Injunctions
55 Section 12GD(1) of the ASIC Act relevantly provides that if the Court is satisfied that a person has engaged in conduct that constitutes a contravention of Pt 2 Div 2 of the ASIC Act (which includes ss 12DA and 12DB) the Court may grant an injunction "in such terms as the Court determines to be appropriate". The power of the Court to grant an injunction restraining a person from engaging in conduct may be exercised whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of that kind, whether or not the person has previously engaged in conduct of that kind and whether or not there is an imminent danger of substantial damage if the person engages in conduct of that kind: s 12GD(5) of the ASIC Act.
56 The text and legislative history of s 12GD of the ASIC Act indicate that the authorities dealing with s 1324 of the Corporations Act 2001 (Cth) (Corporations Act), s 80 of the CCA and s 232 of the ACL are likely to be of assistance in determining the relevant principles to apply in relation to the grant of injunctive relief under s 12GD. Section 80 of the CCA has been described as a "widely drawn remedial provision available to restrain conduct which may impinge upon that public interest by contravention of provisions of the Act": ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 (ICI) at 268. The remedy is flexible and may be applied in service of a variety of functions to support the policy of the Act: ICI at 268.
57 The jurisdiction to order an injunction under s 12GD is a statutory jurisdiction and is not confined by the principles applicable to the jurisdiction of courts of equity to grant injunctions: Australian Securities and Investments Commission v Mauer-Swisse Securities Ltd (2002) 42 ACSR 605 (Mauer-Swisse Securities) at 613 [36]. Traditional doctrine surrounding the grant of injunctive relief was developed primarily for the protection of private proprietary rights, whereas public interest injunctions are different: ICI at 256. An injunction granted under s 12GD is a public interest injunction. The traditional equitable doctrines are not, however, entirely irrelevant: ICI at 256-257. They may represent a sound basis for undertaking a preliminary assessment which should be reviewed against the statutory role the relevant regulator plays and the wider question of what is "desirable" in the statutory context: Australian Securities and Investments Commission v Triton Underwriting Insurance Agency Pty Ltd (2003) 48 ACSR 249 at [25].
58 Amongst the considerations which the Court will take into account in an application for an injunction under s 12GD are the wider issues as to whether the injunction would have some utility or would serve some purpose within the contemplation of the ASIC Act: Mauer-Swisse Securities at 613 [36]. An injunction may be appropriate if directed to achieve an end such as enforcing and giving effect to the relevant statute: Australian Securities and Investments Commission v Pegasus Leveraged Options Group Pty Ltd (2002) 41 ACSR 561 at [109]. Where there is an appreciable, not fanciful, risk of particular future contraventions of the ASIC Act by the defendant, it would serve a purpose within the contemplation of the ASIC Act that the Court may grant an injunction restraining such conduct: Mauer-Swisse Securities at 613-614 [36].
59 The issue between the Commission and Domestic & General here is not whether or not an injunction should be granted. Rather, the dispute is as to the duration of the injunction and its terms. The Commission submits that the injunction should operate for three years whereas Domestic & General submits that two years is appropriate. Perhaps more significantly, the scope and particularity of the injunction proposed by the Commission is significantly broader than the terms of the injunction that Domestic & General submits is appropriate.
60 In this respect, it is clear that the injunctive relief should be appropriate to the occasion and care should be exercised to avoid "casting the net too wide": ICI at 261. Each case must be examined on its own facts to determine the aptness of a particular form of an injunction: Commodore Business Machines Pty Ltd v Trade Practices Commission (1990) 92 ALR 563. There must be a sufficient nexus or relationship between the factual circumstances that gave rise to the proceedings and the terms of the injunction: Australian Competition and Consumer Commission v Z-Tek Computer Pty Ltd (1997) 78 FCR 197 at 203-204; Australian Competition and Consumer Commission v Albert (2005) 223 ALR 467 at [45]; Australian Competition and Consumer Commission v Artorios Ink Co Pty Ltd (No 2) [2013] FCA 1292 (Artorios Ink) at [61].
61 It does not necessarily follow, however, that the injunction must correspond exactly to the particular contravention the subject of the proceedings. An injunction should not be so precisely expressed as to "encourage evasion of the spirit but not the letter" of the injunction: ICI at 261. It may in some circumstances be appropriate for the injunction to prevent conduct to the like effect, or a contravention in a similar manner to that which gave rise to the proceedings: ICI at 261; BMW Australia Ltd v Australian Competition and Consumer Commission (2004) 207 ALR 452 at [36]; Australian Competition and Consumer Commission v IPM Operation and Maintenance Loy Yang Pty Ltd (2006) 157 FCR 162 at [229].
62 The injunction should also be expressed in clear and precise terms so that it is capable of being obeyed without the respondent being required to make an evaluative judgment or subjective assessment about its scope or coverage: Melway Publishing Pty Ltd v Robert Hicks Pty Ltd (2001) 205 CLR 1 at [60]; Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (2007) 161 FCR 513 at [112]; Australian Competition and Consumer Commission v Seven Network Ltd (2007) 244 ALR 343 at [108]; ICI at 259; REIWA at [26].
63 The Commission's primary submission is that an injunction in the following terms is appropriate:
Pursuant to section 12GC(1)(a) of the ASIC Act, for a period of 3 years from the date of this order, [Domestic & General], whether by itself, its servants, agents or otherwise howsoever, be restrained from representing, in trade or commerce, in connection with the supply, possible supply or promotion by any means of the supply or use of financial services in relation to extended warranty plans:
that a consumer will not be protected against the costs of repairing or replacing an appliance in the event of a mechanical or electrical fault after a certain period from the date of purchase of the appliance in the absence of an extended warranty plan.
in circumstances where the consumer may be so protected under the Australian Consumer Law.
64 Domestic & General submits that the form of the injunction proposed by the Commission is both too wide and too uncertain. It points to the fact that, unlike the contraventions that gave rise to the proceedings, the injunction proposed by the Commission is not limited to printed material, not limited to Domestic & General's relationship with F & P Customer Services and not limited to the precise terms of the extended warranty letter it sent on behalf of F & P Customer Services. Domestic & General submits that the form of injunction sought by the Commission is inappropriate because it goes well beyond the conduct involved in the established contraventions and thus lacks the necessary nexus with that conduct.
65 Domestic & General also submits that the proposed form of injunction is uncertain as it uses supposedly uncertain or unclear expressions such as "financial services", "extended warranty plans" and "protected against the costs of". It is also contended that the proposed terms of the injunction requires Domestic & General to make an evaluative assessment of whether a consumer "may have" protection under the ACL.
66 Domestic & General submits that the following form of injunction would be appropriate in the circumstances:
"Pursuant to section 12GD(1)(a) of the ASIC Act, for a period of two years from the date of this order, [Domestic & General], whether by itself, its servants, agents or otherwise howsoever, be restrained from sending to consumers in relation to the supply or possible supply of the Extended Warranty Plan as agent for and on behalf of Fisher & Paykel, the Mid-Warranty Mailer attached in Annexure A.
67 Whilst maintaining its primary submission that the form of injunction it proposes is both appropriate and sufficiently certain in the circumstances, the Commission advances the following alternative form of injunction that purports to meet some of the issues raised in Domestic & General's submissions:
Pursuant to section 12GD(1)(a) of the ASIC Act, for a period of 3 years from the date of this order, [Domestic & General], whether by itself, its servants, agents or otherwise howsoever, be restrained from:
(a) issuing any mailer or other document to consumers in the form, or in a substantially similar form, to the Mid-Warranty Mailer; and
(b) issuing any mailer or other document to consumers in which words to the following effect are stated: "The appliance or good purchased by you will not be protected against repair costs after the conclusion of the warranty with respect to that appliance or good.
68 There is some merit in some of Domestic & General's complaints concerning the terms of the injunction proposed by the Commission. In particular, the terms of the injunction should at the very least be limited to written representations of the sort the subject of these proceedings. It is not, however, appropriate to limit the terms of the injunction to printed material such as letters or "mailers". The injunction should, for example, extend to emails. There should also be some further specificity as to the circumstances whereby the consumer may be protected under the ACL.
69 There are also some problems or disadvantages with the Commissions alternative form of injunction. It would be preferable to avoid having to annex a copy of the extended warranty letter. The use of the expressions "substantially similar form" and "to the following effect" may also require an evaluative assessment of the relevant mailer or other document. The injunctions proposed by the Commission are also not specifically limited to circumstances where ss 54, 64 and 259 of the ACL may operate.
70 However, the injunction proposed by Domestic & General is far too narrow. An injunction in the terms proposed by Domestic & General would permit, if not encourage, "evasion of the spirit but not the letter of the law". It would allow a letter to be sent which contained essentially the same representation as that admitted to be false and misleading in these proceedings, but in slightly different terms. It would permit a letter to be sent to consumers in identical terms to the letter impugned in these proceedings, so long as Domestic & General was not sending the letter on behalf of F & P Customer Services. Domestic & General could send such a letter on behalf of any of its other clients or customers. Finally, the narrow terms of the proposed injunction would permit Domestic & General to send an identical letter on behalf of F & P Customer Services, so long as the extended warranty plan offered in the letter was not in identical terms to the plan the subject to these proceedings. An injunction in such narrow terms would have limited utility and would not serve the purposes of a public interest injunction, including deterrence. It is clear from the Joint Statement that an essential aspect of Domestic & General's business is the provision of extended warranty plans to clients other than F & P Customer Services. It is in these circumstances both appropriate and desirable for the Court to order an injunction which would deter Domestic & General from engaging in like conduct involving other clients.
71 Domestic & General's complaints concerning the breadth and uncertainty of expressions such as "possible supply", "financial services," "extended warranty plans" and "protected against the cost of" have no merit. These expressions are either used in the relevant legislation or are used by Domestic & General itself in the extended warranty letter that gave rise to these proceedings. These expressions are also used in the Joint Statement. They are sufficiently certain.
72 Domestic & General's submission concerning the uncertainty of the expression "in circumstances where the consumer may be so protected by the ACL" is also rejected. The reason that the representation conveyed by the extended warranty letter is misleading is that it represents, in unqualified terms, that a consumer will not be protected after two years, whereas, under the ACL a consumer "may be" protected. That is precisely how the matter is framed in paragraph 30 of the Joint Statement. Domestic & General plainly had no difficulty understanding that point when it agreed to and admitted the facts in the Joint Statement. Nevertheless, as previously indicated, the terms of the injunction should perhaps provide some further specificity as to the circumstances in which a consumer "may be" protected having regard to the facts of the established contraventions.
73 Given the nature and gravity of the contraventions the subject of these proceedings, it is both appropriate and desirable that the injunction operate for a period of 3 years.
74 In all the circumstances, an injunction in the following terms would be both appropriate and desirable:
Pursuant to section 12GD(1)(a) of the ASIC Act, for a period of 3 years from the date of this order, DGS, whether by itself, its servants, agents or otherwise howsoever, be restrained from sending to consumers, in trade or commerce, any written material in connection with the supply, possible supply or promotion of financial services in the nature of extended warranties in relation to domestic electrical appliances purchased by consumers where:
(a) the written material represents to the consumer that the consumer will not be protected against repair costs for the appliance after a certain period from the date of purchase of the appliance (the stated period) unless the consumer purchases an extended warranty plan; and
(b) the circumstances are such that the consumers may be protected against repair costs for the appliances after the stated period even if no extended warranty plan is purchased because a guarantee that the appliance is of acceptable quality applies by reason of s 54 of the ACL and, in the event of a failure to comply with that guarantee, the consumer may be able to take action under s 259 of the ACL after the stated period.
75 An injunction in the same terms should be made against F & P Customer Services.
76 The wording of the injunction is drawn essentially from the wording used in the Joint Statement. The only material variance is that the injunction is not limited to printed material sent by Domestic & General as agent for F & P Customer Services. Nor is it confined to the exact terms of the extended warranty letter or the exact terms of the extended warranty plan that are the subject of the established contraventions. In effect, the injunction will prevent Domestic & General from engaging in conduct in a similar manner, or to like effect, to the conduct involved in the established contraventions.