Australian Communications and Media Authority v Mobilegate Ltd A Company Incorporated in Hong Kong

Federal Court of Australia|2010-11-05|Before: Logan J

The Applicant bring in proposed short minutes of orders to give effect to these reasons for judgment.
The proceeding be adjourned to a date to be fixed for the hearing of submissions and the determination of questions as to forms of relief, penalty and costs. Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website.

BETWEEN: AUSTRALIAN COMMUNICATIONS AND MEDIA AUTHORITY

AND: MOBILEGATE LTD A COMPANY INCORPORATED IN HONG KONG

REASONS FOR JUDGMENT 1 Mr Scott Gregory Phillips is the Eighth Respondent in this proceeding. As against him, the Australian Communications and Media Authority (the Authority) seeks the following relief: A. A declaration that he: i. aided and abetted International Machinery Parts Pty Ltd (IMP), whose central management and control was in Australia, to send SMS messages or to cause SMS messages to be sent via 1977 3366; and ii. was knowingly concerned in, and a party to, IMP, whose central management and control was in Australia, sending SMS messages or causing SMS messages to be sent via 1977 3366: to: (a) Australian mobile telephone numbers, which its servants or agents had obtained by deception using fabricated dating website profiles for the purposes of dishonestly obtaining the account holder's acceptance of its safe divert service; or (b) Australian mobile telephone account holders who had replied "Yes" in circumstances where the company knew that their acceptance of its safe divert service had been obtained by deception, in contravention of s 16(1) of the Spam Act 2003 (Cth) (Spam Act) and thereby engaged in conduct in contravention of s 16(9) of the Spam Act. B. The imposition of pecuniary penalties for the alleged contravention of the Spam Act C. Injunctive relief in addition and in the way foreshadowed in the application. D. In the event of contraventions being found and in the event of my being satisfied that another person or persons have suffered loss or damage as a result of the alleged contraventions. (compensatory orders) 2 The Authority alleges that Mr Phillips' involvement in the contraventions of the Spam Act 2003 (Cth) (Spam Act) and of the Trade Practices Act 1974 (Cth) (Trade Practices Act) occurred between December 2005 and, by an amendment made on behalf of the Authority at the commencement of the trial, 9 April 2006. 3 This judgment addresses the initial question of whether the Authority has made out any or all of the statutory contraventions alleged? Whether it is later necessary separately to consider the questions of penalty and the other relief sought will depend on the answer to this initial question. 4 Section 16 of the Spam Act provides: Unsolicited commercial electronic messages must not be sent (1) A person must not send, or cause to be sent, a commercial electronic message that: (a) has an Australian link; and (b) is not a designated commercial electronic message. Note 1: For Australian link, see section 7. Note 2: For designated commercial electronic message , see Schedule 1. (2) Subsection (1) does not apply if the relevant electronic account-holder consented to the sending of the message. Note: For the meaning of consent, see Schedule 2. (3) Subsection (1) does not apply if the person: (a) did not know; and (b) could not, with reasonable diligence, have ascertained; that the message had an Australian link. (4) Subsection (1) does not apply if the person sent the message, or caused the message to be sent, by mistake. (5) A person who wishes to rely on subsection (2), (3) or (4) bears an evidential burden in relation to that matter. Message must not be sent to a non-existent electronic address (6) A person must not send, or cause to be sent, a commercial electronic message to a non-existent electronic address if: (a) the person did not have reason to believe that the electronic address existed; and (b) the electronic message: (i) has an Australian link; and (ii) is not a designated commercial electronic message. (7) Subsection (6) does not apply if the person: (a) did not know; and (b) could not, with reasonable diligence, have ascertained; that the message had an Australian link. (8) A person who wishes to rely on subsection (7) bears an evidential burden in relation to that matter. Ancillary contraventions (9) A person must not: (a) aid, abet, counsel or procure a contravention of subsection (1) or (6); or (b) induce, whether by threats or promises or otherwise, a contravention of subsection (1) or (6); or (c) be in any way, directly or indirectly, knowingly concerned in, or party to, a contravention of subsection (1) or (6); or (d) conspire with others to effect a contravention of subsection (1) or (6). (10) A person does not contravene subsection (9) merely because the person supplies a carriage service that enables an electronic message to be sent. Civil penalty provisions (11) Subsections (1), (6) and (9) are civil penalty provisions. Note: Part 4 provides for pecuniary penalties for breaches of civil penalty provisions. What constitutes a "commercial electronic message" for the purposes of the Spam Act is defined by s 6 of that Act. It is not necessary to set out that definition. It was not controversial in this case that the messages concerned fell within its terms. On the evidence, the absence of controversy as to the correct characterisation of the messages was not misplaced. 5 Certain of the subsections within s 16 provide for exceptions to the primary obligation created by s 16(1). In respect of these exceptions, an "evidential burden" is cast upon a person wishing to rely upon them. It is not necessary to consider the ramifications of such a provision as Mr Phillips did not seek to rely upon any such exception. 6 Mr Phillips' personal liability was said to arise by virtue of the operation of the ancillary liability provision in s 16 of the Spam Act, s 16(9). 7 Apart from alleging contraventions of the Spam Act the Authority also alleges that Mr Phillips aided, abetted or was knowingly concerned in and a party to a corporate contravention of s 52 of the Trade Practices Act by IMP, by its agent the Third Respondent, Jobspy Pty Ltd (Jobspy). The essence of that alleged corporate contravention is akin to the one which grounds the alleged corporate contravention of the Spam Act in the sense that it centres around the allegation of using fake dating website profiles and the absence of any informing of the viewers of those website profiles that they were fake. Again, Mr Phillips' personal liability is alleged to arise by virtue of the operation of an ancillary liability provision, in this instance s 75B of the Trade Practices Act. Injunctive relief, as well as declaratory relief, is sought in relation to the Trade Practices Act alleged contravention. Though it may ground the granting of declaratory and injunctive relief, a contravention of s 52, does not carry with it a liability to any pecuniary penalty. 8 Mr Phillips contested the allegations that he was a party to contraventions of the Spam Act and the Trade Practices Act. He made certain limited admissions (of which more later). It is for the Authority to prove its allegations, albeit on the balance of probabilities. Because the alleged Spam Act contraventions are penal in character that onus will not be discharged by "inexact proofs, indefinite testimony, or indirect inferences": Briginshaw v Briginshaw (1938) 60 CLR 336 (Briginshaw) at 362 per Dixon J (as his Honour then was); and s 140(2), Evidence Act 1995 (Cth). In this context, the following observation made by Heerey and Sackville JJ in Australian Competition & Consumer Commission v Australian Safeway Stores Pty Ltd (2003) 129 FCR 339 at 438 is also apposite: [The] so-called Briginshaw standard … requires the trier of fact, in determining what inferences to draw from the primary facts, to have regard to the seriousness of the allegations and the gravity of the consequences flowing from an adverse finding. But Briginshaw does not require a court to exclude all alternative possibilities before drawing an inference from the primary facts adverse to one of the parties. The question is whether the Court is reasonably satisfied that the fact in issue has been established, having regard to "the nature and consequences of the fact or facts to be proved": Briginshaw, per Dixon J. In this connection, the Court must take into account not only the seriousness of the allegation made and the gravity of the consequences of an adverse finding, but "the inherent unlikelihood of an occurrence of a given description": Briginshaw. [Citations omitted] 9 Even though the alleged contraventions of the Trade Practices Act do not carry with them a potential liability to the imposition of pecuniary penalties, those allegations by their very nature are serious. To find them proved would visit upon Mr Phillips not just amenability to declaratory and injunctive relief but also a degree of moral opprobrium. Because of this, I intend to approach the question of whether the Trade Practices Act allegations are proved in the same way as I approach the proof of allegations arising under the Spam Act. Indeed, I consider that, in the circumstances of this case, it would be quite artificial to approach those questions otherwise. 10 It was put on behalf of Mr Phillips that the adoption of the Briginshaw approach to satisfaction of the civil standard of proof in respect of the alleged Trade Practices Act contraventions was supported by observations made by Pincus J, Lockhart and Wilcox JJ agreeing, in The Heating Centre Pty Ltd v Trade Practices Commission (1986) 9 FCR 153 (The Heating Centre) at 160. It is true that one there finds reference by his Honour to the applicability of the civil standard of proof but with due regard to Briginshaw but this reference is made in the context of a suit for a pecuniary penalty in respect of a contravention of Part IV of the Trade Practices Act and a rejection of a submission that proof beyond reasonable doubt was required in such a case. Section 52 lies within Pt V, not Pt IV, of the Trade Practices Act and, unlike a contravention of a provision in Pt IV, a contravention of s 52 carries with it no liability to a pecuniary penalty. The Heating Centre is therefore distinguishable. Further, it is not the case that every alleged contravention of s 52 carries with it even a need to take into account what was said in Briginshaw as to the civil standard of proof. Neither s 140(2) of the Evidence Act nor even anything stated in Briginshaw requires that. It is just that in this case there is a coincidence of conduct giving rise to alleged contraventions of a pecuniary penalty provision in the Spam Act and alleged contraventions of s 52 of the Trade Practices Act the circumstances of which are such that, for the reasons given in the preceding paragraph, statute (as found in s 140(2) of the Evidence Act), common law principle (as set out in Briginshaw) and, if it be any different, practicality dictate that, while it is the civil standard which is applicable, due regard must be had to the gravity of the allegations made in this case when considering the ultimate issue of whether Mr Phillips was a party to the alleged corporate contraventions is proved. 11 Another submission made on behalf of Mr Phillips in relation to the standard of proof took as its starting point an observation made by Dawson J in Shepherd v The Queen (1990) 170 CLR 573 (Shepherd) at 578 in relation to a customary direction to a jury with respect to a prosecution case which relied upon circumstantial evidence, "guilt should not only be a rational inference but should be the only rational inference which can be drawn from the circumstances". This observation, it was submitted, was just as much applicable to a civil case based on circumstantial evidence. It is true to say that any conclusion as to his ancillary liability is, on the Authority's case, ultimately a matter for inferences to be drawn in the circumstances on the whole of the evidence. If though by the submission it was intended to suggest that, because there was a circumstantial element in the Authority's case, proof beyond reasonable doubt was required, that would be incorrect. Rather, the position in relation to a case which depends on circumstantial evidence is as stated by Gibbs CJ and Mason J in Chamberlain v The Queen (No 2) (1984) 153 CLR 521 (Chamberlain No 2), at 536: It follows from what we have said that the jury should decide whether they accept the evidence of a particular fact, not by considering the evidence directly relating to that fact in isolation, but in the light of the whole evidence, and that they can draw an inference of guilt from a combination of facts, none of which viewed alone would support that inference. Nevertheless the jury cannot view a fact as a basis for an inference of guilt unless at the end of the day they are satisfied of the existence of that fact beyond reasonable doubt. When the evidence is circumstantial, the jury, whether in a civil or in a criminal case, are required to draw an inference from the circumstances of the case; in a civil case the circumstances must raise a more probable inference in favour of what is alleged, and in a criminal case the circumstances must exclude any reasonable hypothesis consistent with innocence … [Emphasis added] Referring to this passage from Chamberlain No 2 and to the further explanation given by Dawson J in Shepherd (at 580-581) as to cases based on circumstantial evidence, Winneke P in Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125, at 129 stated that they "apply with equal force to the process of reasoning which must be engaged in by a judicial officer when trying a case based on circumstantial evidence" and later (ibid): The task of the learned judge was to consider the weight of the combination of facts proved to his satisfaction and then to determine whether the combined weight of those facts and circumstances supported the inference, as a matter of probability [in that case that the insured deliberately lit the fire which damaged his house such that the insurer was entitled to refuse indemnity] … The onus of proof is only to be applied at the final stage of the reasoning process. It is, erroneous to divide the process into stages and, at each stage, apply some particular standard of proof. 12 In this case, I have to decide, not piecemeal but on the whole of the evidence and at the "final stage", whether the Authority has proved, on the balance of probabilities and paying due regard to the gravity of the allegations made by it, that Mr Phillips was a party to the corporate statutory contraventions which are alleged. To do otherwise would be to engage in a false process of reasoning. That is not, of course, to say that individual items of evidence need not be considered in detail and their significance highlighted but the task is to consider whether the case is proved to the requisite standard by the sum of the whole of the evidentiary parts, with all or any of the interactions between those parts, not whether individual parts are proved to that standard. 13 As already noted, Mr Phillips' liability is, in each instance, said to arise by virtue of the operation of an ancillary liability provision in circumstances giving rise to an alleged corporate contravention. There is no difference as between the Spam Act and the Trade Practices Act with respect to the operation of their respective ancillary liability provisions. It is for the Authority to show that Mr Phillips has been an intentional participant in the alleged corporate contraventions, "the necessary intent being based upon knowledge of the essential elements of the contravention": Yorke v Lucas (1985) 158 CLR 661 at 670. It will be necessary later to consider in greater detail what is entailed in the proof of the ancillary liability alleged. 14 There are some further, but fundamental, matters which should be recorded at the outset. Trite though the statement may be, whether the Authority has proved its case is to be judged solely by reference to the evidence led in this case which is relevant to the allegations made against Mr Phillips, not by echoes from evidence and outcomes in respect of other respondents. The latter are but irrelevant distractions in relation to Mr Phillips' alleged liability. To succeed in showing that Mr Phillips was a party to the corporate contraventions it alleges the Authority must in this case prove those underlying corporate contraventions as well as his ancillary liability: The King v Goldie; ex parte Picklum (1937) 59 CLR 254 at 268; Mallan v Lee (1949) 80 CLR 198 at 210. Such matters are especially important to recall because the affidavits read for the Authority were prepared and filed in anticipation of a broader contest not limited to Mr Phillips as a respondent contradictor. In the events which transpired, the delay and expense entailed in requiring the Authority to file its affidavits afresh would not have been warranted and this course was not promoted on behalf of Mr Phillips. That has meant that, save insofar as it goes to prove a corporate contravention to which Mr Phillips is alleged to have been a party during the period now in question, references in these affidavits to other respondents or to later periods are not relevant. I make these considerations explicit out of an abundance of caution and solely for the reason that it has fallen to me as docket judge separately to deal with the Authority's case against the other respondents. In fairness to the Authority, it did not submit that outcomes in respect of the other respondents were relevant to the case it sought to make against Mr Phillips.

THE RISE OF IMP 15 IMP was incorporated on 7 July 2004. The circumstances of its incorporation were singular. They also have a wider importance in terms of the ancillary liability case which the Authority seeks to make against Mr Phillips. 16 In July 2004 Mr Phillips faced the contingency of future imprisonment for a period of some years. Details of the charges he faced were not in evidence. It was not submitted that I should form any adverse opinion as to Mr Phillips' character or credibility based on the fact that he later came to be convicted and imprisoned in respect of some of these unspecified charges. I make it clear that I draw no adverse inference at all on this basis against Mr Phillips. As will be seen, the relevance of these matters lies only in the influence which they had on the course of events in relation to Mr Phillips' business interests. 17 Mr Phillips was then living at an address on Mount Nebo Road (Lot 4). Lot 4 and an immediately adjoining parcel of land, Lot 3, were each part of the same re-subdivision. Each bore the same street address, save that, at least informally, Lot 3 sometimes carried an "A" designator after the street number. The two lots shared a common driveway and mailbox. Lot 3 and Lot 4 were each then owned by Rural Traders Pty Ltd (Rural Traders) in its capacity as trustee of the Rural Traders Trust (RT Trust). 18 Mr Phillips was then the sole director and shareholder of Rural Traders. He was also the "primary beneficiary" of the RT Trust. That trust was a discretionary trust such that the income derived by the trustee in a given year of income did not, except in default of a determination by the trustee, vest in him as primary beneficiary. 19 From about 2003 Mr Conley, then a solicitor and a member of the firm Morgan Conley but more latterly a member of the Bar, had close social and business relations with Mr Phillips. Mr Conley related in evidence (and I accept) that, being aware of the contingency of imprisonment which Mr Phillips faced and of the possibility that, as a result, Mr Phillips' assets might fall to be managed by the Public Trustee, he gave advice to Mr Phillips (upon which Mr Phillips acted) as to how this management might be avoided and how he might retain control of his affairs. 20 I understood this reference to the possibility of the management of Mr Phillips' assets by the Public Trustee to be a reference to a prospective operation of Pt 7 of the Public Trustee Act 1978 (Qld) (Public Trustee Act). Then, as now, that Part of the Public Trustee Act applies, inter alia, to a prisoner who, after conviction of any indictable offence, is undergoing a sentence of imprisonment for at least a term of 3 years or upwards (or which in conjunction with others aggregate to such a term). Except as that Part otherwise provides (a subject presently unnecessary to explore), the effect of s 91 of the Public Trustee Act is that the Public Trustee, without further or other order or authority, becomes the manager of the estate of every prisoner to whom Pt 7 applies. 21 The advice which Mr Conley gave to Mr Phillips was to replace Rural Traders as trustee of the RT Trust with a different corporate trustee the shares in which should be held by a trusted friend of Mr Phillips, Ms Lichelle Lee, with that shareholding in turn being beneficially held by her. That replacement corporate trustee was IMP. Mr Phillips was asked about Ms Lee's role as director of IMP. He stated that he had a close relationship of trust with Ms Lee and her, since deceased husband, the late Mr Michael Lee, who were well aware in mid-2004 of the prospect of his being imprisoned. Ms Lee had, in effect, volunteered to be a director of IMP with their relationship being such that there was no need to give her explicit instructions about looking after his interests in the management of IMP. When asked whether it was his expectation that Ms Lee would not do something without his express say so, Mr Phillips' ready response was, "[e]xactly". I find that Ms Lee held the shares in IMP on behalf of Mr Phillips. 22 In this fashion, and so I find Mr Conley advised Mr Phillips, he was removed, at least on the public record, from apparent ownership and control of the trustee of the RT Trust. Further, a degree of protection from the possibility that, contrary to expectations held by Mr Phillips and Mr Conley, Ms Lee might act in her own interests, rather than those of Mr Phillips, was provided by her not owning the shares in the new corporate trustee outright. 23 The advice which Mr Conley gave to Mr Phillips in July 2004 coincided with that given to him at that time by another solicitor, Mr Salvatore (Sam) Sciacca, whose evidence in this regard I also accept. Mr Sciacca, too, was aware in July 2004 of the contingency of Mr Phillips being liable to imprisonment. 24 Mr Sciacca had known Mr Phillips for longer than Mr Conley, since about 1997. His then firm had acted for Mr Phillips and the purchasing entity, Rural Traders in relation to the purchase of Lot 3 and Lot 4. Mr Sciacca placed that purchase from recollection as having occurred in 1999. Historical title searches in respect of Lot 3 and Lot 4 confirm the accuracy of Mr Sciacca's recollection in respect of Lot 3. They also indicate that the acquisition of Lot 4 by Rural Traders as trustee occurred in 2001. Nothing turns on this difference. 25 Though Mr Conley did have a business association with Mr Phillips via a company, 3 Point Finance Pty Ltd (later known as Velocity 10 Pty Ltd), it was Mr Sciacca who was Mr Phillips' longstanding commercial law adviser. The advice which Mr Conley gave to Mr Phillips in July 2004, though seriously given and received, seems nonetheless to have been more informally given than that of Mr Sciacca. 26 That Mr Phillips was able to replace the trustee of the RT Trust was a result of his status under the terms of the deed governing that trust as its "Principal". Under that deed, the power of removal and replacement of the trustee was vested in the "Principal" (see clause 9.3, the definition of "Principal" in clause 1.10 and the Schedule). 27 In the result, it was Mr Conley's then firm which caused the incorporation of IMP but otherwise it was Mr Sciacca's firm which, on Mr Phillips' instructions, carried into effect the advice given to him. To this end, Mr Sciacca's firm caused a Deed of Variation to be prepared in respect of the RT Trust whereby, by Mr Phillips' direction, IMP replaced Rural Traders as trustee of that trust. This deed was executed by Mr Phillips and, in her then capacity as director of IMP, Ms Lee, on 7 July 2004 with the change of trustee taking effect that day. Also prepared by Mr Sciacca's firm and executed by these persons at that time were related transfers of the registered proprietorship of Lot 3 and Lot 4 from Rural Traders to IMP. 28 Some further reference to Mr Conley's having become a member of the Bar is necessary. It was in that capacity that he appeared for Mr Phillips for the initial part of the trial. It is necessary to say "initial part" because, in the course of the trial, it became starkly apparent, given issues of the nature and extent of Mr Phillips' involvement with IMP which were at large and Mr Conley's earlier involvement in providing advice to Mr Phillips in relation to IMP, that his absence from the witness box might, in the course of the Authority's closing submissions, become a matter for adverse comment and the subject of an invitation for the drawing of inferences adverse to Mr Phillips' case. Some of Mr Conley's earlier involvement with Mr Phillips I have already referred to; more is yet to come. Mr Conley ceased to appear for Mr Phillips and Mr Laing of Counsel assumed that role. At the stage of the trial when Mr Conley withdrew from and Mr Laing took over the conduct of Mr Phillips' defence I considered that the interests of justice, particularly the according of procedural fairness to Mr Phillips, required an adjournment of the trial such was the volume of evidence which had already been received and the corresponding need for new counsel fully to assimilate the same. 29 It is not the wisdom of hindsight to observe that the potential for the kind of professional embarrassment encountered by Mr Conley was, or at least ought to have been, evident in prospect in the circumstances of this case. At the time when it manifested itself I reserved the question as to whether any special order for costs in relation to the adjournment ought to be made. That is a subject which remains at large and which will fall for consideration once I have determined whether the Authority has made out all or any of its case.

IMP EMBARKS ON A BUSINESS 30 On 28 October 2005 and on behalf of IMP, purportedly as its "director", Mr Phillips signed an agreement between IMP and Mobile 365 Pty Ltd (later known as Sybase 365 Pty Ltd - (Sybase)) known as an "SMS Revenue Sharing Services Agreement" (RSA). The RSA provided for the assignment of two premium shortcode numbers, 19773366 and 19773377, by Sybase to IMP. Appendix 4 to the RSA stated that the name of the service to which the assigned numbers related was "Mobile-friend". The "customer acceptance" portion of this appendix was also signed by Mr Phillips but was dated 1 November 2005. The latter is expressed to be the "effective date" of the RSA. Nothing turns on the different signing dates which I have noted. Of greater significance in the RSA, apart from Mr Phillips' signatures and his apparent assumption of the office of director of IMP, was the giving of Lot 4's Mount Nebo Road street address as the principal place of business of IMP. Lot 4 continued then to be Mr Phillips' place of residence. 31 Of the two premium shortcode numbers, it is 19773366 which is of particular interest in terms of the case alleged against Mr Phillips by the Authority. 32 The nature and extent of Mr Phillips' involvement in the business which IMP conducted following the making of the RSA is controversial. Before considering the evidence and making findings in relation to those subjects some explanation of Australian communications industry practice and terminology in relation to a premium shortcode number is necessary. The evidence as to this came principally from the Authority's Mr Weber. I am satisfied that, both by formal qualification as well as by experience, he was well equipped to give this evidence. I accept this aspect of his evidence. It was not contradicted in Mr Phillips' case. 33 Sybase is what is known in Australian communications industry parlance as an "aggregator". Within that industry aggregators have the rights to use particular premium shortcode numbers. A search of the Register of Numbers confirms that Sybase was the aggregator to which premium shortcode numbers 19773366 and 19773377 were allocated. 34 A premium shortcode number is a 6 or 8 digit telephone number which begins with the digits "19". Such a number enables a person to whom it is allocated or assigned, known in communications industry parlance as a "content service provider", to charge fees for content as part of a mobile premium service. Usually in the Australian communications industry, an aggregator does not itself provide content but rather assigns for a fee the use of a particular premium shortcode to a content service provider. 35 An aggregator such as Sybase might be described as a conduit between a telecommunications carrier such as Telstra or Optus, which transmits calls, and a content service provider. The content service provider uses the premium shortcode to send text messages to, and receive text messages from, individual mobile telephone numbers. The text messages created by a content service provider are forwarded to the aggregator who, in turn, sends them to the various telecommunications carriers. These carriers, in turn, convey the messages to the mobile telephone number of a person who has an account with that carrier. 36 The content service provider charges the mobile telephone account holder for either receiving, sending or receiving and sending the text messages. The charges for so doing are typically significantly higher than the standard rates charged to that mobile telephone account holder for the use of that mobile telephone. Payment for the content service provider's charges is collected from the mobile telephone account holder by the carrier as part of the carrier's account to the account holder for the use of the mobile telephone. The usual practice is for the carrier to take a percentage of the charge as its fee for collection of payment with the net sum being paid by it to the aggregator. In turn, and in accordance with the terms of its agreement with the content service provider, the aggregator passes on this net sum, less its own service fee (usually percentage based), to the content service provider. 37 The RSA provides for just such a service fee arrangement as between Sybase as aggregator and IMP as a content service provider. 38 I turn then to consider the nature and extent of Mr Phillips' involvement with IMP in its capacity as a content service provider. 39 Though he acknowledged signing the RSA, the effect of Mr Phillips' evidence was that he had done this so as to help out his friend, Mr Simon Owen, whom he had known since mid-1996, and otherwise to minimise his personal involvement in IMP's business. That business, he claimed, was effectively that of Mr Owen. 40 To this end, Mr Phillips stated that, in September and October 2005, Mr Owen discussed with him a proposed business the elements of which included that the business would be: (a) called "mobile-friend"; (b) a "fantasy chat" service; (c) a subscription based service; (d) marketed using stickers to invite men and women to participate; (e) also advertised by television if he could afford this. Mr Phillips stated that none of this was his idea. 41 From mid-2005, Mr Owen was, with Mr Phillips' permission, then living rent-free at Lot 3 where a separate house was situated. Mr Phillips' avowed reasons for permitting this were two-fold. Firstly, he (Phillips) travelled a lot and the arrangement meant that there was someone on site to look after Lot 3 and Lot 4. He stated that the property (which I took to be Lot 3 and Lot 4 together) was quite large, some 50 acres, and required constant slashing and gardening to keep firebreaks and the like in place. Secondly, by mid-2005, the course of events in relation to criminal charges Mr Phillips continued to face was such that he was then expecting to be imprisoned at some stage early in 2006. Having Mr Owen resident on the property meant that, while he was imprisoned, he would have someone there to look after the house in which he (Phillips) had been living. According to Mr Phillips, Mr Owen, at the time, had no money and the rent-free arrangement with these caretaking responsibilities suited each of their then needs. 42 It will be recalled that, in mid-2005, Mr Phillips nominally held neither any office in IMP nor any shares in that company with, to external appearance on the records of the Australian Securities and Investments Commission (ASIC), these roles each being consigned to Ms Lee. That Mr Phillips felt able personally to grant Mr Owen permission to occupy the residence on Lot 3 on these terms in itself says much, in my opinion, about who then truly controlled IMP. 43 I accept that Mr Owen lived at Lot 3 on and from mid-2005 with Mr Phillips' permission. I also accept that he had certain caretaking responsibilities with respect to Lot 3 and Lot 4 and that it was envisaged by Mr Phillips that he would continue to undertake these as a resident caretaker if and when Mr Phillips was imprisoned. Given the location of Lot 3 and Lot 4 and the size of the combined properties, I am well satisfied that there were advantages for Mr Phillips, especially given the contingency of extended imprisonment, in, for example, having a person on-site to keep undergrowth in check as a bush fire precautionary measure or otherwise to perform on-site caretaking tasks. If Mr Owen's caretaking and assistance role is regarded as extending to IMP, another reason why it might be advantageous to Mr Phillips to have him located at Mount Nebo Road can readily be seen. That is because, for reasons which will become apparent, I do not accept that Mr Phillips had as remote an association as he claimed with the business IMP commenced after the RSA was signed. 44 According to Mr Phillips, he came to deal with Sybase, initially in October 2005, in relation to the provision by it of premium shortcode numbers because, though Mr Owen had made an initial approach to that company for that purpose, Mr Owen "was very unsure of himself and was worried that he would somehow 'stuff it up' because of his lack of business expertise". In effect, Mr Phillips' evidence in this regard was that Mr Owen was seeking to take advantage of his (Phillips') greater general business experience and that he had agreed to provide assistance because, if successful, the business would improve Mr Owen's financial position and he (Phillips) did not expect that providing assistance would involve much of a time commitment. 45 Mr Phillips acknowledged that, as a precursor to his signing the RSA, he had engaged in negotiations with Ms Vanessa Gois of Sybase in relation to the assignment to IMP of premium shortcode numbers. He remembered, "telling her about the mobile-friend service and fantasy chat and that her concern was to make sure there was no 'adult' content". In his affidavit evidence in chief, Mr Phillips further stated that he had told Ms Gois that he "worked for Simon". Under cross-examination, Mr Phillips put this a little differently, stating that he had told Ms Gois this "later". Pressed further, he conceded that he had not told Ms Gois "in so many words" that the business was Mr Owen's but rather that this was "made clear by the emails". He also acknowledged in cross-examination that: (a) he had wanted to convey to Sybase that he was the contact; and (b) had intended to convey in email communications to Sybase that he had an involvement in the business. 46 Mr Phillips gave evidence that, after having assisted in negotiations and then signing the RSA, "I considered that I had done what I agreed to do to help Simon [Mr Owen] and did nothing more during October, November or early to mid-December 2005". He expressly denied being a party to or even being told of any plan to use fake dating profiles to procure mobile telephone numbers. 47 Mr Phillips also stated that, because his relationship with Mr Owen was one of trust, he had given Mr Owen access to an email account which he had used for some years. Mr Owen had, Mr Phillips stated, access to that email address via his own computer, as well as via one of Mr Phillips' computers, which he had left at the house which Mr Owen was occupying. As to his personal position in relation to accessing his email account, Mr Phillips further stated that he had separate access to this email address via another computer which he had at the home which he was occupying. 48 This is a convenient point at which to refer to evidence of email communications between Mr Phillips' email address and Sybase between December 2005 and March 2006 in relation to the premium shortcode numbers and the subsequent operation of IMP's business using those numbers (extract from Exhibit SJW 86 to Mr Weber's affidavit, which became Exhibit 3). The exchange commences on 22 December 2005. 49 That the emails concerned were sent or, as the case may be, received was not, in itself, controversial. That apart, they are, for the purposes of s 71 and s 161 of the Evidence Act, "electronic communications". Section 71 creates an exception to the exclusionary "hearsay rule" (qv s 59, Evidence Act) so far as electronic communications are concerned. The exception is in respect of: (a) the identity of the person from whom or on whose behalf the communication was sent; (b) the date on which or the time at which the communication was sent; and (c) the destination of the communication or the identity of the person to whom the communication was addressed. In turn, unless evidence sufficient to raise a doubt is introduced, s 161 of the Evidence Act creates presumptions that each of the emails in the schedule: (a) was sent or made in the form of electronic communication that appears from the document to have been the form by which it was sent or made; (b) was sent or made by or on behalf of the person by or on whose behalf it appears from the document to have been sent or made; (c) was sent or made on the day on which, at the time at which and from the place from which it appears from the document to have been sent or made; (d) was received at the destination to which it appears from the document to have been sent; and (e) if it appears from the document that the sending of the communication concluded at a particular time-was received at that destination at that time. 50 The emails in the schedule and the presumptions for which s 161 provides assumed an importance in Mr Phillips' response to the Authority's case because, while Mr Phillips admitted authoring or assisting in the authoring and sending of two emails dated 22 December 2005 to Sybase, in respect of the others he either professed ignorance of them, even though they apparently came to or from his email account and him, said he had noted it but did not respond (email of 9 January 2006 from Ms Gois) or attributed them to Mr Owen. 51 In effect, in respect of the subjects covered by s 161, the presumption is that things are as they appear on the face of the document containing the record of the electronic communication. Mr Phillips sought by evidence either to raise a doubt as to his authorship or, where he admitted authorship, to persuade me that he was but passing on information to help Mr Owen. Resolving that controversy is of importance in relation to whether the Authority has made out its ancillary liability case against Mr Phillips. 52 To detail the contents of the emails in the body of the judgment would detract from its continuity. I therefore detail the emails in a schedule to the judgment. In so doing, I have omitted technical (Meta) data which appears in the exhibit copy of the emails and also excised and suitably annotated where messages were duplicated by copying or forwarding to other addressees. The excised technical data falls outside subjects for statutory presumption. At trial, a submission was made on behalf of Mr Phillips that I could judicially notice certain facts which were said to be apparent from this technical data. I rejected this submission. Then as now my opinion is that this is not a subject for judicial notice but rather for expert evidence. No such evidence was led on behalf of Mr Phillips. 53 Mr Phillips gave the following account of the circumstances relating to the sending from his email account of two emails in December 2005. As to the email of 22.12.2005 2:45pm, he stated that: a. I recall that at about that day Simon [Mr Owen] told me he had been "shut down by Mobile 365 [Sybase]"; b. I recall receiving the email dated 22.12.2005 1:44pm from Cameron Franks and that I spoke with Simon over the phone about it; c. We got together almost immediately and I recall that it was at my house; d. Simon was very agitated about being shut down and wanted to respond urgently; e. I thought that it was a good idea and that he should make sure that he preserved his business' relationship with Mobile 365 [Sybase]; f. I remember I told him words to the effect that if Mobile 365 [Sybase] were concerned about what Simon was doing, which they appeared to me to be, then honestly was the best policy; g. I recall advising him that if he told them what he was doing and they had issues with it on commercial or legal grounds then he would have the chance to work with them to fix whatever the problem was; h. That he was sending SMS messages that referred to dating profile names and the dating websites; i. I recall that Simon told me some things about the specific concerns raised by Mobile 365 [Sybase] and we drafted the email based on that information; j. I was in no position to respond myself to those concerns because I had no knowledge of the matters raised by Mobile 365 [Sybase]; and k. That I replied in my email to all the parties who had been copied in to the email from Mr Franks that was being responded to. [sic] 54 As to the email of 23.12.2005 at 9:13am, Mr Phillips stated: a. This message was composed by Simon and I helped to edit if for grammar and to make sure that his draft read properly; b. I recall that the issue at the time arose out of Simon's business being shut down based on concerns hat the messages were not clear about the charges that applied; c. The purpose of the email was to get Mobile 365 [Sybase] to confirm that they were content that Simon was making clear the costs associated with the messages being sent; d. I was not aware prior to this issue being raised on 22 December 2005 of the content of the messages Simon was sending; e. My involvement was to help Simon by advising him how to respond to Mobile 365 [Sybase] to maintain his business relationship with them; f. I was not aware at the time that there was any allegation or suggestion that there was anything improper about the messages Simon was sending other than the concern that the messages were being sent "without the cost of the messages being made clear to them;" g. Although I now note the content of the proposed text messages and I must have been aware of them, the content of the messages and the references to adult dating sites did not occur to me to be in issue; h. What I understood to be in issue that had to be responded to was the manner in which the costs of those SMS messages was disclosed. [sic] 55 According to Mr Phillips, Mr Owen told him on 22 December 2005 that the operation of the business to which the RSA related was that: a. he had employed a couple of backpackers to set up their own profiles on the website www.adultmatchmaker.com.au [AMM]; b. it was costing men who sent and received messages to those backpackers within the AMM system; c. the girls offered the men the change to interact via a different "user pays" medium, namely Simon's premium SMS system; d. the girls were putting photos of themselves up on the website; e. from what I understood from Simon it was an entirely consensual process. [sic] Mr Phillips stated that: Although I didn't turn my mind to the details of it, I thought that this meant that Simon's business was getting the men to agree to use the premium SMS service instead of the AMM "user pays" system. He stated that he remembered: Simon telling me stories about his staff uploading their photos to websites so the idea never occurred to me that they might be doing anything different to using their own photos. 56 According to Mr Phillips in his affidavit evidence in chief: When it occurred to me some time in late 2005 and probably in December though he [Mr Owen] was actually getting somewhere with starting his business I saw the need to act immediately. I recall mentioning this to Mr Sciacca and he confirmed that I should extricate my Trust from any association with IMP because it was a trading business and it was imprudent for the trustee company to be a trading entity. I recall instructing Mr Sciacca to see that the trusteeship was changed and he did so sometime after that. 57 In cross-examination, Mr Phillips stated that Ms Lee had, without his permission, allowed Mr Owen to use IMP to start the business. He attributed this to a kind of "nervous breakdown" which Ms Lee had suffered following the then recent death of her husband. He said that it wasn't up to him to permit or not to permit this use of IMP "because it wasn't my company and I was told after the fact". Mr Owen, he said, was a friend, but not someone he trusted. He stated that the easier course for him to take was just to change the trustee of the RT Trust. 58 Mr Phillips explained his signing of the RSA as referable to a request from Mr Owen for assistance based on his (Mr Phillips') "longstanding reputation in the internet industry, which has some parallels". He stated that he did not discuss the RSA with Mr Owen prior to his signing that agreement. He also said that Mr Owen had asked him to, in effect, lend his name and reputation to the initial dealing with Sybase and that he had agreed to hold himself out to Sybase as running IMP's business. Mr Phillips further stated that, in the course of his discussions with Sybase's Ms Gois he had never stated that Mr Owen ran the business. 59 Mr Phillips denied any detailed, contemporaneous knowledge before 22 December 2005 about how IMP's business was conducted. Initially, when taken in the course of cross-examination to the "Application description" in the RSA, "Switch via chat platform, opt in by texting chat to 191 …", Mr Phillips denied having read this on the agreement form before signing it. Later in cross-examination, he admitted knowing that Mr Owen had produced thousands of stickers and "plastered them all over town", that this method of promoting what Mr Phillips understood to be a "flirting" chat service using the 19 number hadn't worked and that some sort of computerised system leading to a use of the 19 number was adopted as an alternative. He also admitted knowing that Mr Owen had engaged programmers for assistance with the computer system. 60 Mr Owen also gave evidence at the trial. His evidence touched, inter alia, on the exchange of emails. 61 Mr Owen's evidence in chief, as well as the balance of his evidence, was given orally. He was called in the Authority's case, even though, so I came to be informed by the Authority's junior counsel, the Authority held no formal, signed proof of evidence from him. The Authority had prepared and served in advance of trial a statement of apprehended evidence. I infer from this course that, though there had been some sort of conference with Mr Owen, there had been no resultant signed proof of evidence. In light of some of the evidence which Mr Owen gave in chief, and especially given that there was no application under s 38 of the Evidence Act for him to be declared an unfavourable witness, that the Authority chose to call him in its case struck me at the time (and still does) as an unusual course. 62 In the absence of the Authority's holding of a signed proof of evidence from Mr Owen, I might otherwise have expected him to be called, if he were called at all, in the defence case or at least evidence led in that case explaining why the course of leading evidence from him had not been taken. That is not, of course, to suggest that any onus lay on Mr Phillips to call him; only that I do not see that, in the circumstances, the Authority was under a duty, whether derived from its status as a model litigant or as an applicant in a penal proceeding or because an adverse inference might otherwise have been drawn against it, to call Mr Owen. The nature of the proceeding was adversarial, not inquisitorial. 63 On behalf of Mr Phillips, reference was made to a statement in Heydon, JD Cross on Evidence (7th Australian Ed, LexisNexis Butterworths, 2004) at [19005]; a statement repeated in the current edition, Heydon, JD Cross on Evidence (8th Australian Ed, 2010) (Cross) at [19005], to the effect that it is an expectation of practice that (in the absence of a declaration that the witness is hostile) a party calling a witness tenders that witness as capable of being believed. So much may, in general, be accepted. Another statement made in Cross at [19010] namely that, in general, a party is neither inclined nor permitted to impeach the credibility of his own witness may also be accepted. The learned author of Cross qualifies the latter statement with an observation in a footnote (fn 19), made by reference to a decision of the Full Court in Kabadanis v Panagiotu (1979) 47 FLR 221, that this was not to say that a party could not call witnesses whose evidence differed inter se. A consideration of the authority cited fully supports, with respect, the accuracy of that qualifying observation. 64 The appellant in Kabadanis v Panagiotu had failed at a trial heard by judge alone on the issue of proof of the alleged tort namely the alleged negligent discharge of a shot gun at close range (less than 1 foot) in a motor vehicle in which he was a passenger. Both he and the defendant, who was the driver of the motor vehicle, gave evidence. The evidence of the defendant (consistent with his earlier answers to interrogatories) corroborated that given by the appellant plaintiff, which was to the effect that the loaded shot gun carried in the vehicle had discharged as the vehicle went over a small mound or depression in the road. The defence was conducted on behalf of the defendant by the compulsory third party insurer. Forensic evidence was also led in the defence case at trial to the effect that the plaintiff's injuries were more consistent with those from a shot gun blast at a distance of six to nine feet. The learned trial judge found the forensic evidence "compelling" and his acceptance of it formed the major basis upon which he rejected the evidence of the appellant and the defendant and found that the alleged tort had not been proved. Before trial, notice had been given on behalf of the defendant to the appellant's solicitors by the defendant's solicitors that they did not accept the truth of the defendant's answers to interrogatories. One of the grounds of appeal was that the learned trial judge had erred by allowing the defendant's legal representatives to put the defendant's case differently from and contrary to the defendant's sworn answers to interrogatories. In dismissing this ground, the Full Court observed (at 228) that answers to interrogatories have no status other than evidence and are not pleadings. The Full Court then stated (at 228): It is open to counsel to present, if he wishes, evidence which is inconsistent with, or contradicts, evidence given by his client (King v Wilkinson (1957) 57 SR (NSW) 444), whether the evidence in question is in chief or in cross-examination …. 65 There was no suggestion made on behalf of Mr Phillips in submissions that, in advance of trial, the Authority had put to him that its case was no longer as pleaded or that having regard to the proof of apprehended evidence delivered to him, he had not been put on notice that the Authority apprehended that Mr Owen would give evidence adverse to his case and in support of the Authority's pleaded case. To the contrary, it was conceded on behalf of Mr Phillips that Mr Owen's evidence "did not come up to that proof". The proof concerned was not, of course, evidence and nor was it sought to be introduced. The point is that Mr Phillips was never told that the Authority accepted the evidence which Mr Owen in fact came to give; nor even was he told that it was apprehended that the content of Mr Owen's oral evidence would be as it ultimately came to be. Save for the refinement at trial by the narrowing of the period of alleged ancillary liability, the Authority's pleaded case against Mr Phillips remained as originally pleaded. 66 The following statement made by Cockburn CJ in Richards v Morgan (1863) 4 B & S 641 at 663 is, in the circumstances, also apposite: … the party … calling the witness … may do so not only without the intention of abiding by all the witness may say, but with the deliberate intention of calling on the … jury to disbelieve so much of the evidence as makes against him. See, more generally, the discussion with respect to "unfavourable witnesses" in Cross at [17370]. 67 Having led evidence from Mr Owen which took a particular form, the Authority was not thereby precluded from leading inconsistent evidence. That Mr Owen was called in the Authority's case does not thereby mean that I am obliged to treat all or any of Mr Owen's evidence as believable. Unusual though the course taken by the Authority may have been, it gave to Mr Phillips the opportunity to cross-examine Mr Owen. Mr Owen's evidence and how much of it to accept falls to be considered in its entirety and in conjunction with all of the other evidence in the case. 68 As to the exchange of emails, Mr Owen's recollection in evidence in chief, particularly in relation to the two emails of 22 December 2005 described by Mr Phillips, which culminated the following day in a resolution at the time of Sybase's concerns about IMP's business, was that the emails were those of Mr Phillips. He was, at this stage of his evidence, noticeably vague in his recollection of them. This vagueness was in marked contrast to the responses which he gave to leading questions about the emails when cross-examined. The effect of the answers which he gave at this stage of his evidence was largely to corroborate the account about the emails of 22 December 2005 given by Mr Phillips in the passages set out above in relation to the exchange of emails set out in the schedule and, for that matter, the signing of the RSA. 69 Mr Owen's evidence, if it is to be accepted, also corroborated that of Mr Phillips as to the origins of the business and of the latter's limited, gratuitous role in it. Thus, as of November 2005, Mr Owen described Mr Phillips' role thus, "[h]e was my friend, he helped me to do all this because I didn't - I wasn't very good with this sort of stuff. So he would have helped me to fill out this form and so on and so forth." His explanation for why he had not signed the RSA with Sybase was that he was not a director of IMP at the time. 70 Mr Owen described IMP as "my little business". He gave the nature of the business as "just sending customers messages for money". Initially, he said, the business had been advertised by way of stickers, "we originally started with stickers. We printed a whole heap of stickers. I've got a printer over in Indonesia and I just stuck them everywhere." These stickers carried the message, "Get laid. Text a word to" with the addition of the premium shortcode number 19773366. He said that, thereafter, from about December 2005, calls to this number were solicited by the use of dating websites. 71 Mr Phillips' and Mr Owen's evidence carried with it the necessary corollary that each was content to deceive Sybase as to who controlled IMP but that neither was prepared to give false evidence about the fact of that deception. 72 In further describing the use of dating sites to solicit persons to use the 19 number Mr Owen stated that he and "Glenn" [Mr Glenn Christopher Maughan, the 7th respondent] hired backpackers and other people ("operators"), via IMP, to create and then manage a profile on an internet dating site. Operators were paid in cash for their services. Initially, from about December 2005, the business operated from the living room in Lot 3 using second hand computers acquired by Mr Owen and Mr Maughan. Again initially, photos were taken of those hired, either by them personally or by Mr Owen or Mr Maughan and "they'd run their own thing, just like an ad. Like a profile." 73 Mr Owen related that, initially, a profile on an internet dating site would last for months but that the duration of a profile on a site gradually contracted until, in 2006, a profile might not last more than a day. He stated that this was because the operators of such sites, "slowly got on, you know, got on to what we were doing". Mr Owen said that the use of dating sites in this way was a "fresh thing" and that the business "did well" and later, "[t]he whole idea was to, you know, get the guy's phone number so we could market to them." 74 Mr Owen related that, once a person's telephone number was obtained, one of the operators would enter that number into the "Mobilegate" software where it would be queued for a marketing message. He said that he wrote the marketing messages. These, he said, changed frequently, but they were usually comprised of the following elements in this sequence: "Free message" - [Girl's name from dating site] "wishes to talk to" [guy's name]. - "Please respond, 'Yes' to communicate" - [1800 helpline phone number] - An "opt out", "To opt out send, 'Stop'" - "Message cost" [about $5.00, depending on the shortcode number used]. 75 The "Mobilegate" software operated in a way which facilitated subsequent premium shortcode communication in the event that a person responded to the "Free message". In the event of such a response, the software would then provide a notification to an operator who would then compose and dispatch a reply. 76 Mr Owen stated that he designed the "Mobilegate" software specifically for IMP, with the assistance of two programmers, "Mark" and "Tim". He stated that these persons also were the programmers referred to in the email of 23 December 2005 at 7:34 AM from Mr Phillips' email account to Ms Gois at Sybase. 77 According to Mr Owen, by January and February 2006 anywhere between 4 and 12 operators were working from his lounge room at Lot 3 creating internet dating site profiles and responding to consequential inquiries sent via the 19 number. 78 Mr Owen stated that, in March 2006, the operating site of the business moved from Lot 3 to premises in West End. 79 Before detailing evidence given in relation to the operation of IMP following this change in the location of business operations it is necessary to refer to other evidence as to developments with respect to IMP which occurred between November 2005 and the end of February 2006. For this purpose it is necessary to refer to further evidence given by Mr Sciacca, Mr Conley and Mr Phillips. 80 As with his evidence in relation to his actions in 2004, I am satisfied that the account which Mr Sciacca gave of his dealings with Mr Phillips between December 2005 and February 2006 was accurate. I am satisfied that events and conversations occurred as Mr Sciacca related them. Mr Sciacca endeavoured, as best he could I thought, allowing for the passage of time, to recall conversations and events in his professional life in relation to which there was no reason at the time to think that it would be necessary to keep and retain detailed contemporaneous file notes. That was because the initial conversation which he had with Mr Phillips in December 2005 was informal and because the nature of the task for which he came to be engaged in February 2006 was essentially one of conveyancing and trust administration namely, the effecting in the change of a corporate trustee. 81 The following summary of Mr Sciacca's evidence draws upon both the evidence in chief which he gave by affidavit and his oral testimony. 82 Mr Sciacca stated that, in late 2005, in the course of a conversation which he had with Mr Phillips, Mr Phillips told him that IMP was involved in a business. Mr Phillips did not detail the nature of the business and Mr Sciacca did not seek such detail from him. What he did do was to advise Mr Phillips that trading entities and property holding entities should be kept separate. Mr Phillips did not act immediately upon his advice. In late February 2006 though he did. On 28 February 2006 and in his capacity as the "Principal" of the RT Trust, Mr Phillips executed a deed of variation by which IMP was removed as the trustee of that trust and replaced as trustee by MSG Properties Pty Ltd (MSG). The person who signed that deed on behalf of MSG was Mr Conley. 83 According to ASIC records, MSG was first registered as a company on 28 February 2006. Its then sole director and secretary was (and remained at the date of the trial) Mr Conley. He and a Mr Jones (whose role was not further explored in evidence) were then (and remained at the date of the trial) each respectively held, other than as the beneficial owner, one of the two $1 issued shares in MSG. 84 Having regard to Mr Conley's evidence, which I thought was candid and which in this regard also I accept, what happened after Mr Phillips received Mr Sciacca's advice about keeping trading and asset holding entities separate was this. 85 Most probably in late 2005, Mr Phillips mentioned the advice which he had received from Mr Sciacca to Mr Conley. Mr Conley was not then in active private practice as a solicitor, having disposed of his interest in his former firm at the end of the 2005 financial year. He had yet to commence to practise as a barrister. Inferentially on the evidence, he was engaged in business activities which at least included the association with Mr Phillips via 3 Point Finance, which I have already mentioned and another company in which Mr Phillips had an interest, which traded under the name Business Bridging Finance. In the latter company, Mr Conley seems to have combined the roles of in-house solicitor and manager. I formed the distinct impression, listening to Mr Conley's evidence as well as that of Mr Phillips, that Mr Phillips reposed trust in Mr Conley's business and legal judgement. 86 Mr Sciacca's advice was not the only subject which Mr Phillips and Mr Conley discussed at this time. Indeed, it is likely that they had a number of discussions at this time about options for the management of Mr Phillips' affairs while he was in prison. By that stage, though the Crown had decided not to proceed with some of the charges which Mr Phillips faced, others of sufficient seriousness to predict that he was in jeopardy of a sentence of imprisonment for at least 5 years remained. Mr Conley was aware of this. Mr Conley also then knew Ms Lee. His experience of her was that, while she was honest, she was not adept or reliable as a property manager. I accept that, between them, Mr Phillips and Mr Conley discussed and shared a reservation as to her having any managerial role while Mr Phillips was in prison. I find that there were multi-factorial and interplaying reasons for Mr Phillips' decision to replace IMP as trustee of the RT Trust. Though he had already in 2004 "camouflaged" his control as the owner of Lot 3 and Lot 4, the means by which that had been achieved, IMP, had become unsuitable for two reasons, an undesirable undertaking by IMP of the roles of both trading entity and trustee of property and an apprehension about Ms Lee having any managerial role while Mr Phillips was in prison. 87 In the result, Mr Phillips asked Mr Conley to act as the director of a company which would, as trustee, own "his house" [this was a generic reference by Mr Conley to Lot 3 and Lot 4]. Mr Conley agreed to do this. 88 Mr Conley stated that he was not, at the time, aware of the business in which IMP was engaged. He said this would only have been of interest to him "if the [RT Trust] carried on that business". A trust is not, of course, a legal entity only an equitable obligation assumed by a person in respect of property. It is certainly not uncommon though, even amongst some members of the legal profession, for reference to be made to a trust as if it were a separate legal entity. What I took from Mr Conley's statement was that his understanding was that IMP had not traded in its capacity as trustee. So understood, his explanation makes sense. I accept that he was not aware in 2005 or up to the end of February 2006 of the particular business in which IMP was by then engaged. 89 A sequel to Mr Phillips' decision was that, probably in February 2006 but not later than 28 February of that year, Mr Conley discussed with Mr Sciacca the process for the changing of the trustee of the RT Trust. He also arranged for his former firm to incorporate MSG for the purpose of assuming the role of trustee. 90 Mr Owen was known to Mr Conley by late 2005 in the sense that the two had by then met. The effect of Mr Conley's evidence was, and I find, that Mr Phillips did not mention to him, in the context of their discussions about IMP and the management of Mr Phillips' affairs, that Mr Owen had any role in relation to IMP, much less that Mr Owen had commenced to use IMP in some rogue or unauthorised way as a vehicle to conduct a business effectively controlled by him. There was no suggestion that Mr Conley was otherwise aware of this. Mr Sciacca, too, gave evidence and that, in mentioning IMP's having become involved in a business, Mr Phillips did not make any reference to Mr Owen. 91 Accepting as accurate the evidence of Messrs Sciacca and Conley has ramifications in relation to the reliability of the evidence given by Mr Phillips and also by Mr Owen. 92 I regard the absence of any reference to Mr Owen by Mr Phillips in referring to IMP in the respective discussions which he had with Messrs Sciacca and Conley over the period December 2005 to February 2006 as highly significant. Given the nature of the association which Mr Phillips had at the time with Mr Conley and Mr Sciacca, I consider it inherently unlikely that if, over this period, there had been any unauthorised assumption of control over IMP or its then developing business by Mr Owen, this fact would not have been communicated by Mr Phillips to Mr Sciacca and, especially, to Mr Conley. If, though, Mr Owen were merely a subordinate this absence of reference to him in relation to IMP by Mr Phillips to Messrs Sciacca and Conley is unremarkable. The more likely explanation in relation to the removal of IMP as trustee of the RT Trust is that the move was reactive to Mr Sciacca's advice as to not mixing the roles of trading and asset holding. Inferentially, this advice formed part of a general review by Mr Phillips, with the benefit of advice from Mr Sciacca and Mr Conley, as to how best his interests might be managed while he was in prison. 93 I observed Mr Phillips and Mr Owen closely when each was giving his oral evidence. I mean no disrespect to Mr Owen in observing that Mr Phillips was far and away the more fluent and mentally agile of the two. Of course, that might explain why, as each of them put it, Mr Owen turned to Mr Phillips for assistance in dealing both in initial negotiations and in later email and other communications with Sybase but this but a possibility to take into account when weighing up the whole of the evidence. 94 The exchange of emails in the schedule makes ready sense if Mr Phillips is indeed the author or recipient as the case may be where he is recorded as such, i.e. if the emails are to be read as truly being what they purport on their face to be. Where on the face of each email Mr Phillips is recorded as the author the same fluency of language and mental agility which he exhibited in oral evidence is evident in the text. 95 A stark example of the email exchanges making ready sense if it is not the case that Mr Owen sent emails in Mr Phillips' name using his email account is offered by an email of 28 December 2005 which, on its face, is sent by Mr Owen to both Mr Phillips and to Ms Gois on the subject of the inputting of "automessages" (automatically generated messages) for use in conjunction with the premium shortcode 19773366. There is no need at all for Mr Phillips to be an addressee if Mr Owen is controlling IMP and Mr Phillips is doing nothing more than helping him out. Equally, if Mr Owen is impersonating Mr Phillips in communications with Sybase, why communicate in his own name? I comment further on features of the email exchange when discussing the subject of ancillary liability. It is possible to conjecture that Mr Owen was practising a sophisticated level of deception on Sybase but that level of sophistication is inconsistent with the absence of memory and vagueness of response and demeanour on display throughout Mr Owen's evidence. Viewed against all of the circumstances, this conjectured possibility seems inherently unlikely. On the other hand, if viewed as it purports to be on its face namely the report of a subordinate to his superior, Mr Phillips and to the responsible account officer at Sybase, Ms Gois, this email makes ready sense. 96 In the exchanges, it is Mr Phillips who is the voice of IMP in relation to any risk of suspension of the premium shortcode and matters of financial accounting. Mr Owen has a subordinate role in the exchanges but one consistent with his having some managerial and IT responsibilities. Mr Owen is astute to copy Mr Phillips in his correspondence with Sybase. I consider that it is inherently unlikely that he would have done this repeatedly if Mr Phillips were merely an occasional, gratuitous adviser. Further, even assuming that Mr Owen was able, as he claimed, to access Mr Phillips' email account, this does not explain why replies repeatedly go out in Mr Phillips' name. The exchange discloses that Mr Owen was identified to Sybase as a contact for IMP. Certainly thereafter, a response in his own name to Sybase on behalf of IMP would have carried with it the appearance of regularity and authority and that even if the initial query to Sybase had been directed to Mr Phillips at the latter's email address. 97 The description given by the Authority in its closing submissions of what is revealed by the exchange of emails in the schedule is an accurate one, "[w]here technical responses are required, one finds Mr Owen responding in his own name. Where broader responses are required, dealing with a … 'business-like' response to an inquiry, then one almost invariably finds it goes out under Mr Phillips' name". 98 It was put on behalf of Mr Phillips that the Authority ought to have called Ms Vanessa Gois, a Sybase officer who features in the exchange of emails and was a person with whom Mr Phillips dealt in the negotiations for the RSA. It was further submitted that I should infer from a failure to call her that her evidence would not have assisted the Authority. There is no substance in these submissions. The actual sending and receipt of the emails exchanged was admitted. Further, Mr Phillips did not suggest that, either in writing or even, when pressed, otherwise, he had expressly informed Ms Gois that he was not really an officer of IMP but only assisting Mr Owen. To the contrary, Mr Phillips' evidence was that he was actively seeking to give Sybase the impression that he was an officer of IMP. The Authority was under no obligation to call Ms Gois. Its failure so to do does not provide any basis for the discounting of the email exchange. 99 Mr Phillips' signing of the RSA on behalf of IMP also makes ready sense if one treats that document as fully intended to convey what it purports so far as IMP is concerned, i.e. that Mr Phillips is able to bind that company. As the emails in the schedule reveal, the premium shortcodes were a critical part of the proposed income earning activity of IMP. IMP was not a large company. It is understandable that in relation to a critical step in the commencement of a new business by such a company the person who controlled it would personally negotiate for and then sign on its behalf such an important agreement. 100 This impression is strengthened by knowledge of Mr Phillips' business background. That is not confined to the finance business in which Mr Conley was also for a time involved. Mr Phillips acknowledged earlier, internet related business experience. Further, in December 2005, application was made by the firm Morgan Conley to ASIC for the registration of a company to be called Dancertext Pty Ltd (Dancertext). Dancertext was incorporated on 2 December 2005. According to the registration application, Ms Lee (for whom a Kedron address was given) was to be the sole director and also, but not beneficially, the holder of the three $1 issued shares in the company. The address given as the principal place of business of the company was the Mount Nebo Road street address of Lot 4. 101 Initially, Mr Phillips denied knowledge of this company. However, when a copy of an agreement between "Dancertext Australia" and mBlox Ltd (a UK company) was put to him in cross-examination, he acknowledged his signature in the capacity of "Managing Director" and handwritten date "18/12/2005" on the document. That agreement gives the street address of Lot 3 and Lot 4 as the principal place of business for Dancertext Australia. Further, Mr Phillips' email address is that specified as the email contact address. The copy produced in evidence also bears a facsimile transmission record as having been sent, apparently to an international facsimile number addressee, on 19 December 2005 from a facsimile machine which made the imprint "Paytech Aust". Though the agreement bears a type written date 22 August 2005, the handwritten date and facsimile imprint suggest strongly and I find that this August date was pre-printed but that the agreement was not made until signed and returned by facsimile in December 2005. 102 Mr Phillips admitted that he held the office of managing director in a company called "Paytech Australia". He also made reference to profitable involvement in a company which provided residential bridging finance. 103 My strong impression at the time was (and remains) that Mr Phillips' denial in oral evidence of knowledge of this Dancertext agreement with mBlox was deliberately false and that, in effect, he gave dissembling answers in respect of it when the subject was raised with him in cross-examination. The resemblance between the use of Ms Lee as a nominee director and non-beneficial shareholder and then Mr Phillips signing as a director an agreement with a telecommunications provider as between the RSA he executed on behalf of IMP and the agreement he executed on behalf of Dancertext is uncanny. Also uncanny and not, I find, a coincidence is that, according to the ASIC record, Mr Owen assumed the role of director and secretary of Dancertext on and from 23 March 2006. 104 Mr Phillips also gave inconsistent evidence as to his opinion of Mr Owen. If one is to accept his evidence, on the one hand, he reposed such trust in Mr Owen as to assign to him a possibly long term, resident caretaker role with respect to Lot 3 and Lot 4 and to permit him unrestricted access to a computer and his personal email account, knowing that he was to commence to operate a business from an adjoining house on the same property; on the other hand, he regarded Mr Owen as a friend but not someone to be trusted in business. On the one hand Mr Owen is said by Mr Phillips just to have assumed control of IMP from Ms Lee, lending by December 2005 a sense of urgency on his part about a need to change the trustee of the RT Trust; on the other, as early as 1 November 2005, Mr Phillips was signing the RSA as director, nominally so as to help out Mr Owen. Again, if there were any sense of urgency about a need to change the trustee of the RT Trust arising from IMP having been "pirated", in effect, by Mr Owen, it is inherently unlikely that this need would not have been communicated either to Mr Sciacca or to Mr Conley in December 2005. It is also inherently unlikely that, knowing and disapproving of this, Mr Phillips would have chosen to help out Mr Owen in the way he claimed or to permit the unauthorised takeover to continue for about 3 months. 105 Ms Lee seems to have been regarded by Mr Phillips as suitable as a nominee director and shareholder while he was at liberty and readily able himself to control the day to day affairs of companies with which she was associated in this way. Accepting as I do Mr Conley's evidence, I accept that Ms Lee was not regarded by Mr Phillips as a sufficiently able manager to entrust with control of his affairs while he (Mr Phillips) was in prison; hence the formal succession on the ASIC record of Mr Owen on 23 March 2006 to the roles of director of IMP and of Dancertext. 106 Ms Lee was not called to give evidence. Axiomatically, the onus of proving the alleged contraventions always remained with the Authority. The content of the evidence which Mr Phillips gave as to her permitting an assumption of control of IMP suggests that it was for him to call her. Mr Owen, who was called in the Authority's case, gave similar evidence but I was asked not to accept that. Ms Lee's absence from the witness box was unexplained. The inference I draw is that her evidence would not have assisted Mr Phillips' claims about IMP. 107 On the whole of the evidence which was led though, I consider that Mr Phillips exaggerated Ms Lee's unsuitability. He said she had suffered from a "nervous breakdown". Mr Conley did not go this far. Having regard to each of the recorded changes that occurred on 23 March 2006 and to the fact that those changes did not occur until then, there was never any unauthorised "takeover" of IMP by Mr Owen, it is just that he, rather than Ms Lee, was regarded as the more suitable nominee director for companies controlled by Mr Phillips while the latter was in prison. 108 That the monthly revenue share statements produced by Sybase for the period from January 2006 to February 2007 are addressed to IMP at Mr Phillips' Mount Nebo Road address is perhaps neutral, given that both Mr Phillips and Mr Owen resided at that address and that there was a shared letterbox there. However, Sybase's tax invoices to IMP for this period are also directed to this address and these are marked for Mr Phillips' attention. Again, it might be said that this was but a reflection of an intended faÇade but it is also just as consistent with there being no faÇade. For reasons already given, I do not accept that the marking of the invoices for Mr Phillips' attention was a faÇade. Rather, it is another reflection of the reality of who was the controller of IMP. 109 For these reasons, I find that, at least until 9 April 2006, Mr Phillips was the effective owner and controller of IMP and, on and from the end of October 2005 until then, of the business it conducted using the 19 number. I also find that, up to that date, Mr Owen played a subordinate role in this business, albeit an important one which involved managerial responsibilities in relation to staff, complaints and information technology. It is unnecessary to decide what the position thereafter was. Insofar as the evidence of each of Mr Phillips and Mr Owen asserted to the contrary, I reject that evidence. In particular, I reject so much of the evidence of Mr Phillips and Mr Owen to the effect that Mr Phillips' emails in the email exchange in the schedule should not be read as not sent by him in his own right. That necessarily carries with it a conclusion, insofar as presumptions under s 161 of the Evidence Act support a conclusion that those emails were so sent that I am not persuaded that I should doubt those presumptions.

IMP MOVES TO WEST END 110 I accept Mr Owen's evidence that IMP operated from Lot 3 at Mount Nebo Road until March 2006 and then moved to premises at West End. 111 One reason for the change of premises was that the business outgrew the Lot 3 premises at Mount Nebo Road. 112 The timing of the move also coincides with Mr Phillips' last active involvement in dealings by email with Sybase. That was to forward to Mr Owen on 21 March 2006 a Telstra complaint to Sybase concerning unsolicited messages upon which Mr Cameron Franks of Sybase had sought comment. That Mr Owen chose to direct his response both to Sybase (Mr Franks) as well as to Mr Phillips is, in my view, significant. There was no reason to do this if Mr Phillips' role was nothing more than that of a conduit and occasional but uninvolved adviser in respect of a business in fact controlled by Mr Owen. 113 In an email of 23 March 2006 to Ms Shirley Low Wee Peng of Sybase, Mr Owen describes himself as "Director, IMP". This corresponds with his assumption of that status according to the formal ASIC record in respect of IMP. 114 This correspondence of dates was not a coincidence. 115 By that stage, Mr Phillips' imprisonment was imminent. He was imprisoned in April 2006 [Mr Phillips pleaded guilty on 9 April and was imprisoned on 28 April 2006. His recorded reference, at transcript p 278, to the year 2007 is, in context, a misstatement; more precise answers, the accuracy of which I accept, were given by him later in his evidence, at transcript, p. 292]. Though Mr Phillips denied that he had initiated the formal succession on the public record in respect of IMP from Ms Lee to Mr Owen as director, I do not accept this denial. Rather, the more likely explanation in the circumstances is that both in form and substance Mr Owen assumed the role of director of IMP on and from late March 2006 as part of the preparatory planning for Mr Phillips' imprisonment. He was then expecting a relatively lengthy sentence. That a like succession occurred at the same time in respect of Dancertext underscores why this is the more likely explanation. The succession which occurred was a managerial one. Ms Lee remained as a nominee shareholder for Mr Phillips. 116 Mr Phillips' expectation as to imprisonment was not misplaced. Though I do not have precise details of the sentence he received, it appears that the custodial portion of that sentence did not cease until late 2007. 117 As can now be seen, the Authority's choice, by amendment, of 9 April 2006 as the conclusion of the period of Mr Phillips' alleged involvement was designed to correspond with the date upon which he pleaded guilty to certain criminal charges he was then facing. He relinquished managerial control of IMP shortly before then but retained, by his nominee, Ms Lee, ownership control.

IMP'S BUSINESS METHODS 118 I make the following findings of fact based on formal admissions made by Mr Phillips: (a) IMP had its principal place of business and also carried on business in trade or commerce in Australia between December 2005 and 9 April 2006. Admission apart, the evidence led by the Authority amply supported such conclusions. (b) IMP supplied an SMS chat service via the premium shortcode number 19773366 between December 2005 and 9 April 2006. (c) Between December 2005 and 9 April 2006, IMP utilised third party dating websites to procure mobile telephone numbers. (d) Between December 2005 and February 2006, persons engaged by or on behalf of IMP: (i) wrote SMS messages into a software programme enabling the transmission of these messages to Sybase. (ii) entered mobile telephone numbers into a software programme to enable the transmission of these SMS messages via Sybase for delivery to mobile telephones; (iii) read reply messages transmitted by Sybase. 119 Though I have rejected the evidence of Mr Owen insofar as he asserted that Mr Phillips played but an occasional, gratuitous, advisory role and that IMP was "my little business", it does not follow that all of the evidence which he gave as to IMP is to be rejected. His evidence was, for reasons given above, unreliable as to Mr Phillips' role but he had a noticeably detailed knowledge of the methods actually employed by IMP to procure the use by mobile telephone account holders of the 19 number. Further, his description of IMP's business methods broadly corresponded with the general, formal admissions made by Mr Phillips as to those methods (albeit that Mr Phillips refrained from being knowingly concerned in or otherwise being a party to the creation of fictitious profiles on third party dating websites). 120 I have already set out above the evidence which Mr Owen gave as to the methods used by IMP to induce mobile telephone account holders to reply to the premium shortcode number 19773366. Having regard to Mr Owen's evidence, which I accept in this respect, the software programme concerned was the Mobilegate programme. 121 Also based on Mr Owen's evidence, I make the following further findings concerning IMP's business methods: (a) initially, that is during November 2005 and until about mid-December 2005, IMP sought to get mobile telephone account holders to use the 19 number by a wide placement (inferentially around Brisbane) of stickers which carried the message "Get laid. Text a word to [the 19 number]"; (b) by about mid-December 2005, this method of soliciting the use of the 19 number had proven ineffective and this fact was known to Mr Owen; (c) on and from about mid-December 2005, on behalf of IMP, Mr Owen and Mr Glenn Maughan, the Seventh Respondent, hired backpackers and other people ("operators") to create and then manage profiles on third party, internet dating websites such as www.AdultMatchMaker.com; (d) initially, photos for a particular profile were prepared by either the operators themselves taking photos of one another or by Mr Owen or Mr Maughan taking an operator's photo and using this for a particular profile; (e) the operators were paid in cash; (f) from about mid-December 2005 onwards, the operators worked from the living room in Lot 3 using second hand computers acquired for IMP by Mr Owen and Mr Maughan and under their direct supervision; (g) there was a fluctuating pool of operators (by January 2006 the number varied between 4 and 12 at any given time) whose length of service varied from only a few days to a period of some weeks; (h) if and when the mobile telephone number of a person responding to a profile on a dating website was obtained, this number was entered into the Mobilegate software programme by an operator to enable the transmission of pre-prepared pro-forma SMS messages via Sybase to that person soliciting further communication via the 19 number. 122 As Mr Owen put it, "[w]e put profiles on dating sites and engaged the members in chat, and then tried to get them on the service." His reference to "service" was a reference to that 19 number - 19773366. 123 I also find, again based on Mr Owen's evidence, that: (a) the length of time that an IMP operator generated profile remained on a third party dating website progressively shortened as the controllers of such a website became increasingly on guard as to the potential for abuse of their website by the posting of profiles for other than genuine dating purposes. Initially, that is at mid-December 2005, a profile might last for some weeks before a website controller removed it but, with the passage of time, a particular profile might only last a day. (b) though the precise content of the output message produced and dispatched via the Mobilegate software to a mobile telephone account holder changed frequently, such messages usually comprised these elements in this sequence: "Free message" - [Girl's name from dating site] wishes to talk to [guy's name]. - "Please respond, 'Yes' to communicate" - [1800 helpline phone number] - An "opt out", "To opt out send, 'Stop'" - "Message cost" [about $5.00, depending on the shortcode number used]. 124 The following exchange occurred in the course of Mr Owen's evidence in relation to the activities of the fluctuating pool of operators with respect to profiles on third party dating websites in the January/February 2006 period when IMP was operating from Lot 3 at Mount Nebo Road: In January/February 2006 on any one day, how many operators would have been operating the system for the premium number 19773366? Anywhere between four and 12, depending on the day. And could those operators answer messages that referred to any of the profiles that were then being used? Yes. I accept this evidence as accurate. What I conclude from it is that it was not part of IMP's business method that a pseudonym and related profile created by a particular operator and posted on a third party dating website was only ever later accessed for the purpose of generating message traffic by that same operator. It is the inherent likelihood that, with a fluctuating pool of operators of uncertain length of service, profiles which remained on third party websites for an unpredictable length of time and a business the income of which depended upon maximising the generating of replies to the 19 number, such a method would be employed that persuades me of the accuracy of this part of Mr Owen's evidence and to reach the conclusion just mentioned. A related conclusion, which I make for like reasons, is that the profiles truly were fabricated or fictitious. In other words, even when in the initial operation of IMP's business photos of the operators themselves were used to create profiles on third party websites, it was never the case that the operator whose photo was used exclusively accessed and generated messages using the pseudonym for that profile. The profiles truly were but a hollow faÇade, a fiction, a fabrication. 125 The number and type of messages sent to Australian mobile telephone numbers via the premium shortcode number 19773366 between December 2005 and February 2006 became the subject of formal admissions made by Mr Phillips. On the basis of those admissions, I find that the number and type were as set out in the table below. The message admitted types in that table correlate with the elements related by Mr Owen in his oral evidence. That correlation underscores why not all of Mr Owen's evidence should be regarded as unreliable. Date Range Message Type Number of Messages 12.01.2006 - 19.01.2006 FreeMsg chat service hi [Name], [Profile] from [Dating Site] wants to 2 talk 2u via our safe divert service reply yes 2b connected! 5.55 per 2msgs 4info call 1300659707 4264 20.01.2006 FreeMsg chat service hi [Name], [Profile] from [dating site] wants 2 talk 2u via safe divert reply YES to be connect! $5.55 per msg pair 4help call 1300659707 332 25.01.2006 FreeMsg chat service he [Name], [Profile] from [Dating Site] wants 2 talk 2u via safe divert service reply yes 2b connected! 5.55 per 2msgs 4info call 1300659707 329 23.01.2006 - 24.01.2006 Someone has a secret crush on you! reply CHAT to this message to be connected to them! 4 help 1300659707 577 25.01.2006 Someone has a secret crush on you! Reply CHAT to this message to be connected to them! 4help 1300659707 1465 26.01.2006 - 01.02.2006 FreeMSG You have a secret admirer! Reply CHAT to this message 2 be connected directly! 4help 1300659707 5.55per msg pair 25906

126 Mr Phillips' formal admissions as tabulated did not go to whether the originator of any of these messages was IMP as opposed to, materially, another company, Jobspy.

JOBSPY 127 Jobspy was incorporated in February 2005. On and from that time its sole director and shareholder has been Scott Mark Moles, the Sixth Respondent. Mr Moles was the beneficial owner of all of the shares in Jobspy (2 x $1.00 shares). 128 By January 2006 Jobspy was operating from premises at New Farm, Brisbane. These operations were not materially distinguishable from those then being conducted at Mount Nebo Road by IMP. It was in that month that Ms Katie Van Dyk came to be employed by Jobspy. She was engaged as an employee following an interview at the New Farm premises by, notably, Mr Maughan. During that interview Mr Maughan said to her and it was in fact the case in respect of Jobspy's business that: The job involves setting up profiles on dating websites, using those profiles to get the names and mobile telephone numbers from members, and sending messages to them. While Jobspy operated from the New Farm premises, Mr Maughan supervised Ms Van Dyk as well as a succession of mostly female backpackers, in the main English or American, who worked in the business for varying periods of time, none for more than six months. Soon after she started employment, Ms Van Dyk came to know Mr Moles as the owner of Jobspy. Mr Maughan reported to Mr Moles and undertook the day to day supervisory role at the New Farm premises. 129 Another who came to work for Jobspy at the New Farm premises under Mr Maughan's supervision was Ms Francescia Crowe. She commenced employment there in February 2006. She, too, came to know Mr Moles as the owner of Jobspy. 130 Having regard to the evidence given by Ms Van Dyk and Ms Crowe, which I thought was frank and credible; Jobspy's business method was as follows. 131 On and from January 2006 and for the purpose of obtaining mobile telephone numbers, Jobspy, via Mr Maughan, Ms Van Dyk, the fluctuating workforce of backpackers and Ms Crowe created fictitious personal profiles which were then placed on various Australian internet dating websites, including those which catered to the male and female homosexual community. Once mobile telephone numbers were obtained, messages were sent out to the account holder for that mobile telephone using computers which employed the "Mobilegate" software. Ms Crowe gave a description of the operation of this software which corresponded with that given by Mr Owen in his evidence. It was never intended by Jobspy that there ever be a meeting between the author of a text to a mobile telephone account holder and that account holder. It was never a situation in which a person chose to adopt a pseudonym so as to provide a degree of anonymity in genuine exchanges concerning a genuinely intended liaison. Rather, the exercise was one of deliberate deception of the third party mobile telephone account holder so as to extend, for as long as possible, the incurring by that account holder of premium rate usage charges. 132 Ms Crowe placed the time of Jobspy's move to the West End premises as September 2006. She remembered that the backpackers who had been working at the New Farm premises did not come across to West End but that there were already some backpackers working there. That is consistent with an initial, March 2006, occupation and use of those same premises by IMP. 133 Neither Ms Van Dyk nor Ms Crowe gave evidence that they met Mr Phillips either at the New Farm premises of Jobspy or otherwise in the period from when they commenced employment until 9 April 2006. 134 Ms Van Dyk and Ms Crowe each related in affidavit evidence the nature of the operation conducted following Jobspy's move to the West End premises and persons (including other respondents not the subject of this trial) who came to undertake managerial or supervisory tasks these. IMP's move to West End came at about the end of the period of Mr Phillips' alleged involvement in contraventions. The West End operations of Jobspy and IMP were not said by the Authority to be relevant to the case which it sought to make against Mr Phillips. For that reason, I have disregarded evidence of later, West End operations. 135 What the Authority did submit to be relevant were what were said to be necessary inferences to be drawn to the effect that the business methods employed by Jobspy before its move to West End were those which IMP was already employing including, in particular, the use of fictitious profiles. Even apart from any such inferences, I have already concluded that there is an inherent likelihood that IMP's business method involved the use of fictitious profiles on dating websites. In the case of Jobspy, there is direct evidence from Ms Van Dyk and Ms Crowe that its business method involved the use of fictitious profiles. 136 That IMP and Jobspy shared common software and business methods was not a coincidence. The obvious link between the two, in terms of regular, physical presence, on the evidence, lies in Mr Maughan. 137 Mr Owen's evidence in relation to Jobspy was, in effect, that in early 2006 he had "franchised" to Mr Moles for a lump sum a business of the kind then being conducted by IMP. His evidence was further that Mr Maughan had left IMP at about this time to work for Jobspy both so as to receive better pay and also to assist in establishing that company's separate business. Mr Owen further stated that it had later become convenient for IMP and Jobspy to, in effect, "merge" at the West End premises. 138 That Mr Maughan undertook a training and supervisory role at the New Farm premises is corroborated by the evidence of Ms Van Dyk and Ms Crowe. I find that he undertook such a role. I do not accept that he undertook this role in respect of a business that was independent of IMP. 139 Mr Owen was noticeably vague both in content and demeanour in relation to the exact amount of the lump sum (about $150,000, according to him) agreed for the sale of the "franchise" or how it came to be paid. One reason that Mr Phillips gave in respect of why the arrangement for Mr Owen living at the other Mount Nebo Road house was mutually suitable was that Mr Owen had no money and needed somewhere to live. And live there Mr Owen did. Assuming Mr Owen is to be believed, the alleged sale of the franchise must therefore then have been a significant event in his life. Given this and even allowing for the effects of the passage of time, I should have expected his recollection of the "franchise" deal to be much better, if it had occurred. 140 Mr Owen's evidence as to the sale of a "franchise" to Jobspy and of the independent operation of that company by Mr Moles is inconsistent with his (Mr Owen's) repeated involvement, revealed by the email exchange in the schedule, with the giving of responses to Sybase in respect of customer complaints relayed by it and information technology matters in respect of the premium shortcode 19773366 during and after January 2006. Regard to the evidence of Ms Van Dyk and electronic logs of messages delivered and received by Sybase via that premium shortcode (Ex SJW-78) establishes the following. A dating profile in the name of "Sexyloz", which was a fictitious profile, was created on the AdultMatchMaker dating website on 10 January 2006. By 13 January 2006, if not earlier, electronic communications from "Sexyloz" were being generated in relation to the premium shortcode 19773366. Amongst others, the fictitious dating profiles "Little_emma" and Minx_megan", also identified by Ms Van Dyk, offer like examples in January 2006. Yet Ms Van Dyk was a Jobspy employee. 141 The "Little_emma" dating profile is also noteworthy in that this profile was created on the AdultMatchMaker website on 6 December 2005, before the time when the franchise sale is alleged to have occurred and at a time when IMP was operating its business using the Mobilegate software from Mr Owen's living room. The fictitious dating profile "naughtynatilie" is another in this category. 142 Mr Owen's evidence also leaves unexplained, if Jobspy were an independent "franchise", why, in respect of the premium shortcode 19773366, which the examples given show was associated with operations conducted by Jobspy, statements continued to be sent by Sybase to IMP at the Mount Nebo Road address pursuant to the RSA. 143 I reject Mr Owen's evidence that there was a sale of a "franchise" at his behest by IMP to Jobspy. It follows that I also reject the submission made on behalf of Mr Phillips that dating profiles associated with Jobspy's operations in the period on and from January 2006 until April 2006 have no association with IMP. They do in terms of the time when some dating profiles were created, when dealings by email by Messrs Phillips and Owen with Sybase in respect of premium shortcode 19773366 occurred and when statements of income in respect of that shortcode were sent from Sybase to IMP. 144 Ms Van Dyk, in particular, had a close involvement in the creation of dating profiles on and from her commencement with Jobspy in January 2006. To my observation, she had a good recollection of the names of particular profiles with which she had worked. Yet there were some with which, on the evidence, premium shortcode 19773366 could be associated which she did not recognise. The AdultMatchMaker dating profiles "Sexy_Melinda" and "Sweet_tami", created on 15 and 21 December 2005 respectively, with each of which use of the premium shortcode 19773366 in January 2006 was related, offer two examples of this. Ms Crowe likewise did not recognise these particular profiles. 145 This absence of recognition is consistent with a continued operation of IMP at the time from Mr Owen's living room using premium shortcode 19773366 as related by him in the passage from his evidence which I have quoted above. 146 Even if, as was submitted on behalf of Mr Phillips, the "secret crush/secret admirer" SMS messages were sent by IMP and there are, prior to 9 April 2006, 13 adult dating website profiles associated with the sending of SMS messages which are linked to Jobspy, such a finding would raise more questions against Mr Phillips than provide answers in his favour. The correspondence conducted with Sybase by email, including by Mr Phillips, is general in its focus in relation to premium shortcode 19773366, not differentiated by reference to some different business conducted by Jobspy. Nor is there, in the period in question, any differentiated provision of revenue share statements by Sybase as between IMP and Jobspy. 147 Inferentially, Jobspy did have some arrangement with IMP whereby its operators, under Mr Maughan's supervision and using a like method of operation to IMP, also solicited third parties to use premium shortcode 19773366. That premium shortcode was, subject to the scrutiny of Sybase under the terms of the RSA, under the control of IMP and therefore Mr Phillips, not Jobspy. Jobspy must therefore have had some arrangement with IMP whereby it was able to use this 19 number. Whatever benefit Jobspy received was not from Sybase but inferentially from IMP for performing services for IMP. Evidence as to the precise benefit or its amount is lacking but the service cannot have been gratuitous given that Ms Van Dyk, Ms Crowe and the backpackers were being paid by Jobspy. Inferentially though, under this arrangement, Jobspy generated traffic in respect of a shortcode assigned to IMP and on IMP's behalf. 148 The conclusion which I draw from this is that, between January 2006 and 9 April 2006, IMP in its own right and Jobspy on behalf of IMP each conducted operations using fictitious dating profiles to solicit the use of premium shortcode 19773366. It seems likely and I find that Mr Maughan was deployed from IMP to Jobspy for the purpose of training and then supervising the employees of Jobspy, be they ongoing such as Ms Van Dyk and Ms Crowe or casual backpackers, who undertook Jobspy's work on behalf of IMP. The overall responsibility for the operation remained with IMP, as the absence from any reference to Mr Moles in the email exchanges with Sybase underscores. 149 Given Mr Maughan's prior experience with the starting up of IMP's operations in the living room at Lot 3, it seems inherently likely that the training which he gave to Ms Van Dyk and, in turn, by her to Ms Crowe replicated the operation already being conducted by IMP. Thus, quite apart from inferences open in any event as to the inherent likelihood that profiles created on and from the commencement of IMP's operations were always intended to be fictitious, there is a necessary inference as well, flowing from how Jobspy staff were trained and subsequently operated, that it was always a feature of IMP's operations that dating profiles were fictitious. 150 There is then evidence that IMP and Jobspy each contravened s 16(1) of the Spam Act and s 52 of the Trade Practices Act as alleged. The whole method of operation of each of these companies, in the case of Jobspy on behalf of IMP, centred around the practice of deception in relation to dating profiles on various sites and the procuration thereby of affirmative responses from deceived third parties in communications which facilitated IMP's derivation of income through the use of the premium shortcode 19773366. It is axiomatic that, in practising that deception, IMP and Jobspy engaged in misleading or deceptive conduct. The dating profiles posted in the course of their operations were always fictitious. That was so even when they bore a photo of their original author in that this person neither intended communication with third parties with a view to the possibility of meeting or that the profile name relate only to her. For both these dating profiles and the others operated by IMP and Jobspy on its behalf the intention was solely to create an impression in the minds of third parties that a person truly interested in the possibility of future social contact could be contacted by agreeing to use the premium shortcode. The corporate intention was profit making via the use of that number, nothing more.

was MR PHILLIPS' a party to IMP'S AND JOBSPY'S CONDUCt? 151 Is Mr Phillips to be regarded as a party to IMP and Jobspy's conduct in the period up to 9 April 2006? 152 As at January 2006 Mr Moles was known to Mr Phillips. The two had operated competing businesses earlier in the decade. Mr Phillips' past acquaintance hardly makes him a party to Jobspy's conduct on and from January 2006. Added to that is the fact that Mr Phillips was never physically present at Jobspy's New Farm premises. 153 Yet Mr Phillips, as the emails in the schedule reveal, is an active participant in exchanges with Sybase in relation to the premium shortcode 19773366. These emails also reveal his conducting separate but related telephone conversations both with Sybase's senior officer ("Country Manager") in Australia, Mr Cameron Franks and the latter's subordinate, Ms Gois on 22 and 23 December 2005 respectively. To Mr Franks, Mr Phillips relates how operations are conducted in relation to the use of the premium shortcode 19773366 in response to a complaint that persons are being lured away from adult dating sites to use that premium shortcode without being warned about user charges. To Ms Gois, Mr Phillips proposes what he evidently hopes will be a usage protocol that will highlight in a way acceptable to Sybase the usage charge. This direct involvement by Mr Phillips is responsive to a threat by Sybase of suspending the use of the shortcode. He does not mention either to Mr Franks or to Ms Gois that the dating profiles are fictitious. That they were fictitious is proved but Mr Phillips denies being aware they were fictitious. Were he aware he is hardly likely to have informed anyone in Sybase of that fact. 154 Significantly also, on 2 January 2006, Ms Gois on behalf of Sybase and in respect of the subject "automessages ready" directs Mr Phillips' attention by email to the receipt of calls from "irate customers re messages received from premium shortcode 19773366". This message is copied by her to Mr Owen (and to "Mark", the computer programmer who worked on the Mobilegate system design). The email exchange further reveals that it was Mr Maughan who investigated these complaints with Mr Owen then forwarding these results to Ms Gois at Sybase as well as to Mr Phillips. If Mr Owen were using Mr Phillips' email account to send messages in Mr Phillips' name but without his knowledge there was no reason to use his (Mr Owen's) own name and account. Given that the exchange occurred in early January, it is more likely that it occurred in respect of premium shortcode communications generated by operators engaged by IMP rather than Jobspy. What this email exchange shows is a reporting hierarchy within IMP. Mr Maughan reported to Mr Owen who, in turn, reported to Mr Phillips. Given this hierarchy, it seems inherently unlikely that Mr Phillips would not have been aware of Mr Maughan's deployment to Jobspy later in January 2006 and the purpose of that deployment. 155 On 13 January 2006 and in response to further customer complaints Mr Phillips again corresponds with Ms Gois as to the protocol being employed in relation to the use of premium shortcode 19773366. This response has the added significance that it is likely that, by this stage in January 2006, Jobspy had commenced its operations. 156 On 6 February 2006 (again at a time when Jobspy is operating) Mr Phillips complains to Ms Gois about the imposition by Sybase without warning of "MO billing" and a related shortcode suspension. 157 On 10 February 2006 (once again at a time when Jobspy is operating) Mr Owen seeks Mr Phillips' clearance ("if your [sic] happy with this") in respect of a response to Ms Leisa Frost of Sybase in relation to a customer complaint. 158 On 23 February 2006 Mr Phillips corresponds with Ms Gois about the delay in the "reprovisioning" of premium shortcode 19773366 concluding with the insistent query, "when will we be live again?" At the time this query is made both IMP itself and Jobspy need this shortcode for their operations. 159 These email exchanges offer a powerful, contemporaneous insight into Mr Phillips' true involvement. It is to be remembered, too, that they were written for consumption by officers of Sybase but not with any expectation that they might later feature in penal proceedings under the Spam Act or proceedings under the Trade Practices Act. I have already referred with approval to a summary offered by the Authority in its submissions about the respective involvements of Messrs Phillips and Owen revealed by the email exchanges with Sybase. I also find that a pattern which emerges from these telephone conversations and emails is that Mr Phillips assumes a direct involvement whenever there is a threat to the continued use of the premium shortcode. He never differentiates IMP's position from that of Jobspy or even mentions the latter. He makes no reference at all to the existence of any separate, independent operation conducted by Jobspy. 160 Either by admission or on the basis of evidence which I have accepted, Mr Phillips was: (a) the controller of IMP; (b) as a consequence the controller of the Mount Nebo Road premises from which IMP operated for most of the period alleged; (c) Mr Owen's and Mr Maughan's superior in IMP; (d) the negotiator for and signatory to the RSA; (e) the negotiator with Sybase whenever a threat emerged to the continued use of the premium shortcode 19773366; (f) aware that IMP derived its income from the use by third parties of that premium shortcode and that its level of income directly related to the frequency of use of that shortcode; (g) the person for whose attention and at whose address Sybase's revenue share statements in respect of that premium shortcode were directed; (h) aware that a fluctuating pool of backpackers was engaged at the Mount Nebo Road premises to solicit the use of that premium shortcode. 161 There is, as noted above, also evidence that the profiles employed by IMP and by Jobspy on its behalf were in fact fictitious. 162 A number of issues of law arise. One is what is entailed in the circumstances of this case in knowledge of the essential matters that go to make up the corporate contraventions so as to ground accessorial liability on the part of Mr Phillips? Depending on the answer to this question, the other question, if knowledge by Mr Phillips of the deceptive quality of the profiles is required, is are falsehoods in his evidence probative at all of a guilty mind in relation to the operations of IMP and of the existence and operations of Jobspy? 163 With respect to Mr Phillips, the Authority has alleged that he aided, abetted, counselled or procured or further or alternatively was directly knowingly concerned in corporate contraventions of the Spam Act and the Trade Practices Act. 164 In Yorke v Lucas at 667, Mason ACJ, Wilson, Deane and Dawson JJ noted in their joint judgment that the words "aided, abetted, counselled or procured" were taken from the criminal law. The same may be said of the "knowingly concerned" alternative, an analogue of which was found in the former s 5 of the Crimes Act 1914 (Cth). In holding that proof of aiding, abetting, counselling or procuring required proof of knowledge of the essential matters that go to make up an offence attention was drawn in the joint judgment to the then recently decided criminal law case, Giorgianni v The Queen (1985) 156 CLR 473. (Giorgianni). Their Honours (ibid) also expressly contrasted knowledge of essential matters with knowledge that those matters went to make up an offence. The latter is not a necessary proof to establish accessorial liability. That this is so was affirmed in Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53 (Rural Press) at [48]. 165 In Giorgianni (at 480-481) Gibbs CJ observed of the words "aided, abetted, counselled or procured" that they overlap, sometimes being used in combinations and sometimes as a phrase to be considered as a whole with the distinction between them not generally now one of legal importance. In that same case, Mason J (as he then was) went even further stating (at 493) that, in Australia, the terms were descriptive of a single concept. His Honour favoured the observation by Cussen ACJ in R v Russell [1933] VLR 59, at 67: All the words abovementioned [aiding, abetting, counselling and procuring] are, I think, instances of one general idea, that the person charged as a principal in the second degree is in some way linked in purpose with the person actually committing the crime, and is by his words or conduct doing something to bring about, or rendering more likely, such commission. 166 It is not necessary for the purposes of determining this case to delve into whatever subtleties there may be as between aiding, abetting, counselling or procuring for it is clear from Yorke v Lucas that each would require knowledge of the essential matters that go to make up the contravention. 167 Giorgianni is instructive for present purposes because the offence of culpable driving to which the accused was alleged to be a party was one of strict liability. Nonetheless, a necessary proof, so far as the accessory was concerned, was knowledge of the defective condition of the brakes of the vehicle being driven. That was so even though proof of such knowledge on the part of the principal offender was unnecessary because the offence was one of strict liability. By analogy, even though, to ground a contravention of s 52 of the Trade Practices Act, it is not necessary to prove that the alleged contravener knows that the representation is misleading or deceptive or likely to mislead or deceive, only that objectively the representation has one of these qualities, a person is not liable as an accessory to that contravention merely by proving knowledge of the making of the representation. 168 In Medical Benefits Fund of Australia Ltd v Cassidy (2003) 135 FCR 1 (MBF v Cassidy) at [15]-[16] Moore J (with whom in this regard Mansfield J at [17] agreed), after an extensive survey of authority, concluded: 15. [In] my opinion, liability as an accessory (in circumstances where the contravening conduct of the principal was making false or misleading representations) does not depend on an affirmative answer to the question whether the alleged accessory knew the representations were false or misleading. All that would be necessary would be for the accessory to know of the matters that enabled the representations to be characterised in that way. In a comparatively simple situation, such as the situation considered in Yorke v Lucas, where particular representations were being made to individuals or groups of individuals, knowledge of those matters would almost inevitably result in the alleged accessory also knowing the representations were false or misleading. Had Lucas known of the real turnover figures, then it is difficult to imagine that he would not have appreciated, additionally, that what he was saying about the business was false and misleading. 16. However in a situation where representations are made to the public and whether they are misleading or deceptive is to be approached at a level of abstraction (to use the language of the High Court in Campomar Sociedad, Limitata v Nike International Ltd (2000) 202 CLR 45 (at [101]) it seems inapt to explore the question of whether the alleged accessory knew the representations were false or misleading in some subjective sense. As illustrated by the preceding consideration of the facts of this case, it is probably appropriate to consider, and only consider, the question of whether the alleged accessory knew that the conduct of the principal might lead members of the public to assume a state of affairs which was not the true state of affairs. If this analysis is correct, then the division of judicial opinion referred to at the beginning of those reasons may, at least in many instances, be illusory rather than real. It is not a large step to say knowledge that a representation may convey a meaning contrary to the facts is also knowledge that the representation is false and the making of the representation is misleading and deceptive conduct. 169 A different conclusion is evident in the judgment of Stone J in MBF v Cassidy. Her Honour, too, made extensive reference to authority with the conclusion she reached being evident from the following excerpts from her judgment (at [80]-[81] and [85]: 80. It is well established that neither knowledge nor intention is necessary for there to be a contravention of s 52 of the TPA or of s 12GA of the ASIC Act. It is sufficient (and necessary) that the conduct in question can be accurately described as "misleading or deceptive" or "likely to mislead or deceive". This misleading or deceptive character is a question of fact that must be decided in the context of all the surrounding circumstances; Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 202. That "fact" is an essential element of the contravention. It follows that to be liable as an accessory one must have knowledge of the misleading and deceptive character of the relevant conduct. 81. In Yorke v Lucas Mr Lucas was not liable as an accessory because he did not know that the information he was giving to the prospective purchaser was false. He lacked knowledge of an essential element of the contravention, such knowledge being "necessary to form the required intent"; 667 per Mason ACJ, Wilson, Deane and Dawson JJ. In the words of Brennan J, he was "honestly ignorant of the circumstances that [gave] that conduct a contravening character"; see [71] above. As such and given that, per Gibbs CJ in Georgianni, "a person cannot aid, abet, counsel or procure an offence of strict liability without having an intention to do so formed in light of the knowledge of the facts", Mr Lucas could be not be liable as an accessory. … 85. [The] proposition that an accessory does not need to know that "the conduct has the capacity to mislead" is inconsistent with the Yorke v Lucas. The High Court interpreted the accessory liability provisions not as requiring that the accessory know the essential elements of the contravening conduct but that he or she know the essential elements of the contravention. As stated earlier this involves knowing, in addition to what happened, the fact that the relevant conduct is misleading or deceptive or likely to mislead or deceive. [Emphasis by her Honour] 170 MBF v Cassidy was decided in the Full Court less than a week after the High Court delivered its judgment in Rural Press. It does not appear that the Full Court's attention was drawn to the High Court's judgment in Rural Press for the references to the latter are to the judgments delivered in the case in this Court at intermediate appellate level. In any event, there is nothing in Rural Press at ultimate appellate level which resolves the different views evident in MBF v Cassidy. Though I consider that, sitting in the original jurisdiction, I am bound to follow the views of Moore and Mansfield JJ in MBF v Cassidy, I respectfully consider that this is one of those cases where, as their Honours allowed, the difference in judicial opinion is illusory. In the circumstances of this case, proof by the Authority that Mr Phillips knew that the profiles were fictitious will necessary carry with it a conclusion that he knew that third party assent to the use of the premium shortcode 19773366 was being procured by deception. 171 As to the further or alternative pleading of accessorial liability based on being "knowingly concerned", in an early trade practices prosecution, Given v Pryor (1979) 39 FLR 437, at 442-443 Franki J, referring to Mallan v Lee proceeded on the basis that for the respondent to be found to have been knowingly concerned in a corporate contravention, it was necessary that it be proved that he had "full knowledge of the relevant facts". That is a very similar formulation to that adopted in respect of the phrase "aid, abet, counsel or procure" in Yorke v Lucas. A definition of "knowingly concerned" given by the Full Court of the West Australian Supreme Court in Ashbury v Reid [1961] WAR 49 at 51, which has commended itself both to the New South Wales Court of Appeal, in R v Tannous (1987) 10 NSWLR 303, and to judges of this Court, in Trade Practices Commission v Australian Meat Holdings Pty Ltd (1988) 83 ALR 299 at 357 (Wilcox J) and Australian Competition and Consumer Commission v Black on White Pty Ltd (2001) 110 FCR 1 at [91] (Spender J) is this: whether on the facts it can reasonably be said that the act or omission shown to have been done or neglected to be done by the defendant does in truth implicate or involve him in the offence, whether it does show a practical connexion between him and the offence. If the Authority is able to show "full knowledge of the relevant facts" on the part of Mr Phillips it will show a "practical connexion" between him and the corporate contraventions. I intend to follow this approach. Having regard to the authorities as to "knowingly concerned" and at least in the circumstances of this case, if the Authority is able to prove that Mr Phillips aided, abetted, counselled or procured the corporate contraventions which it alleges it will also have proved that he was "knowingly concerned" in those contraventions. 172 There was debate before me in submissions as to the level of detail of knowledge of contravening conduct which the Authority must prove. As I understood it, the submission made on behalf of Mr Phillips was that the Authority needed to go so far as to prove that he was aware that particular profiles were fictitious and that particular deceptive messages were being sent using that particular fictitious profile. That would involve proof of detailed knowledge of the deceptive quality attending each and every of many thousands of messages. I reject this submission. It is not, in my opinion, supported by Yorke v Lucas. It will be sufficient to prove accessorial liability in respect of the corporate contraventions if the Authority proves that Mr Phillips was aware that IMP and on its behalf Jobspy were employing a system of operations whereby fictitious profiles were being created to the end that each third party consent to the use of the premium shortcode would be procured by a message which was deceptive because of the employment of a fictitious profile. Proof of knowledge at a more detailed level of abstraction is not, in my opinion, essential. 173 In his evidence before me Mr Phillips sought to distance himself from any involvement in the email exchanges, telephone conversations and the signing of the RSA beyond that of helping out a friend. Mr Owen. In so doing, for reasons which I have already given, he gave false evidence. Also false, for reasons already given, was his account of IMP being "taken over" by Mr Owen without his knowledge or authority for the purpose of conducting a business using the 19 number. For these same reasons, these falsehoods were deliberate. Put another way, I am satisfied that Mr Phillips' evidence consisted of a series of studied lies as to his involvement with the business conducted by IMP and, in particular, its use of premium shortcode 19773366 so as to derive income. 174 In Edwards v The Queen (1993) 178 CLR 193 at 208-209 Deane, Dawson and Gaudron JJ stated: There is a difference between the mere rejection of a person's account of events and a finding that a person has lied. A lie is a deliberate untruth. To conclude that a statement is a lie is to conclude that the truth lies elsewhere. In some circumstances, a finding that a person lied will necessarily involve acceptance of the contrary. However, the fact that a person has lied does not of itself establish a specific contrary proposition. Ordinarily, the telling of a lie will merely affect the credit of the witness who tells it. A lie told by an accused may go further and, in limited circumstances, amount to conduct which is inconsistent with innocence, and amount therefore to an implied admission of guilt. In this way the telling of a lie may constitute evidence. When it does so, it may amount to corroboration provided that it is not necessary to rely upon the evidence to be corroborated to establish the lie. At one time it was thought that only a lie told out of court could amount to an implied admission, but the distinction is not logically supportable and is no longer drawn. When the telling of a lie by an accused amounts to an implied admission, the prosecution may rely upon it as independent evidence to "convert what would otherwise have been insufficient into sufficient evidence of guilt"\ or as corroborative evidence. But not every lie told by an accused provides evidence probative of guilt. It is only if the accused is telling a lie because he perceives that the truth is inconsistent with his innocence that the telling of the lie may constitute evidence against him. In other words, in telling the lie the accused must be acting as if he were guilty. It must be a lie which an innocent person would not tell. That is why the lie must be deliberate. Telling an untruth inadvertently cannot be indicative of guilt. And the lie must relate to a material issue because the telling of it must be explicable only on the basis that the truth would implicate the accused in the offence with which he is charged. It must be for that reason that he tells the lie. To say that the lie must spring from a realization or consciousness of guilt is really another way of saying the same thing. It is to say that the accused must be lying because he is conscious that "if he tells the truth, the truth will convict him". [Footnote references omitted] 175 The Authority submitted that the falsehoods mentioned were telling in relation to a finding that Mr Phillips was a party to the corporate contraventions of the Spam Act and the Trade Practices Act by both IMP and Jobspy and, in particular, that he was aware that profiles used were fictitious. 176 The deliberate falsehoods in Mr Phillips' evidence were, in my opinion, lies that an innocent person would not tell. If the profiles used by IMP were not fictitious there was no reason falsely to seek to distance himself from anything but transient, gratuitous involvement with IMP or its dealings with Sybase. Once again, if Jobspy's operations under its arrangement with IMP did not involve the use of fictitious profiles there was no need for Mr Phillips to deny knowledge of Jobspy. 177 For Mr Phillips to tell the truth about knowing of the use of fictitious profiles would have been to supply the missing element of knowledge that corporate conduct in relation to premium shortcode 19773366 which was deceptive. 178 Looking, as I must, at the evidence as a whole, and in respect of the number and type of messages sent to Australian mobile telephone numbers via the premium shortcode number 19773366 between December 2005 and February 2006 (detailed above), I am satisfied on the balance of probabilities and having regard to the gravity of the allegations that the Authority makes that Mr Phillips was an accessory to the sending of unsolicited commercial electronic messages contrary to s 16(1) of the Spam Act and to misleading or deceptive conduct contrary to s 52 of the Trade Practices Act. The contraventions were either those of IMP directly or those of Jobspy on its behalf. Mr Phillips is liable as a person who aided, abetted, counselled or procured those contraventions or further or alternatively was knowingly concerned in them. In this case, there is no relevant distinction to be drawn in relation to the basis of his accessorial liability. 179 Whether or not to grant declaratory relief is discretionary but the public interest for so doing in the circumstances of this case is very strong.

180 I shall hear the parties as to the form of orders to give effect to the conclusions which I have reached in these reasons for judgment both in respect of declaratory relief and otherwise. It will also be necessary to hear the parties as to the penalty, if any, which ought to be imposed and in respect of any injunctive or ancillary orders as well as costs. I therefore propose to direct the Authority to bring in proposed short minutes of orders, to fix a date for the hearing of submissions on these subjects and to make such further directions as may be necessary to facilitate that hearing. I certify that the preceding one hundred and eighty (180) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.

SCHEDULE EXCHANGE OF EMAILS BETWEEN MR PHILLIPS' EMAIL ACCOUNT AND SYBASE

From: Simon Owen [mailto:simon@impmobile.com] Sent: Thursday, 23 March 2006 12:23 PM To: Cameron Franks; 'Scott Phillips' Cc: aucustomercare01 Subject: RE: Mobile Friend 19773366

What time would you like me to call? I am free all day.

-----Original Message----- From: Cameron Franks [mailto:Cameron.Franks@mobile365.com] Sent: Tuesday, March 21, 2006 11:14 PM To: Simon Owen; Scott Phillips Cc: aucustomercare01 Subject: RE: Mobile Friend 19773366

Ok thanks for this - will have a look through - perhaps we can discuss tomorrow?

From: Simon Owen [mailto:simon@impmobile.com] Sent: Thursday, 23 March 2006 11:46 AM To: 'Scott Phillips' Cc: Cameron Franks; aucustomercare01 Subject: RE: Mobile Friend 19773366

Customer was sent the initial message on the M365 roaming http route.

"FreeMSG You have a secret admirer! reply CHAT to this message 2 be connected directly! 4help 1300659707, 5.55per msg pair" at 2006-03-05 19:43:49

If the customer is unhappy we would be happy to offer a full refund and black list the customer Thanks

Ive got brown hair & clear blue eyes does that help narrow it down 4 u?

Message 1 of the order 1430676195 at destination of +61402225787 has been sent at 08:05:03 (CET) on the 15-03-2006.

well it was fairly large.. i dont know exactly what it was for becuz my friend, the one who introd me 2u, invited me to come

Give me a clue re social function now confused thought id solved the mystery

Message 1 of the order 1430597899 at destination of +61402225787 has been sent at 07:22:39 (CET) on the 15-03-2006.

Message 1 of the order 1430579342 at destination of +61402225787 has been sent at 06:50:04 (CET) on the 15-03-2006.

if i tell you the exact place and friend youll know straight away, i will tell you though that it was a largish social gatherin

Message 1 of the order 1430540027 at destination of +61402225787 has been sent at 06:26:08 (CET) on the 15-03-2006.

we met through a mutual friend about two months ago... a female friend if that helps narrow it down for you

Message 1 of the order 1430527297 at destination of +61402225787 has been sent at 06:03:31 (CET) on the 15-03-2006.

im someone you know... ive had a crush on you for like a month now.. would you like a clue to help you out?

Message 1 of the order 1430490999 at destination of +61402225787 has been sent at 05:52:53 (CET) on the 15-03-2006.

hey babe havent heard from you in a while? how have u been? hope i didnt offend u in anyway..

FreeMSG You have a secret admirer! reply CHAT to this message 2 be connected directly! 4help 1300659707, 5.55per msg pair

-----Original Message----- From: Scott Phillips [mailto:sphillips@nologic.com] Sent: Tuesday, March 21, 2006 7:49 PM To: simon@impmobile.com Subject: FW: Mobile Friend 19773366

------ Forwarded Message From: Cameron Franks Date: Mon, 20 Mar 2006 23:22:29 -0000 To: Scott Phillips Cc: aucustomercare01 Subject: RE: Mobile Friend 19773366 Order ID: 1430490999 Message ID: 1 Notification level: SMS-C Notif. Message status: SMS-C Notif. Submit date: 2006-03-15 05:52 Mobile delivery time: 2006-03-15 05:52 Phone number: +61402225787 TPOA: 19773366 Operator name: Telstra GSM

hey babe havent heard from you in a while? how have u been? hope i didnt offend u in anyway..

Order ID: 1430527297 Message ID: 1 Notification level: SMS-C Notif. Message status: SMS-C Notif. Submit date: 2006-03-15 06:03 Mobile delivery time: 2006-03-15 06:03 Phone number: +61402225787 TPOA: 19773366 Operator name: Telstra GSM

im someone you know... ive had a crush on you for like a month now.. would you like a clue to help you out?

Order ID: 1430540027 Message ID: 1 Notification level: SMS-C Notif. Message status: SMS-C Notif. Submit date: 2006-03-15 06:25 Mobile delivery time: 2006-03-15 06:26 Phone number: +61402225787 TPOA: 19773366 Operator name: Telstra GSM

we met through a mutual friend about two months ago... a female friend if that helps narrow it down for you

Order ID: 1430579342 Message ID: 1 Notification level: SMS-C Notif. Message status: SMS-C Notif. Submit date: 2006-03-15 06:45 Mobile delivery time: 2006-03-15 06:50 Phone number: +61402225787 TPOA: 19773366 Operator name: Telstra GSM

if i tell you the exact place and friend you?/?/ ill know straight away, i will tell you though that it was a largish social gatherin

This is clearly breaching the rules - any comments?

From: Cameron Franks Sent: Monday, 20 March 2006 5:26 PM To: Scott Phillips Cc: Janene (Customer Care) (Aucustomercare01@mobile365.com) Subject: FW: Mobile Friend 19773366

This is a different case - can you provide all logs for this number please - more complaints - this time from Telstra Can you please check the Mobile Friend service run on 19773366. I received feedback from our Front of House re unsolicited messages along the lines of

"It's been so long we've had a lot of fun, let's catch up "and "Hi I've admired you from afar...".

The unsuspecting customer replies and incurs a $5 charge.

Here is one customer number 0402225787. It would be good to see the message log. Hope this isn't a new money-making scheme!

SendTo: Vanessa Gois From: Simon Owen […] Subject: RE: Request for information […] DeliveredDate: 05/15/2006 02:14:14 PM

Don't worry ive got my puppy dog to look after me :-)

I'll get that other email to you shortly Simon -----Original Message----- From: Vanessa Gois [mailto:vanessa.gois@mobile365.com] Sent: Sunday, May 14, 2006 11:05 PM To: Simon Owen Subject: RE: Request for information Hello, As discussed, can you please send though the IMP ABN details? Hope you feel better soon, Regards, Vanessa

From: Simon Owen [mailto:simon@impmobile.com] Sent: Tuesday, May 16, 2006 8:27 AM To: Cameron Franks Cc: Vanessa Gois Subject: RE: Request for information Cameron, My number is 0424549431, you should already have this on record. Feel free to pass that and my email address on if you wish Simon -----Original Message----- From: Cameron Franks [mailto:Cameron.Franks@mobile365.com] Sent: Sunday, May 14, 2006 10:23 PM To: Simon Owen Cc: Vanessa Gois Subject: FW: Request for information Can you provide me your full contact details please thanks

From: Heather Neate [mailto:Heather.Neate@acma.gov.au] Sent: Monday, 15 May 2006 3:21 PM To: Cameron Franks Subject: Request for information Dear Mr Franks Heather Neate from the Anti-Spam Team at the ACMA here. ACMA has received multiple complaints about marketing messages for one of the shortcode numbers assigned to Mobile 365. Accordingly, could you please advise the full contact details for whomever is responsible for the following shortcode?

19773366 Your earliest response would be appreciated. Regards Heather Neate Anti-Spam Team ACMA […]

SendTo: Vanessa Gois From: Simon Owen […] Subject: RE: Mobile Friend 19773366 […] DeliveredDate: 05/04/2006 06:20:36 AM

Vanessa, My phone number is 0424549431 don't sign me up for any ring tones :-) I will give you a call today :-) Simon

-----Original Message----- From: Vanessa Gois [mailto:vanessa.gois@mobile365.com] Sent: Sunday, April 30, 2006 3:28 PM To: Simon Owen Subject: RE: Mobile Friend 19773366 If you're still in Sydney please drop by - it would be nice to meet you. Otherwise, I look forward to your call. Also - can you please pass through your contact details - I don't seem to have anything other than your email address! Thanks! Vanessa

From: Simon Owen [mailto:simon@impmobile.com] Sent: Saturday, April 29, 2006 12:25 PM To: Vanessa Gois Subject: RE: Mobile Friend 19773366 Hi Vanessa, I was in Sydney today I should have stopped by :-) Will give you a call asap Simon -----Original Message----- From: Vanessa Gois [mailto:vanessa.gois@mobile365.com] Sent: Thursday, April 27, 2006 7:08 PM To: Simon Owen Subject: RE: Mobile Friend 19773366 Hi Simon, Hope you're well. When you have a moment could you please contact me on 02 9258 9602 to catch up on what's been happening while I have been away. Thanks and regards, Vanessa

From: Simon Owen [mailto:simon@impmobile.com] Sent: Tuesday, March 28, 2006 12:22 PM To: Cameron Franks Cc: Vanessa Gois; aucustomercare01; pentae@zorgmedia.com Subject: RE: Mobile Friend 19773366 Understood. Will modify our service first thing in the morning Thanks Simon -----Original Message----- From: Cameron Franks [mailto:Cameron.Franks@mobile365.com] Sent: Sunday, March 26, 2006 10:55 PM To: Simon Owen Cc: Vanessa Gois; Aucustomercare01@mobile365.com Subject: FW: Mobile Friend 19773366 [Message text reproduced below]

Sent: Monday, 27 March 2006 5:52 PM To: Cameron Franks Cc: aucustomercare01 Subject: RE: Mobile Friend 19773366 [Message text reproduced below]

From: Cameron Franks [mailto:Cameron.Franks@mobile365.com] Sent: Monday, 27 March 2006 2:50 PM To: Chandler, Rosemary J Cc: Aucustomercare01@mobile365.com Subject: RE: Mobile Friend 19773366

From: Chandler, Rosemary J [mailto:Rosemary.Chandler@team.telstra.com] Sent: Monday, 20 March 2006 1:16 PM To: Cameron Franks Subject: Mobile Friend 19773366 [Message text reproduced below]

SendTo: Cameron Franks CopyTo: Vanessa Gois,aucustomercare01,pentae@zorgmedia.com From: Simon Owen […] Subject: RE: Mobile Friend 19773366 […] DeliveredDate: 03/27/2006 03:23:09 PM

Understood. Will modify our service first thing in the morning Thanks Simon

-----Original Message----- From: Cameron Franks [mailto:Cameron.Franks@mobile365.com] Sent: Sunday, March 26, 2006 10:55 PM To: Simon Owen Cc: Vanessa Gois; Aucustomercare01@mobile365.com Subject: FW: Mobile Friend 19773366 Telstra feedback - please include service name "mobile crush" in inducement messages - thanks

Sent: Monday, 27 March 2006 5:52 PM To: Cameron Franks Cc: aucustomercare01 Subject: RE: Mobile Friend 19773366 hi Cameron, thanks for following up. The inducement messages definitely need to have the full info re pricing and help, but also service name. I suspect that in this instance, someone other than the customer was using the phone initially. cheers, Rosemary

From: Cameron Franks [mailto:Cameron.Franks@mobile365.com] Sent: Monday, 27 March 2006 2:50 PM To: Chandler, Rosemary J Cc: Aucustomercare01@mobile365.com Subject: RE: Mobile Friend 19773366 Hi Rosemary Have been looking into this with CP IMP. The user was signed up by someone he knows at our site http://www.mobile-crush.com . Because our site allows people to signup their friends we send a free message informing of charges and asking for a acc before we start the service. This was received in this case by the user replying chat - in logs below read from bottom up. I think there may have been some confusion caused by 4th message - incentive message - which the user may not have associated back with charged service. As such I have advised IMP that any incentive message sent after an initial chat session has ended (i.e. not that day) should contain the same information as the first message - ie price, frequency etc. Keeping an eye on this service - let me know your thoughts / concerns. IMP are keen to ensure that they are fully compliant with all and any regulations - so if you think anything else needs changing please let us know. Thanks

im someone you know... ive had a crush on you for like a month now.. would you like a clue to help you out?

hey babe havent heard from you in a while? how have u been? hope I didnt offend u in anyway.. Hey baby,guess who this is?its a secret hehe ) xox Chat system

FreeMSG You have a secret admirer! reply CHAT to this message 2 be connected directly! 4help 1300659707, 5.55per msg pair

From: Chandler, Rosemary J [mailto:Rosemary.Chandler@team.telstra.com] Sent: Monday, 20 March 2006 1:16 PM To: Cameron Franks Subject: Mobile Friend 19773366 Hi Cameron, Thank you for lunch, it was great to catch-up. Can you please check the Mobile Friend service run on 19773366. I received feedback from our Front of House re unsolicited messages along the lines of " It's been so long we've had a lot of fun, let's catch up "and "Hi I've admired you from afar...". The unsuspecting customer replies and incurs a $5 charge. Here is one customer number 0402225787. It would be good to see the message log. Hope this isn't a new money-making scheme!

SendTo: Shirley Low Wee Peng CopyTo: Leisa Frost,Cameron Franks,AustraliaFinance,Vanessa Gois From: Simon Owen […] Subject: RE: invoice amounts for IMP […] DeliveredDate: 03/24/2006 11:08:28 AM

Shirley, This happened and Vanessa advised us, however I didn't issue an invoice for the difference I was planning on just adding it to January. Its no big deal, I am happy to wait for Vanessa's return to sort if out if you were not informed. Thanks Simon

-----Original Message----- From: Shirley Low Wee Peng [mailto:shirley.low@mobile365.com] Sent: Thursday, March 23, 2006 7:01 PM To: Simon Owen Cc: Leisa Frost; Cameron Franks; AustraliaFinance; Vanessa Gois Subject: RE: invoice amounts for IMP [Message text reproduced below]

From: Simon Owen [mailto:simon@impmobile.com] Sent: Saturday, March 25, 2006 4:52 AM To: Shirley Low Wee Peng Cc: Leisa Frost; Cameron Franks Subject: RE: invoice amounts for IMP [Message text reproduced below] -----Original Message----- From: Shirley Low Wee Peng [mailto:shirley.low@mobile365.com] Sent: Thursday, March 23, 2006 5:57 PM To: simon@impmobile.com Cc: Leisa Frost; Cameron Franks Subject: RE: invoice amounts for IMP [Message text reproduced below]

From: Cameron Franks Sent: Thursday, March 23, 2006 9:18 AM To: Shirley Low Wee Peng Cc: simon@impmobile.com; Leisa Frost Subject: FW: invoice amounts for IMP [Message text reproduced below]

SendTo: Shirley Low Wee Peng,'Simon Owen' CopyTo: Leisa Frost,AustraliaFinance,Vanessa Gois From: Cameron Franks […] Subject: RE: invoice amounts for IMP […] DeliveredDate: 03/24/2006 11:07:12 AM

The $15,067.53 is the final revised amount including 491 MT messages that Optus paid us for for Dec.

From: Shirley Low Wee Peng Sent: Friday, 24 March 2006 2:01 PM To: Simon Owen Cc: Leisa Frost; Cameron Franks; Australia Finance; Vanessa Gois Subject: RE: invoice amounts for IMP

That only happens when the operators revises / amend their report to us & we in turn have to amend our Revenue Share Statements to you. Our Account Managers will inform you respective when such cases arise.

From: Simon Owen [mailto:simon@impmobile.com] Sent: Saturday, March 25, 2006 4:52 AM To: Shirley Low Wee Peng Cc: Leisa Frost; Cameron Franks Subject: RE: invoice amounts for IMP

Ok, I understand. However I remember there was an additional amount we had to invoice for that Vanessa found after she issued our first invoice for December as Optus didn't add about 3k worth of messages. I just received Januarys invoice from M365 should I add that other amount to that?

-----Original Message----- From: Shirley Low Wee Peng [mailto:shirley.low@mobile365.com] Sent: Thursday, March 23, 2006 5:57 PM To: simon@impmobile.com Cc: Leisa Frost; Cameron Franks Subject: RE: invoice amounts for IMP

We only paid for Optus + Telstra + Voda Dec05 RS as we only receive the payments from these operators. We will pay IMP the remaining once we got the payments from the other operators. In fact we state on the debit advice which operators' RS we are paying for.

Please find attached a copy of the debit advice for your reference.

From: Cameron Franks Sent: Thursday, March 23, 2006 9:18 AM To: Shirley Low Wee Peng Cc: simon@impmobile.com; Leisa Frost Subject: FW: invoice amounts for IMP

Please can you clarify this for Simon - I assume you may have contra'd set up etc?

our invoice for December should have been $15.067.53, however I checked our account and we only received $10,385 from m365, did you want me to invoice you the remaining amount, I know there was an issue with the Optus amounts so perhaps this is what went wrong?

SendTo: Simon Owen ,Vanessa Gois From: Daragh O'Sullivan […] Subject: RE: Reprovisioning of 19773366 […] DeliveredDate: 02/27/2006 12:53:43 PM

19773366 price point has now been updated to 500c MO and 0c MT and the routing is now complete.

Virgin - msg delivered successfully to IMP Still waiting on:

-----Original Message----- From: Simon Owen [mailto:simon@performanceforums.com] Sent: Tuesday, 28 February 2006 7:29 AM To: Vanessa Gois Cc: Daragh O'Sullivan Subject: RE: Reprovisioning of 19773366

That's great news, thanks tons for all your work on this guys :)

From: Vanessa Gois [mailto:vanessa.gois@mobile365.com] Sent: Sunday, February 26, 2006 6:26 PM To: Simon Owen Cc: Daragh O'Sullivan Subject: RE: Reprovisioning of 19773366

He's working on it now - he has to change all the routing - he's indicated that it will be live and active by 4pm today.

From: Simon Owen [mailto:simon@performanceforums.com] Sent: Tuesday, February 28, 2006 7:18 AM To: Vanessa Gois Subject: RE: Reprovisioning of 19773366

Sorry to be a bother, did you talk to the sales engineer?

From: Vanessa Gois [mailto:vanessa.gois@mobile365.com] Sent: Sunday, February 26, 2006 2:30 PM To: Simon Owen; Scott Phillips Subject: RE: Reprovisioning of 19773366

Our Sales Engineer is in meetings till 11am - he is in charge of the short code process - I will get an update from him at 11am and get back to you.

From: Simon Owen [mailto:simon@performanceforums.com] Sent: Tuesday, February 28, 2006 3:26 AM To: Vanessa Gois; 'Scott Phillips' Subject: RE: Reprovisioning of 19773366

From: Vanessa Gois [mailto:vanessa.gois@mobile365.com] Sent: Wednesday, February 22, 2006 5:34 PM To: Scott Phillips Cc: simon owen Subject: RE: Reprovisioning of 19773366

The number is ready on Vodafone and Telstra. Optus have not got back to me as yet - I sent them an email yesterday and am waiting to hear from them.

I'll let you know when I hear from them - (provisioning is all done via email correspondence - so I can't even call someone to follow up)

From: Scott Phillips [mailto:sphillips@nologic.com] Sent: Thursday, February 23, 2006 10:49 AM To: Vanessa Gois Cc: simon owen Subject: Reprovisioning of 19773366

It has been 13 business days since you requested reprovisioning of 19773366.

You told us it would be 12 business days, when will we be live again?

SendTo: 'Scott Phillips' CopyTo: Leisa Frost,Vanessa Gois From: Simon Owen […] Subject: RE: TIO Complaint Ref#06/017249 […] Delivered Date: 02/10/2006 08:30:16 AM

The customer was sent 2 messages from our website http://www.mobile-crush.com .

FreeMSG You have a secret admirer! reply CHAT to this message 2 be connected directly! 4help 1300659707, 5.55per msg pair 2006-02-01 20:33:53

FreeMSG You have a secret admirer! reply CHAT to this message 2 be connected directly! 4help 1300659707, 5.55per msg pair 2006-02-01 20:21:54

It's a self explanatory service a user can go to our website and enter the number of someone who they are interested in and want to anonymously chat with until such time as they feel safe to reveal who they are. What the customer received was a free roaming message, asking them if they wanted to opt into the service. As for the customer receiving 2 of the messages I can only think perhaps another party entered the number twice because they didn't understand how it worked. It is uncommon not unheard of for us to get the odd number added wrongly or mistyped, it is also uncommon but not unheard of for a friend of the user to add them as a joke.

Once again I must re-iterate the customer was not charged for the message and were happy to add him to our black list so he is unable to be contacted via any of our services ever again. Please be aware also that if you try to use mobile-crush.com it won't work as our mobile365 short codes are currently being re-allocated to $0 MT $5 MO and are currently offline

Please let me know if I can be of further assistance

-----Original Message----- From: Scott Phillips [mailto:sphillips@nologic.com] Sent: Thursday, February 09, 2006 11:29 AM To: simon owen Subject: FW: TIO Complaint Ref#06/017249

------ Forwarded Message From: Leisa Frost Date: Thu, 9 Feb 2006 03:08:50 -0000 To: Subject: FW: TIO Complaint Ref#06/017249

From: Cameron Franks Sent: Thursday, February 09, 2006 1:39 PM To: CustomerCare.AUS Cc: Christie.White@optus.com.au Subject: FW: TIO Complaint Ref#06/017249

From: Christie White [mailto:Christie.White@optus.com.au] Sent: Thursday, 9 February 2006 12:37 PM To: Cameron Franks Subject: TIO Complaint Ref#06/017249

SendTo: Vanessa Gois From: Scott Phillips […] Subject: FW: TIO Complaint Ref#06/017249 […] DeliveredDate: 02/10/2006 06:35:38 AM

------ Forwarded Message From: Simon Owen Date: Fri, 10 Feb 2006 08:27:24 -0800 To: 'Scott Phillips' Subject: RE: TIO Complaint Ref#06/017249

Scott if your happy with this I will forward it on Leisa, The customer was sent 2 messages from our website http://www.mobile-crush.com . Message History for session FreeMSG You have a secret admirer! reply CHAT to this message 2 be connected directly! 4help 1300659707, 5.55per msg pair 2006-02-01 20:33:53 FreeMSG You have a secret admirer! reply CHAT to this message 2 be connected directly! 4help 1300659707, 5.55per msg pair 2006-02-01 20:21:54 It1s a self explanatory service a user can go to our website and enter the number of someone who they are interested in and want to anonymously chat with until such time as they feel safe to reveal who they are. What the customer received was a free roaming message, asking them if they wanted to opt into the service. As for the customer receiving 2 of the messages I can only think perhaps another party entered the number twice because they didn1t understand how it worked. It is uncommon not unheard of for us to get the odd number added wrongly or mistyped, it is also uncommon but not unheard of for a friend of the user to add them as a joke. Once again I must re-iterate the customer was not charged for the message and were happy to add him to our black list so he is unable to be contacted via any of our services ever again. Please be aware also that if you try to use mobile-crush.com it wont work as our mobile365 short codes are currently being re-allocated to $0 MT $5 MO and are currently offline Please let me know if I can be of further assistance Simon Owen -----Original Message----- From: Scott Phillips [mailto:sphillips@nologic.com] Sent: Thursday, February 09, 2006 11:29 AM To: simon owen Subject: FW: TIO Complaint Ref#06/017249

------ Forwarded Message From: Leisa Frost Date: Thu, 9 Feb 2006 03:08:50 -0000 To: Subject: FW: TIO Complaint Ref#06/017249

Hi, Can you please come back to me with details asap Thanks

Mobile 365 Tel: +61 2 9258 9600 Fax: +61 2 9251 6411 Leisa.Frost@mobile365.com www.mobile365.com

From: Cameron Franks Sent: Thursday, February 09, 2006 1:39 PM To: CustomerCare.AUS Cc: Christie.White@optus.com.au Subject: FW: TIO Complaint Ref#06/017249

From: Christie White [mailto:Christie.White@optus.com.au] Sent: Thursday, 9 February 2006 12:37 PM To: Cameron Franks Subject: TIO Complaint Ref#06/017249

Hi Cameron. I am investigating a TIO-referred complaint for the below customer: 0422392225 - Mr Terrence Burke The customer advises he has received two SMS messages, from 19773366, which is listed as part of the 3Mobile-Friend SMS Dating2 promotion through mobile365, and 3secret admirer SMS dating2. The customer strongly disputes subscribing to any SMS-dating service via his mobile. Are you able to advise me how this service works and how the customers details/number is obtained? Ie. Only by SMS or through a website, and is it the person sending or receiving who gives the details, or both.

Christie White Customer Relations Executive - Regulatory 'yes' OPTUS

( Direct (02) 9775 9431 ( Fax (02) 9775 9077

christie.white@optus.com.au

This e-mail may contain confidential information. If you are not the intended recipient, please notify the sender immediately and delete this e-mail from your system. You must not disclose this email to anyone without express permission from the sender. The contents of all emails sent to, and received from, Optus may be scanned, stored, or disclosed to others by Optus at Optus' discretion. Optus has exercised care to avoid errors in the information contained in this e-mail but does not warrant that the information is error or omission free.

The information (including any pricing information) contained in this e-mail is subject to change. This e-mail is not a quotation or proposal and no contractual obligations arise until you and Optus sign a formal written contract or formal variation to your existing contract

SendTo: Scott Phillips CopyTo: simon owen ,Vanessa Gois From: Vanessa Gois […] Subject: RE: 19773366 Service ComposedDate: 02/06/2006 01:15:50 PM PostedDate: 02/06/2006 01:15:50 PM

I have sent though a request to provision the number across ALL carriers today. I will advise you when the code is ready for use.

From: Scott Phillips [mailto:sphillips@nologic.com] Sent: Monday, February 06, 2006 12:36 PM To: Vanessa Gois Cc: simon owen Subject: Re: 19773366 Service Importance: High

SendTo: Vanessa Gois CopyTo: simon owen From: Scott Phillips […] Subject: Re: 19773366 Service […] DeliveredDate: 02/06/2006 09:36:06 AM

I understand. Please reprovision the code for $5 MO as soon as possible.

[…] SendTo: Vanessa Gois CopyTo: simon owen From: Scott Phillips […] Subject: Re: 19773366 Service […] DeliveredDate: 02/06/2006 08:54:23 AM

Is there any way we can delay this by a couple of days to give us time to adjust. Its extremely inconsiderate to dump it on us with no warning.

SendTo: Scott Phillips CopyTo: simon owen From: Vanessa Gois […] Subject: 19773366 Service ComposedDate: 02/06/2006 08:41:00 AM PostedDate: 02/06/2006 08:41:00 AM

To comply with new operator regulations, we are having to amend chat services to be MO billed only. Unfortunatley, due to the level of complaints and ACMA spam inquiry into this number, we are going to have to make this change immediately. As such we will have to suspend the short code while we re provision the code to be MO billing. We will do this as quickly as we can - though the lead time is up to 12 working days. Once this is completed, Mobile 365 will re-active the service for you.

This is all outline in the letter attached - could you please advise in writing how you would to proceed?

Tel: +61 2 9258 9600 DDI: +61 2 9258 9602 Fax: +61 2 9251 6411 Mobile: +61 400 371 229 Vanessa.gois@mobile365.com www.mobile365.com

SendTo: Scott Phillips CopyTo: Leisa Frost,simon owen From: Vanessa Gois […] Subject: RE: December Revenue Share Statement ComposedDate: 02/06/2006 08:37:00 AM PostedDate: 02/06/2006 08:37:00 AM

Scott, I've looked into the Optus figures for you. As you were not requesting handset receipts on Optus MT messages, it does not show up on our or Optus reports what messages have been delivered and billed - other than the 2 messages with receipts - as per reports and extranet. We will follow up with Optus to see if there is any other way they can see if a message has been billed, but on past occasions, they have only been able to confirm there receipts have been requested. This is the only revenue that we have received from Optus (these 2 messages) and this is all that we can pay you on.

I've re-attached the IMP statement as the Total was not tallied correctly.

From: Scott Phillips [mailto:sphillips@nologic.com] Sent: Sunday, February 05, 2006 10:01 AM To: Vanessa Gois Cc: Leisa Frost; simon owen Subject: Re: December Revenue Share Statement

There appears to be some problems with the report. The numbers do not tally with your own online stats and the individual items do not tally correctly to the stated total. Also, the statement says that we have only 2 optus MT calls for the month, which is a statistical impossibility.

Please call me at your earliest convenience to discuss.

Hi Scott, Hope you're well. Please see attached the December Revenue Share Statement. Could you please send the invoice to our finance team at australiafinance@Mobile365.com Also - can you please send though to me examples of the adverts used for the services? I need to have this as a reference in the even that I'm questioned about the services. Regards, Vanessa Vanessa Gois Account Manager Mobile 365

Tel: +61 2 9258 9600 DDI: +61 2 9258 9602 Fax: +61 2 9251 6411 Mobile: +61 400 371 229 Vanessa.gois@mobile365.com www.mobile365.com

SendTo: Vanessa Gois,'Scott Phillips' CopyTo: Hannah Sohail,R.Hall@Vodafone.com From: Simon Owen […] Subject: RE: TIO Complaint for 0415331610 […] DeliveredDate: 01/30/2006 09:41:00 AM

Rachel When we first started in this business, we were very na?ve about what was and wasn't required from us by law. At that time we sent out our first batch of messages without getting the customer to send and ACC "YES" back to us. This was quickly spotted by Vanessa and Mobile365 who suspended our account and informed us of what we were meant to be doing, we immediately added a initial free message asking for an ACC "YES", a best practice message for when the customer had reached $30 and greatly improved our customer service line and staff training. This customer was one of the first batch that never got informed of pricing on the service. As such we would be more than happy to immediately refund the whole amount the customer has spent with us. If you could provide me with an address I would be happy to make sure he got a full refund today I have records of 7MT and 5MO for the customer. Once again if I could get his details I would be happy to immediately refund him and also add him to our blacklist so he can never be messaged by our system in future. Thanks in advance, Simon Owen -----Original Message----- From: Vanessa Gois [mailto:vanessa.gois@mobile365.com] Sent: Sunday, January 29, 2006 2:04 PM To: Simon Owen; Scott Phillips Cc: Hannah Sohail Subject: RE: TIO Complaint for 0415331610 Hi Simon, I would prefer it if you dealt directly with Vodafone and not the customer as per Vodafone's wishes. Regards, Vanessa

From: Simon Owen [mailto:simon@performanceforums.com] Sent: Saturday, January 28, 2006 1:14 PM To: 'Scott Phillips' Cc: Vanessa Gois; Hannah Sohail Subject: RE: TIO Complaint for 0415331610 Vanessa I have 7 MT and 5 MO from this guy. He is one of our first batch that didn't get the ack yes. Would you like us to call the customer and arrange a refund for him? The Vodaphone rep said not to contact them directly so I'm not sure what I should do. Thanks in advance Simon -----Original Message----- From: Scott Phillips [mailto:sphillips@nologic.com] Sent: Thursday, January 26, 2006 3:20 PM To: simon owen Cc: Vanessa Gois; Hannah Sohail Subject: FW: TIO Complaint for 0415331610 Simon,

Can you have this customer contacted please and advise of the outcome

------ Forwarded Message From: Hannah Sohail Date: Wed, 25 Jan 2006 04:28:11 -0000 To: Cc: "Hall, Rachel, VF-AU" Subject: FW: TIO Complaint for 0415331610

Hi, I have received the complaint below. Can someone please contact the following customer in regard to their dispute and advise of the outcome. Kind Regards, Madeleine Mobile 365 Tel: +61 2 9258 9600 Fax: +61 2 9251 6411 Hannah.Sohail@mobile365.com www.mobile365.com

From: Hall, Rachel, VF-AU [mailto:R.Hall@Vodafone.com] Sent: Wednesday, January 25, 2006 3:03 PM To: CustomerCare.AUS Subject: TIO Complaint for 0415331610

I've received a TIO complaint from the above customer in relation to 19773366.

The customer is disputing registering for the service and also sending any MO TXT back to the service.

Can you please investigate and provide the outcome and content directly to me? Please do not contact the customer.

Rachel Hall TIO Advisory Team Email: r.hall@vodafone.com www.vodafone.com.au Vodafone Pty Ltd ABN 76 062 954 554

SendTo: Vanessa Gois,simon owen CopyTo: mark@firesport.com ,Tim Johnson From: Scott Phillips […] Subject: Re: 19773366 [Fishy Business] […] DeliveredDate: 01/13/2006 07:14:36 AM

All our initial messages are the format you specified, with the first phrase being [FreeMsg], the end being 3cost $5.50 per message pair2, and the customer service number last of all. Believe me, you would notice immediately if we were not doing this correcly, per your specifications.

We have a script for the customer service where everyone is advised it's a pay per use service, $5.50 per message pair, that a message ack is required, and the service can be discontinued with STOP and that they have NOT been charged yet.

This was being glossed over for the first 2 days of operation, until our first issue with you. You have my 100% absolute guarantee that we are playing this straight, all the way through the process, including $30 best practice customer care messages.

Quite a lot of the customers simply lie and say they never had anything to do with it, we send them out a 3grievance pack2 same day, to apply for a refund. Any of the unfortunate guys who we didn1t tell was a premium service (first day only) we offer immediate refund and send them actual cash folding money in the mail. FYI, there was only one in the last 2 days I1ve been running the operators, for $20.55 (we sent him $25). His address is Tony Mitchell 51 Kernan St Strathmore 3041. The claim that we have women meeting women for coffee and drinks and giving their number as a premium number is quite simply a lie. Obviously its not an efficient way to solicit a $5.50 premium message pair paying an attractive girl to pick up guys in bars and coffee shops. This is what I hear sometimes on the customer service line from people who are too shy to admit they use a dating site.

Vanessa, we are absoultely 100% upfront and transparent about the charges. Please do your own tests of our operators and customer service today, I will call this morning to discuss.

As for the unfortunate guy who has a similar number - I have offered him compensation for inconvenience and to buy him a new phone number. He is absolutely inflexible.

Please see below the issue at hand. It appears the female operators are NOT advising consumers the true price of SMS messages to the short code. If such complaints continue to come through, we will have to suspend the account. Also Scott, thanks for the heads up on the poor man whose mobile number has the short code within it? unfortunately there is very little I or M365 can do. The only way for the man to stop receiving calls from disgruntled consumers is for your service operators to be upfront/transparent about the charges - that way there would be no complaints?

From: Angela [mailto:angela Sent: Thursday, 12 January 2006 12:00 PM To: CustomerCare.AUS Subject: IMP: 19773366 [Fishy Business]

We have had several people call in regards to this short code claiming that they have been going onto dating sites such as rsvp.com.au and adultmatchmaker.com.au and other such dating sites. A female or various females and been 'luring' men with their charm and asking them to text them on the 19773366 number, telling the male victims they meet that they will be getting charged a normal sms and NOT a premium sms charge.

Some have also met up with women for coffee and drinks and these women [or one woman] gives the sms code as a contact sms! We also had a call from a man with a mobile number 0419 773 366 who unluckily, having the same digits of the short code in his mobile number, has been the victim of bombarded sms messages from these male victims trying to find this 'woman' on the other side of 19773366. This is a big concern and though that you should know. We have had at least 10 messages from these guys saying that this woman has never mentioned any charges apart from a normal sms charge.

Please let me know if there is anything that we can do or say to these customers.

[…] SendTo: 'Scott Phillips' ,Vanessa Gois CopyTo: mark@firesport.com From: Simon Owen […] Subject: RE: Contact details required […] DeliveredDate: 01/10/2006 09:08:10 AM

Vanessa My number is 0424549431 my phone is on 24/7 my email is simon@nt4.com I should be listed as a commercial contact Mark is definitely our technical contact his number is 0401432480 his email is mark@firesport.com

Mark has been in a lot of contact with m365 tech support in Singapore lately apparently they are having some issue with replies to roaming messages to Optus, however I'm sure Mark and his team will work it all out. FYI Scott is now back from Japan and contactable again, however I will be going to Indonesia tomorrow for a week, my phone and email will work from there however I would expect it not to be 100% reliable. Simon -----Original Message----- From: Scott Phillips [mailto:sphillips@nologic.com] Sent: Monday, January 09, 2006 4:28 PM To: simon owen Subject: FW: Contact details required Importance: High

------ Forwarded Message From: Vanessa Gois Date: Mon, 9 Jan 2006 22:54:57 -0000 To: Scott Phillips Subject: Contact details required

Hi Scott, I've noticed the Simon and Mark are copied on a lot of the emails you send through. Are they also my points of contacts with any matters relating to your service? I need to provide our service desk with the following information: Commercial contact: I have put your details for this - should Simon also be added here? If so can you please provide me with a contact number for him? Technical Contact - is this Mark? If so can you please provide me with a contact number for him also? Thanks and Regards,

Tel: +61 2 9258 9600 DDI: +61 2 9258 9602 Fax: +61 2 9251 6411 Mobile: +61 400 371 229 Vanessa.gois@mobile365.com www.mobile365.com

SendTo: Vanessa Gois,'Scott Phillips' CopyTo: mark@firesport.com From: Simon Owen […] Subject: RE: auto messages ready […] DeliveredDate: 01/03/2006 03:28:51 PM

Vanessa, Here is the progress with these users as of close of business today. Simon -----Original Message----- From: Glenn Maughan [mailto:subaru_liberty@hotmail.com] Sent: Monday, January 02, 2006 10:58 PM To: simon@performanceforums.com Subject: RE: auto messages ready Simon, In regard to email from M365 Jack [1317pm] Called customer on 0438011492, customer informed me he was busy and requested I call back in approximately one hour. [1429pm] Attempted to contact customer phone rang out to message bank, left customer support number and comment regarding M365 complaint. [1634pm] Attempted to contact customer phone rang out to message bank, left customer support number and comment regarding M365 complaint.

Was unable to contact this customer as the M365 email did not provide a contact number and multiple users exist with the name Joseph in the database. Richard

[1322pm] Attempted to call customer on 0404857152 phone rang out to message bank, left customer support number and comment regarding M365 complaint.

[1431pm] Attempted to contact customer phone rang out to message bank, left customer support number and comment regarding M365 complaint. [1512pm] Customer called customer support line in response to message bank message, customer offered refund. Customer to call back with bank deposit details. 6 messages in 6 messages out. David

[1325pm] Attempted to call customer on 0407947535, phone rang out to message bank, left customer support number and comment regarding M365 complaint. [1432pm] Attempted to contact customer phone rang out to message bank, left customer support number and comment regarding M365 complaint. [1510pm] Called customer and explained that he was being contacted in regard to an M365 complaint but his number was not in the system. Customer was asked if the messages were received on another number, customer provided the number 0432768258 number was found in the system. Customer offered refund but declined. Customer made it clear he was happy to simply be removed from the system. -----Original Message----- From: Vanessa Gois [mailto:vanessa.gois@mobile365.com] Sent: Monday, January 02, 2006 6:59 PM To: Scott Phillips Cc: simon owen; mark@firesport.com Subject: RE: auto messages ready Hi Scott, We have received calls from some very irate consumers re: messages received from 19773366. Please note these are complaints we received prior to receiving your customer care number. Could you please arrange to have consumers contacted and refunded. Also could you please notify me when this is done so that I can let our call cetre know. Thanks! Vanessa Jack [19773366] 0438 011 492 -Unsolicited. Wants a refund.

Joseph [1977336] -Unsolicited. Wants a refund.

Richard 19773366 0404 857 152 --Unsolicited. Wants a refund.

David 19773366 0407 947 535 -Unsolicited. Wants a refund.

From: Scott Phillips [mailto:sphillips@nologic.com] Sent: Tuesday, January 03, 2006 12:42 PM To: Vanessa Gois Cc: simon owen; mark@firesport.com Subject: Re: auto messages ready [Message text reproduced below]

From: Scott Phillips [mailto:sphillips@nologic.com] Sent: Mon 2/01/2006 12:18 AM To: Vanessa Gois Subject: Re: auto messages ready

From: Scott Phillips [mailto:sphillips@nologic.com] Sent: Thursday, December 29, 2005 1:04 PM To: Vanessa Gois Subject: Re: auto messages ready

From: Scott Phillips [mailto:sphillips@nologic.com] Sent: Thursday, December 29, 2005 12:30 PM To: Vanessa Gois; simon owen Subject: Re: auto messages ready

From: Simon Owen [mailto:simon@performanceforums.com] Sent: Wednesday, December 28, 2005 3:15 AM To: Scott Phillips; Vanessa Gois Subject: Fw: auto messages ready

SendTo: Vanessa Gois CopyTo: simon owen ,mark@firesport.com From: Scott Phillips

When you refer to invoice, I assume you are referring to Revenue share statements - is that correct? If so, what happens now is that the carriers will send M365 an account of how > many messages were received per short code and how much revenue they pay us. We then translate this information into a statement and issue it to your company who inturn will issue M365 with an invoice for the amount stated.

We tend to get the carrier stats mid month and the statements are sent out to clients (and/or emailed) towards the end of the month. You can invoice us by either email or mail - which ever you prefer. (I'd recommend email, at leaseyou have a record of the date the invoice was sent).

From: Scott Phillips [mailto:sphillips@nologic.com] Sent: Mon 2/01/2006 12:18 AM To: Vanessa Gois Subject: Re: auto messages ready

Its the end of the period, what do we do about sending you an invoice? Would you like it in electronic form or paper? And I know this is going to sound stupid, but how do we work out the amount? ;)

I1m so sorry to hear the Scott?.My condolences to your friend1s family.

I look forward to meeting you and Simon in the New Year.

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