Australian Competition and Consumer Commission v Willesee Healthcare Pty Ltd

BACKGROUND 4 The background to the application is briefly set out in the March reasons. In essence, the ACCC alleged that all nine respondents contravened, variously, ss 52, 53(a), 53(aa), 53(c), 55 and 55A of the Trade Practices Act 1974 (Cth) ("Trade Practices Act"), by making false or misleading representations in relation to the diagnosis, treatment and cure of allergies. While the conduct of all nine respondents had many common elements, the contravening conduct of the sixth to ninth respondents involved more widely promulgated representations and posed a grave risk to the health of consumers including children. Accordingly, pecuniary penalties were sought against them. 5 The relief granted against the respondents includes declarations, undertakings, publication orders (requiring notices to be published, if applicable, on the respondents' front counter at their places of business and on various websites, in magazines, and in letters to be sent to persons who have used their goods or services), compliance training orders, pecuniary penalties and costs. 6 The parties relied on their joint submissions dated 27 May 2011, an agreed statement of facts dated 27 May 2011, the ACCC's fast track statement filed on 8 October 2010 and schedules F and H thereto, the respondents' fast track responses filed on 28 November 2010 (in so far as they contained admissions of making the statements), statutory declarations of Mr Schianetz and Ms Price declared on 19 May 2011, and the affidavit of Associate Professor J A Douglass sworn on 19 November 2010 verifying her medical report dated 10 November 2010, which the ACCC tendered with the consent of the respondents. 7 As appears from the materials filed by the parties, NewLife and Renew You have carried on the business of promoting and providing to consumers services involving the diagnosis and treatment of allergies using a system known as BioFast allergy elimination program, which shares many features with the Nambudripad's Allergy Elimination Technique ("NAET") discussed in the March reasons. 8 Bojan Schianetz is a director and secretary of both NewLife and Renew You. Dzung Price was the sole director and secretary of NewLife from 18 January 2007 until 9 July 2008. Between them, Mr Schianetz and Ms Price own all or almost all of the issued shares in NewLife and 95% of the issued shares in Renew You. 9 Renew You has owned and operated clinics in Ashgrove and Ashmore Queensland, in which the BioFast program was offered to consumers. 10 From a date on or before 12 April 2008 until 27 May 2011, about 10 practitioners, including Mr Schianetz and Ms Price, provided health services at the clinics. Prior to the ACCC's institution of proceedings in October 2010, the respondents administered the "allergy treatments" at an average cost of over $2,000 per patient. 11 New Life and Renew You controlled and maintained numerous websites of which Mr Schianetz controlled the URLs and by which, together with video recordings, brochures, electronic and printed books, audio CDs, video DVDs and printed advertisements, the respondents on or after the 15 April 2010 made or caused to be published the relevant statements.

1 The contravening conduct of the respondents 12 The joint submissions described the respondents' contravening conduct as follows: Each Respondent has, during the relevant period, promoted and (in the case of the Sixth and Seventh Respondents) carried on the business of providing services to consumers purporting to involve the diagnosis and treatment of allergies using the BioFast allergy elimination program (BioFast). BioFast refers to a program which purportedly involves: (a) testing for and identifying a person's allergens by using techniques similar to [Nambudripad's Allergy Elimination Technique (NAET), used by the first to fifth respondents]… including Muscle Resistance Testing… and the following other techniques:

(i) diagnostic resonance testing of hair and blood samples; (ii) kinesiology; (iii) dowsing; (iv) radionics; (v) the use of a Bruce Copen laboratory machine; and (vi) the use of the Path Lab Alcat test and the analytical reference laboratory test; and (b) curing, eliminating or successfully treating a person's allergies by using techniques similar to NAET… including Acupressure and Acupuncture Techniques… and the following other techniques: (i) bioresonance to align the meridians and clear energy blockages in meridians; (ii) detoxification salts; (iii) sublingual desensitisation drops; (iv) detoxification and nutrition; (v) herbal remedies and supplements; and (vi) biomesotherapy. The BioFast Program is based on the premises that: (a) an allergen disrupts the energy field of a person, leading to energy blockages; and (b) the Acupressure and Acupuncture Technique will stimulate centres along the energy pathways of the person being treated; and thereby

(i) clear the energy blockage; and (ii) desensitise the person's body to that particular allergen. The core conduct by each Respondent which the ACCC alleges is false or misleading relates to statements made by the Respondents in relation to the diagnosis, treatment and cure of allergies… 13 The respondents admitted that by publishing identified statements set out in the statement of agreed facts, they made misleading representations that: (a) each could test for and identify a substance to which a person was reacting which was an allergen and/or a substance to which the person was allergic; (b) each could cure or eliminate all or virtually all allergies, or allergic reactions, and successfully treat a person's allergies or allergic reactions; (c) after treatment it would be safe to have, or there would be no risk or a reduced risk in the person having, contact with the substance or allergen to which that person had previously had an adverse reaction; (d) each could teach or instruct parents or carers of children in techniques to test for and identify substances which were allergens for that child and/or to which the child was allergic; (e) each could teach or instruct parents or carers of children in techniques to successfully treat and cure or eliminate all or virtually all the child's allergies, or allergic reactions, and after parents or carers applied the techniques taught or instructed to a child, it would be safe for the child to have, and there would be no risk or a reduced risk in a child having, contact with the substance or allergen to which the child had previously had an adverse reaction. 14 The relevant representations are set out in Schedules A, B and C to the orders made, supra. 15 The respondents admitted that, as the ACCC contended, and contrary to the representations, they could not test for or identify allergies or substances to which a person was allergic, cure or eliminate all or virtually all allergies or allergic reactions, successfully treat a person's allergies or allergic reactions, teach or instruct parents or carers in techniques that would enable them to do so for their children, and further, that none of the treatments or techniques offered could reduce the risk arising from contact with allergens or substances to which a person had previously had an adverse reaction. 16 The respondents further admitted that they had contravened, variously, ss 52, 53(a), 53(aa), 53(c), 55 and 55A of the Trade Practices Act.

2 Report of Associate Professor Douglass 17 The report dated 10 November 2010 of Associate Professor Douglass is briefly described in the March reasons. It analysed in detail the techniques used, or similar to those used, by the respondents. It relevantly stated: There are several variations of muscle tests for allergy, including kinesiology or muscle strength testing, performed by practitioners, which lack a scientific basis or reproducibility. Such testing is explicitly dismissed as invalid for diagnostic testing for allergies when subject to scientific scrutiny. In my clinical practice I do not use, nor would I recommend, such a test to diagnose allergy and current practice parameters support this view. … I am not clear what "diagnostic resonance testing" constitutes. Analysis of hair samples can be used in toxicology but it is not a recognized means to diagnose allergic diseases. … [Radionics] involves a remote method of diagnosis or treatment using radiated energy from the patient or a tissue sample. Having read descriptions of this technique I cannot conceive of a plausible biological mechanism to account for its effects, in particular the remove effects ascribed to its use. This method of testing is not recognized as a reliable and scientifically valid method of diagnosing allergic diseases by bodies such as the Australasian Society of Clinical Immunology and Allergy (ASCIA) nor in recent international reviews of allergy diagnosis. … [Dowsing] apparently uses a pendulum device to determine the presence of allergic disease. I am not aware of scientific evidence to support this as an accurate method to diagnose allergic diseases and this method of testing is not recognized as a reliable and scientifically valid method of diagnosing allergic disease by bodies such as… ASCIA nor in recent reviews of allergy diagnosis. … [PathLab] ALCAT testing is a form of automated cytotoxic testing where allergens are mixed with blood cells and the effects observed. Cytotoxic allergy testing has been clearly discredited in published evidence as a reproducible means to diagnose allergic diseases. This method of testing is not recognized as a reliable and scientifically valid method of diagnosing allergic diseases by bodies such as… ASCIA and other published groups. … The [Analytical Reference Laboratory] tests referred to here detect Immunoglobulin G (IgG) to a wide range of food allergens. Antibodies of the IgG class have been studied extensively as a candidate for allergy diagnosis and have been found not to discriminate between allergic and non-allergic people. An exception to this is anti-gliadin antibodies, which are associated with coeliac disease. This form of testing is not recognized as a reliable and scientifically valid way to diagnose diseases other than coeliac disease by ASCIA and other specialist allergy publications. … [Bruce Copen Laboratory Mars II machine and/or other Bruce Copen Laboratory machines] utilize principles of radionics and/or electric homeopathy. There is no evidence I have found as to their efficacy in diagnosing allergic disease, nor are they recognized by medical practitioners as diagnosing allergic disease. In my experience they do not constitute part of usual medical practice in allergy. … I am not aware of acupressure being used in Australia or internationally to effectively treat allergies by medical practitioners. Moreover I cannot conceive of a physiological process whereby acupressure could be effective in treating a specific immunological process. This method of treating allergies is not recognized by bodies such as… ASCIA and other international groups and experts such as the "Allergic Rhinitis and its Impact on Asthma (ARIA) consortium and the American Academy of Allergy, Asthma and Immunology. … I am aware of a large number of publications regarding the effects of acupuncture in both asthma and allergic rhinitis. These have been subject to review and meta-analysis and no consistent evidence of benefit was found, especially in those trials which were of high quality, being appropriately randomized and blinded. In my experience, acupuncture does not comprise a usual part of the treatment of allergic diseases, nor is it used by Allergy and Clinical Immunology specialists as part of usual practice. … Desensitisation with homeopathic remedies has been studied in several published trials and the consensus of evidence is that there is no evidence for the efficacy of homeopathic medicines beyond placebo effect. This method of treatment is not recognized as a scientifically valid and reliable means of treating allergic diseases by… ASCIA, nor other international consensus groups. … "Detoxification" is not a proven effective practice for treating allergic diseases. The concept of detoxification does not take account of the immunological basis of allergic disease. This method of treatment is not recognized as a scientifically valid and reliable means of treating allergic disease by… ASCIA nor other international consensus groups. … I am unaware of evidence to support the prescription of herbal remedies as an effective measure to treat allergic diseases. I am supported in this by publications from international consensus groups which specifically dismiss herbal remedies as an effective therapy together with the absence of recommendations for herbal remedies as effective therapy for asthma, allergic rhinitis or food allergy from international consensus groups. … I understand that [biomesotherapy] is a combination of acupuncture and homeopathic techniques, neither of which, as described above, have been shown to be effective in the medical treatment of allergic diseases. This method of treatment is not recognized as a scientifically valid and reliable means of effectively treating allergic disease by… ASCIA or other international consensus groups such as the American Academy of Allergy, Asthma and Immunology. … 18 In relation to the BioFast system used by the respondents, Associate Professor Douglass' report stated: The BioFAST™ system is described as a multi-modal program entailing Advanced Allergy Assessment including the ALCAT and Analytical Reference Laboratory tests followed by a detoxification nutritional program including the administration of exogenous enzymes as nutritional supplements. The components of this program are not included in descriptions of medically validated ways to treat allergic diseases. The techniques of allergy diagnosis described, such as ALCAT testing and Analytical Reference Laboratory testing for food specific IgG have been shown earlier in this report to lack consistency and credibility as a medical diagnostic test for allergic disease. The program also uses "bio-resonance" technology, again a technique that does not have supporting evidence to treat or diagnose allergic diseases. 19 Associate Professor Douglass observed that her research had not revealed any credible scientific evidence to support the NAET, which did not form part of the scientific literature in allergic disease and was not based on her clinical experience in Australia and internationally, including attendance at international conferences. 20 Associate Professor Douglass further stated: I have consulted published papers on the NAET technique, medical journal search engines including PubMed and Medline for specific papers that have reference to NAET but was unable to find credible scientific evidence to support the efficacy of the NAET technique. The NAET technique does not form part of the scientific literature in allergic disease.

In my experience, NAET is not a medically accepted treatment for allergic disease. My decision on this is based upon my clinical experience in allergy practice, both in Australia and in the UK, my attendance at international meetings of allergy practitioners where advances in techniques are discussed, together with the failure of these techniques to be discussed in the medical text books and published practice guidelines for allergy treatments.

Given the international consensus definition of allergic disease having an immunological basis, the NAET technique does not identify an underlying immunological basis for disease and therefore cannot be said to accurately diagnose and treat allergies. In my experience and in my understanding of current practice and science in the field of allergic disease, the NAET technique is not a medically validated or reproducible method for the diagnosis and/or treatment of allergic diseases.

In my clinical practice and experience, NAET, muscle strength testing, diagnostic resonance testing, kinesiology, dowsing, radionics, homeopathy, the ALCAT tests, electrodermal testing, herbal therapies, detoxification, chinese medicine, acupuncture, acupressure, enzyme supplements or probiotics do not comprise methods of diagnosis or treatment of allergic disease with scientific evidence to support their efficacy.

The reports cited that I have read do not provide a rational scientific basis for the diagnosis or treatment of allergic disease for any of the techniques referred to above. I am supported in this by national and international publications.

I am concerned that an individual with a serious allergy who has undergone the NAET technique treatment may falsely consider themselves cured and thereby expose themselves to risk by consuming a food which has previously provoked a reaction and which they have previously avoided. The muscle strength test or electrodermal testing is not a validated method for detecting IgE to food allergens. Individuals at risk of anaphylaxis due to food allergy with high levels of IgE to a food are unlikely to be diagnosed by these techniques and are therefore unlikely to receive appropriate food avoidance advice. In addition, such patients will be denied the often life-saving measures of an emergency plan and therapy. This could have severe outcomes. 21 Professor Douglass' conclusion that there is no sufficient scientific evidence or consensus on the validity or efficacy of the NAET clearly applies to the BioFast system, in so far as it incorporates a number of the same underlying techniques.

The declarations 22 As noted in the March reasons, notwithstanding the enactment of the Competition and Consumer Act 2010 (Cth), Schedule 7 item 6 to the Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010 (Cth) preserves the operation of the Trade Practices Act in relation to acts or omissions that occurred before the commencement of the new legislation. The Trade Practices Act thus applies to the respondents' conduct in this case. 23 In the March reasons, I concluded that in accordance with the preponderance of relevant authority, the court had power to make declarations sought by consent on the basis of a statement of agreed facts in an ACCC instituted proceeding. 24 In ACCC v MSY Technology Pty Ltd (No. 2) [2011] FCA 382 ("ACCC v MSY"), Perram J has since expressed the view that, although declarations as to public rights may be made on the basis of an agreed statement of facts, they may not be made by consent. Rather, such declarations may be made only if a contradictor has contested the relief. 25 Perram J identified the two principal impediments to the making of declarations by consent and on the basis of agreed facts as: (a) the principle derived from Wallersteiner v Moir [1974] 1 WLR 991 ("Wallersteiner v Moir") suggesting that declarations should not be made on submissions, but only on evidence ("the evidence requirement"); and (b) the principle derived from Lord Dunedin's speech in Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 ("Russian Commercial") suggesting that a declaration may not be made in the absence of a contradictor ("the contradictor requirement"). 26 On a detailed analysis of the judicial antecedents in the above principles, Perram J concluded that the evidence requirement derived from Wallersteiner v Moir was based on a misreading of the authorities and was otherwise unpersuasive. 27 Further, in Perram J's view, Finkelstein J's holding in ACCC v Allergy Pathway Pty Ltd (No 2) [2011] FCA 74 that a judge of the Federal Court was bound not to grant a declaration involving a public right in the absence of supportive evidence was based on a misconstruction of the ratio of BMI Ltd v Federated Clerks Union of Australia (1983) 76 FLR 141 ("BMI"). 28 In contrast, Perram J recognised that Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 ("Forster") imposed a binding requirement for a proper contradictor. In Forster, Gibbs J (with whom McTiernan, Stephen and Mason JJ agreed on that issue) approved Lord Dunedin's description of a proper contradictor in Russian Commercial as "some one presently existing who has a true interest to oppose the declaration sought" (at 437 to 438). 29 In Perram J's view, the majority in BMI (Keely and Beaumont JJ) held that, additionally, a contradictor was "a party arguing against the granting of the relief and that this could not be satisfied where the matter proceeded by consent" (at [32]). Perram J considered that, as the absence of a contradictor (in the sense of a party contesting the declaratory relief sought) was the basis of the majority's decision in BMI, a single judge of the Federal Court was bound not to make a declaration involving a public right in the absence of a contest on the question. 30 His Honour nevertheless concluded that the majority view in BMI was probably incorrect and acknowledged that, contrary to his understanding of BMI, a large number of declarations by consent had in fact been made by this court. 31 Perram J concluded at [43]: (d) this court is bound by Forster not to make declarations without a contradictor; (e) as a matter of correct legal doctrine a contradictor will be present when all proper defendants have been joined and so are bound to the result. They will not cease to be contradictors merely because they consent to the proposed declarations; (f) BMI has, as its ratio decidendi, the contrary proposition which binds me. 32 While in my view his Honour's conclusions in sub‑paragraphs 43 (d) and (e) are correct, I am not, with respect, persuaded that the ratio of BMI is such as to preclude single judges of this court from making declarations involving a public right in the absence of a contradictor who contests that relief. 33 In BMI, the applicants, a group of employer organisations, sought three distinct species of relief, viz: (a) an interpretation under s 110 of the Conciliation and Arbitration Act 1904 (Cth) ("C&A Act") of certain provisions of a federal award, (b) declarations under s 21 of the Federal Court of Australia Act 1976 (Cth); and (c) declarations under s 108 of the C&A Act as "a person interested" that a State award was invalid under s 65 of the C&A Act, in so far as it purported to bind BMI in respect of employees engaged to perform various categories of work within three classifications of the federal award. 34 The applicants' first two claims were dealt with by a single judge, but the third claim for a declaration under s 108 of C&A Act was required to be heard by the Full Court. 35 The majority (Keely and Beaumont JJ) in their joint reasons observed that there was no opposition at the hearing of the application for the declaration under s 108 of the C&A Act. The applicants presented full argument, but the respondents represented at the hearing merely indicated that they raised no objection to declarations in the terms sought. 36 The majority observed that the discussions of Buckley and Scarman LLJ in Wallersteiner v Moir of the evidence requirement were pertinent to the present case. The majority stated that under s 108(3), the court had a discretion as to whether, in a particular case, it was appropriate to make a declaration and circumstances which must exist for the making of a declaration. 37 Their Honours stated (at 153): For the reasons advanced by Buckley LJ and Scarman J above we think that it is generally undesirable that the court should grant relief by way of declaratory orders under s. 108 in the absence of any contest on the question. 38 Their Honours contemplated that it might be different if the matter were merely one of private right, but recognised that in the case before them, the declarations, if made, could practically extend well beyond the parties and would be seen to express the court's views, notwithstanding that it had not had the benefit of any contrary argument. 39 Their Honours proceeded to consider extensively a number of different matters, which also weighed against the exercise of their discretion, including: (a) The fact that there were no practical benefit or useful purpose from the court's expression of its views on the question, as it had become, due to the agreement of the parties, academic. (b) There were doubts about whether the federal award applied to the first applicant, BMI, as BMI may have been a member of an employers' association expressly excluded from the application of that award. (c) It was arguable that the State award was not inconsistent with the federal award. (d) There was doubt about, and no evidence of, the eligibility of BMI employees for membership of the State union or of any other respondent who consented to the declaration. (e) The form of the declaration sought was unsatisfactory, because it declared an invalidity limited to certain activities of a particular employer, and, if made, could cause confusion, as it might be assumed that the court had found the State award otherwise valid. 40 Their Honours concluded (at 155) that: In the circumstances we would decline to make the declaration sought. It is apparent from what we have said that the refusal of the relief sought is made on discretionary grounds… 41 In my opinion, while the majority in BMI characterised a proper contradictor as a party who contested the question, their discussion of that issue was expressly within the context of an application under s 108 of the C&A Act and the peculiar features of the case before them. On my reading of their Honours' reasons, they did not purport to enunciate absolute requirements for a proper contradictor generally applicable in all contexts. Further, the absence of a proper contradictor (as defined) was but one of a number of factors which the majority proceeded to consider as relevant to the exercise of their discretion. Their Honours noted that the absence of a contradictor who contested the relief sought had a particular impact on some other relevant factors, but it did not appear to be, in itself, decisive. Their Honours' comprehensive analysis of a number of other relevant factors suggests the contrary. 42 As the joint submissions stated: 77. The true ratio in BMI Ltd is that, as a matter of discretion, the Court was not persuaded to grant the declaratory relief because of a stated concern that such an order could give a misleading impression in relation to activities of parties not before the Court. This (merely) reflects an exercise of discretion in the circumstances of that case. The majority judgment neither states nor purports to state a more general principle of the type identified by Perram J. 78. Further, and in any event, the matters causing concern which presented in BMI Ltd do not present in the circumstances of the present case. Those matters, identified above, that persuaded the Court in BMI Ltd to exercise its discretion to not make the declaration there sought by the applicant are not present in this controversy. 43 For the above reasons, in my opinion, the BMI majority's requirement for a contradictor contesting the relief sought may be confined to declarations sought under the particular legislation relevant in that case and, moreover, was but one of a number of factors relevant to the exercise of the discretion. 44 Consequently, I considered that in the present case, the requirement for a proper contradictor was satisfied despite the absence of any contest, and it was both permissible and appropriate to make the relevant declarations by consent.

THE PENALTIES 45 In contrast to the relief it sought against the March respondents, the ACCC sought the imposition of pecuniary penalties of $125,000.00 in total between NewLife and Renew You and $30,000.00 on each of Mr Schianetz and Ms Price, to which the relevant respondents consented. 46 The power to impose a pecuniary penalty is conferred by s 76E of the Trade Practices Act, which relevantly provides: (1) If the Court is satisfied that a person: (a) has contravened any of the following provisions: … (ii) a provision of Division 1 or 1AAA of Part V (other than section 52)...

the Court may order the person to pay to the Commonwealth such pecuniary penalty, in respect of each act or omission by the person to which this section applies, as the Court determines to be appropriate. (2) In determining the appropriate pecuniary penalty, the Court must have regard to all relevant matters including: (a) the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission; and (b) the circumstances in which the act or omission took place; and (c) whether the person has previously been found by the Court in proceedings under Part VC or this Part to have engaged in any similar conduct. 47 Section 76E came into effect on 15 April 2010 and was thereafter repealed, but the Trade Practices Act as in force immediately prior to 1 January 2011 continues to apply to acts or omissions that occurred before that date. While the contravening conduct of the respondents commenced well before 15 April 2010, pecuniary penalties were sought in relation to conduct that took place on or after that date.

Applicable principles 48 Although s 76E was in force for a relatively short time and there are few reported decisions on it, the principles relevant to the purpose and assessment of penalties under s 76 (a similar, albeit not identical, regime) provide guidance. Relevant authorities recognise that the principal purpose of a penalty under s 76 is deterrence, both specific and general. 49 As the joint submissions stated: 102. In TPC v CSR Ltd, French J stated:

"The principal, and I think probably the only, object of the penalties imposed by s.76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravener and by others who might be tempted to contravene the Act." 103. This articulation was repeated by the Full Court of the Federal Court of Australia, in ACCC v High Adventure, where Heerey, Finkelstein and Allsop JJ stated, at [11], that:

"...the principal, if not the sole, purpose for the imposition of penalties for a contravention of the antitrust provisions in Part IV is deterrence, both specific and general. This rule is so well entrenched that citation of authority is unnecessary." 104. In ACCC v Leahy Petroleum Pty Ltd (No 3), Goldberg J concluded that:

"The penalty imposed must be substantial enough that the party realises the seriousness of its conduct and is not inclined to repeat such conduct. Obviously the sum required to achieve this object will be larger where the Court is setting a penalty for a company with vast resources. However, as specific deterrence is only one element and general deterrence must also be achieved, consideration of the party's capacity to pay must be weighed against the need to impose a sum which members of the public will recognise as significant and proportionate to the seriousness of the contravention".

… 142. In ACCC v Gourmet Goody's Family Restaurant Pty Ltd (t/as Steersons Steakhouse), Jagot J imposed the penalties pursuant to section 76E of the TPA for the first time. In that case, the respondents contravened section 53C of the TPA by failing to specify in a prominent way, and as a single figure, the single price for the goods supplied in their restaurant. An agreed pecuniary penalty of $13,200 was imposed against the respondents in respect of each of the two separate proceedings. In imposing the pecuniary penalty, Jagot J commented that:

"...it is important that I record that I am satisfied on the agreed statement of facts that the penalty which the parties have agreed between themselves in [sic] an appropriate reflection of the circumstances of the culpability of each respondent in the proceedings. In reaching this conclusion I have had regard to the fact that a principal object of a penalty under section 76 is deterrence." 50 In ACCC v MSY, Perram J stated at [72]: There are remarks by a number of first instance judges that suggest that the penalty must be pitched at a sufficiently meaningful level to ensure that the penalties do not come to be seen as merely a cost of doing business... These comments were all made in the context of penalties imposed for breaches of Pt IV but I cannot perceive from s 76E that the Parliament considers these kind of breaches to be less serious. I accept, of course, that the penalty must not be so high so as to be oppressive... 51 In Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 ("CSR"), French J held that in addition to the non‑exhaustive mandatory considerations in s 76 (which are the same as those in s 76E(2)(a)-(c)), relevant factors to the assessment of penalty recognised in the authorities included:

1. The nature and extent of the contravening conduct.
2. The amount of loss or damage caused.
3. The circumstances in which the conduct took place.
4. The size of the contravening company.
5. The degree of power it has, as evidenced by its market share and ease of entry into the market.
6. The deliberateness of the contravention and the period over which it extended.
7. Whether the contravention arose out of the conduct of senior management or at a lower level.
8. Whether the company has a corporate culture conducive to compliance with the Act, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention.
9. Whether the company has shown a disposition to co-operate with the authorities responsible for the enforcement of the Act in relation to the contravention. 52 In subsequent decisions on s 76, courts considered other factors including the respondent's financial position, whether the respondent has engaged in similar conduct in the past, and whether the conduct was systematic, deliberate or covert (see, for example, J McPhee & Son (Australia) Pty Ltd & Ors v ACCC (2000) 172 ALR 532; NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 ("NW Frozen Foods"); ACCC v April International Marketing Services Australia Pty Ltd (No 5) [2010] FCA 17). 53 The joint submissions also referred to Hartnell v Sharp Corporation of Australia Pty Ltd (1975) 5 ALR 493, where, in relation to criminal fines for making false representations that goods were of a particular standard, Smithers J stated (at 497) that the following matters were relevant: (a) the importance of untrue statements and the departure from standards; (b) the degree of wilfulness or carelessness in the making of the statements; (c) the degree that the statement departs from the truth; (d) the degree that the statement has been disseminated; (e) what efforts have been made to correct the situation; and (f) finally, to look at it in the context of the Trade Practices Act and to consider the deterrent effect of any penalty that must be imposed. 54 The factors identified in CSR and subsequent cases on s 76 have been applied in decisions on s 76E, (save for the contravenor's degree of market power (see, for example, ACCC v Global One Mobile Entertainment Ltd [2011] FCA 393; ACCC v MSY; ACCC v Yellow Page Marketing BV (No 2) [2011] FCA 352)). 55 The Court must satisfy itself that a penalty jointly advocated by the parties is appropriate. As Branson, Sackville and Gyles JJ stated in Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72, the decision in NW Frozen Foods established the following propositions: (i) It is the responsibility of the Court to determine the appropriate penalty to be imposed… (ii) Determining the quantum of a penalty is not an exact science. Within a permissible range, the courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another. (iii) There is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy. Accordingly, when the regulator and contravenor have reached agreement, they may present to the Court a statement of facts and opinions as to the effect of those facts, together with joint submissions as to the appropriate penalty to be imposed. (iv) The view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty… (v) In determining whether the proposed penalty is appropriate, the Court examines all the circumstances of the case. Where the parties have put forward an agreed statement of facts, the Court may act on that statement if it is appropriate to do so. (vi) Where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is, in the Court's view, appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if within the permissible range. 56 In ACCC v Le Sands Restaurant & Ors [2011] FCA 105 ("ACCC v Le Sands"), Jagot J adopted (at [12]) the ACCC's submissions that: [p]rovided the Court is satisfied that the terms of the orders are appropriate, it is in the public interest for the Court to make orders on the terms that have been agreed between parties so as to encourage negotiated settlements.

Totality and parity 57 The principles applicable to criminal sentencing set out in Markarian v The Queen (2005) 228 CLR 357 were transposed to civil penalties under s 76 (and by analogy, under s 76E) by Gyles J in ACCC v Liquorland (Australia) Pty Ltd [2005] FCA 683. The considerations of totality and parity relevant to criminal sentencing also apply in the present context. In ACCC v Telstra Corporation Ltd (2010) 188 FCR 238, Middleton J stated (at 277): Application of the totality principle requires the Court to review the entirety of the conduct and to determine whether the proposed penalty is appropriate "as a whole"… The rationale underlying the totality principle is to ensure that the proposed penalty is not out of proportion with the conduct giving rise to the contraventions when viewed collectively, and to ensure the penalty is accordingly just and appropriate from the perspective of that collective assessment. 58 In ACCC v Leahy Petroleum (No 3) (2005) 215 ALR 301, Goldberg J described the parity principle as follows (at [43]): When dealing with several respondents whose situation and culpability are not the same, it is inevitable that different penalties will be imposed. Nevertheless it is necessary to bear in mind what is generally referred to as the parity principle. All other things being equal, similar conduct should be deserving of similar penalties. Of course, as the Full Court said in NW Frozen Foods… "other things are rarely equal where contraventions of the Trade Practices Act are concerned". It is also desirable to bear in mind the penalties that have been imposed in past cases. A dramatic departure from previous practice might be seen as representing unjustifiable disparity but may also demonstrate that a level or quantum of previous penalties may, now in the present circumstances under consideration, be regarded as inadequate.

Recent decisions in relation to s 76E 59 As stated above, there are only a few decisions dealing with the imposition of pecuniary penalties under s 76E of the Trade Practices Act. 60 In ACCC v Gourmet Goody's Family Restaurant Pty Ltd (t/as Steersons Steakhouse) [2010] FCA 1216 ("Gourmet Goody's"), Jagot J imposed an agreed pecuniary penalty of $13,200 against the respondents pursuant to s 76E for publishing menus which did not prominently state, as a single figure, the single price for the goods supplied in their restaurants. 61 The cases of ACCC v Le Sands and ACCC v AI Constructions (ACT) Pty Ltd [2010] FCA 1377 ("ACCC v AI Constructions") involved similar contraventions by cafÉs, for which pecuniary penalties of $15,000 and $20,000 were imposed respectively. 62 In ACCC v CI & Co Pty Ltd [2010] FCA 1511 ("ACCC v CI"), North J imposed an agreed pecuniary penalty of $50,000 against the second respondent for selling eggs labelled "free range" or "fresh range Omega 3" when they were, in fact, cage eggs. In imposing this penalty, his Honour considered, inter alia, the following factors: (a) the contravening conduct occurred over a relatively short period of time; (b) the second respondent had not previously been found to have contravened the Trade Practices Act; (c) the second respondent could have obtained significant revenue from his conduct; (d) the conduct involved a high degree of dishonesty, and was extremely difficult to detect (because once eggs were placed in cartons, it was impossible to determine whether or not they were free range); (e) the conduct was a "cruel deception" on consumers who hope to "advance the cause of animal welfare" by seeking out free range eggs as a matter of principle; and (f) given that this type of conduct was apparently a problem in the egg industry, it was necessary to send a message that such conduct would be dealt with quickly. 63 The respondents' contraventions in the present case were considerably more serious than the conduct in Gourmet Goody's, ACCC v Le Sands, ACCC v AI Constructions and ACCC v CI, as they posed a grave risk of serious harm to the health and safety of consumers, including children. 64 Moreover, during the relevant period, the promulgation of contravening representations was relatively prolific and effected through diverse media, including websites, video recordings and an electronic book. 65 While there was no evidence of actual injury, illness or harm to any person, the serious risks associated with respondents' conduct, including to children, required the imposition of penalties sufficiently substantial to deter the respondents from any repetition and to deter other persons from similar contraventions. 66 Mr Schianetz and Ms Price are or were, between them, directors and remain owners of almost all of the issued shares in the corporate respondents. The contraventions plainly arose out of the conduct of senior management of the corporate respondents. It is also clear that the corporate respondents did not, at the relevant time, have a culture conducive to compliance with the Trade Practices Act. No compliance program was in place. Neither Mr Schianetz or Ms Price had undertaken any trade practices compliance training, and the respondents' contravening conduct occurred over the course of almost a year after the ACCC had forwarded to Mr Schianetz (which was subsequently provided to the ninth respondent) a copy of Finkelstein J's orders in ACCC v Allergy Pathway Pty Ltd [2009] FCA 960 ("ACCC v Allergy Pathway"), a case involving misleading representations in relation to allergy diagnosis and treatment with similar facts to the present case. 67 There were, however, a number of factors in mitigation. The respondents had not previously been found to have contravened Part V of the Trade Practices Act. They co‑operated with the ACCC, acknowledged liability, expressed regret and undertook not to repeat the contraventions. According to the parties' joint submissions, "The Respondents regret the contravening conduct and have no intention of repeating it". The respondents' co‑operation avoided the need for complex and lengthy litigation. 68 It is also necessary to consider the respondents' capacity to pay. The penalty should not be oppressive, but equally, should not represent a mere price of doing business. The penalties proposed by the parties are towards the low end of the range, given the seriousness of the contraventions. 69 The respondents' generation of over $3 million in revenue for their "allergy treatments" of over 1,500 patients prior to the period of the contraventions may have suggested a relatively large scale of business and a high level of profit and prosperity, thus requiring higher pecuniary penalties. The length of time in which the $3 million in revenue was generated and the profit component were, however, unspecified. Nor was there evidence of the revenue or net profit produced by the treatments or the number of patients treated during the period of contravention. The statutory declarations and financial statements filed by Mr Schianetz and Ms Price indicated, and the investigations of the ACCC confirmed, that the respondents' financial circumstances were modest and the scale of the business small. 70 In light of all the above circumstances, I was satisfied that the total penalty of $185,000.00 was proportionate to the entirety of the respondents' contravening conduct, and that the penalties of $125,000.00 for each corporate respondent and $30,000.00 for each individual respondent satisfied considerations of parity. 71 The individual respondents almost wholly owned the corporate respondents and also controlled them. An aggregate penalty of $185,000.00 was, in my view, sufficient to deter the individual respondents from like future contraventions without being oppressive, and to achieve general deterrence. 72 The pecuniary penalties proposed by consent were therefore, in my opinion, appropriate.

CONCLUSION 73 I was satisfied that the declarations and orders should be made and the undertakings accepted in the terms proposed. I certify that the preceding seventy-three (73) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dodds-Streeton.