parties' submissions - Viper
31 Dr Griffiths, who appeared for the ACA throughout the proceedings, furnished written submissions in which he discussed the matters referred to in s 570(2) of the Telecommunications Act. These considerations are, of course, non-exclusive. Dr Griffiths also submitted that there is a public interest in all carriage service providers joining the TIO scheme. The scheme is intended to provide industry-wide consumer protection which can only be achieved if all eligible service providers participate in it. By not joining the scheme Viper, it was submitted, was avoiding the consumer accountability which it is designed to provide.
32 In relation to the matters specified in s 570(2), the ACA submitted that, given that the statutory obligation to join TIO Limited arose on 1 July 1997 when s 246 of the Telecommunications Act commenced, Viper was in contravention of its obligation for over three and a half years. Moreover its failure to join TIO Limited was the subject of repeated correspondence between the ACA and Viper since at least mid 1999. Despite receiving two remedial directions, Viper continued to refuse to join TIO Limited.
33 As to the nature and extent of any loss or damage resulting from Viper's contravention (s 570(2)(b)), the ACA relied upon the fact that several complaints were received by the TIO relating to Viper which were unable to be investigated because of lack of jurisdiction. It may be inferred, it was submitted, that the relevant complainants were disadvantaged by their inability to have their complaints investigated by the TIO.
34 Section 570(2)(c) refers to the circumstances in which the contravention occurred. In this regard the ACA conceded that Viper had expressed various objections to joining the TIO Scheme as operated by TIO Limited. In ACA's submission, Viper had two principal options open to it. They were:
(a) To join TIO Limited under protest and then bring legal proceedings raising the question of whether the company was legally obliged to join TIO Limited; or
(b) Not to join TIO Limited, thereby exposing the company to a pecuniary penalty and other enforcement action, and raising the issue of statutory construction collaterally in any enforcement proceedings brought against it.
35 Option (a) was the more responsible course, it was submitted, but Viper elected to follow option (b), thereby prolonging its non-membership of the TIO Scheme and exposing itself to a pecuniary penalty once its contentions were rejected.
36 The ACA conceded that no issue under s 570(2)(d) arises in that no previous contraventions have been committed by Viper.
37 In general, the ACA submitted that a primary consideration in determining whether to impose a pecuniary penalty (and, if appropriate, the amount of the penalty) is that of deterrence. In this regard, it was pointed out that Viper and Albury were not the only internet service providers who had failed to join the TIO scheme. The TIO Annual Report for 1999-2000 noted that during that year the TIO had referred seven providers to the ACA for enforcement action. The report went on to state:
"Two ISP's have effectively challenged a direction by the ACA to join the TIO Scheme and the ACA has commenced enforcement action in the Federal Court. The position of a number of other ISP's who have also failed to join the TIO is dependent on the outcome of these proceedings."
38 The ACA submitted that these matters highlight the appropriateness of imposing a pecuniary penalty which has a deterrent effect on other service providers who have thus far failed to join the TIO scheme.
39 Also on the issue of deterrence, Dr Griffiths tendered documents downloaded from Viper's website in which Mr Russell detailed the history of his dealings with the ACA and the TIO. It was headed "TIO Exposed as Fools". At one point, in June 1999, Mr Russell commented:
"Oh shit will these guys ever learn, now they want my PC hardware supplying company to join their poxy little scheme. If you have already joined this scheme I would be VERY VERY worried."
A little later he commented: "I think these guys need beating with a Clue Stick."
40 The address given for comments was "TIO@sux.dot.com". Mr Russell was asked about this by Dr Griffiths, and said that "sux" stands for "Sydney Unix Club", Unix being an operating system.
41 Dr Griffiths pointed to the generally contemptuous nature of this material, and the fact that it was available to any interested member of the public. In particular he submitted that the statement "If you have already joined this scheme I would be VERY VERY worried" may well have encouraged other internet service providers to desist from joining the TIO scheme.
42 In the light of all these considerations, the ACA submitted that an appropriate pecuniary penalty in respect of Viper was in the range of $5,000 to $7,500. This, as will be seen, is higher than the range suggested in relation to Albury. The distinguishing features between them, according to the ACA, are the fact that TIO has received complaints against Viper which were unable to be investigated, but none against Albury. In addition, Viper's public and contemptuous comments about the TIO and the TIO scheme are relevant to the issue of deterrence.
43 Mr Tyson, who appeared for Viper on this aspect of the proceedings, submitted that this is not an appropriate case for the imposition of pecuniary penalties. As to the nature and extent of the contravention (s 570(2)(a)), Mr Tyson submitted that it was an over-simplification to suggest, as the ACA had done, that Viper's contravention lasted for over three and a half years. Certainly the legislative requirement to join the scheme commenced in July 1997. However the ACA's proceedings against Viper were commenced in December 1999, after which the issue became one for determination by the Court. In any event, Viper's failure to comply with the ACA's remedial directions was motivated by a genuine belief that it was unnecessary to join TIO Limited in order to join the TIO scheme. At that stage, Mr Russell had received no legal advice on the issue. It was pointed out that the legislative scheme is a complex one, even for lawyers. People in Mr Russell's position could not be expected to understand its various ramifications.
44 As to any damage or loss suffered as a result of the contravention (s 570(2)(b)), Mr Tyson relied upon the fact that any complaints received in relation to Viper were level one complaints, namely complaints that should take less than ten minutes to resolve with no requirement for the TIO member to notify the TIO of the outcome of the complaint. In any event, the TIO's records show that less than 50 per cent of all complaints received by the TIO were resolved in favour of complainants. It therefore could not be assumed that each of these complaints was a legitimate one.
45 As to the circumstances in which the contravention took place (s 570(2)(c)), Mr Tyson pointed out that, in one sense, Viper did attempt to adopt option (b) (referred to in par [34] above) when it submitted its membership application form with the deletion of references to "TIO Limited".
46 In general it was submitted that the existence of a contravention is a necessary but not a sufficient pre-condition for the imposition of pecuniary penalties. The applicant would need to show that there was something about the applicant's conduct that was reprehensible and which justified the Court in imposing a penal sanction. No such feature has been displayed in this case, it was suggested. Mr Tyson did not cavil with the ACA's submission that there is a "clear public interest in the enforcement of the Act". However he submitted that it by no means followed, as a matter of logic or practicality, that the Court should impose a pecuniary penalty in respect of each contravention of the Act. He pointed out that shortly after my judgment of 22 November 2000 Mr Russell, on behalf of Viper, took all appropriate steps to seek membership of TIO Limited. The fact that this turned out to be ineffective, thereby delaying Viper's membership by some two months, was a result of a series of mishaps and not to any delaying tactics on the part of Viper.