Australian Competition and Consumer Commission v Titan Marketing Pty Ltd

THE COURT DECLARES THAT: 1. The first respondent ("Titan"), between February 2011 and December 2012, in the course of entering into agreements that were each an 'unsolicited consumer agreement' (as that term is defined within section 69 of the Australian Consumer Law ("the ACL") which is Schedule 2 to the Competition and Consumer Act 2010 (Cth)), in respect of each consumer listed in rows 1 to 1424 to Annexure A of the amended statement of claim ("Statement of Claim"): 1.1 by its sales representative (as the dealer negotiating with consumers) not, as soon as practicable and in any event before starting to negotiate with the consumer: 1.1.1 clearly advising the consumer that the sales representative's purpose was to seek the consumer's agreement to the supply of Titan products, contravened section 74(a) of the ACL; 1.1.2 clearly advising the consumer that the sales representative was obliged to leave the consumer's premises immediately on request, contravened section 74(b) of the ACL; 1.1.3 providing information to the consumer about their identity or the identity of Titan as specified by Regulation 82 of the Competition and Consumer Regulations 2010, contravened section 74(c) of the ACL; and 1.2 by its sales representative (as the dealer negotiating with consumers) not, before making the agreement with each consumer, informing or adequately informing, the consumer of: 1.2.1 their right to terminate the agreement during the termination period, contravened section 76(a)(i) of the ACL; and 1.2.2 the way in which the consumer could exercise their right to terminate the agreement, contravened section 76(a)(ii) of the ACL; and 1.3 by its sales representative: 1.3.1 not providing the consumer with an agreement document that on its front page included a notice that conspicuously and prominently informed the consumer of the consumer's right to terminate the agreement; and/or 1.3.2 deliberately concealing any such notice that informed the consumer of the consumer's right to terminate the agreement, contravened section 79(b) of the ACL. 2. The first respondent, between January 2011 and December 2012, in trade or commerce and in connection with the supply or possible supply of goods, by its sales representatives acting at the direction of the first respondent: 2.1 using identification tags that identified the sales representatives as being from "Austral Aid First Aid Kits"; 2.2 from about July 2011, wearing shirts which bore the logo "Austral Aid First Aid Kits"; 2.3 using promotional material which bore the logo "Austral Aid First Aid Kits"; 2.4 using contractual documents, and from in or about June 2011, other documents (such as direct debit forms and notices which purported to be given pursuant to the ACL) that: 2.4.1 prominently bore the logo "Austral Aid"; and 2.4.2 bore a name other than that of the first respondent; 2.5 selling first aid kits that bore the logo "Austral Aid First Aid Kits"; and 2.6 stating to consumers: 2.6.1 that the sales representative was from "Austral Aid"; 2.6.2 that the sales representative was from a company associated or affiliated with a charity; 2.6.3 that the sales representative was from a community group affiliated with a charity; and/or 2.6.4 that all, or a substantial proportion of, the funds from the sale of the Titan products would go towards supporting a charity, and thereby representing to consumers: 2.7 that it was a community group or a charity; 2.8 that it was associated or affiliated with a charity; 2.9 that it was a community group affiliated with a charity; and/or 2.10 that all, or a substantive proportion of, the funds from the sale of the Titan goods would go towards supporting a charity, in circumstances when it was the case that: 2.11 the first respondent was a commercial trading company, and not a community group or charity; 2.12 the first respondent was not associated or affiliated with a charity; 2.13 the funds from the sales of the Titan products went to the first respondent and not to a charity; and 2.14 any donations made by the first respondent to a charity represented an insignificant proportion of the funds from the sale of the Titan products, made false and misleading representations that its goods had sponsorship, approval or benefits which they did not have and that it had a sponsorship, approval or affiliation which it did not have, in contravention of sections 29(1)(g) and (h) of the ACL respectively. 3. The first respondent, in trade or commerce and in connection with the supply of goods, between January 2011 and August 2011 by its sales representatives stating to consumers that the contents of the first aid kits sold by it were valued at $1,000, when it was in fact the case that the total value of the contents of the first aid kits was substantially less than $1,000, made false or misleading representations that the goods were of a particular value, in contravention of section 29(1)(a) of the ACL. 4. On five occasions between September 2012 and December 2012, the first respondent, in trade or commerce, in connection with the supply or possible supply of goods of a kind ordinarily acquired for personal, domestic or household use or consumption, by making representations with respect to an amount that if paid would constitute a part of the consideration for goods without also prominently or clearly stating the single price for the goods, engaged in conduct that contravened section 48(1) of the ACL. 5. The first respondent, in trade or commerce in connection with the supply or possible supply of goods of a kind ordinarily acquired for personal, domestic or household use or consumption and by its system of selling such goods to consumers in Indigenous communities between January 2011 and December 2012, whereby, using the contractual documents referred to in paragraph 2.4: 5.1 it took no, or no reasonable, steps to ascertain whether the consumer with whom its sales representatives was negotiating was capable of reading and understanding the agreement documents; 5.2 it took no, or no reasonable, steps to ascertain whether the consumer with whom its sales representatives was negotiating understood or was capable of understanding the dealings with the sales representatives, including as to what the consumer was to receive, when the consumer was to receive it, how much it would cost the consumer and how the consumer was to pay for it; 5.3 it intentionally did not inform the consumer with whom its sales representatives was negotiating about their cooling off rights under the ACL in relation to unsolicited consumer agreements; and 5.4 it took no, or no reasonable, steps to ensure that the consumer with whom its sales representatives was negotiating was informed of, or understood, their other rights under the ACL in relation to unsolicited consumer agreements, and from January 2011 until about September 2011 involving the conduct that is the subject of the declarations in paragraphs 2 and 3 above, engaged in conduct that was, in all the circumstances, unconscionable, in contravention of section 21 of the ACL. 6. The first respondent, in or about September 2012, in trade or commerce in connection with the supply or possible supply of goods, by entering into an agreement with a consumer for the sale of two first aid kits and a bench top water filter, in circumstances where: 6.1 the consumer was a resident of the Wujal Wujal Home and Community Care Centre; 6.2 the consumer was dependent upon the care and support provided by the Wujal Wujal Home and Community Care Centre due to poor health; 6.3 the consumer required assistance from staff of the Wujal Wujal Home and Community Care Centre for day to day communications; 6.4 the consumer required a device for respiratory assistance; 6.5 the consumer had a limited ability to read, write or understand English; 6.6 the consumer had available to him in the Wujal Wujal Home and Community Care Centre first aid facilities; 6.7 the consumer had available to him in the Wujal Wujal Home and Community Care Centre a supply of drinking water; 6.8 the sales representative of the First Respondent called upon the consumer unsolicited at his place of residence in the Wujal Wujal Home and Community Care Centre; 6.9 the sales representative called upon the consumer for the purpose of negotiating an unsolicited consumer agreement for the supply of a first aid kit and a bench top water filter to him; 6.10 the sales representative did not inform the consumer, before starting to negotiate, or at all, that the sales representative's purpose on calling on him was to seek his agreement to the purchase of a first aid kit and a bench top water filter; 6.11 the sales representative did not inform the consumer, before starting to negotiate, or at all, that the sales representative was obliged to leave the consumer's premises immediately on the consumer's request; 6.12 the sales representative presented contractual documents, including a pro forma contract and a form authorising direct debit payments from his bank account, to the consumer to sign, which he did; 6.13 the sales representative did not consult with staff of the Wujal Wujal Home and Community Care Centre as to the consumer's capacity to understand the documents; 6.14 the sales representative made unsolicited consumer agreements with the consumer for the supply by the first respondent of: 6.14.1 two first aid kits; and 6.14.2 a water filter; 6.15 the consumer was not able to understand the contractual documents for the supply of the first aid kits and the water filter referred to in paragraph 6.12 above; 6.16 the consumer was not capable of understanding the dealings with the sales representative without assistance; and 6.17 by reason of the foregoing, the sales representative exerted undue influence or pressure on, or used unfair tactics against, the consumer in relation to the supply of the first aid kits and the water filter, engaged in conduct that was, in all the circumstances, unconscionable, in contravention of section 21 of the ACL. 7. The first respondent, in or about December 2012, in trade or commerce and in connection with the supply or possible supply of goods, by entering into an agreement with a consumer for the sale of a first aid kit, in circumstances where: 7.1 the sales representative called upon the consumer unsolicited at her place of residence in the Imabulk Centre Aged Care facility within the Belyuen Community for the purpose of negotiating an agreement for the supply of a first aid kit to her; 7.2 the consumer had first aid facilities available to her in the place where she resided; 7.3 the consumer was an employee of the Imabulk Centre, and received support from the Imabulk Centre in the form of free accommodation; 7.4 the consumer was not able to read or write English; 7.5 the sales representative did not inform the consumer, before starting to negotiate, or at all, that the sales representative's purpose of calling on her was to seek her agreement to a supply of a first aid kit; 7.6 the sales representative did not inform the consumer, before starting to negotiate, or at all, that he was obliged to leave her premises immediately on her request; 7.7 the sales representative said to the consumer words to the effect that he would take 20 dollars a pay out of her account and send her goods; 7.8 the sales representative did not inform her how much the goods would cost in total; 7.9 the sales representative did not inform the consumer what she was buying or when she would receive the goods; 7.10 the sales representative was informed by the consumer that she could not read English; 7.11 the sales representative filled in contractual documents for the consumer to sign; 7.12 the sales representative presented the contractual documents, including a pro forma contract and a form authorising direct debit payments from her bank account, to the consumer to sign, which she did; 7.13 before making an agreement with the consumer, the sales representative did not give her information as to her right to terminate the agreement within a cooling-off period; 7.14 the sales representative did not ask whether the consumer required assistance to sign the contract or whether she understood the dealings with the sales representative; 7.15 the sales representative made an unsolicited consumer agreement with the consumer for the supply by the first respondent of a first aid kit; 7.16 the consumer was not able to understand the contractual documents for the supply of the first aid kit; and 7.17 by reason of the forgoing, the sales representative exerted undue influence or pressure on, or used unfair tactics against, the consumer in relation to the supply of the first aid kit, engaged in conduct that was, in all the circumstances, unconscionable, in contravention of section 21 of the ACL. 8. The second respondent, as the director and manager of the first respondent and the person responsible for its operating systems and its day to day operations, including giving training and feedback to its sales representatives about their selling techniques, deciding with the sales manager which locations the first respondent would focus its door to door selling, and directing sales staff to wear the identification badges and the shirts referred to in paragraph 2.1 and 2.2 above and by: 8.1 authorising employees or persons engaged as salespeople by the first respondent to use the system in paragraph 5; and 8.2 authorising and knowing that the conduct referred to in paragraph 5 was occurring, was directly knowingly concerned in, or a party to, each of the contraventions by the first respondent referred to in paragraph 5 hereof. THE COURT ORDERS THAT: 9. The first respondent, by itself or by its servants or agents or otherwise, and that the second respondent, by himself or by his agents or otherwise, in respect of any Indigenous community which has a requirement that visitors obtain permission from that community's elders or administrators in order to enter that community: 9.1 be restrained for a period of five years from entering such communities for the purpose of selling or attempting to sell any goods, or soliciting customers for any business or company owned, operated or controlled by the first respondent or the second respondent, or with which the first respondent or the second respondent is involved in any manner, unless at least 21 days prior to so entering the community for that purpose, that respondent: 9.1.1 has requested permission to so enter the community from the elders or administrators as the case may be and given notice of its purpose for doing so; 9.1.2 at the time of that request, has provided copies of Annexures A, B and D to these Orders to the said elders or administrators; 9.1.3 has received permission in writing from the said elders or administrators to so enter and remain in the community for the said purpose on specified dates; 9.1.4 maintains a register comprising complete copies of such requests and the permission granted; and 9.1.5 provides to the applicant upon request copies of the documents containing such requests and any permission granted. 10. The first respondent, by itself or by its servants or agents or otherwise and the second respondent, by himself or by his agents or otherwise, be restrained for a period of five years, in the course of selling or offering for sale to a consumer any goods, from making any representation, that it or he has a sponsorship, approval or affiliation of any kind with any charity, aid organisation, or community group, unless it or he: 10.1 has a sponsorship, approval or affiliation with a charity, aid organisation or community group; and 10.2 at the time of making the said representation, has the current written consent of the charity, aid organisation or community group which specifies the nature and scope of that sponsorship, approval or affiliation, to represent that it or he has a sponsorship, approval or affiliation with that charity, aid organisation or community group; and 10.3 advises the consumer with whom it or he is negotiating, the nature and scope of the sponsorship, approval or affiliation with the charity, aid organisation or community group, as specified in the current written consent in 10.2; and 10.4 maintains for a period of three years a register comprising copies of all consents provided by any charity, aid organisation or community group and provides to the Applicant upon request copies of the written consent provided by each charity, aid organisation or community group. 11. The first respondent, by itself or by its servants or agents or otherwise, be restrained for a period of five years from requesting or accepting from or on behalf of any consumer payment in whole or part pursuant to an unsolicited consumer agreement negotiated in person on or from the date of this order, unless: 11.1 the first respondent has formed the view that the consumer has the capacity to read and understand English; 11.2 the first respondent has formed the view that the consumer understands: 11.2.1 what the consumer is to receive; 11.2.2 when the consumer is to receive the goods or services; 11.2.3 how much the goods or services are to cost the consumer; and 11.2.4 how the consumer is to pay for the goods or services, 11.3 the first respondent has read the contents of, in a manner the consumer understands, and shown the consumer, a document in the form of Annexure B to these Orders; and 11.4 the first respondent has provided to and left with the consumer a written notice, completed in the form of Annexure D to these Orders; 11.5 the first respondent retains a copy of all of the completed written notices; and 11.6 the first respondent provides a copy of any such written notice to the applicant within seven days of receiving a request for that written notice from the applicant. 12. The second respondent, by himself or by his servants or agents or otherwise, be restrained for a period of five years from requesting or accepting from or on behalf of any consumer payment in whole or part pursuant to an unsolicited consumer agreement negotiated in person on or from the date of this order, unless: 12.1 the second respondent has formed the view that the consumer has the capacity to read and understand English; 12.2 the second respondent has formed the view that the consumer understands: 12.2.1 what the consumer is to receive; 12.2.2 when the consumer is to receive the goods or services; 12.2.3 how much the goods or services are to cost the consumer; and 12.2.4 how the consumer is to pay for the goods or services. 13. The first respondent, by itself or by its servants or agents or otherwise, be restrained for a period of five years from requesting or accepting from or on behalf of any consumer payment in whole or part pursuant to an unsolicited consumer agreement negotiated by telephone on or from the date of this order, unless: 13.1 it has formed the view that the consumer has the capacity to read and understand English; 13.2 before starting to negotiate in relation to the agreement, it has read to the consumer, in a manner the consumer understands, the full text in the form of Annexure C to these Orders; 13.3 within five business days after the agreement is made it has provided to the consumer, together with the agreement document, a written notice in the form of Annexure E to these Orders; 13.4 it retains a copy of all of the completed written notices; and 13.5 it provides a copy of any such written notice to the applicant within seven days of receiving a request for that written notice from the applicant. 14. The first respondent provide a copy of these Orders to: 14.1 each current employee, officer, sales representative and any other person involved at any stage in dealing at the first or second respondent's direction with its or his potential customers, within seven days of the Orders being made; and 14.2 for a period of three years to each new employee, officer, sales representative or person involved at any stage in dealing at the first respondent's direction with its potential customers, within three days of that person commencing such duties. 15. Pursuant to s 248(1) of the ACL, the second respondent be disqualified from managing corporations for a period of five years from the date of this order. 16. Pursuant to s 246(2)(a) of the ACL, within 30 days of the date of this order, the first respondent perform the service of delivering at its own expense 12 first aid kits to the Wujal Wujal Home and Community Care Centre and 12 first aid kits to the Belyuen Health Clinic, for the benefit of those communities. 17. The first respondent pay to the Commonwealth of Australia, within 30 days of this order, in respect of the contraventions of the ACL referred to in paragraphs 1 to 7 above, pecuniary penalties totalling $750,000. 18. The first respondent pay to the applicant, within 30 days of this order, a contribution toward its costs of $100,000. 19. The second respondent pay to the Commonwealth of Australia, within 1 year of this order, in respect of being knowingly concerned in the first respondent's contraventions of the ACL referred to in paragraph 8 above, pecuniary penalties totalling $50,000 in instalments as follows: 19.1 $5,000 within 30 days of the date of this order; 19.2 $15,000 within 4 calendar months of the date of this order; 19.3 $15,000 within 8 calendar months of the date of this order; and 19.4 $15,000 within 12 calendar months of the date of this order, provided that if any instalment is not paid on or before the specified date, the whole of the remaining penalty then outstanding shall become immediately payable. 20. The second respondent pay to the applicant, within 1 year of this order, a contribution toward its costs of $20,000, in instalments as follows: 20.1 $2,000 within 30 days of the date of this order; 20.2 $6,000 within 4 calendar months of the date of this order; 20.3 $6,000 within 8 calendar months of the date of this order; and 20.4 $6,000 within 12 calendar months of the date of this order, provided that if any instalment is not paid on or before the specified date, the whole of the remaining costs then outstanding shall become immediately payable. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.