Australian Communications and Media Authority v FHT Travel Pty Ltd

REASONS FOR JUDGMENT 1 Section 11 of the Do Not Call Register Act 2006 (Cth) (the "Act") provides that: A person must not make, or cause to be made, a telemarketing call to an Australian number, if: (a) the number is registered on the Do Not Call Register; and (b) the call is not a designated telemarketing call. 2 Section 7 provides that: A person must not aid, abet, counsel or procure a contravention of subsection (1) or otherwise be knowingly concerned in such a contravention. 3 Designated telemarketing calls are exempted from the provisions, but there is no suggestion that that exemption is relevant for present purposes. A telemarketing call is defined in s 5 and, in particular, includes: A voice call to a telephone number, where, having regard to the content of the call, it would be concluded that the purpose, or one of the purposes, of the call was to offer to supply goods or services or to advertise or promote goods or services. 4 In this case, the second respondent is, or was at the relevant time, the sole director of the first respondent. Appearances have been entered on behalf of both respondents. However, at an earlier directions hearing, I refused to allow the second respondent to appear on behalf of the first respondent, she not being able to produce any authority which would justify her doing so. However there seems to be no reason to doubt that she had authority to enter an appearance on behalf of the first respondent. I therefore treat both respondents as having appeared in the proceedings. 5 The applicant intended to proceed today upon the basis of O 35A. However, it is more appropriate that it proceed upon the basis that the respondents have not appeared at the trial as contemplated by O 32. At the directions hearing on 18 March 2011, I ordered that the parties file a statement of agreed facts, if any, on or before 25 March 2011. I further ordered that should either respondent wish to deny or admit a fact alleged in the statement of claim, they file a defence on or before 1 April 2011. Neither respondent has done so. In those circumstances, it is submitted that pursuant to O 32, I should proceed upon the basis that the facts alleged in the statement of claim have been admitted. It is appropriate that I proceed in that way. 6 The Act provides for a Do Not Call Register. As I understand it, the register permits individual subscribers to domestic telephone services to make it known to the applicant in these proceedings that he or she does not wish to receive unsolicited telephone calls of the kind described as telemarketing calls. These proceedings are brought to enforce the Act in the sense that it is alleged that the first respondent has breached the prohibition in s 11(1), and that the second respondent has authorized, and therefore procured, such contravention. 7 It is alleged that on various dates between 14 August 2008 and 8 October 2008, the first respondent made telephone calls which infringed the Act. In some cases, there were specific telephone calls to identified numbers. However, it is alleged that from 10 September 2008 until 8 October 2008, a very large number of infringing telephone calls were made, particulars of which are only given in a few cases. It seems that the records relating to telephone calls made prior to 10 September 2008 have been lost, and so the applicant relies upon particular complaints received from persons whose numbers were on the register. Thereafter, it has been able to identify from telephone records the number of calls made to numbers on the register. 8 The evidence demonstrates, I am told, about twelve and a half thousand infringing calls over a period of slightly less than a month. I am satisfied to proceed upon the basis that the calls were made, and that they were contrary to the Act. Contravention by the first respondent is therefore demonstrated on a substantial scale. The question of the involvement of the second respondent in the company's contraventions is somewhat more difficult. It is alleged in para 30 of the statement of claim that she was, at all material times, aware of matters pleaded in paras 4-6 of the statement of claim, caused or authorised the first respondent to make or caused the calls to be made, was aware of the existence of the Do Not Call Register and took no steps, or no adequate steps, to ensure that the first respondent did not make, or cause to be made calls to such numbers. 9 The breadth of these allegations is a little unsettling. In my view, in order to demonstrate knowing involvement or, for that matter, that there was aiding, abetting, counselling or procuring of a contravention, it must be demonstrated that the relevant person was knowingly involved in, or knowingly entered into such conduct. This is the approach that has consistently been taken under the Trade Practices Act 1974 (Cth) (the "TP Act"). It has not been suggested that it is incorrect. It is therefore necessary to show that the second respondent knew that telephone calls to be made would contravene the Act, at or before the time at which they were made. 10 Such assertion having been made in the statement of claim and not denied, it is, I suppose, theoretically possible simply to infer its correctness. However the allegations in the statement of claim in this regard are somewhat lacking in detail. When one looks at the history of the matter, it becomes clear that at least insofar as concerns calls after 29 August 2008, the second respondent had quite detailed knowledge of events. In an email to an officer of the applicant dated 24 November 2008, she sought to respond to complaints conveyed to her by the applicant. She said: Until 29 August, FHT Travel were running on the attached washed lists. These included two Brisbane lists and a Geelong list. On 2 September, FHT Travel had the boards on the dialler fail, and this, coupled with FHT Travel's dialler support technician being overseas, meant that FHT Travel changed to past sales lists. These lists are paper based and manual dialled. Once the dialler was reinstalled, FHT Travel finished the past sales lists and went back on the dialler on washed lists. 11 This seems to mean that from 2 September 2008, the first respondent was not using lists described as "washed lists". They are lists provided by the applicant to those who intend to engage in telemarketing. However, on 2 September 2008, for technical reasons, the first respondent resorted to using sales lists, which I take to be their own sales lists, presumably lists of customers with whom they have previously dealt. That seems inevitably to have involved the first respondent in making calls without regard to the content of the register. At some stage in that period, probably early in the period, the second respondent as the sole director and person engaged in supervising the management of the company, must have become aware of it. 12 I am therefore willing to infer that from shortly after 2 September 2008, she was aware that the first respondent was making calls without seeking to identify numbers which were on the register. Having regard to that conduct, I am willing to infer the absence of any defence to the statement of claim, and that she authorized all of the calls pleaded in the statement of claim. This leads to the conclusion that the acts of contravention alleged against her are also established. In concluding that the applicant has made out its claim, I have had regard to the stringency needed in determining whether or not conduct contrary to legislation has been proven for the purpose of imposing pecuniary penalties. 13 Counsel has made submissions concerning the form of declaration. I shall allow the applicant to bring in a declaration reflecting those submissions. The effect of the declaration will be limited to recognising the fact that the first respondent has, on numerous occasions, infringed the provision of s 11(1) by making telephone calls which fit the description contained in s 5. It will not be necessary to refer to the absence of any of the various authorisations. The assertion that it was contrary to the Act will be sufficient in that regard. There will also be a declaration that the second respondent authorized, and therefore procured such contraventions. 14 As to the question of injunctive relief, I have been concerned that any injunctive relief granted for a fixed period of time carries with it an implied assertion that the respondents will be at liberty to break the law after the period expires. For that reason, I do not consider such injunctions to be particularly useful or desirable. The other risk with injunctive relief in cases of this kind is that the conduct can either be too vaguely described or described in so much detail that it becomes impossible for the enjoined party to work out what it is that he or she is restrained from doing. Further, one has to take into account, in the case of the second respondent, the fact that she will have to make a living in one way or another, and it should not be made impossible for her to engage in employment in commercial areas in ways in which others may. 15 I shall make an injunction restraining both the first and the second respondents, for a period of five years, from being engaged in any business which relies upon the regular use of telemarketing calls, without first advising the applicant in writing of its or her intention to do so, and providing such information concerning that involvement as the applicant may reasonably require. There will also be liberty to apply. I shall leave it to the applicant to bring in an injunction in appropriate terms. 16 As to the question of pecuniary penalty, the conduct demonstrates a course of conduct over a period of time which must have caused considerable annoyance to telephone subscribers who had gone to the trouble of asking that their names be put on the register. The applicant had previously contacted the respondents, advising of complaints about which the applicant did not then intend to take any action. At a later stage, the applicant, having received further complaints, again took the matter up with the respondents. The responses appear to have been rather less than satisfactory. In the circumstances, significant pecuniary penalties are justified. However it seems unlikely that either the first or second respondents will be in a position to pay. The first respondent is presently in the course of being struck off the register by the Australian Securities and Investments Commission ("ASIC"). The second respondent is in bankruptcy. 17 As to the first respondent, there is no reason why a significant financial penalty should not be imposed. It will either be paid or not paid, depending upon its asset position. The applicant suggests that a range of $100,000 to $120,000 is appropriate. That seems to me to reasonably reflect the seriousness of the conduct. I impose a penalty of $120,000 upon the first respondent. 18 As to the second respondent, it seems to me that as a matter of public policy, it would be undesirable that she come out of bankruptcy with a substantial debt. Any debt would, I infer, be a debt incurred after the bankruptcy and so continue to be payable. In those circumstances, I decline to impose a penalty upon the second respondent. However I indicate that had I chosen to do otherwise, the range would have been that specified by the applicant, namely $10,000 to $20,000. 19 I order that the first respondent pay to the Commonwealth the amount of $120,000 on or before 9 June 2011. I order that the respondents pay the applicant's costs of the proceedings, including reserved costs. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.