REASONS FOR JUDGMENT
1 The applicant ("the Commission") has filed a motion seeking orders against the respondents arising out of their failure to comply with an order made by the Court on 6 August 2001 and the failure of the second respondent ("Mr Lyster") and the third respondent ("Ms Glover") to comply with an order made by the Court on 9 April 2002 in which a declaration was made that they were guilty of contempt of court and each was ordered to pay a fine of $10,000 within sixty days of the date of that order.
2 On 6 August 2001 I published my reasons for judgment in this proceeding in which I found that the first respondent, Purple Harmony Plates Pty Limited ("the company"), had contravened s 52 of the Trade Practices Act 1974 (Cth) ("Trade Practices Act") by making misleading representations in relation to certain products which it offered for sale: Australian Competition and Consumer Commission v Purple Harmony Plates Pty Limited [2001] FCA 1062. I also found that Mr Lyster and Ms Glover were involved in those contraventions.
3 On 6 August 2001, I made the following orders:
"1. The first respondent be restrained, whether by itself, its servants or agents or any of them or otherwise howsoever, from publishing, distributing, transmitting, displaying or broadcasting material which contains representations:
(a) in relation to the product known and described as the large Purple Harmony plate that:
(i) the plate has an energy field of approximately 2.5 metres around it that negates the effects of the electrified and frequency toxic environment and treats the sub‑particles of electromagnetic and other frequencies, reducing the effect on human bodies, thereby lowering bodily stress and fatigue levels;
(ii) placing the plate beneath a computer monitor counters the effects of Electromagnetic Radiation ('EMR') and reduces fatigue;
(iii) the plate will negate the effects of re‑radiated and electromagnetic frequencies;
(iv) the plate will clear and energise fruit and vegetables, restoring their natural vitality;
(v) the plate will calm people, making them more receptive to treatment by health practitioners;
(vi) the plate has a beneficial effect on health, accelerates healing and lessens or cures pain;
(vii) the plate creates a positive energy field around it that is very beneficial to all life, plant, animal or human;
(viii) the plate raises personal energy levels and protects against EMR in the environment and from EMR producing equipment, such as computers, televisions, mobile phones;
(b) in relation to the product known and described as the small Purple Harmony plate that:
(i) the plate has an energy field of approximately 50 centimetres around it that negates the effects of the electrified and frequency toxic environment and treats the sub-particles of electromagnetic and other frequencies, reducing the effect on human bodies, thereby lowering bodily stress and fatigue levels;
(ii) the plate will negate the effects of re-radiated and electromagnetic frequencies;
(iii) the plate has a beneficial effect on health, accelerates healing and lessens or cures pain;
(iv) the plate creates a positive energy field around it that is very beneficial to all life, plant, animal or human;
(v) the plate raises personal energy levels and protects against EMR in the environment and from EMR producing equipment, such as computers, televisions, mobile phones;
(c) in relation to the product known and described as the Purple Harmony disk that:
(i) wearing the purple harmony disk over the thymus gland directly helps to strengthen the immune system;
(ii) the disk enables the human body to cope better with the electrified and toxic environment;
(iii) the disk will increase a person's general health;
(iv) the disk will cause aches, pains, niggly coughs and colds to be less severe;
(v) the disk can be used to treat cuts, burns, aches and pains, water, foods and all the things that Purple Harmony plates can be used for;
(vi) the disk reduces the effects of harmful electromagnetic and other frequencies on human bodies;
(vii) the disk will decrease stress levels on the human body and strengthen the immune system;
(viii) the disk will negate the effects of re-radiated and electromagnetic frequencies;
(d) in relation to the product known and described as the Purple Harmony angel that:
(i) the angel will strengthen the immune system;
(ii) the angel can be used to treat cuts, burns, aches and pains, water, goods and all the things that Purple Harmony plates can be used for;
(e) in relation to the product known and described as the Purple Harmony mobile phone disk that placing a mobile phone disk to the area nearest to the antenna will reduce all uncomfortable sensations from using a mobile phone, such as 'hot spots', jaw and/or teeth problems, headaches and/or earaches, tinnitus or nausea;
(f) in relation to the product known and described as the Purple Harmony green thumb that:
(i) holding one or two green thumbs for twenty minutes a day will energise your body system;
(ii) the green thumb will re-oxygenate water, giving it more life force energy to benefit all living organisms;
(iii) use of the green thumb will result in plants growing with vim and vigour;
(iv) by placing the green thumbs in a bucket or jug of water, the green thumbs will treat water, whereby the water will taste, smell and feel, and be so much better for the user;
(v) attaching three green thumbs to any power cord will treat the electromagnetic frequencies emanating from gadgets and result in reduced stress levels;
(g) that the product known and described as the fuel ionizer system:
(i) ionizes the fuel cars use;
(ii) creates more power from complete burning of fuel;
(iii) produces cleaner engines and injectors;
(iv) reduces emissions;
(v) gives better mileage and reduces fuel consumption;
(vi) enables quicker starting of engines;
(vii) will lead to less shifting of gears with heavy loads;
(viii) produces useable energy;
(h) that the products known and described as the Hunza water ionizer system/Hunza living-energy water system - gold Hunza and blue Hunza products:
(i) re-oxygenate water;
(ii) energise water;
(iii) improve water quality;
(iv) free water of odour and chlorine;
and that the Blue Hunza will last indefinitely;
(i) that the product known and described as the Hunza swimming pool ionizer:
(i) has similar beneficial effects to the Hunza water ionizer, however, it is much more powerful;
(ii) reduces the use of chemicals required to maintain correct pool pH;
(iii) decreases the effect of those chemicals on hair, skin and eyes;
(j) that the product known and described as the Purple Harmony fridge freshener:
(i) lowers the refrigerator temperature;
(ii) makes food last between two to four times longer than usual;
(iii) removes odours;
(iv) reduces energy costs;
(v) reduces the running costs of a refrigerator;
(vi) saves energy;
(vii) is a long lasting product;
(viii) eliminates the effects of EMR from computers;
(ix) reduces stress and fatigue;
2. The second and third respondents be restrained from being in any way directly or indirectly, knowingly concerned in, or party to, publishing, distributing, transmitting, displaying or broadcasting material containing any of the representations referred to in paragraph 1 of this order.
3. The respondents, within fourteen days of the date of this order, at their own expense, send or cause to be sent by mail a letter to all customers who have purchased any of the products from the first respondent in the form set out in Schedule A to this order.
4. The respondents, within fourteen days of the date of this order, place on the Internet website at 'www.purple-plates.com', and maintain for a period of three months thereafter, an automatically generated active pop-up window or message box that complies with the contents, requirements and format described in Schedule B to this order.
5. The first respondent refund in full on request by a customer all monies paid by customers for the supply or possible supply of the products.
6. The respondents file and serve on the applicant by 31 August 2001 an affidavit verifying that they have carried out their obligations under pars 3 and 4 of this order.
7. The respondents pay the applicant's costs of the application and the applicant's costs of giving notice under s 78B of the Judiciary Act 1903 (Cth)."
("the 6 August order").
Schedule B to the order was in the following terms:
"The first, second and third respondents will cause to be published on the website at www.purple‑plates.com a corrective statement in the following form:
1. The corrective statement will be required to be legible and the type will be at least 12 point, Times New Roman font and right and left justified;
2. The corrective statement will have a bold type prominent heading at least 18 point;
3. The corrective statement will contain the Purple Harmony Plates company logo at the top.
4. The corrective statement will appear in an automatically generated active pop‑up window or message box, whereby a member of the public is required to interact with the window or message box to close it;
5. The corrective statement should not be less than 50% of the size of the computer screen; and
6. The corrective statement should appear immediately upon access by a consumer to the homepage and the page containing the order form on the first respondent's website."
4 A copy of the 6 August order was served on each of the respondents. Each of them failed to comply with the 6 August order. Relevantly, for present purposes:
· they have failed to send the letter to customers referred to in par 3 of the 6 August order;
· they have failed to place and maintain an automatically generated active pop‑up window or message box on the internet website www.purple‑plates.com in accordance with par 4 of the 6 August order;
· they have failed to file and serve an affidavit verifying that they have carried out their obligations under pars 3 and 4 of the 6 August order.
5 Further, for a period of time up to a date in September 2001 the company continued to make representations substantially to the same effect as those set out in par 1 of the 6 August order. Sometime prior to 24 September 2001 a link to a new internet website at www.purple‑harmony‑plates.com was added to the website. The contents of each website was identical in that representations in contravention of par 1 of the 6 August order were displayed on both websites.
6 On 27 November 2001 access by an officer of the Commission to each of the websites disclosed that the contents of the websites (including the representations which had previously been made in contravention of par 1 of the 6 August order) had been removed, except for the statement "Purple Harmony Plates International - Due to circumstances beyond our control this site will be closed until further notice." On 30 November 2001 a search conducted by an officer of the Commission in respect of the two websites showed that the front pages of both websites were last modified on 24 October 2001.
7 On 10 October 2001 the Commission filed a motion charging the respondents with contempt of court, being their failure to comply with the 6 August order. On 9 April 2002 I found that the respondents were guilty of contempt of court and made the following orders:
"3. The first respondent pay a fine of $20,000 to the District Registrar of the Court within sixty days of the date of this order.
4. The second respondent pay a fine of $10,000 to the District Registrar of the Court within sixty days of the date of this order.
5. The third respondent pay a fine of $10,000 to the District Registrar of the Court within sixty days of the date of this order.
6. The respondents pay the applicant's costs of and incidental to the motion filed 10 October 2001.
7. Liberty is reserved to all parties to apply for such further or other orders as they may think fit."
("the 9 April order").
8 Copies of the 9 April order were served on each of the respondents. The 9 April order was served on the company at its registered office situated at 20 Davis Street, Kew.
9 On 24 July 2002 the solicitor for the Commission wrote to the respondents notifying each of them that they had failed to comply with the 6 August order and the 9 April order. The solicitor informed each of the respondents that, notwithstanding the making of the 9 April order, they were still obliged to comply with the terms of the 6 August order. The letters were delivered by courier and although Mr Lyster accepted the letter addressed to him, he refused to accept the letter addressed to the company. Accordingly the letter was left at the business address of the company at 20 Davis Street, Kew. On 16 August 2002 that letter was returned to the Commission's solicitor marked "return to sender".
10 On 16 August 2002 the Commission conducted a search of the records of the company maintained by the Australian Securities and Investments Commission ("ASIC") which search disclosed that the company had been deregistered on 18 February 2002 by ASIC pursuant to s 601AB of the Corporations Act 2001 (Cth) ("Corporations Act").
11 On 19 August 2002 the Commission conducted a search in respect of the domain name www.purple‑plates.com which disclosed that the registrar of the domain name was Network Solutions Inc, that the registrant of the domain name was the company and that the administrative contact in respect of the domain name was Mr Lyster.
12 The matter was brought on for mention before me on 20 August 2002 as I was concerned to ascertain what was the then current position as to compliance with the earlier orders I had made. By that stage the Commission had ascertained that the company had been deregistered. A consequence of that deregistration was that all the property of the company vested in ASIC pursuant to s 601AD of the Corporations Act. At the hearing on 20 August 2002 counsel for the Commission indicated that the Commission's view was that, as the company's licence to use its website vested in ASIC, ASIC had the power conferred by s 601AF of the Corporations Act to act on behalf of the company if it was satisfied that the company would be bound to do an act if the company still existed. The Commission's view at that time was that it was open to ASIC to comply with the 6 August order and establish a pop‑up window on the internet website displaying the corrective advertisement. The Commission foreshadowed that it would seek orders, if necessary, against ASIC for ASIC to carry out the acts ordered on 6 August 2001 and that application would accordingly be made for such orders pursuant to O 37 r3 of the Federal Court Rules. The Commission therefore proposed to put ASIC on notice that it would make an application by way of notice of motion if ASIC was not willing to carry out the orders which the company was bound to perform.
13 In relation to the failure of Mr Lyster and Ms Glover to comply with the 9 April order for the payment of fines, the Commission indicated that it would ascertain the position of the Commonwealth Attorney‑General as to whether he proposed to take proceedings to enforce the order for payment of those fines.
14 On that occasion, as at earlier hearings, Mr Lyster and Ms Glover contended they were not subject to the jurisdiction of the Court. I found in my reasons of 6 August 2001 that they were subject to the jurisdiction of the Court. The 6 August judgment and order has not been the subject of any appeal.
15 The matter was adjourned for further mention to 24 September 2002.
16 On 23 September 2002 the Commission filed a motion seeking orders that:
(a) the company take all necessary steps to transfer the registration of the domain name in respect of the website www.purple‑plates.com to the Commission;
(b) Mr Lyster remove his name as administrative contact for the domain name and replace it with the name of a specified solicitor of the Commission;
(c) Mr Lyster file and serve an affidavit verifying that the company had taken all necessary steps to transfer the registration of the domain name in respect of the website www.purple‑plates.com to the Commission within seven days of the domain name being transferred;
(d) in the event that the company did not transfer the domain name, the Commission be authorised pursuant to O 37 r3 of the Federal Court Rules to take all necessary steps to have the domain name transferred to it;
(e) in the event that Mr Lyster did not file and serve an affidavit verifying that the company had taken all necessary steps to transfer the registration of the domain name in respect of the website www.purple‑plates.com to the Commission within the period of time stipulated, the Commission be authorised pursuant to O 37 r3 of the Federal Court Rules to take all necessary steps to have Mr Lyster's name removed as the administrative contact of the domain name and replaced by that of the specified solicitor for the Commission.
(f) the Commission be authorised to place on the worldwide web at a site accessed by the domain name a corrective advertisement in terms of par 4 of the 6 August order.
17 At the further mention on 24 September 2002 evidence was led by the Commission in respect of the following matters:
· the registrar for the domain name was now Verisign Inc;
· the Commission had applied to ASIC to reinstate administratively the company to enable the Court to make orders in relation to it;
· ASIC had reinstated the company as a registered corporation on the basis that the Commission would notify ASIC when it no longer had any cause to require the company to be registered;
· the Commission had discovered on 23 September 2002 that when an officer attempted to access the website www.purple‑plates.com, the computer displayed a message which stated "The required URL could not be retrieved";
· the Commission had received a letter from the Commonwealth Attorney‑General stating that he did not propose to become involved in the proceeding and that the matter of the enforcement of the order for the payment of the fines was a matter for the Commission;
18 At the mention Mr Lyster and Ms Glover agreed, in response to my enquiry, to file an affidavit verifying their assets.
19 On 24 September 2002 I made the following orders:
(1) within 21 days Mr Lyster and Ms Glover file and serve an affidavit verifying what assets and property each of them had in their possession, power, custody or control;
(2) within 21 days the Commission file and serve notice of any application it wished to make or orders it submitted that the Court should make consequent upon the failure of the respondents to comply with the earlier orders;
(3) the Commission's notice of motion filed on 23 September 2002 be adjourned for further hearing.
20 On 15 October 2002 Ms Glover filed an affidavit in which she set out the following matters and circumstances:
· she had resigned as a director of the company on 14 October 2002;
· on 6 August 2001 her position with the company was to carry out administrative functions and she had nothing to do with the internet website of the company, nor did she have any authority to operate the bank account of the company;
· since 6 August 2001 she had not been party to any publishing, distributing, transmitting, displaying or broadcasting of material referred to in par 1 of the 6 August order and had no financial resources which would enable her to comply with par 5 of the 9 April order;
· she wished to comply with any orders made by the Court to the extent she was able to do so;
· her assets comprised clothing, personal effects, several items of furniture of little value and a thirteen year old car. She had debts of approximately $6,000 and was employed as a clerical assistant earning less than $500 net per week.
21 Mr Lyster did not comply with the direction for the filing of an affidavit setting out the assets and property in his possession, power, custody or control.
22 On 16 October 2002 the Commission filed a notice of motion which, in general terms, sought the following relief:
(a) an order that the company take all necessary steps as directed by the Commission to transfer the registration of the domain name in respect of the website www.purple‑plates.com to the Commission;
(b) in the event that the company did not so transfer the domain name, an order that the Commission be authorised pursuant to O 37 r3 of the Federal Court Rules to take all necessary steps to have the domain name transferred to it;
(c) in the event the domain name was transferred to the Commission, an order that the Commission be authorised to place on the worldwide web at a site accessed via the domain name a corrective advertisement that complied with the content requirements and format described in the schedule to the motion;
(d) an order that Mr Lyster be imprisoned for two months in respect of the contempts of court constituted by wilfully refusing to pay the fine of $10,000 provided for in the 9 April order and breaching pars 2 and 4 of the 6 August order;
(e) a warrant for the committal of Mr Lyster to prison for a period of two months issue for his contempts of court;
(f) an order that Mr Lyster take all necessary steps, as directed by the Commission, to secure the transfer of the registration of the domain name www.purple-plates.com from the company to the Commission;
(g) an order that Ms Glover be imprisoned for a period of two months in respect of her contempts of court constituted by wilfully refusing to pay the fine of $10,000 ordered on 9 April 2002 and breaching pars 2 and 4 of the 6 August order;
(h) a warrant for the committal of Ms Glover to prison for two months issue for her contempts of court but that the warrant lie in the Registry and not be executed provided that she took all necessary steps as directed by the Commission to secure the transfer of the registration of the domain name from the company to the Commission and refrain from contravening any of the provisions of Pt V of the Trade PracticesAct or being knowingly involved in such contravention by anyone else for a period of two years;
(i) the respondents pay any expenses incurred by the Commission in implementing the orders and pay its costs.
23 In accordance with O 40 r6 of the Federal Court Rules, the Commission filed a statement of charge in respect of Mr Lyster and Ms Glover specifying the contempt alleged against each of them as being:
(a) disobedience and continued disobedience of the 6 August order;
(b) disobedience of the 9 April order in respect of their refusal or neglect to pay the fine of $10,000.