Trade Practices Commission v Norton Holdings Pty Ltd - [1987] FCA 11

IN THE FEDERAL COURT	)
OF AUSTRALIA	1

WESTERN

AUSTRALIA

No. WA G1 of 1987

DISTRICT

REGISTRY

GENERAL	DIVISION	)
B E T W E E N :

I	TRADE PRACTICES COMMISSION

Applicant

and

NORTON HOLDINGS PTY. LIMITED

First Respondent

and

mTAN ANGUS McKENZIE

Second Respondent

CORAM:

T O O I E Y

12 January 1987

M TEMPORE REASONS

FOR JUDGMENT

Last week the Court granted an injunction to restrain

the respondents

from operating two accounts; one,

an account with.

'. -\

the Commonwealth Trading Bank and the other,

an account with the

First Federal Building Society.

The Trade Practices Commission

seeks an extension of those injunctions, and also,

by way of

interlocutory relief, the grantlng

of injunctions against the

respondents restraiming them from promoting

a scheme which goes

various names, but can be conveniently referred to as the Metro

Marketing Scheme.

2 .

I am satlsiied that the Commisslon has demonstrated not

only that there

is a serious question to be tried as to

misleading

or deceptive conduct on the part of the respondents but that there

is a prima facie case.

Mr. McKenzie, the second respondent, has

spoken at some length about the way

in which the scheme

works, but

nothing that he has

sald

has really dealt with the essential

complaint made by the Commisslon. This is that the advertisements

placed by the respondents, and the documents which are sent to

persons who respond to those advertisements, suggest activities

to be carried out, which are quite different from those which the

person responding learns	when, and only when, he	or she has paid
$40.

, .

And clearly the amounts which

a person may earn cannot

be derived from filling envelopes, as the advertisement suggests;

nor can they be earned merely by doing what is set out in the

. .

exhibits PJD 8 and PJD 9.

It only becomes apparent when one has

paid one's $40 that moneys can only be earned by others responding

in a similar

way.

I am quite satisfied that the advertisements

and the initial documents are misleading

or deceptive and indeed

that they almost certainly contravene other sections of the Trade

Practices Act

1974.

The question then

1 s what relief should- be granted to

the Commission by way of injunctions at this stage.

So far as the

exlsting lnjunctions are concerned, they really are subsumed in

i	'
I

3 .

what 1 s sought ln the application itself, and so It 1s enouTh to

turn t o the

lnterlocutory

relief

which

1 s

clalmed

the

in3unctlon.

As aqainst the first respondent it seems to me that an

injunctlon in terms of para.ta1 is appropriate with one

two

qualifications.

I would grant

an injunction pending the hearing

of this application

or until further order

- and, interpolating,

do that to give the first respondent

an opportunity to return to

the Court if it can demonstrate that the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Trade Practices Commission v Norton Holdings Pty Ltd

Details

AGLC: Trade Practices Commission v Norton Holdings Pty Ltd [1987] FCA 11
Case: [1987] FCA 11
Decision Date: 12 Jan 1987

CaseChat Overview and Summary

In Trade Practices Commission v Norton Holdings Pty Ltd, the Trade Practices Commission sought an extension of existing injunctions and additional interlocutory relief to restrain Norton Holdings Pty Ltd and Tan Angus McKenzie from operating certain bank accounts and promoting a scheme known as the Metro Marketing Scheme. The respondents were accused of engaging in misleading and deceptive conduct by advertising activities that differed significantly from what participants would actually undertake upon payment of a fee. The court was required to determine whether the Trade Practices Commission had demonstrated a serious question to be tried regarding the misleading or deceptive conduct of the respondents and whether injunctions should be extended or granted against them.

The court found that the Trade Practices Commission had indeed demonstrated a serious question to be tried regarding the misleading or deceptive conduct of the respondents. The advertisements and initial documents provided by the respondents were misleading, as they suggested that activities would be carried out that were different from those which participants would actually undertake upon payment of a fee. The court was satisfied that the advertisements and documents were misleading or deceptive and likely contravened other sections of the Trade Practices Act 1974. Regarding the relief sought by the Trade Practices Commission, the court found that injunctions should be granted against both respondents, pending the hearing of the substantive application or until further order. The injunctions were intended to prevent the respondents from promoting the Metro Marketing Scheme and to freeze certain bank accounts to preserve any moneys derived from the scheme.

The court granted the injunctions as sought by the Trade Practices Commission, with minor modifications to clarify the terms of the injunctions and provide an opportunity for the respondents to seek variation or setting aside of the injunctions if appropriate. The court also noted that the second respondent, Tan Angus McKenzie, had given certain undertakings regarding shelving the operation of the scheme and returning moneys received, and encouraged him to follow through with these undertakings. Finally, the court ordered that the costs of the hearing be reserved.

Orders