Australian Competition & Consumer Commission v Jones

THE COURT DIRECTS THAT: 7. The Applicant file and serve its statement of claim on or before 19 March 2010. 8. The Respondent file and serve its defence on or before 9 April 2010. 9. The matter be listed for further directions at 9.30 am on 16 April 2010. Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website.

BETWEEN: AUSTRALIAN COMPETITION & CONSUMER COMMISSION

REASONS FOR JUDGMENT 1 The Australian Competition and Consumer Commission (the Commission) has instituted proceedings against a Mr Darryl Peter Jones in respect of alleged contraventions of the Trade Practices Act 1974 (Cth). Whilst the application recites, on its face, that it has been made on grounds stated in the accompanying statement of claim and in an affidavit of Shane Denzil Dallas, for reasons which will emerge, the application for interlocutory injunctive relief has about it an urgency such that the Commission has not yet filed and served a statement of claim. Rather, the nature of the case as brought by the Commission emerges from the affidavit of Mr Dallas, as then detailed in oral submissions made on behalf of the Commission by Mr Brady of counsel. 2 The nature of the case which the Commission brings is that it alleges that, both on a website which Mr Jones maintains and also in a publication authored by him, entitled "The Truth About Overcoming Cancer", there are representations which are misleading or deceptive. As put for the purposes of the interlocutory injunction application, the representation on the website is to be found in the following passage, which I note appears on page 89 of the exhibit bundle to Mr Dallas's affidavit: The Darryl Jones Health Resolution Centre methodology is based on the resolution of life-threatening diseases without dispensing pharmaceutical drugs, advocating radium therapy, surgery, or harmful chemotherapy - focusing instead on a three-step Triune Wellness Offensive - utilizing nutrition, exercise, and vitamins, along with close, professional, personal accountability. The Darryl Jones Health Resolution Centre - committed to your total victory over modern day life-threatening diseases - with time-proven personal strategies empowering you with the tools you need for a prolonged life, greater health, and real hope for the future. [sic] 3 On that same part of the website, and in terms of paper print there from, the latter of those quoted representations is repeated in white type against a dark background. 4 It is put on behalf of the Commission that, when one reads those particular representations in context, and in particular in the context of particular statements which are made referable to views which were expressed by a Dr Otto Warburg, one sees that there is a particular promotion of the exclusion of glucose as a way of resolving life-threatening diseases such as cancer. 5 When one explores, as the Commission invites, in terms of alleged representations, the publication, "The Truth About Overcoming Cancer," one sees, in essence, the same representations made. In particular, in that publication, at pages 108 to 109 of the exhibit bundle, the following statement is made: The crux of the matter is that Cancer Loves Glucose and glucose is easily obtainable from many of the vast majority of foods that we ingest daily. So to take away its major source of nutrition will deprive it of 'its life source' and therefore compromise its ability to persist and grow. This access to Glucose helps to explain the awesome rise in new cases of cancer, at a rate which is unprecedented at any time in our history. It is a modern day epidemic! Later, at page 115 in that same publication, a similar statement is made as to "what we really need." 6 The basis upon which the Commission alleges that statements of the kind to which I have made reference are misleading and deceptive, at least prima facie (and that is all with which I am concerned today) emerges from a report which the Commission has obtained from Dr Raymond Snyder, FRACP: see exhibit 11 to Mr Dallas's affidavit. I am satisfied that Dr Snyder is a person who is well qualified to express the opinions that are contained in his report of 5 February 2010. 7 The Commission posed a series of questions to him. It suffices for present purposes to quote question one and the answer given by Dr Snyder in response. That is so because, whilst I have made particular reference to glucose in the quotes, a study more generally of both the website and Mr Jones' publication discloses other matters which form the subject of question one. Question one is in these terms: 1. Is your opinion that any of (and if so, which): (1) the elimination of glucose from the diet; (2) undertaking resistance exercise; (3) naturally produced human growth hormone; or (4) the administration of laetrile (B17); is effective in the treatment of: (a) all forms of cancer; (b) any form of cancer? 8 Dr Snyder's response is as follows: 1.1 Elimination of Glucose from Diet 1.1.1 In my opinion, there is no accepted scientific basis for this claim. It derives from the mistaken belief by Otto Warburg in 1930 that abnormal glucose metabolism in malignant cells is the cause of cancer. Modern opinion is that it is an epiphenomena (one that occurs in cells as a consequence of becoming malignant, but is not a cause of cancer). However, there have been some recent reports challenging this view. If glucose is eliminated from the diet, the body can manufacture the sugar it needs from other body substances such as certain amino acids. This process is called gluconeogenesis. It is not really critical if the Warburg mechanism applies or not. What is important is the lack of published reports of trials showing objective benefit from glucose exclusion in patients with cancer. 1.2 Undertaking Resistance Training 1.2.1 There is some preliminary data that patients with some early cancers, especially bowel and breast, may have a reduced risk of relapse after their initial treatment. These studies are not restricted to resistance exercise, but usually include a variety of types of physical activity. I'm not aware of published studies that show benefit (as defined above) for resistance training specifically for people with advanced/recurrent cancer. There are a few studies which fail to show an anti-cancer effect. In my opinion, there's no evidence to support the use of resistance exercise specifically as the sole modality in the treatment of any cancer, especially at the advanced stage. 1.3 Naturally Produced Human Growth Hormone (HGH) 1.3.1 I am aware of no scientific evidence for the use of this agent in treating patients with cancer. In my opinion, there's no basis to recommend its use. There are many studies published investigating the oncogenic (cancer causing) effect of adding HGH to cells in cultures. It's unlikely that patients can increase their own production of this hormone to a level likely to cause noticeable effects, either beneficial or deleterious. 1.4 Administration of Laetrile (Vitamin B17) 1.4.1 In my opinion, there's no evidence that laetrile (B17, amygdaline) is a vitamin that is a substance required in small amounts to maintain health, nor any objective evidence that it can change the progress of cancer. It has been tested in a clinical trial which failed to show any benefit. Attempts to collect groups of patients who have allegedly benefited have been unsuccessful. It is potentially toxic, especially when given orally. I omit from the quote the footnote references in Dr Snyder's report. 9 In short, then, the case as presented at present on behalf of the Commission is that the statements made in the website, read in context, and particularly in the context of the reference to Dr Warburg's work, as well as statements made in the publication authored by Mr Jones, are misleading or deceptive, having regard to the utility of the methods apparent in the question posed to Dr Snyder, with respect to the treatment of cancer. It ought also be apparent from the very nature of the representations and the Commission's reliance upon Dr Snyder's medical opinion, that there is a public interest about the bringing on of the application for interlocutory injunctive relief urgently. 10 Making due allowance for the present general statement by the Commission for the nature of the representations and the allegedly misleading or deceptive quality, it appears to me that there is a prima facie case, a case which raises a serious question for trial, in respect of whether or not there is or is not a misleading or deceptive quality about the promoted benefits of the various methods which would seem either collectively or individually to comprise the Darryl Jones Health Resolution Centre methodology. The question then becomes, in terms of principle, whether or not interlocutory injunctive relief of the kind sought by the Commission ought to go on the basis of the balance of convenience. 11 The nature of that relief, as set out in the application, is as follows: 8. An injunction that the respondent be restrained, until further order, whether by himself or his servants or agents or otherwise howsoever, in trade or commerce, from making any representation to the effect that the occurrence or growth of cancer or any medical condition can be prevented or successfully treated by any means whatsoever unless the respondent: 8.1 first has obtained: 8.1.1 from a doctor then registered with a medical practitioners board to practise medicine in Australia; or 8.1.2 from a professor then teaching or researching in medicine at an Australian university; written advice certifying that the proposed treatment is supported by reliable scientific evidence or expert medical opinion and is believed to be effective and safe; 8.2 at the time of making the representation, prominently discloses details of the said advice, including the name, qualifications and position of the person providing the said advice; and 8.3 retains a copy of said advice and provides same to the applicant within 14 days of a written request for same. 9. An order that the respondent, at his own expense, shall, within 7 days of this order, cause a notice in the form of Schedule 2 attached hereto to be published and to remain continuously in place, until further order, on the home page of the following websites: 9.1 www.darryljoneshealth.com.au; and 9.2 any other website controlled, owned, operated or maintained by the respondent that, at the date of this application, offers or promotes goods or services associated with the treatment or prevention of cancer or any other medical condition whatsoever; and shall take all reasonable steps to ensure that such notice shall: 9.3 be a size that consists of at least 40% of the screen area; 9.4 be clearly viewable immediately on screen after the web page is accessed; 9.5 not be blocked by a pop up blocker; 9.6 remain on screen until closed by the person accessing that website; and 9.7 not require a further selection by hyperlinks or scrolling on the screen to be seen. 10. An order that, within 14 days of making this order, the respondent shall provide the applicant with a list of all persons who, in the last 2 years preceding this order. 10.1 have made an agreement with, or payment to, the respondent or to another person with the knowledge and consent of the respondent, to be supplied with goods or services associated with the treatment or prevention of cancer; or 10.2 were supplied or provided by the respondent, or by another person with the knowledge and consent of the respondent, with copies of the following documents: 10.2.1 the document entitled "The Truth About Overcoming Cancer"; 10.2.2 the document entitled "An Entirely Different Approach to Cancer"; or 10.2.3 any other document containing representations to the effect of any of those set out in order 1. 11. An order that the list to be provided in accordance with order 10 shall also contain the last known address, including electronic address, and telephone number, if known to the respondent, of each listed person together with the amount each such person paid. 12. An order that the respondent shall provide to each person in the said list, at the last known address supplied for each such person, a copy of: 12.1 the notice in Schedule 1 attached hereto; and 12.2 these orders; within 14 days of this order. 12 In the course of oral submissions on behalf of the Commission, some refinement of the relief sought was proposed, in particular, in para 8.1. In the concluding part of that paragraph and after the words "proposed treatment is" the words "in the opinion of that person" be inserted. That seems to me to be an appropriate refinement. 13 There was then raised, in the course of discussion with counsel, the aptness of the reference in para 8.1 to either, as 8.1.1 would have it, a doctor practising medicine in Australia or as 8.1.2 would have it, a professor teaching or researching in medicine at an Australian university. The reason why that was raised was that it might be thought, at first flush, unnecessarily restrictive of an ability to draw upon the wisdom of persons beyond Australia's shores in respect of the treatment of cancer. However, there is, on closer study, a restriction only in the sense that the body of research must be the subject of a written advice from a person within the class proposed. In other words, there is no restriction as to the source of the research. Rather, the concern of the Commission is that there be an ability readily to identify within the jurisdiction a person attesting to the utility of the research, whatever the source of that research might be locationally. So viewed, that seems to me to be an appropriate formulation at least at an interlocutory stage, given the nature of the representations made and in light of Dr Snyder's opinion concerning those representations. 14 There is also, raised in the proposed form of orders for the Commission a requirement for the disclosure of a clientele as set out in the proposed orders that clientele is to be measured by those who, within the last two years, have in the way described in para 10, dealt with Mr Jones. It emerged, though, in the course of submissions, that twelve (12) months was a more apt period rather than two years. That seems to be the effect, also, of a statutory declaration made by Mr Jones which became exhibit 1 in the proceeding. 15 The orders proposed in para 10 and para 11 were particularly resisted by Mr Jones. The other orders were not, although it fair to say that he made the point so far as balance of convenience is concerned, that there may be a practical effect of occasioning difficulty with, if not terminating in a practical sense, the further conduct of his business. Though there is no direct evidence on the subject it is, in my opinion, a necessary inference that there will be an impact on a continuing business from the making of orders of the kind which the Commission seeks. That in itself, though, is not a basis for making orders which are otherwise appropriate. Rather, the effect of the orders proposed by the Commission would be to leave the public generally and, in particular, to those who have or may come to deal with Mr Jones, a choice and an ability to make an informed choice. 16 I did have evidence from one of Mr Jones' clients as to concerns which she had in relation to disclosure to the Commission of her name and contact details. There is undoubtedly, in the making of the orders of the kind the Commission seeks, an element of intrusion on privacy in the sense that the orders would entail a disclosure by Mr Jones of personal information of particular persons who have dealt with him. The disclosure, though, is not to the world at large but rather, is a disclosure to the Commission. Further, the disclosure is sought in aid of the primary interlocutory injunctive relief and to ensure that the nature of that relief is drawn to the attention of these persons. 17 There is, in my opinion, in this case, particularly having regard to Dr Snyder's report, a public interest in that particular targeted publication of the orders proposed by the Commission. Further, the grant of power under s 80(2) of the Trade Practices Act, together with powers granted to the court in a case in which it has jurisdiction by the Federal Court of Australia Act 1976 (Cth) provide, in my opinion, a foundation for the making of an order of that kind. 18 The nature of the case, and the evidence read on behalf of the Commission, is such, in my opinion, (even taking into account what I accept will be, at a practical level if nothing else, an impact upon Mr Jones' business), that the balance of convenience favours the granting of interlocutory injunctive relief. 19 I expressed a concern in the course of submissions about the titling of sch 2 to the application. At present, the title is "Court restrains Darryl Jones from making cancer treatment claims." That title, whilst it might, in a sense, be strictly accurate, could also be regarded as overstating matters, in the sense that I make no final decision at all as to the question of whether the alleged representations are misleading or deceptive. A more apt title, in my opinion, is "Court restrains temporarily Darryl Jones." That accords with the true nature of the interlocutory injunctive relief which I propose to grant. 20 For completeness, I should make reference to an alternative foundation for the ancillary orders, which was at one stage promoted on behalf of the Commission, and that is s 86C of the Act, in particular, 86C(2)(c). Read in isolation, that provision allows for an order requiring the person to disclose, in a way and to the person specified in the order, such information as is so specified, being information that the person has possession of or access to. Read though in context, and in particular in the context of s 86C(1), there appears to be condition precedent to the making of an order of the kind described in s 86C(2)(c). That is, a finding that the person concerned has engaged in contravening conduct. 21 At this interlocutory stage, I am making no such finding. All I am doing is reaching a conclusion that the Commission has, prima facie, established a case, prima facie in the sense of raising a case which warrants a case proceeding to trial. 22 The other factor which I take in to account, on the balance of convenience, is that, as Mr Dallas' affidavit reveals, there was, in September last year in particular, prior to the institution of proceedings, an informal exchange of correspondence between the Commission and Mr Jones, relative to the giving of undertakings in respect of conduct not materially distinguishable from that which has become the subject of the present proceedings. It suffices to note that there is an apprehension, arising from the exchange of correspondence and subsequent conduct referred to by Mr Dallas in his affidavit, that undertakings informally given are not sufficient. Rather, there is a need for the making of orders pending the hearing and determination of a substantive application brought by the Commission. 23 The orders, then, that I propose to make are in the terms of the interlocutory injunctive relief sought by the Commission, with the modifications noted by me in these reasons. And further, with the modification that 8.1 read: First has obtained: (8.1.1) from a person then registered with a medical practitioner's board to practice medicine in Australia; or (8.1.2) from a professor, associate professor, reader, senior lecturer, or lecturer then teaching or researching in medicine at an Australian university. 24 I make the modification to 8.1.1 because it seems unnecessary to describe a person registered with the medical practitioner's board as a doctor and 8.1.2 because it seems unnecessarily restrictive on Mr Jones to restrict his pool of domestic advice only to those holding professorial appointments. 25 In relation to para 8.3, as originally propounded, it seems that a more apt form of wording, having regard to the submissions that I have heard, would be to have an order in these terms: Retains a copy of the said advice, and provides a copy of the same to the applicant with 7 days of the receipt thereof. 26 The costs of and incidental to today's application are reserved. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.