REASONS FOR JUDGMENT
1 The first respondent, formerly known as Advanced Allergy Elimination Pty Ltd (AAE), operates clinics for the diagnosis and treatment of allergies. The methods by which AAE diagnoses and treats allergies include testing for and identifying a person's specific allergies using a muscle strength indicator technique and treating allergies by using a technique based on positive and negative conditioning. In the ordinary course of its operations AEE publishes information about those services on an internet website. It also advertises its services on the radio, in newspapers and in brochures given to clients, prospective clients and other interested persons. The Australian Competition and Consumer Commission (ACCC) alleges that certain statements published on the website and contained in the advertisements are in breach of the Trade Practices Act 1974 (Cth).
2 The impugned statements can be grouped into several categories. The first are statements by which AAE represents that it can test for and identify a substance to which a person is reacting and which is therefore an allergen for that person or a substance to which that person is allergic. The second are statements by which AAE represents that it can cure or eliminate virtually all allergies or allergic reactions. The third comprise statements by which AAE represents that it can successfully treat a person's allergies or allergic reactions. The fourth are statements by which AAE represents that its treatment is safe or involves low risk. The fifth group are statements by which AAE represents that following its treatment it is safe to have contact with the substance or allergen to which the person was having an adverse reaction. There are quite a number of statements said to be infringing and for convenience they are set out in an annexure to these reasons, grouped according to the category into which they fall.
3 The ACCC's specific allegation is that these statements are in breach ss 52, 53(aa), 53(c) and 55A of the Trade Practices Act. In summary, those sections provide that a corporation shall not in trade or commence: engage in misleading or deceptive conduct (s 52); falsely represent that services are of a particular standard or quality (s 53(aa)); represent that services have benefits they do not have (s 53(c)); and engage in conduct that is liable to mislead the public (s 55A).
4 To establish that each statement is in breach of the Trade Practices Act the ACCC tendered a report by Professor Douglass, the Head of the Allergy, Asthma and Clinical Immunology Service at the Alfred Hospital. Professor Douglass is a specialist in allergy and respiratory medicine. Her report is lengthy and technical. It is sufficient for present purposes to set out the following selected passages:
International consensus guidelines define an allergy as a type of hypersensitivity. These guidelines have been produced by the Nomenclature Review Committee World Allergy Organization. The Authors of this report are representatives of national Allergy and Clinical Immunology organizations and include internationally recognized experts … In these guidelines a hypersensitivity is defined as: 'objectively reproducible symptoms or signs initiated by exposure to a defined stimulus at a dose tolerated by normal persons'. Furthermore allergy is defined as a 'hypersensitivity reaction initiated by specific immunological mechanisms.' …
Allergic diseases are recognized to include asthma, rhinitis, conjunctivitis, eczema (allergic dermatitis), urticaria, food allergy, stinging insect allergy, drug allergy and anaphylaxis. These allergic conditions are usually mediated by the antibody IgE: thereby being designated 'IgE mediated allergy', and these conditions are those most commonly attributed to allergy in the community. Generally, IgE-mediated allergy is the most commonly recognized form of allergy and the one responsible for the increasing prevalence of inhalant and food allergies in the community.
Allergic diseases can be limited in extent, such as the local reaction occurring in the upper respiratory tract due to grass pollen inhalation in an individual who produces IgE to grass pollens, usually known as 'hay fever' or more correctly as allergic rhinitis … Allergic reactions can also be generalized such as occurs in severe food or drug allergy. In these instances, exposure to a small amount of allergen leads to a cascade of release of cellular mediators, in particular histamine, causing the manifestations of anaphylaxis, or a severe generalized allergic reaction.
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According to the International Consensus Guidelines allergic reactions can occur which are mediated by antibodies other than IgE, or by other immune mechanisms.
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Whilst there are proven methods of successful desensitization of individuals with allergic disease by incremental exposure to allergens, known as desensitization or 'immunotherapy', these methods do entail the risk of inducing a generalized allergic reaction and have not been shown to be successful in general medical practice with respect to food allergies. In the conventional medical literature, fatalities have been reported due to immunotherapy for both inhalant and food allergies. The statement that patients with true allergies can initiate contact with the substance that had previously caused the allergic reaction will, in my opinion if followed, expose some individuals to the risk of severe allergic reaction or even death.
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The diagnosis of an allergic disease is determined by two factors. The first is a clinical history of symptoms and/or signs on exposure to the putative allergen which are characteristic of an allergic disease. The diagnosis of an allergic disease is then confirmed by the demonstration of an immunological basis of the allergy. In the most well-recognised allergic conditions, that is IgE-medicated allergy, this is determined by detection of allergen specific IgE. This can be performed by either skin prick testing or blood-specific IgE testing.
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In practice allergy testing is usually performed by a medical practitioner with specific expertise and training in allergy as a test at the point of care. The medical practitioner should order the tests to be performed in order to ensure the correct allergens are tested for. Because of the small but nevertheless evident risk of adverse reactions it is required that appropriate medical expertise and equipment to deal with a severe generalized allergic reaction is in attendance at the site of testing. The ASCIA guideline states that a medical practitioner should be on site at the time of testing.
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The treatment of allergic disease is usually performed by a medical practitioner. The specialty of Allergy and Clinical Immunology is a specialist training program for medical practitioners under the auspices of the Royal Australasian College of Physicians and the Royal College of Pathologists, involving a minimum of 7 years post-graduate training and examinations for medical graduates. Other medical practitioners may also gain experience in the field of clinical allergy practice, including general practitioners and other specialist physicians with specific training and experience in this area.
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The treatment of IgE-mediated allergic diseases falls into two broad categories.
Firstly, non-allergen specific therapies are utilized respective of the causative allergen. These are frequently drug treatments and include such drugs as antihistamines for allergic rhinitis and allergic conjunctivitis, inhaled bronchodilators for allergic asthma and topical nasal corticosteroid preparations for persistent allergic rhinitis. Such treatments are often prescribed by a medical practitioner, although some, such as oral antihistamines are available from a pharmacist without a prescription.
Secondly, therapies may be utilized which require accurate diagnosis of the causative allergen: 'allergen specific therapy'. In the first instance, this can involve allergen avoidance.
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Allergen immunotherapy is the only form of treatment which can alter the natural history and immunological parameters of allergic disease. By this I mean that the natural progression of allergic diseases appear to be altered by the administration of allergen immunotherapy. For example there is good evidence that the risk of severe allergic reactions to insect stings can be reduced by immunotherapy.
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The scientific concept of allergens, their properties and identification is not consistent with the AAE statement 'Successful elimination of allergies/sensitivities may require clearing of preliminary allergens first. If components of allergens are not cleared the items containing those compounds will remain allergenic.'
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Medically valid treatments for allergy include drug treatments and allergent specific therapies such as allergen immunotherapy. The use of these treatments is described in evidence-based guidelines such as the ARIA consensus document (Allergic Rhinitis and its Impact on Asthma), the Global Initiative in Asthma (GINA) consensus document and guidelines on immunotherapy. During the course of my practice, I have not been made aware of a medically validated therapeutic process of 'positive conditioning' or 'negative conditioning' with regard to allergies. I am therefore unaware of 'positive conditioning' and 'negative conditioning' as an effective form of allergy treatment. I am aware that 'positive conditioning' and 'negative treatment' does not form part of the body of authoritative treatment guidelines for allergic diseases. In my opinion I do not believe the scientific literature has information to support 'positive conditioning' or 'negative conditioning' treatments to cure or eliminate allergies.
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I am not aware of the muscle strength testing as a medically validated test for allergy, nor is it recommended in international consensus treatment and diagnosis guidelines.
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As a clinical practitioner in the field of allergy for over 18 years I am not aware of acupressure or muscle testing being used in Australia or internationally to effectively treat allergies by medical practitioners.
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The categories of allergens claimed to be treated by AAE include contactant, inhalant, ingestant and injectant. I am not aware of effective strategies of allergen immunotherapy for contactant allergies. I have stated previously the difficulties in treating ingestant allergies.
I am unable to verify the statements claiming cure or improvement of allergies through the Allergy Elimination Technique. I do not believe there is published scientific evidence to support these claims.
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[I]ndividuals with true allergic disease could be harmed by this treatment. Many of the symptoms claimed to be relieved in the AAE publicity brochures, such as irritable bowel syndrome, diarrhoea and attention deficit disorder are unlikely due to an allergic process and therefore unlikely to have an immunological basis. However the brochures do state that 'ingestant' allergies can be eliminated. I take this to mean food allergies. At the current time to my knowledge, there is no safe, scientifically-based treatment for food allergies.
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I am concerned by claims that AAE can treat wheezing and asthma. In my own and international experience, there is currently no known cure for asthma, which still carries a very substantial burden of illness which includes mortality.
5 In light of Professor Douglass' evidence it is no longer disputed that AAE has contravened the Trade Practices Act. The parties have therefore been able to reach agreement as to the orders they ask be made. In summary, the orders seek: (a) a declaration that AAE's publication of the impugned statements contravenes a number of provisions in the Trade Practices Act 1974 (Cth) and that the second respondent, Mr Kier, a director of AAE, was knowingly concerned in or a party to the contraventions; (b) an order requiring AAE to publish corrective advertising; (c) the establishment by AAE of a compliance program to avoid further contraventions; and (d) that Mr Kier attend practical training regarding Div 1 of Pt V of the Trade Practices Act. Rather than an injunction (which was originally sought) the respondents will undertake to not cause the impugned statements to be published.
6 I consider it appropriate for the orders to be made and the undertaking received. It is, I think, particularly important that the respondents publish corrective information. The impugned statements have the potential to cause real harm. Persons with allergies are best treated by medical practitioners. Further, clients suffering from allergies and taking the treatment provided by AAE may wrongly believe the treatment is effective when it is not. Some treatments may even be dangerous to a client. This state of affairs must be remedied and the provision of corrective advertising is an appropriate means to achieve that result.
7 This leaves one matter of procedure to be dealt with. The issue comes about in this way. At that time the orders were provided to the court, the ACCC had filed Professor Douglass' report but, because it had only recently been served, the respondents objected to it being read. The ACCC was prepared to go along with this. In the result there was no evidence to support the declaratory relief sought in the orders, the parties asking that the court proceed on their agreement that the declarations were justified.
8 On this aspect I was referred to Thompson Australian Holdings Pty Ltd v The Trade Practices Commission (1981) 148 CLR 150. In that case the Trade Practices Commission (the predecessor of the ACCC) brought an action against a group of liquor retailers alleging they had entered into a price fixing agreement in breach of what was then s 45 of the Trade Practices Act. Pecuniary penalties and injunctions were sought. Several defendants entered into a settlement agreement with the Commission consenting to orders imposing injunctions and agreeing to give undertakings that they would not in the future engage in like conduct. The question raised by the appellant, who had been given leave to intervene, was whether the Federal Court had power to grant the agreed injunctions. The Federal Court found it had power, but the High Court held that there was no power to grant the injunctions. In the course of its reasons the plurality said (at 163-164): "In the ordinary case … the Court will be justified in making consent orders, if it has jurisdiction and power so to do and the orders are such as to be capable of enforcement … In deciding whether consent orders sought are in conformity with legal principle the Court is entitled to treat the defendants' consent as involving an admission of all facts necessary or appropriate to the granting of the relief sought".
9 Based on this reasoning the parties submitted I should make the declarations. I declined to do so. In due course the respondents withdrew their objection to the tender of Professor Douglass' report, save for certain portions which were said to be irrelevant. Thus there is evidence that justifies the declaratory relief.
10 In the absence of that evidence I would not have made the declarations. It has for a long time been the position in England that a court will not grant a declaration "on admissions of the parties or on consent, but only if the Court was satisfied by evidence": Williams v Powell [1894] WN 141, 141 per Kekewich J. This rule was confirmed in an early design infringement case, Gramophone Company Ld v Magazine Holder Company (1911) 28 RPC 221. The defendant was sued for infringement. It admitted that the design was new and original but denied infringement. The House of Lords refused to act on the concession. Lord Loreburn LC, with whom the other Law Lords agreed, said (at 225):
"It is the duty of a Court to decide cases according to the truth and fact, not according to any assumed or artificial state of facts which the parties may find it convenient to present. No doubt Courts of Law allow and indeed encourage parties to simplify litigation by making admissions and to a certain extent by waiving their rights, because, when there is a real controversy depending upon real facts, everyone ought to facilitate its authoritative settlement. But that is a very different thing from allowing people to obtain an adjudication upon the footing that something exists or has happened which in truth does not exist, or has never happened … A Court of Justice can never be bound to accept as true any fact, merely because it is admitted between the parties."
This passage was cited with approval in Interstate Parcel Express Co Pty Ltd v Time-Life International (Netherlands) BV (1997) 138 CLR 534, 561.
11 When the issue of making a declaration by consent comes up the case usually referred to is Wallersteiner v Moir [1974] 1 WLR 991. The defendant by way of counter-claim sought a declaration that the plaintiff had been guilty of fraud. No defence to the counter-claim having been delivered, the defendant moved for judgment in default. The trial judge entered judgment but the Court of Appeal set the judgment aside. Buckley LJ said (at 1029):
It has always been my experience and I believe it to be a practice of very long standing, that the court does not make declarations of right either on admissions or in default of pleading. A statement on this subject of respectable antiquity is to be found in Williams v. Powell [1894] W.N. 141, where Kekewich J., whose views on the practice of the Chancery Division have always been regarded with much respect, said that a declaration by the court was a judicial act, and ought not to be made on admissions of the parties or on consent, but only if the court was satisfied by evidence. If declarations ought not to be made on admissions or by consent, a fortiori they should not be made in default of defence, and a fortissimo, if I may be allowed the expression, not where the declaration is that the defendant in default of defence has acted fraudulently. Where relief is to be granted without trial, whether on admissions or by agreement or in default of pleading, and it is necessary to make clear upon what footing the relief is to be granted, the right course, in my opinion, is not to make a declaration but to state that the relief shall be upon such and such a footing without any declaration to the effect that that footing in fact reflects the legal situation.
Scarman LJ put the matter somewhat differently. He said (at 1030):
But, when what is sought is a declaration, there is the risk of irremediable injustice: the court has spoken and words cannot be recalled, even though later they be negatived; 'nescit vox missa reverti,' Horace, Ars Poetica, line 390. The power of the court to give declaratory relief upon a default of pleading, of course, exists, but, for the reasons crystallised by Horace in those four words of his, should be exercised only in cases in which to deny it would be to impose injustice upon the claimant.
This approach leads me to the conclusion that the declaratory relief contained in the minute of judgment annexed to the order of [the trial judge] should be disallowed at this stage.
12 Perhaps the most succinct statement of the rule is to be found in Metzger v Department of Health and Social Security [1977] 3 All ER 444. There, Megarry VC said (at 451):
The court does not make declarations just because the parties to litigation have chosen to admit something. The court declares what it has found to be the law after proper argument, not merely after admissions by the parties. There are no declarations without arguments: that is quite plain.
13 In Patten v Burke Publishing Co Ltd [1991] 1 WLR 541 Millett J said (at 544) that the rule is a rule of practice only, not a rule of law. He explained that the rule was justified by the fact that a declaration of right may affect third parties who are not bound by the declaration. Notwithstanding that the rule is only one of practice, it has been said the court will only depart from the practice in a "rare case" and then only when it is necessary "to do justice between the parties": Animatrix Ltd v O'Kelly [2008] EWCA Civ 1415 at [54].
14 In recent times it has been suggested that the court may move away from the strictness of the rule. With the introduction in 1999 of the Civil Procedure Rules in the United Kingdom a statement of case and a response must be verified by a statement of truth (r 22.1) - ie a statement by the party putting forward the document that he believes the facts stated in the document are true. This led to a suggestion that "the reluctance of the court to grant declarations without full investigation of the facts is less strong now that the allegations have to be verified by a statement of truth than was formally the case": Lever Fabergé Ltd v Colgate-Palmolive Co [2005] EWHC 2655 (Pat) at [4] per Lewison J. See also Hayim v Couch [2009] EWHC 1040 (Ch).
15 Cases in Australia follow the orthodox English approach. The leading Federal Court decision is BMI Ltd v Federated Clerks Union of Australia (1983) 51 ALR 401. The case involved an application for a declaration that an industrial award was invalid. In their joint judgment Keeley and Beaumont JJ said (at 413-414):
[W]e think that it is generally undesirable that the court should grant relief by way of declaratory orders … in the absence of any contest on the question. If the matter were merely one of private right between particular parties, for example, a question as to the respective rights of parties under a contract, it may well be appropriate for a court to make a declaration as to those rights by consent. In such a case, the public and other parties cannot be affected, let alone bound, by such a declaration.
But different considerations apply in a case such as the present. If a declaration were made, even in the terms sought, its practical operation may well extend beyond the activities of the first applicant. (Citations omitted)
16 Although this represents the orthodox view, the New South Wales Supreme Court has taken a different approach. Cases in that court acknowledge that a declaration on a matter relating to a public or an analogous right should not be made by consent. However, while the cases have said that a declaration can only be made when the court is satisfied by evidence that it ought be made, the "evidence" to which regard may be had include "facts" admitted to be true but about which there is no evidence (eg facts contained in a statement of agreed facts). By way of example, see Australian Securities and Investments Commission v Rich (2004) 50 ACSR 500. See also Re One.Tel Ltd (in liq); Australian Securities and Investments Commission v Rich (2003) 44 ACSR 682; Australian Securities and Investments Commission v Elm Financial Services Pty Ltd (2005) 55 ACSR 411; Australian Securities and Investments Commission v Edwards (2004) 51 ACSR 320. This approach has also been applied by one Federal Court judge: see Australian Securities and Investments Commission v Cash King Pty Ltd [2005] FCA 1429.
17 None of the New South Wales cases have explained why there should be a departure from the established rule. In Rich (50 ACSR 500) White J said (at [15]) that the new approach was consistent with the decision in Dean-Willcocks Pty Ltd v Commissioner of Taxation (No 2) (2004) 49 ACSR 325. There Austin J was dealing with a statutory requirement that the court must be "satisfied" of the existence of a certain state of affairs before it could make a particular order. Usually, the word "satisfied" is taken to mean "established by proof". Austin J said, however, that in the context of the particular provision under consideration, it was permissible for the court to rely on the parties' admissions. He justified this approach (at [28]) on the basis that it would promote the "just, quick and cheap resolution of … dispute[s]".
18 The declaration cases, however, require proof by way of evidence. An assurance by parties (whether by admission or agreed statement) that asserted facts are true will not suffice. Moreover, the House of Lords did not think a departure from this rule was justified because of administrative expediency.
19 For the time being, at least until a Full Court holds otherwise, it is, in my view, incumbent upon a single judge of the Federal Court to follow BMI and therefore not grant a declaration involving a public right in the absence of evidence that supports the declaration.
20 I will make orders in the form submitted by the parties.
I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.