Australian Competition & Consumer Commission v Purple Harmony Plates Pty Limited

REASONS FOR JUDGMENT 1 The applicant ("the Commission") has moved the Court by notice of motion filed on 17 December 2002 for an order that the warrant that was ordered to be issued, and to lie in the Registry of the Court, for the committal of the second respondent to prison for a period of one month, in accordance with the order of the Court made on 29 November 2002, be executed. 2 On 29 November 2002 I made, inter alia, the following orders: "1. The first respondent, Purple Harmony Plates Pty Limited, transfer the registration of the domain name in respect of the website ('the domain name') to the applicant, AustralianCompetitionandConsumerCommission('theCommission'),within fourteen days of the date of this order. 2. The second respondent, Neal Arthur Lyster, take all such steps, perform all such acts and sign all such documents as may be required of him by the Commission within fourteen days of the date of this order to effect the transfer of the registration of the domain name to the Commission. … 7. The second respondent be imprisoned for a period of one month in respect of his contempt of court in breaching par 4 of the order of the Court made on 6 August 2001 by failing to place on the website within fourteen days of the date of the said order, or at all, an automatically generated active pop‑up window or message box that complied with the contents, requirements and format described in Schedule B to the said order. … 9. A warrant for the second respondent's committal to prison for a period of one month issue. 10. The said warrant lie in the Registry with the intent that it not be executed provided that the second respondent: (a) takes all such steps, performs all such acts and signs all such documents as may be required of him by the Commission within fourteen days of the date of this order to effect the transfer of the domain name to the Commission; (b) refrainsfortwoyearsfromthedateofthisorderfrom publishing,distributing, transmitting, displaying or broadcasting material which contains representations in the form or to the effect of the representations set out in par 1 of the order of the Court made on 6 August 2001 and also refrains for two years from the date of this order from being knowingly involved in the publishing,distributing,transmitting,displayingorbroadcastingof material which contains such representations by any other person; and (c) files in the Court and serves on the Commission within seven days of the date of this order an affidavit sworn or affirmed by him verifying the assets he has in his possession, power, custody or control." 3 On 10 December 2002 the second respondent filed in the Court an affidavit sworn on 9 December 2002. The affidavit was not in compliance with par 10(c) of the order of 29 November 2002 and did not in any way verify the assets the second respondent had in his possession, power, custody or control. Further, although the affidavit was discursive, rambling and difficult to comprehend it appears that, in substance, the second respondent denied the authority and jurisdiction of the Court in this matter to make orders affecting him. 4 On 12 December 2002 the solicitor for the Commission delivered to each of the second respondent and the third respondent by courier an authority and covering letter in which each of them was requested to sign the authority for the purpose of assisting in effecting the transfer of the registration of the domain name in respect of the website "" ("the domain name") to the Commission. The letter also requested the second and third respondents to hand the signed authority to the courier. The third respondent signed the authority on 12 December 2002 and returned it to the courier who had delivered it to her. The second respondent told the courier who had delivered the authority to him that he did not want to sign the authority at that time but would read through it and provide a response to the solicitor the following day. The second respondent did not provide a response to the solicitor on the following day and has not provided any response on any later date. He claims that the authority was taken from his home in an incident which he says occurred on 15 December 2002. He did not sign the authority. 5 The authority given to the second respondent to sign was in terms that he requested VeriSign Inc, the registrar of the top level domain name ".com", immediately to transfer the domain name from the first respondent, Purple Harmony Plates Pty Limited, to the Commission. The authority also provided for him to advise as to the password, authorisation question and authorisation answer in relation to the domain name. 6 On 13 December 2002 VeriSign Inc agreed to transfer the registration of the domain name to the Commission without the need for any document to be signed by either the second or third respondent. The domain name was transferred to the Commission on 16 December 2002 and a notice in accordance with Sch A to the order of 29 November 2002 was placed on the domain name website on or shortly after 31 December 2002. 7 On 17 December 2002 an investigations officer with the Commission undertook an investigation of the domain names "" and "". The registrant of "" is shown by a relevant internet search as being "H.R.H Prince James Renton". The registrant of the domain name "" is shown by a relevant internet search as being "His Excellency, Governor, Government of Commonwealth of Caledonia Australis, 20 Davis Street, Principality of Caledonia, Kew, 3101, Australia". This is the same title and address that has been used by the second respondent in documents filed with the Court. The relevant internet search of that domain name also discloses that the administrative contact and technical contact for the domain name is the second respondent of the same address. The domain name "" links directly to the same information that can be accessed from the internet by entering the domain name "" into the Universal Resource Locator field on the Windows Explorer browser. In effect, it is an alternative domain name that enables access to the same internet protocol address. 8 The investigations officer with the Commission downloaded onto a CD‑ROM disk the "" website and links to associated websites on the internet. There is a link on the "" website which can be accessed by clicking the computer screen cursor on the logo containing the letters "PHP", which accesses various pages offering for sale products previously sold by Purple Harmony Plates Pty Limited. 9 On 23 December 2002 the second respondent filed a statutory declaration in the Court in which he set out details of an incident which he claimed had occurred on 15 December 2002 at 20 Davis Street, Kew when persons entered the premises and, according to the second respondent, stole a number of items. 10 The Commission's motion came on for hearing before Weinberg J on 23 December 2002. His Honour directed that the second respondent undergo an assessment at Forensicare, in Brunswick on or before 28 January 2003 and that a pre‑sentence report regarding the second respondent be provided by Forensicare to the Court on or before 4 February 2003. An appointment was made by the District Registrar of the Court for the second respondent to attend Forensicare at 10.00am on 23 January 2003. The District Registrar informed the second respondent of the date and time of the appointment but he failed to attend at that time on that date. 11 I am satisfied that each of the matters provided for in par 10(a) and 10(c) of the order I made on 29 November 2002 have not been satisfied and that the second respondent did not undertake the obligations he was required to undertake in accordance with those paragraphs. I am also satisfied that the second respondent has not complied with par 10(b) of that order. 12 When the motion was called on for hearing the second respondent filed with the Court three statutory declarations, the substance of which was that he did not consent to the jurisdiction or authority of the Court. He claimed that the Court was an Australian company and had infringed s 60 of the Trade Practices Act 1974 (Cth) ("the Act"). That section provides: "A corporation shall not use physical force or undue harassment or coercion in connection with the supply or possible supply of goods or services to a consumer or the payment for goods or services by a consumer." I have already determined in previous judgments that the Court has jurisdiction in this proceeding and has jurisdiction over the respondents in relation to the matters alleged against them. I reject the proposition that the Federal Court of Australia is an Australian company and I reject the submission that the Court is in any way subject to s 60 of the Act or that the Court has in any way infringed s 60 of the Act in this proceeding. Those submissions are fanciful. 13 I gave the second respondent the opportunity to respond to the matters which were put against him. When I asked him to respond to the fact that he had not attended Forensicare for the appointment made for his assessment at 10.00am on 23 January 2003, his response was that he had "checked up on what was happening, and looked at a few of the people that had been detained in the Austin Hospital owing to the assessment, and I thought it was better not to go". 14 When I put to him the submission that he had not complied with par 10(a) of the order of 29 November 2002 by not signing the authority which had been delivered to him on 12 December 2002 and which he had been requested to sign, his response was that there was no point in signing the authority as he was told on Friday (20 December 2002) that the registration of the domain name had been transferred to the Commission. He also claimed that the authority which he was asked to sign had been taken in the incident which had occurred at his home on 15 December 2002. I have considerable doubts about the veracity of his claims as to what occurred on 15 December 2002 and whether the authority which he had been asked to sign was in fact taken. Nevertheless, the fact remains that the authority was delivered to him by the courier and he was requested to sign it on 12 December 2002. He failed to sign it on that day and failed to sign it at least on the two subsequent days. The point remains - the second respondent failed to comply with par 10(a) of the order of 29 November 2002 when he failed to sign the document as required of him by the Commission. 15 When I put to the second respondent that he had failed to file and serve an affidavit verifying the assets he had in his possession, power, custody or control he said that his only asset was "me" and that he had said that earlier. The fact remains that he failed to comply with par 10(c) of the order on 29 November 2002 as he was required to do by failing to provide the required verification. 16 I put to the second respondent that the evidence disclosed that he was in breach of par 10(b) of the order of 29 November 2002 because he had been knowingly involved in the publishing, distributing, transmitting, displaying and broadcasting of material which contained representations in the form or to the effect of the representations set out in par 1 of the order of the Court made on 6 August 2001 in the respects outlined by counsel for the Commission. He said that he disagreed and that the website was the manufacturer's website and that it was not his website. 17 Iamsatisfiedthatthewebsite" statements or representations which are to the effect of a number of the representations set out in par 1 of the order of the Court made on 6 August 2001. I refer to the following representations: · "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; … (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;" The representations are reproduced in effect on the website under the heading "Purple Harmony Disks" in the following terms: "Many computer operators around the world wear a large disk to help protect them from the growing concern over electromagnetic radiation from computer monitors. … Positive Energy Disks attached to your pet's collar will let him/her enjoy the same positive energy you enjoy with your Positive Energy Plates." · "(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;" I am satisfied that this representation is reproduced in effect on the same website under the heading "Purple Harmony Disks" in the following terms: "Of particular concern to mobile/cellular phone users is the affect of radiation on brain tissues. Even particularly insensitive individuals have reported 'hot spots' or headaches when mobile phones are used for more than a couple of minutes, and news media reports indicate the scientific jury is still out about the degree of harm that could be involved. However, users of mobiles report a marked reduction of these unpleasant effects when a Disk or Angel is attached to the back or side of the phone with an adhesive or with tape. (As close to the antenna as possible.)" · "(g) that the product known and described as the fuel ionizer system: - (i) … (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; …" I am satisfied that these representations are reproduced in effect on the same website under the heading "Fuel Ionizers" in the following terms: "… converting the 30% of neutral ions within petroleum, for example, produces charged ion pairs that can become usable energy. Applications include all types of gasoline, diesel, and LPG equipment and every type of oil‑burning furnace. Among the astonishing results claimed for the ionizer are more power, cleaner engines and injectors, reduced emissions, better mileage, and easier starting. …" · "(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; … (vi) saves energy; … (viii) eliminates the effects of EMR from computers; …" I am satisfied that these representations are reproduced in effect on the same website under the heading "Fridge Freshener (Computer Guard)": "In the majority of refrigerators, the temperature will drop several degrees after a period of time. If this happens, readjust the thermostat temperature control so that your foods to not freeze. Less electrical power is required to maintain the proper temperature (2 to 4 degrees Celsius). The efficiency of these units increases with time and you will gradually notice that foods remain fresh and useable longer than normal. This will vary depending on how old the product was before it was placed in your refrigerator. Uncooked meats, fish and foul [sic] remain fresh only slightly longer than normal, but after they have been cooked, they remain fresh and useable for much longer periods of time. Energy is continuously emitted from these units in which the atoms of the crystal materials have been reoriented into what might considered a 'single crystal'. They have zero resistance with higher energies and create what might be considered a 'bubble' of positive energy. This field of energy has the ability to slow deterioration of all types of food without affecting the taste or flavor." 18 I am satisfied that these representations are reproduced in effect on the website that can be accessed through the website of which the second respondent is in control as the registrant, administrative contact and technical contact. Although the registrant is disclosed as "His Excellency, Governor, Government of Commonwealth of Caledonia Australis, 20 Davis Street, Principality of Caledonia, Kew, 3101, Australia", I infer that the registrant is the second respondent as he uses that title and description and lives at that address. 19 Having regard to the identification of the parties involved with the two websites and the connection between them, I am satisfied that the second respondent has been knowingly concerned in the publishing, distributing, transmitting, displaying and broadcasting of material which contains representations to the effect of the representations set out in par 1 of the order of the Court made on 6 August 2001. The connection between the two websites is such that the representations can be accessed from the internet by entering the domain name "" into the Universal Resource Locator field on the Windows Explorer browser. 20 When I asked the second respondent whether he had anything further to say as to whether I should order that the warrant for his committal be executed forthwith, his response was "I don't believe a judgment can be made lawfully in this Court … And I do not consent to it". As I have noted earlier in these reasons for judgment and in earlier judgments, I am satisfied that the Court has jurisdiction over the matters which have been brought before the Court by the Commission and I am satisfied that the Court has jurisdiction to make the orders, not only which have been sought earlier by the Commission, but also those which have been sought in the motion presently before me. 21 The second respondent has been given every opportunity by orders made earlier by myself and by Weinberg J to avoid the situation occurring of the Court making an order for the execution of the warrant for his committal. He has failed to take advantage of those opportunities and I am satisfied on the material before me that the warrant for his committal which was the subject of pars 9 and 10 of the order of 29 November 2002 should be executed forthwith. I so order. I certify that the preceding twenty‑one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg.