Australian Competition & Consumer Commission v Jones

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

Background 1 Orders made by judges of this Court are not aspirational statements. The role of courts exercising the judicial power of the Commonwealth is to preserve the rule of law within the Commonwealth. An order made by a superior court which may be breached or ignored with impunity is, in effect, no order at all. There is, therefore, a very singular consideration which arises where a contempt constituted by a breach of a court order has been found. That consideration is no less than the maintenance of the rule of law in our society. That is no less the case when the order concerned is not a final order in a proceeding but, as in this case, an interlocutory order, an order which necessarily entails in its making no final conclusion as to where the merits of the case may ultimately lie. 2 The reasons why I made orders on 5 March 2010 are apparent from the reasons for judgment which I gave that day (see Australian Competition & Consumer Commission v Jones [2010] FCA 105). Those orders, unless and until set aside, had to be obeyed by Mr Jones. He was perfectly entitled to seek to challenge those orders, and did so. As it happened, that challenge was unsuccessful (see Jones v Australian Competition & Consumer Commission [2010] FCA 481). However, even while that challenge was subsisting and as yet undetermined, while those orders were in place they had to be obeyed. 3 In this case, for reasons which I have given in the judgment which I delivered earlier today (see Australian Competition & Consumer Commission v Jones (No 3) [2010] FCA 908, particular orders made on 5 March 2010, extended materially on 14 April 2010, were not obeyed by Mr Jones.

General Sentencing Considerations? 4 In the reasons for judgment which I delivered earlier today I made reference to the rationale for the law of contempt as it has been stated in cases of high authority. I shall not repeat those particular statements now. When it comes to deciding a penalty to impose in respect of a contempt, a number of considerations intrude. These are helpfully gathered in a judgment of Spender J in Australian Competition and Consumer Commission v World Netsafe Pty Ltd (2003) 133 FCR 279, where, at [16], his Honour stated: Considerations which are relevant in deciding what is the appropriate penalty include: (a) The relative seriousness of the contempt, which is determined by the extent to which the contemnor appreciated that a contempt was being committed: Australian Competition and Consumer Commission v Info4PC.com Pty Ltd (2002) 121 FCR 24. (b) Whether the contemnor subjectively intended to disobey the order: Attorney-General v Times Newspapers Ltd [1992] 1 AC 191; Australian Competition and Consumer Commission v Hughes [2001] ATPR 41-807; and Info4PCCom. (c) The importance of bringing home to the contemnor the seriousness of the contempt: Hughes; Info4PCCom. (d) Whether the contemnor has offered any explanation or apology for his conduct: Gallagher v Durack (1983) 152 CLR 238, per Gibbs CJ, Mason, Wilson and Brennan JJ at 245. (e) An acknowledgment by the contemnor that a contempt was committed may be a mitigating factor: Matthews. Reference might also usefully be made to considerations listed by Palmer J in Australian Securities and Investments Commission v Michalik (No 2) (2004) 62 NSWLR 335 at [29]. In Australian Competition and Consumer Commission v Globex Systems Pty Ltd (2005) FCA 550 at [59] and [60] it was observed that a contempt may be technical where the contemnor has taken all reasonable steps to comply with the Court's orders, notwithstanding which an unintentional breach has occurred, or it may be willful, where the breach is something more than casual, accidental or unintentional.

Relative Seriousness of contempts found 5 In this case, though Mr Jones' position was that particular breaches which I have found occurred were unintended, that is not the conclusion which I have reached, for reasons given earlier today. Each of the contempts which I have found to have been proved I am satisfied was a deliberate contempt. Of those, and as was frankly acknowledged on behalf of the Australian Competition and Consumer Commission (ACCC), that related to the failure to provide the list with all of the attendant information requirements is the least serious of the charges that I have found to have been proved. In making that observation I do not wish to be regarded as diminishing the seriousness of a failure to take fully and seriously the obligation entailed by the orders which I made on 5 March 2010 in relation to the provision of a list with particular information to the ACCC. It is just that, in a relative sense, it is less serious than the other two internet site related breaches. 6 A particular motivation in terms of the balance of convenience for the making of the orders on 5 March 2010 was the protection of the public in relation to a matter of public health importance, pending the hearing and determination of the substantive proceeding brought by the ACCC. It was then, and remains, a matter of concern to me that those in our community who are afflicted with cancer, or whose loved ones are so afflicted, not be placed in a position where, in desperation, they take a particular course of conduct based on representations that are not backed by particular medical or other scientific opinion. That sentiment is clear enough in terms of the orders that I made on 5 March 2010 regulating, pending trial or further earlier order, the type of conduct in which Mr Jones could engage. It was not the purpose of those orders to forbid him from making particular representations, but rather to forbid that without a particular medical or other scientific foundation. 7 In two instances, one based on the Darryl Jones Health Resolution Centre (DJHRC) website, the other on the Fellowship of Faith, Hope and Healing (the Fellowship) website, that particular regulation has been breached. Given that that conduct touches on a matter of public health, I regard it as very serious indeed. It remains serious irrespective of what might be the ultimate outcome of the substantive proceeding brought by the ACCC.

Background to Mr Jones' conduct in contempt 8 There is a background to Mr Jones' conduct, the subject of the contempt proceeding, which, whilst the ACCC did not lead it in terms of whether or not the charges laid were proved, is relevant in relation to sentencing. That conduct is related in an affidavit of Mr Dallas which was read on the sentencing proceeding. It transpires that, in September last year, before the institution of the present proceeding, Mr Jones came to send to the Australian Government Solicitor (AGS) a letter responsive to earlier dealings between him and the ACCC. The letter is entitled "Re Cancer Cure Claims". Materially in that he states: I will not, without giving 14 days prior written notice to the ACCC, make or cause or permit to be made any representations to the effect that the health resolution program: (1) Can cure cancer or reverse, stop or slow it progress; (2) Will prolong the life of a person suffering cancer; (3) Is supported by empirical scientific evidence; (4) Is supported by generally accepted medical opinion; (5) Can or will if used by a person who has cancer, cure that person's cancer or reverse, stop or slow its progress; (6) Can or will, if used by a person who has cancer, prolong that person's life; (7) Any other representation to the same purport or effect as any of the representations referred to in paragraphs (1) to (5) above; (8) Any other representations to the same purport or effect as any of the representations referred to in paragraph (3) above. [sic] 9 What I take from this particular letter is that Mr Jones was then well aware of the intensity of scrutiny of his conduct by the ACCC. It remains to be seen whether or not the later instituted proceeding by the ACCC has any substantive merit. I do not regard the conduct alleged in that proceeding as proved. All that I make of the letter is that there is a history of interest by the ACCC well known to Mr Jones in his conduct. To me it is an aggravating factor that in the face of a knowledge of that interest, evident by the response in the letter quoted, nonetheless he has engaged in conduct in respect of each of the DJHRC website and the Fellowship website which amounts to a breach of court orders.

Is desperation mitigation? 10 There were very able submissions made on behalf of Mr Jones as to another context in which one might view those two website-related behaviours. That was in effect that his conduct related to desperation, having regard to the impact of interlocutory orders made on 5 March on his then existing business. I accept that a sequel to those orders was that it became necessary for Mr Jones to wind up, in effect, the business which he had hitherto been conducting. I accept further that in so doing there was a financial sequel and an adverse financial sequel at that. It seems, and I accept, that he, as a consequence, had to relinquish a residence and also an investment property. I infer from the submissions made to me that the income stream from the business was used to service mortgage debts in respect of each of those properties and that so doing became either impossible or at least impractical once the business came to be wound up. 11 There may be other considerations in respect of unrelated proceedings which also intrude on Mr Jones' predicament. I do not have details of these, but merely note that it is not only the phenomenon of the proceeding instituted by the ACCC which is relevant to the situation in which Mr Jones finds himself at present. I accept, though, that the ACCC's proceeding have had a very real impact on his financial situation. Accepting that does not amount to condonation of the deliberate breach of court orders, particularly when those orders, as must have been known to Mr Jones by his presence in court on 5 March 2010, which have a public health-related motivation.

Mr Jones' Antecedents 12 Mr Jones comes to court as a person without prior convictions. He has led a life of some 55 years' duration without prior convictions. He has six adult children. He is not presently employed and his source of income at present is a form of allowance from the Commonwealth known as "Newstart Allowance". 13 I was informed, as with other matters concerning his antecedents without objection, that he has minimal savings. Three of his adult daughters had hitherto been living with him at his North Coast residence. A sequel to his having to relinquish that residence has been that those daughters have had to find alternative accommodation. There is, therefore, as part of the impact of the proceeding, a degree of separation of familial bonds. I take that into account. 14 I was informed that Mr Jones has, since relinquishing his residence, led something of an itinerant lifestyle, relying on the charity of some of his former clients or fellow believers. That charity has on occasion, though, not been sufficient to provide him always with a roof over his head. He has been forced, so I was informed, to sleep in his car on occasion. That car is an old Holden which is not owned by him outright. 15 Mr Jones also faces debts of an unspecified nature in relation to his former business. I was informed that those debts are such that, taken in conjunction with the income which he presently receives, he should be regarded as insolvent. He has not as yet either filed a debtor's petition or otherwise been made bankrupt. I accept, though, that he does not have the capacity to pay a fine.

Sentencing Powers 16 The powers that this Court has in respect of contempts that are proven have been considered in a number of cases. Drummond J gave a succinct summary of powers which the court has in his judgment in Australian Competition and Consumer Commission v Goldstar Corporation Pty Ltd [1998] FCA 1441 at p 2, where his Honour noted that he had power, in addition to the power to impose a sentence of imprisonment for contempt, to suspend any such sentence on conditions. His Honour continued: In Lee v Walker, [1985] 1 All ER 781 the English Court of Appeal affirmed the existence of the longstanding inherent or common law power, as it is sometimes described, of the English High Court to suspend committal orders made in respect of contempts and to suspend those committal orders on conditions. In Morris v Crown Office [1972] 2 QB 114, the Master of the Rolls at 125 also discussed the common law power of the English High Court to postpone such a sentence, to bind over the contemnor to be of good behaviour and in other ways to suspend the operation of a sentence of imprisonment for contempt. In AMIEU v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 114, in a joint judgment of the Chief Justice and Mason, Wilson and Deane JJ, their Honours referred to the wide-range of remedies available to courts, including this Court, to deal with persons in contempt of court, including contempt constituted by failure to comply with court orders. In Macleod's case, I considered that the AMIEU case, read with the English authorities, demonstrated that the powers of this Court in respect of punishment for contempt are wide and in appropriate cases authorise the imposition of consecutive sentences of imprisonment. For the same reasons, I consider that this Court's power to punish for contempt includes power to suspend on condition any sentence of imprisonment that it might impose in respect of contempt.

Appropriate Penalty 17 Irrespective of Mr Jones' capacity to pay, I do not regard the present as a case where a fine either by itself, or in addition to any other order, would be appropriate. That is so, particularly in relation to the two contempts involving internet websites. I regard these as contempts of such a gravity in the circumstances as requiring, both for general and specific deterrence purposes, the imposition of a period of imprisonment. 18 The question becomes whether to suspend a sentence of imprisonment? The power so to do is clear. That power was acknowledged on behalf of the ACCC, and also in the submissions made on behalf of Mr Jones. 19 For the ACCC, it was submitted that there was a range of imprisonment penalties that was between six to nine months. It was submitted that, against that range, a suspension after serving one to three months would be appropriate. I note that in the Goldstar case, Drummond J, by reference to his earlier judgment in McLeod (No 3), was of the opinion that, in recent times, and that is now a decade ago, that there existed a pattern of sentences in respect of persons guilty of serious contempts of court constituted by breaching court orders or undertakings, being a pattern of orders for imprisonment from two to six months. 20 The ACCC supplemented its oral submissions with a schedule of comparative penalty cases. I have directed that this schedule be placed on the court file. I have taken into account this schedule. It is possible to range more widely, but ultimately, in my opinion, to no more beneficial effect in terms of sentence comparatives. That is so because, when all is said and done, each particular case, perhaps tritely, turns on its own singular facts. What I mean by that, particularly in this context, is that unlike as in the case with respect is some federal criminal offences, and many state criminal offences, where the frequency of their commission and the circumstances of their commission are such that one can discern a pattern of sentences it does not seem to me that there is any such benefit to be gained in this case by resort to comparatives. There is truly, in my opinion, in respect of the conduct which is the subject of contempt findings that I have made today, no pattern. All that I derive from the comparatives provided is that it is appropriate in respect of serious contempts for the power of imprisonment to be exercised. 21 The length of imprisonment then depends wholly upon the circumstances of the particular contempt. So, too, does the occasion for whether the undoubted power to suspend for a period imprisonment which has been ordered should be exercised. 22 It was put on behalf of Mr Jones that that suspension power should be exercised in a way that led to either imprisonment for the rising of the Court, in effect, no imprisonment at all, or suspension, such that a warrant was, as in Goldstar, left to lie in the registry, and so that the practical effect of the court order was wholly to suspend a period of imprisonment. 23 I acknowledge that these are options in theory, but they do not, in my opinion, meet the gravity of the particular circumstances of the breaches which I have found. 24 In taking into account then the imprisonment which I believe I am duty bound to order in the circumstances of this case, there is though a relevant consideration highlighted neatly in the submissions made on behalf of Mr Jones. It was put that, though the mitigation attendant necessarily in a plea of guilty was not present, there nonetheless had been a demonstrable cooperation with the administration of justice in terms of the way in which the defence was conducted. That was that the ACCC's case had not been the subject of particular challenge on cross-examination to a very large extent indeed. In other words, whilst there had been particular submissions on matters of law put, and whilst Mr Jones had given evidence and submissions were made on the strength of that, the ACCC's witnesses, either those who gave evidence by affidavit or, in Mr Greenwood's case, orally, had not been the subject of cross-examination. 25 The point of that submission was that the course taken by Mr Jones had led to a great saving in terms of court time. I am prepared to accept that the way in which the defence was conducted did result in a saving of court time. It did not, of course, result in obviating the need for the ACCC to go to the extent of proving its case by affidavit evidence. Nonetheless, I do take the conduct of the defence into account as a mitigating factor. 26 There has also been, again highlighted in the submissions made on behalf of Mr Jones, a degree, perhaps a slight degree, but it is a degree which I acknowledge, of cooperation, in the sense that there were particular acknowledgments of conduct, albeit coupled with a particular reservation in respect of alleged unintended transgression. That particular reservation though carried with it, if the ACCC did not, as it patently did not accept it, a need for the ACCC to lead a very considerable body of evidence. 27 One issue which was canvassed in submissions, in the context of the making of an order wholly or partly suspending the period of imprisonment, was the duration of any suspension. Unlike other cases where a contempt has occurred after making of final orders, this is a case where the contempts which have been proved relate to an interlocutory order. Neither counsel was able to direct me to a particular example of a suspension of imprisonment which had occurred in the context of a breach of interlocutory orders, nor have my own researches revealed such a case. 28 In terms of principle, it seems to me that any suspension of imprisonment for breach of an interlocutory order ought not run for longer than the duration of that order. Were the duration of suspension longer, it would intrude upon final orders, if they come to be made. It seems to me that any question of whether a final order is breached and, if so, the penalty ought to be judged by reference to that final order, rather than additionally by the triggering of an earlier, interlocutory order related, suspended sentence. That is not to say that, were a final order breached, it would not be relevant to take into account that someone had already been convicted of an earlier contempt constituted by a breach of an interlocutory order, just that the interlocutory order related sentence ought to be regarded as self contained. I particularly hold that view because it is yet to be determined in this proceeding whether or not Mr Jones has engaged in the conduct alleged in the substantive proceeding. 29 It is possible to find examples, and Australian Competition and Consumer Commission v Levi (No 3) [2008] ATPR 42-257 is one, of cases where conditions have been imposed in respect of a suspension which relate to particular conduct. Here, there are subsisting orders in respect of conduct; orders that have been breached. The only condition that I have in mind would relate to the existing orders themselves. In other words, whilst I can see a need to replicate these conditions, I do not propose to go outside the existing conditions by imposing fresh conditions which would travel to conduct which might become the subject of a separate interlocutory application in respect of separate conduct. 30 Other conditions which other judges have been disposed to make have related to not breaching the terms of the Trade Practices Act 1974 (Cth) generally. That though, in my opinion, is more appropriate in respect of a suspension of final orders. 31 The questions then become, having regard to the matters I have mentioned, what particular period of imprisonment ought to be imposed, and whether or not the period of imprisonment should be suspended in whole or in part, and, if suspended, then on conditions that I have mentioned?

Sentences 32 The view I have reached is that, in respect of each of the internet related contempts, there ought to be imposed, and I do impose, a period of imprisonment of six months. 33 In respect of the breach constituted by the failure to provide a list, I order that Mr Jones be imprisoned for one month. 34 Each of those periods of imprisonment is to be served concurrently. 35 As to the internet related breaches, I order that each of those be suspended after Mr Jones has served one month's imprisonment. The suspension will be on terms which replicate the terms of para 1 and para 2 of the orders that were made on 5 March 2010. The orders of imprisonment will take effect on and from today. 36 I have considered whether to make a condition in respect of the Fellowship website, but in the end, have decided that it is likely, in light of the orders made today, that there will not be a repetition by Mr Jones warranting the making of a discrete condition. And in any event, the "or otherwise howsoever" quality of para 1 ought to be pellucidly clear by now to Mr Jones.

Costs 37 There remains a question in relation to costs. It is apparent from the cases that the usual order in respect of a contempt application in respect of costs is to order that the costs be paid by the respondent contemnor on an indemnity basis. It was not submitted otherwise on behalf of Mr Jones, although his particular financial circumstances were noted. That is not, in my opinion, a basis for declining to make a costs order on the application of the ACCC to which the ACCC would otherwise be entitled. 38 I have taken into account, in relation to costs, whether there ought to be some discounting, if only on a robust percentage basis, referable to particular charges in respect of which the ACCC did not succeed. On balance though, the case has not been elongated at all by the ACCC's failure to succeed in respect of each of its charges. Further, there was, as I have indicated earlier today, a basis upon which they might reasonably have been brought, even though I have not regarded them as proved beyond reasonable doubt. 39 In the circumstances, the order that I make in respect of costs is that Mr Jones pay the ACCC's costs of and incidental to the application for contempt, to be taxed and paid on an indemnity basis.

Remand 40 Mr Jones will be remanded in custody for the present to await the formal drawing up of the warrant for committal.

Application for Stay 41 The orders that I make in respect of the stay application, and I expressly dispense with a need for any written notice of motion in that regard, are that upon Mr Jones undertaking in writing to attend and surrender himself into the custody of the Court upon the hearing of the appeal, and further to abide the orders of the court on the hearing of the appeal and its subsequent determination, or further earlier order, I stay the operation of the order of imprisonment made today. The result of that will be that Mr Jones will have to attend at the hearing of the appeal, and then his subsequent disposition will be by the order of the Court that hears the appeal, or such further earlier order as the Court might make. I further order that each party have liberty to apply in respect of that suspension. 42 Pending the execution of the undertaking, I will order that Mr Jones remain in the custody of the Court, and that he attend, in company with the officers of the Australian Federal Police (present in Court), at Level 6 of the Court, and remain there until such time as he has executed the undertaking that I have required of him. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.

COURT RESTRAINS TEMPORARILY DARRYL JONES FROM MAKING CANCER TREATMENT CLAIMS The Australian Competition and Consumer Commission (ACCC) has instituted proceedings in the Federal Court of Australia against Darryl Jones alleging that certain of his representations are misleading or deceptive under the Trade Practices Act 1974 (the TPA). On 5 March 2010 the Federal Court of Australia issued interim injunctions in relation to cancer treatment claims promoted by Mr Jones under The Darryl Jones Health Resolution Centre Program. Those injunctions can be found at www.fedcourt.gov.au/ecourt/ecourt_esearch_slide2.html and remain in effect until such time as the Court makes further orders. Those injunctions restrain Mr Jones, until further order of the Court, from making any claims that treatments can prevent the occurrence or treat the growth of cancer or any medical condition unless he has first obtained written medical or scientific advice to support that claim. The ACCC urges anyone who is suffering from cancer, or who wishes to take steps to prevent it, to seek advice from a suitably qualified medical practitioner.