Australian Competition & Consumer Commission v Commercial and General Publications Pty Ltd

REASONS FOR JUDGMENT 1 The Australian Competition and Consumer Commission (the Commission) brought forty-one charges against the defendants Anthony Robert Hassett and his company Commercial and General Publications Pty Ltd (CGP) alleging that they asserted a right to payment for unsolicited services contrary to s 64(2A) of the Trade Practices Act 1974 (Cth) (TPA). In a judgment delivered on 22 July 2002 I dismissed those charges: [2002] FCA 900. However, I found proved five charges under s 58(b) of the TPA alleging the acceptance of payment for services where there were reasonable grounds for believing that the defendants would not be able to supply those services. I now have to consider questions of penalties and costs. Penalties 2 The imposition of penalties for federal offences is subject to s 16A of the Crimes Act 1914 (Cth) which is as follows: "(1) In determining the sentence to be passed, or the order to be made, in respect of any person for a federal offence, a court must impose a sentence or make an order that is of a severity appropriate in all the circumstances of the offence. (2) In addition to any other matters, the court must take into account such of the following matters as are relevant and known to the court: (a) the nature and circumstances of the offence; (b) other offences (if any) that are required or permitted to be taken into account; (c) if the offence forms part of a course of conduct consisting of a series of criminal acts of the same or a similar character - that course of conduct; (d) the personal circumstances of any victim of the offence; (e) any injury, loss or damage resulting from the offence; (f) the degree to which the person has shown contrition for the offence; (i) by taking action to make reparation for any injury, loss or damage resulting from the offence; or (ii) in any other manner; (g) if the person has pleaded guilty to the charge in respect of the offence - that fact; (h) the degree to which the person has co-operated with law enforcement agencies in the investigation of the offence or of other offences; (j) the deterrent effect that any sentence or order under consideration may have on the person; (k) the need to ensure that the person is adequately punished for the offence; (m) the character, antecedents, cultural background, age, means and physical or mental condition of the person; (n) the prospect of rehabilitation of the person; (p) the probable effect that any sentence or order under consideration would have on any of the person's family or dependants." 3 The payments the subject of the s 58(b) charges were received by the defendants between 13 September and 25 October 1999. In one case the amount received was $195 and in the other four cases $185.25. The amounts were retained by the defendants until 14 April 2002, the day before the commencement of the trial. On that day Mr Hassett, on the advice of his counsel, gave personal cheques for the amounts in question to the Commission. The trial proceeded on 15, 16, 17, 18 and 19 April and 11, 12 and 13 June 2002 and, as already mentioned, judgment was delivered on 22 July. 4 The five payments were received for the insertion of advertisements in the 1999 edition of the Returned Services League (RSL) magazine On Service. CGP had published the 1997 and 1998 editions of On Service (the latter not coming out until March 1999). After a period of uncertainty, the RSL told Mr Hassett in late July that CGP would not be authorised to publish the 1999 edition. The circumstances leading up to this will be referred to in more detail later. Mr Hassett consulted solicitors who protested on his behalf at the decision but, as Mr Hassett later admitted in a s 155 examination, by the time he received a letter dated 11 August 1999 from the RSL confirming its decision, his hope of changing their mind had disappeared. The RSL's position was confirmed by a letter of 29 September 1999 from its solicitors. Mr Hassett's explanation proffered to this court for not repaying the money earlier was that he did not do so until he was advised by counsel and that he was waiting to finalise his complaints against the RSL. 5 The complainants in the s 58(b) charges were not aware that a 1999 edition had not been published until they were advised by the Commission in March 2000 as a result of its investigations. 6 One of the relevant matters both under general principles of sentencing and by virtue of 16A(2)(f) is the contrition of the defendants. Counsel for the Commission submitted that Mr Hassett has shown no contrition. This is true, but perhaps understandable. 7 Had the RSL not denied authorisation for the 1999 edition of On Service, the magazine would have been published and the s 58(b) contraventions would not have occurred. The RSL's action can be traced to two factors. The first was the intervention of the Commission as a result of complainants alleging they had not authorised advertisements in the 1998 edition. The second was the reaction of the RSL to Mr Hassett's using its logo on CGP invoices for advertising in On Service. 8 It is clear that the quality of the 1997 and 1998 editions of On Service was satisfactory to the RSL. Although the 1998 edition was late, that did not seem to concern the RSL unduly or play any part in their decision to dispense with Mr Hassett's further services. However Mr Anthony Scott, the State Secretary, deposed that the RSL received several telephone calls from people complaining they had been billed for advertisements which they had never authorised. He advised them that the RSL had nothing to do with the advertising arrangements and referred them to CGP. Mr Scott deposed: "At the time [April to June 1999] I did not consider that this was a significant problem and did not make a record of the dates or names of the complainants." 9 Mr Scott continues: "However, in about June 1999 Mr David MacFie of the Australian Competition & Consumer Commission's (ACCC) Hobart office contacted me. He told me that the ACCC had concerns about Hassett/CGP's conduct in relation to some of the advertising appearing in On Service. In July 1999, Tony Hassett again came to see me at RSL headquarters about CGP publishing the next edition of On Service. Mr Hassett said that he was aware of positive feedback from RSL members to the 1998 edition of On Service and on this basis was expecting to get the go ahead for the next edition of On Service. I was considering the advice from the ACCC, and was of the view that, in this case I should consult with the RSL State Executive." 10 Mr Scott says that Mr Hassett appeared to be very agitated about not getting the go ahead and said if it did not occur his company would have to go into liquidation. Mr Scott wanted to "stall" Mr Hassett until he had consulted with the State Executive "about Hassett/CGP's conduct in relation to some of the advertisers". He told him that he would speak to the Acting State President and phone back on the following Monday. 11 Mr Scott then met again with Mr MacFie who showed him invoices CGP had sent out for advertising appearing in On Service with the RSL logo prominently displayed. Mr Scott informed the Acting State President Mr John O'Connor and the Vice-President Mr John Paul who said that this was the first they knew of use of the logo and that Mr Hassett had never been given permission to use it. Mr Paul was, according to Mr Scott, "most displeased". Mr O'Connor told Mr Scott to tell Mr Hassett that the RSL would not agree to him publishing the next edition. On Monday 26 July 1999 Mr Scott telephoned Mr Hassett and conveyed the RSL's decision not to authorise the publishing of the next edition. 12 The RSL's reaction to Mr Hassett's use of their logo seems excessive and unreasonable. On Service was the official journal of the RSL and it was in the interests of the RSL, at least indirectly, that advertisers pay their accounts to CGP. Mr Hassett had not been using the logo for a purpose unconnected with the RSL or to get some improper advantage for himself. He was given no opportunity to explain his actions. In any event, a fairer and more sensible course might have been simply to tell Mr Hassett that he was not to use the logo in the future. Of course, the Commission cannot be blamed for the stand the RSL took in relation to its logo, but it is clear from Mr Scott's affidavit that their contact with the RSL about the allegations of non-authorisation was a contributing cause to the RSL's decision. 13 The Commission's decision to prosecute Mr Hassett and CGP had even more disastrous consequences. There are grounds for disquiet as to why this prosecution was brought. 14 There were in evidence three magazines published by CGP over the period 1997 to 1999, two editions of On Service and one of Country Women Calling for the Country Women's Association (CWA). They contain a total of 578 advertisements, each one of which, it may be inferred, was produced by a telephone approach from Mr Hassett in the way described in my earlier judgment. If Mr Hassett was engaged by way of systematic practice in the conduct of which the complainants complained, one might have expected to see many more complaints from the remaining 570 advertisers. In fact the complaint rate was only about 1.4 per cent. 15 In deciding whether or not to commence this prosecution, consideration might have been given to the following factors: · Mr Hassett was a reputable small businessman with over twenty years experience in publishing in Tasmania. During that time he has published over 100 magazines which included approximately 22,000 advertisements. He had no prior convictions. He was no fly-by-night or confidence man. · His business was not only legitimate, but socially beneficial. A magazine is an important asset for valuable community organizations like the RSL and the CWA. Mr Hassett was able to provide quality publications for these organizations without cost or risk to them. · Although one detects some distaste within the Commission for Mr Hassett's business method (the description "telephone blowing" was used by its counsel), seeking business by unsolicited telephone calls and relying on oral authorisation confirmed by the trader's written advice is perfectly lawful for the kind of business in which Mr Hassett was engaged, in contrast to the specific prohibition in s 64(3) and (4) of the TPA concerning entries in directories. · It was not surprising in the circumstances that there might be some disputes as to the terms of oral conversations. As I said in my earlier judgment, [2002] FCA 900 at [42]-[43]: "There is a human tendency, and not necessarily a conscious or dishonest one, for people to reconstruct past events in a way which is supportive of their interests. The further back in time the event is when they are first called upon to recollect, the stronger is that tendency. And the tendency is all the more persuasive when people have no objective evidence ready to hand that stands in the way of a self-serving reconstruction. In the present case there was typically a delay of some ten to twelve months between the time of the complainant's conversation with Mr Hassett and the time an invoice was received. In some instances the complainant's capacity for objective recollection was likely to be affected by the fact that the business had been closed down or sold, with the consequence that they would get no value for the money now being demanded. And in respect of some complainants there was a mistaken assumption that no legal liability would attach unless the complainant had signed a document, which would make it all the easier to reconstruct the telephone conversation as something tentative, provisional and non-binding."