission v StoresOnline International [2007] FCA 1597
Rural Press Ltd v Australian Competition and Consumer Protection (2003) 216 CLR 53


(Page 3)

BEECH J:

Introduction

1 The plaintiff, the Commissioner for Consumer Protection (the Commissioner) applies for declarations and injunctions relating to an enforceable undertaking given by the defendant, Ms Fay Armstrong, to the Commissioner. The Commissioner claims that Ms Armstrong has breached her enforceable undertaking in various respects. For the reasons that follow, I am satisfied that Ms Armstrong has breached the enforceable undertaking she gave, and that injunctions should be granted to substantially the same effect as the undertaking.

The background to the enforceable undertaking

2 By letter of 4 March 2011, the Commissioner wrote to Ms Armstrong setting out her concerns that, in advertising and selling puppies, Ms Armstrong had breached a number of consumer protection laws, including the Fair Trading Act 1987 (WA), the Fair Trading Act 2010 (WA) and the Australian Consumer Law (WA) (ACL). The letter stated that:

(a) since August 2008 up to March 2011, the Commissioner had received a number of credible complaints from consumers in relation to their purchase of puppies from her;

(b) the Commissioner alleged that on at least 8 occasions Ms Armstrong had contravened the relevant consumer protection laws, in that she had:


(i) offered for sale or sold to consumers animals with express representations, either orally or in writing by advertisements in The Quokka or the Sunday Times, as to a characteristic of the animals, namely that they had been 'vet checked, vaccinated, and wormed' whereas that was not the case;
(ii) offered for sale or sold to consumers animals with implied representations as to the health of the animal or its fitness for purpose;

(iii) offered for sale or sold to consumers animals which were in fact seriously ill, and which required veterinarian services or which had to be destroyed;

(Page 4)

(iv) made false or misleading statements in the course of trade or commerce that an animal was healthy;

(v) engaged in misleading or deceptive conduct in the course of trade or commerce;

(vi) breached an implied guarantee in a consumer contract that the animal was of an acceptable quality; and

(vii) breached an implied guarantee in a consumer contract that the animal was fit for purpose.

(c) the Commissioner's view was that this conduct contravened various provisions of the consumer protection laws (referred to more specifically in the letter); and

(d) to avoid the necessity of taking injunctive action in the Supreme Court, Ms Armstrong was invited to enter into an enforceable undertaking in the form enclosed with the letter.

3 Further letters to similar effect were written on 24 March 2011 and 14 April 2011.

4 On 18 May 2011, the Commissioner commenced proceedings in this court; CIV 1840 of 2011. The substance of the claim was to the effect alleged in the Commissioner's earlier letters. The claim was set out in more detail in the indorsement of claim on the writ.

5 On 9 June 2011, the Commissioner wrote to Ms Armstrong, referring to telephone conversations with a solicitor on behalf of Ms Armstrong. The letter stated that the solicitor had advised that Ms Armstrong wished to sign the enforceable undertaking. The letter expressed concern that Ms Armstrong was supplying animals to consumers which were seriously ill and in some cases had to be destroyed by the consumers at considerable expense and emotional distress. Further the letter stated that notwithstanding the express concerns, the Commissioner had been 'reliably informed' that Ms Armstrong had recently continued to sell animals.

6 On 30 June 2011, the Department of Commerce on behalf of the Commissioner received a signed undertaking from Ms Armstrong, witnessed by her solicitor.

7 By letter of 7 July 2011, the Department of Commerce on behalf of the Commissioner advised that the signed enforceable undertaking had

(Page 5)

been received and that consequently the Commissioner had discontinued Supreme Court proceedings CIV 1840 of 2011. The letter stated that breaches of the undertaking were enforceable in a court and could result in the Commissioner seeking compensation orders injunctions and any other orders set out in s 218 of the ACL. The letter also stated that Mr Crowley of the Department of Commerce had gone through each of the written undertakings and confirmed with Ms Armstrong that she understood each of them.

Enforceable undertaking

8 The terms of the undertaking (the Enforceable Undertaking) given by Ms Armstrong are as follows:

I, Fay Marie ARMSTRONG, UNDERTAKE to the COMMISSIONER FOR CONSUMER PROTECTION for the purpose of section 218 of the Australian Consumer Law (WA) that I will not, whether by my servants, agents or otherwise:

1. represent, whether expressly or impliedly, that any animal that I sell or offer for sale is in good health, has been vaccinated, or has been wormed, without first obtaining a written report of a suitably qualified veterinarian stating precisely that;

2. sell or offer for sale an animal without first obtaining a written report of a suitably qualified veterinarian as to the animal's condition;

3. sell or offer for sale an animal without providing to the purchaser a written report of a suitably qualified veterinarian as to the animal's condition;

4. sell or offer for sale an animal with parvovirus, hepatitis, distemper, parainfluenza, or bordatellabronciosepta;

5. sell or offer for sale an animal without first having that animal tested for and vaccinated against parvovirus, hepatitis, distemper, parainfluenza, or bordatellabronciosepta;

6. without limiting any of the above, enter into an agreement for the supply of a dog without obtaining and providing a written report of a suitably qualified veterinarian as to the animal's condition;

7. without limiting any of the above, accept payment or other consideration for the supply of an animal without obtaining and providing a written report of suitably qualified veterinarian as to the animal's condition.

(Page 6)

In so undertaking I understand that this undertaking is ENFORCEABLE by the Commissioner for Consumer Protection in the Supreme Court of Western Australia, and the sanctions described in section 218 of the Australian Consumer Law (WA) for breach are available.

The Commissioner's application

9 The Commissioner is 'the regulator' for the purposes of the ACL: see s 22 of the Fair Trading Act 2010.

10 By s 218(1) of the ACL, the regulator may accept a written undertaking given by a person for the purposes of the section in connection with a matter in relation to which the regulator has a power or function under the ACL. The Commissioner has powers and functions under the ACL to bring proceedings in respect of contraventions of the ACL and other consumer laws referred to in the writ in action CIV 1840 of 2011. Consequently, s 218(1) empowered the Commissioner to accept the Enforceable Undertaking given by Ms Armstrong in this case.

11 Section 218(3) empowers the Commissioner, as the regulator, to apply for an order under s 218(4) in the event that the regulator considers that the person who gave the undertaking has breached any of its terms.

12 In these proceedings, the Commissioner has invoked her power under s 218(3) of the ACL.

13 The Commissioner claims, in summary:

(a) declarations that Ms Armstrong has breached substantially all of the clauses of the Enforceable Undertaking;

(b) a permanent injunction restraining Ms Armstrong from selling or offering for sale any dog;

(c) alternatively to (b), a permanent injunction restraining Ms Armstrong, in effect, from engaging in conduct in breach of the enforceable undertaking;

(d) an order that Ms Armstrong pay compensation in stipulated amounts to three persons.

14 The grounds of the Commissioner's application are that by conduct on 24 July 2011, 1 August 2011, 31 October 2011 and 22 January 2012, Ms Armstrong has breached the Enforceable Undertaking in various specified respects.

(Page 7)

No appearance by Ms Armstrong

15 Ms Armstrong was served with the Commissioner's application and the supporting affidavits by Mr Stefan Reksmiss: see his affidavit of 8 June 2012. Ms Armstrong refused to take possession of the documents, but in the circumstances set out in [10] - [18] of Mr Reksmiss's affidavit, I am satisfied that Ms Armstrong was duly served.

16 Further, I note that the relevant court documents were sent by express post to Ms Armstrong's address.

17 Ms Armstrong did not appear at the hearing of the application. The hearing proceeded in her absence.

Breaches of enforceable undertakings: overview

18 As I will explain in more detail later in these reasons, there is ample evidence of conduct which, if engaged in by Ms Armstrong, would constitute breaches of Ms Armstrong's Enforceable Undertaking. In short, in the sales of puppies to Ms Veronica Pakieto, Ms Alyce Ramsay and Ms Jacqueline Devereaux, and in the offer of a sale to Ms Cheryl Dyer, there was conduct which in various respects would constitute breaches of the Enforceable Undertaking.

19 In each of these cases, the person with whom the consumer dealt did not identify herself as Ms Armstrong. Rather, in each case, the person identified herself by another name, being a different name in each case. Consequently, it is necessary for the Commissioner to demonstrate that the person selling or offering to sell the puppy in each case was Ms Armstrong.

20 For the reasons which follow, I am satisfied of that.

21 First, the transactions in question exhibit striking similarities in a number of respects. The seller placed an advertisement in the publication known as 'The Quokka', leaving a mobile number. In the case of two of the three mobile numbers used, it has been shown that the mobile number in question was registered in a false name. In each case, the seller arranged to meet the prospective buyer in a public car park, and explained that she did not live in Perth, but was in Perth at that time. Each meeting took place in the southern suburbs of the metropolitan area; three were in close proximity to Ms Armstrong's home address.

22 Secondly, in each case the seller drove a white station wagon. Ms Pakieto, Mr Ramsay, Ms Ramsay and Ms Barry identified the car as a

(Page 8)

Mitsubishi Magna. A white Mitsubishi Magna station wagon is recorded as licensed to Ms Armstrong on the vehicle register: see exhibit 1. In some cases, witnesses recorded the registration number of the vehicle, which accorded with the car registered to Ms Armstrong. Further, both Mr Ramsay and Ms Devereaux noticed a dent in the car.

23 Thirdly, the various purchasers or prospective purchasers each gave corresponding descriptions of the seller.

24 Fourthly, Ms Pakieto and Ms Devereaux identified the seller as the person, namely Ms Armstrong, who had been featured on an item in the media. Further, Ms Dyer and Ms Barry specifically identified the seller or prospective seller as Ms Armstrong.

25 One of the transactions relied on by the Commissioner was the offer of sale of the puppy to Ms Karen Criddle on 22 May 2011. Because that transaction was before Ms Armstrong entered into the Enforceable Undertaking, it does not involve any breach of the Enforceable Undertaking. However, it is of some relevance in that it can be seen to be part of a consistent pattern of behaviour by Ms Armstrong. Further, Senior Constable Freer specifically identified the prospective seller in that transaction as Ms Armstrong and identified that she was driving the white station wagon registered in her name.

26 I turn now to make findings about each of the transactions said to involve breaches of the Enforceable Undertaking.

The breaching transactions

27 There are four transactions involving breaches of the Enforceable Undertaking. I will deal with them in turn.

Sale to Ms Pakieto - 24 July 2011

28 In July 2011, Ms Pakieto and her husband wanted to purchase a puppy for their two young daughters. On 24 July 2011, Ms Pakieto met with Ms Armstrong in a car park in Armadale. Ms Armstrong used the name 'Mandy' in her dealings with Ms Pakieto. She asked whether the puppy had been vet checked, to which Ms Armstrong said 'no'. Ms Armstrong said words to the effect that you should not have any problems once you get him checked. She also said that the reason the puppy had not been checked was because in Bencubbin, where Ms Armstrong said she lived, there was only a vet present once a month.

29 Ms Pakieto purchased the puppy for $350.

(Page 9)

30 Almost immediately thereafter the puppy showed signs of being unwell, having diarrhoea and being lethargic.

31 On 28 July 2011, he was diagnosed by Dr Kay McIntosh with parvovirus.

32 Parvovirus is a highly contagious diseased afflicting dogs which causes a painful death. It erodes the lining of a dog's gut, making the animal prone to bacterial infections, and causing dehydration and spasms. Without treatment the animal may die within about 2 days in severe cases or a week in milder cases. The incubation period is between 5 and 21 days, but on average usually between 10 and 14 days. Symptoms such as diarrhoea and vomiting may be present within about 3 days after exposure.

33 Even with treatment, the prospects of survival are limited. Vaccinations against parvovirus are inexpensive and readily available.

34 Ms Pakieto had the puppy treated, and received bills of $1,675. She has paid off that bill.

35 The puppy had to be put down.

36 I find that in the transaction with Ms Pakieto, Ms Armstrong breached cl 1 to cl 5 and cl 7 of the Enforceable Undertaking in the following respects:

(1) in breach of cl 1, in saying that Ms Pakieto should not have any problems with the animal once it was checked, Ms Armstrong impliedly represented that the animal was in good health;

(2) in her dealings with Ms Pakieto, Ms Armstrong in effect admitted that the animal had not been examined by a veterinarian, thereby admitting a breach of cl 2;

(3) in breach of cl 3, she sold the puppy to Ms Pakieto without providing a veterinarian's report;

(4) I am satisfied by the evidence of Ms Pakieto and Dr McIntosh that the animal sold was infected with parvovirus. Consequently, in selling the puppy, Ms Armstrong breached cl 4;

(5) consequently, it is to be inferred that Ms Armstrong sold the puppy without first having had it specifically tested for parvovirus, thereby breaching cl 5; and

(Page 10)

(6) in receiving payment of $350 for the puppy without having obtained and provided a veterinarian's report, Ms Armstrong also breached cl 7.

Offer to Ms Cheryl Dyer - 1 August 2011

37 The effect of Ms Dyer's evidence, which I accept, is that on 1 August 2011, Ms Armstrong:

(1) expressly represented that an animal which she offered for sale was healthy, without first obtaining a veterinarian's report confirming the representation, in breach of cl 1;

(2) offered an animal for sale without first obtaining a veterinarian's report, in breach of cl 2;

(3) offered the puppy for sale without providing a veterinarian's report, in breach of cl 3; and

(4) offered the puppy for sale without first having had it specifically tested for parvovirus, in breach of cl 5.

Sale to Ms A Ramsay - 31 October 2011

38 In October 2011, Ms Ramsay wanted to purchase a puppy for her two young children as an early Christmas present. After responding to an advertisement in The Quokka and speaking to Ms Armstrong, who was using the name 'Emma', she arranged to meet in a public car park.

39 Ms Ramsay's father paid $450 in cash for the puppy. It started to vomit within a few hours. The next day, Ms Ramsay took the puppy to a veterinarian, Dr Blaikie. The puppy was diagnosed with parvovirus. Given the costs of thousands of dollars for treatment, the puppy was put down.

40 For reasons corresponding to my previous findings, in the conduct of the sale to Ms Ramsay, Ms Armstrong breached cl 1 to cl 5 and cl 7 of the Enforceable Undertaking.

Sale to Ms Devereaux - 22 January 2012

41 In January 2012, Ms Devereaux decided to buy a puppy for her daughter. She responded to an advertisement in The Quokka by ringing the mobile phone number listed. Ms Armstrong used the name 'Jody' in her dealings with Ms Devereaux. At the suggestion of Ms Armstrong, on

(Page 11)

22 January 2012 they met in a car park in Success. Ms Devereaux purchased a puppy for $400.

42 A few days later she noticed the problem that the dog was not eating well, but attributed that to the hot weather. A few days later, she took the dog to a veterinarian clinic where it tested positive to parvovirus. Given the price of treatment and the limited prospect of success, the dog was put down.

43 Again, in the respects already explained, in her dealings with Ms Devereaux, Ms Armstrong breached cl 1 to cl 5 and cl 7 of the Enforceable Undertaking.

Relief

44 The Commissioner claims a number of kinds of relief in respect Ms Armstrong's breach of her Enforceable Undertaking.

45 First, the Commissioner claims a declaration in terms that Ms Armstrong 'has breached each of clauses 1 to 7 of the enforceable undertaking'. I would not make a declaration in such general terms. Whether any declaration is appropriate requires careful consideration. See, for example, Rural Press Ltd v Australian Competition and Consumer Protection (2003) 216 CLR 53 [89] - [90], [95]. I will hear further on the question of declarations.

46 Secondly, the Commissioner claims a permanent injunction restraining Ms Armstrong from selling or offering for sale any dog. In the alternative to that, the Commissioner claims that an injunction restraining Ms Armstrong, in effect, from acting in breach of the Enforceable Undertaking.

47 I am satisfied that injunctions in the alternative form sought by the Commissioner should be made. An injunction which effectively requires compliance with the undertaking is within the power in s 218(4). The ordinary and natural meaning of the section is to give a court power to better enforce undertakings by converting them into orders of the court, and to make other orders at its discretion, if and when that becomes appropriate: Australian Competition and Consumer Commission v StoresOnline International [2007] FCA 1597

48 However, I am not satisfied that Ms Armstrong should be restrained from selling or offering for sale any dog. Provided that Ms Armstrong

(Page 12)

acts in accordance with her undertaking, she should be at liberty to sell a dog.

49 Finally, the Commissioner seeks orders for compensation in favour of Ms Pakieto, Ms Ramsay and Ms Devereaux. The amount for Ms Pakeito represents the total of what she paid for the puppy and the cost of treatment; for Ms Ramsay it is the price of the puppy, and in the case of Ms Devereaux, the price of the puppy plus the expense incurred at the veterinarian.

50 I am satisfied that it would be appropriate to make an order for compensation in these terms. In each case, the amount in question was lost as a direct and foreseeable consequence of Ms Armstrong's breach of the Enforceable Undertaking.

Conclusion

51 For the reasons I have explained:

(1) I am satisfied that Ms Armstrong has breached the Enforceable Undertaking she gave in the various respects alleged by the Commissioner;

(2) I am not presently persuaded to make any declaration in that respect, but will hear further from the Commissioner on that topic;

(3) I would grant an injunction in terms which, in effect, require compliance with the Enforceable Undertaking; and

(4) I would make orders for compensation in the terms sought by the Commissioner.