Bailey v Veda Advantage Information Services and Solutions Limited

Federal Court of Australia|2008-07-01|Before: Lindgren J

These proceedings are brought by the applicant pursuant to Order 73 of Federal Court Rules of the Federal Court Act 1979 (Cth) on his own behalf and on behalf of all Group Members (New South Wales) with regard to describing them as having had a "Payment Default" which at all material times was recorded as personal information about the applicant and each group member by the respondent in the respondent's credit reports. The applicant relies on the following facts and assertions:

The Parties: Applicant and Group Members 2. The applicant and each of the other group members (hereinafter referred to collectively as "group members") are each and all natural persons who satisfy all of the following six criteria (a) to (f) inclusive ("group membership criteria"): (a) The applicant and each other group member was ordinarily resident in the State of New South Wales at the date of the respondent's assertion (as defined in para (d) below) in a credit report or reports by Baycorp Advantage Business Information Services Limited or its successor (the respondent) relating to the applicant or other group member respectively; Applicant's particulars [an address in New South Wales appeared] (b) During the three year period that commenced on 12 March 2004 up until these proceedings were instituted on 12 March 2007 ('the relevant period'), the applicant and each other group member respectively was the subject of at least one individual credit report referring to him or her respectively in an "Individual Consumer Credit Report" and/or in an "Individual Consumer and Commercial Credit Report" ("credit report"); (c) Each separate credit report was prepared by Baycorp Advantage Business Information Services Limited or its successor (the respondent); each such credit report was supplied by Baycorp Advantage Information Services Limited or its successor (the respondent) to a credit provider or lender who requested such a report from Baycorp Advantage Information Services Limited or its successor (the respondent) during the relevant period about any identified consumer (ie the applicant or other respective group member); Applicant's particulars The applicant was the subject of the credit report by the respondent referred to in Schedule 'A' to this pleading. (d) Each such credit report concerned the alleged credit worthiness of one consumer only (ie the applicant or other respective group member respectively), although the same consumer might be the subject of multiple separate credit reports prepared by the respondent about the same consumer. In each such credit report, Baycorp Advantage Business Information Services Limited or its successor (the respondent) supplied information, data and made representations with regard to aspects of the alleged credit history and credit-worthiness of one consumer (ie the applicant or other respective group member respectively) about whom the personal information in that report related. The matter supplied by Baycorp Advantage Business Information Services Limited or its successor (the respondent) in each such credit report included information, data and representations in or to the effect that the respective individual consumer named in that credit report had previously breached his or her credit repayment obligations to a previous lender or lenders in a manner known as 'Payment default' (herein described as 'the respondent's assertion' in relation to the applicant and each other Group Member). "Payment Default" meant that: the account must be 60 days or more overdue; and the borrower/consumer (ie the applicant or other respective group member) must have been sent a written notice by the credit provider or that credit provider's assignee of the debt advising the borrower/consumer of the overdue payment and requesting payment of the amount outstanding; and where $100 or more was owed; and for which the credit provider or its assignee had commenced collection action against the respective consumer before listing the alleged payment default with Baycorp Advantage Business Information Services Limited or its successor (the respondent). Applicant's particulars The applicant's alleged payment default was referred to by the respondent in the credit report supplied by Baycorp Advantage Business Information Services Limited or by its successor (the respondent) to the credit providers who or which requested that credit report in the manner referred to in Schedule 'A'. (e) The applicant and each other group member respectively had not, in fact, breached his or her respective credit obligations to a previous lender or lenders in a manner described in or to the effect of the respondent's assertion. Applicant's particulars The applicant's conduct as at the date of the said disclosure of the respondent's assertion in the said credit report was not such as to be described in fact as having a "Payment Default". The applicant was not in breach of his credit obligations in the manner described in Schedule 'A' below to the pleading. (f) The applicant and each other group member suffered respective loss or damage by Baycorp Advantage Business Information Services Limited or its successor (the respondent) having supplied to the membership subscribers of Baycorp Advantage Business Information Services Limited or its successor (the respondent) one or more credit reports each containing information, data and representations in or to the effect of the respondent's assertion namely: Injury and/or harm to the applicant or other respective group member's reputation in the sector of his or her credit worthiness, and hurt to his or her feelings, together with- Either- (i) refusal of credit and/or an increase in the cost to each such consumer of seeking or obtaining credit; And/or- (ii) loss of opportunity for investment or purchase by reason of the matters referred to in (i). And/or- (iii) Loss of chance of obtaining credit on more favourable terms and conditions. Applicant's particulars of loss and damage The applicant will supply, prior to hearing and in accordance with the orders of this Honourable Court, full details of his claim for loss and damage. Including the circumstances in which the loss or damage arose.

The Respondent's Business 3. The respondent is and was at all material times a trading and/or financial corporation incorporated under the Corporations Act 2001 (Cth). The respondent is the legal successor of Baycorp Advantage Business Information Services Limited (hereinafter 'Baycorp') which was at all material times a trading corporation incorporated under the Corporations Act 2001 (Cth). The respondent acquired Baycorp's rights and liabilities. Hereinafter the word 'respondent' encompasses the activities, rights and liabilities of Baycorp and/or its successor, the respondent. 4. The respondent at all material times owned, controlled, managed, offered, conducted, supplied and promoted for its commercial interests a range of integrated and overlapping business activities in and throughout Australia in trade or commerce. These included, amongst other activities: (a) The respondent owned, controlled, managed, offered and conducted a membership system for lenders and credit providers (hereinafter 'the respondent's membership system'); and (b) The respondent carried out and conducted the business activities of a 'credit reporting agency' and a 'credit reporting business' within the meaning of the Privacy Act 1988 (Cth). The respondent's credit reports at all material times were obliged to comply with the requirements of the Privacy Act 1988 (Cth) and the Credit Reporting Code of Conduct issued pursuant to s 18 of the latter Act. 5. Membership applications by lenders and credit providers to participate in the respondent's membership system were lodged by such lenders and credit providers with the respondent, and were subject to the respondent's approval and agreement. Each lender and credit provider whom the respondent agreed to accept as a member paid the respondent various fees: (a) an initial base joining fee (paid in the first year of membership only); and also (b) a base subscription fee (charged annually, which was related to the volume of services requested by and supplied by the respondent to such member, so that higher volume attracted a higher annual charge); and also (c) a monthly account service fee (which was to be waived by the respondent if the other fees were paid by direct debits); together with (d) additional specific fees incurred on each occasion that a member ordered various membership products or membership services from the respondent's during the membership period. 6. Members of the respondent's membership system were eligible to request the respondent to supply any such member with any one or more of a number of financial products and services, which were included in a range (or portfolio) of products and services, which the respondent made available for supply to members in exchange for additional fees charged by the respondent to the member making such requests. The said products and services were promoted and supplied by the respondent to its members and to prospective members as membership services to facilitate the ability of any such member, or prospective member, to improve the respective member's profitability and business efficiency, by facilitating the ability of any such member or prospective member: (a) to assess the credit worthiness of a member's own consumers (including, inter alia, the applicant or other respective group member), and (b) to assist any such member to recover debts and to collect disputed debts from a member's own consumers efficiently and cost effectively. 7. The membership products and services that were supplied by the respondent to any member included, inter alia, in exchange for specific fees charged by the respondent to the member, the supply by the respondent to such a member of credit reports which had been requested by any such member (with the permission of the member's own consumer), and were prepared by the respondent with regard to the respective consumer's credit worthiness. Such credit reports were provided by the respondent to its members as part of the portfolio of membership products and services available to the respondent's members. Each separate credit report was prepared by the respondent, and in each such credit report the respondent supplied information, data and made representations with regard to aspects of the alleged credit history and credit-worthiness of one consumer only (including, inter alia, the applicant or other respective group member) about whom the personal information in that report related; each separate credit report concerned the alleged credit worthiness of one consumer only (including, inter alia, the applicant or other respective group member), although the same consumer might be the subject of multiple separate credit reports prepared by the respondent about the same consumer. 8. In the course of carrying on its membership system business in the relevant period, the respondent promoted to its members the alleged benefits to such members of ordering additional membership products and services for supply by the respondent to such members, in exchange for additional fees charged by the respondent to such members, to enhance the utility of any credit reports supplied by the respondent to a member that related to a member's own consumers (including, inter alia, the applicant and or each other respective group member). The additional products and services so promoted by the respondent, for supply or possible supply by the respondent to the respondent's members, included, inter alia, so-called "Risk OnLine products and services" which included, inter alia, a 'bureau score' which the respondent prepared from its accumulated data bases. The respondent promoted the said 'Risk OnLine' products and services to members by the respondent's conduct of representing to members that by ordering "Risk OnLine" products and services from the respondent for supply by the respondent, that would enable the requesting members: (a) to turn data into information, and (b) could also provide members with powerful risk management solutions that could improve the profitability of a member's credit decisions. 9. The respondent conducted its membership system by encouraging the respondent's members, during the relevant period, to use their membership of the respondent's membership system as a method of exerting economic pressure on any member's own consumers to repay alleged debts which any such member claimed was or were owed by a respective consumer to the member. The respondent promoted this product or service as a benefit of membership, which members could use to threaten a member's own consumers with the risk of adverse listing in the respondent's future credit reports about that individual consumer if the consumer did not pay the alleged debt which the member claimed was owed to the member by the consumer. This membership service, which the respondent promoted to its members, enabled the respondent's members to place economic pressure on a member's own consumers to repay alleged debts, or disputed debts, more quickly or fully to avoid the risk of adverse listing, even if the alleged debt was in dispute between a member and the member's own consumer. The respondent also made available to its members, and promoted, additional services of debt recovery and debt collection for supply or possible supply by the respondent to any member, on request by such member, in the event that a member's own consumers either did not pay alleged debts, or disputed debts. that were allegedly owed to the member by the member's own consumers. 10. The respondent also conducted its business by engaging in the following practices at all material times: (a) Collecting information on the credit status of 70,000 Australian and New Zealand consumers and businesses that applied for credit every day. The respondent used that information for the supply or possible supply and promotion and use of the respondent's own membership products and services, namely, the respondent's credit reports and other membership products and membership services for the respondent's membership subscribers and prospective members; (b) granting each of the respondent's membership subscribers access to the respondent's "Business Information Service" products and services, including internet databases which contained "personal information" and "credit information files" within the meaning of the Privacy Act 1988 (Cth) about individuals and companies including the applicant and the other group members. (c) allocating to each membership subscriber and to each subscriber's nominated servants and agents, a unique access code, whereby each such subscriber (and that subscriber's nominated servants or agents) were able to gain access to the respondent's credit reports about individuals and companies including the applicant and each of the other respective group members. (d) providing to each membership subscriber with hard copies of, or electronic access to, a copy of the respondent's "Internet Service Guide", also known as "User Guide" as current and updated from time to time, in which the respondent gave instructions to each subscriber (and to that subscriber's nominated servants or agents) with regard to how to access the respondent's Business Information Services, and how to interpret the respondent's credit information files and credit reports, and how that subscriber (personally or by its nominated servants or agents) could add personal information to the respondent's credit information files relating to the alleged credit worthiness of the applicant and each of the other group members. The said User Guide was one of the respondent's own membership products or services for each subscriber, to enable subscribers to use the respondent's own credit reports to contribute to each subscriber's profitability and to help each subscriber reduce the level of bad debt write-offs. (e) The means by which- (i) the respondent supplied to any membership subscriber the personal information, including credit worthiness information, relating to the applicant or relating to any other respective group member, and (ii) any of the respondent's membership subscribers gained access to personal information, including credit worthiness information, relating to the applicant or relating to any other respective group member was that any such membership subscriber (personally or by its nominated servants or agents) requested a credit report from the respondent, and the respondent provided its own credit report to the subscriber which included a report that included personal information, including credit information, about the person who was being inquired about (viz, applicant or any other respective group member). Particulars Privacy Act 1988 (Cth), s 18K(1)(a) & s 6. (f) The respondent authorised and permitted and enabled each of its membership subscribers (and that subscriber's nominated servants or agents) to add or update personal information, including credit worthiness information, to the respondent's credit information files, relating to the applicant or to any other respective group member, without any checking or verification by the respondent as to the truth or accuracy of such personal information added or updated by any subscriber (hereinafter referred to as 'the respondent's Honour System'). (g) Credit reports provided by the respondent to its membership subscribers from time to time (including those relating to the applicant and each other group member respectively) were based wholly or partly on personal information, including unverified personal information, added to the respondent's credit information files by subscribers using the respondent's Honour System. (h) The respondent supplied credit reports to a member in any one or more of three ways in accordance with the member's request and the fees which the member agreed to pay: (i) The first method of supplying a credit report was in the form of a document that was viewed and printed in ordinary English language format, which the member viewed either on a computer screen or in a printed out format, and which expressly listed, inter alia, any recorded payment defaults that the member's customer had allegedly committed at various times in the past; (ii) The second method of supplying a credit report was that the respondent used the data from the respondent's own databases, including any recorded payment defaults that the member's customer had allegedly committed at various times in the past, and such data was used as data inputs into a decision-making algorithm which was part of the respondent's intellectual property and which took account of various factors, including any defaults, and calculated an overall 'score' known as the respondent's own 'bureau score'. The overall bureau score was calculated by the respondent and was promoted by the respondent as an additional members product or service that was available for supply or possible supply to a member on request and for additional fee charged by the respondent to such requesting member. The overall bureau score was heavily influenced, in a manner that was unfavourable to the member's own consumer, by any alleged defaults by the said consumer that were recorded in the respondent's databases; (iii) The third method of supplying a credit report was that the respondent supplied information and data from the respondent's own databases, including any recorded payment defaults which the member's own consumer (including inter alia the applicant or other respective group member) had allegedly committed at various times in the past; that information and data was then incorporated (either by the respondent's computers or by the member's own computers) with the member's own data and own lending criteria, by electronic communication between the respondent's computers and the member's own computers and included, inter alia, a representation in or to the effect that the said consumer had one or more payment defaults. Lending criteria varied as between members, but regardless of those variations, invariably took account of, and were heavily influenced, in a manner that was unfavourable to a consumer of a member, by any alleged payment defaults by the said customer recorded in the respondent's own databases. 11. The respondent knew, or should have known, that incorrect credit worthiness information about any particular customer of a member of the respondent which was supplied by the respondent (with the consumer's permission) in any of the respondent's credit reports to such member, would more probably than not adversely impact on whether a member would offer credit facilities to a member's own consumers (including, inter alia, the applicant and each other respective group member). 12. Further, in conducting its business- (a) The respondent was obliged to take reasonable steps at all material times to ensure that personal information relating to the applicant and each of the other respective group members, contained in the respondent's respective credit reports, and supplied by the respondent's practices and/or conduct to any of the respondent's membership subscribers, was and were accurate, up to date, complete and not misleading. Particulars Privacy Act 1988 (Cth), s 18(G)(a) & s 6; Privacy Act 1988 (Cth), s 18R; Privacy Act 1988 (Cth), s 14 & the "Information Privacy Principles" thereto, Principle 7(1) & Principle 8; Privacy Act 1988 (Cth), s 16(2); Credit Reporting Code of Conduct issued pursuant to s 18 of the Privacy Act 1988 (Cth) (b) The respondent was obliged to take reasonable steps at all material times, by way of making appropriate corrections, deletions and additions, to ensure that personal information relating to the applicant and each of the other respective group members, contained in the respondent's respective credit reports, and supplied by the respondent's practices and/or conduct to any of the respondent's subscribers, was and were accurate, up-to-date complete and not misleading. Particulars Privacy Act 1988 (Cth), ss 18J(1) & s 6; Privacy Act 1988 (Cth), s 18R; Privacy Act 1988 (Cth), s 14 & the "Information Privacy Principles" thereto, Principle 7(1) & Principle 8; Privacy Act 1988 (Cth), s 16(2); Credit Reporting Code of Conduct issued pursuant to s 18 of the Privacy Act 1988 (Cth) Number of Group Members 13. It is estimated that approximately one per cent of those credit reports supplied by the respondent during the relevant period in New South Wales which had included information, data, allegation or representation of payment default were incorrect in such assertion. Claims under sections 52 & 53 Trade Practices Act 1974 (Cth) 14. In the premises as aforesaid, the respondent, in trade and commerce, engaged in the conduct of supplying respective credit reports to the respondent's members which included information, data and allegations which made representations in or to the effect, in each such credit report, that the applicant and each other group member respectively from time to time during the relevant period was properly described as having or had a "Payment Default" (i.e., the respondent's assertion, as defined at para 2(d) above). Applicant's Particulars The respondent's assertion about the applicant is set out in Schedule 'A' below to this pleading. The membership subscribers to whom the respondent disclosed, made or published the said assertion, and the dates when that occurred, were: (i) Commonwealth Banking Corporation August 2006 application for loan (ii) ANZ Banking Corporation Ref: 000121110498 7th February 2007 in the sum of $20,000.00 (iii) HSBC Bank Sydney 4th March 2007 15. In supplying credit reports to the respondent's respective members which included information, data and which made representations in or to the effect that the applicant and each other group member respectively identified by that credit report from time to time during the relevant period was properly described as having or had a "Payment Default" (i.e., the respondent's assertion, as defined at para 2(d) above), the respondent also engaged in the conduct of representing to each of the subscribers that: (a) The applicant and each other group member respectively had refused for more them sixty days to pay a creditor a debt or debts which he or she was legally obliged to pay, (b) The applicant and each other group member respectively was or were each reasonably suspected by the respondent of not being able to pay his or her debts, (c) The applicant and each other group member is respectively a credit risk; (d) The applicant and each other group member respectively was properly described as having a "Payment Default". Applicant's Particulars for representations (a) to (d) inclusive The representations arose from and were conveyed by the material in Schedule 'A' below to this pleading, and/or arose from the following extrinsic facts which were known to the membership subscribers (and their nominated servants or agents) of the respondent to whom the respondent supplied credit reports incorporating the representations in Schedule 'A'. Particulars of extrinsic facts for the Applicant and for each of the other Group Members (i) The respondent's Internet User Guide defined "Payment Default" to mean that: the account must be 60 days or more overdue; and the borrower must have been sent a written notice advising of the overdue payment and requesting payment of the amount outstanding; and where $100 or more is owed; and for which the credit provider has commenced collection action. (ii) The persons to whom the matter was disclosed and/or published each knew each of the facts referred to in (i) and (ii) and were aware and understood the "internet user guide" as a whole. (iii) Section 18E(1) of the Privacy Act 1988 (Cth) provides that a credit reporting agency must not include personal information in an individual creditors information file unless it comes within the circumstances set out in s.18E(1). The only subsection to which the personal information "Payment Default" could be authorised is under s.18E(1)(vi) (iv) a " Payment Default" are each Payment Defaults which remains listed on a credit report for five years. 16. Each of the respondent's respective assertions (as defined in paragraphs 2(d) & 15 above) in relation to the applicant and each of the other respective group members was false and/or misleading. 17. Further or in the alternative, the respondent, in trade or commerce, supplied credit reports to its members during the relevant period relating to the applicant and each of the other group members, in connection with: (a) the supply or possible supply by the respondent of additional membership goods and/or membership services of a kind supplied by the respondent, and/or (b) the promotion by the respondent of the supply or use of additional membership goods and/or membership services of a kind supplied by the respondent, pursuant to ss65A(1)(a)(i), 65A(1)(a)(iii), s65(1)(a)(v) & 65A(3) of the Trade Practices Act 1974 (Cth). 18. In the premises as aforesaid, the respondent by supplying each of the credit reports to its respective membership subscribers as aforesaid, which included the representations pleaded in paras 2(d) and 15 above, engaged in conduct in trade or commerce that was misleading or deceptive or likely to mislead or deceive in breach of s.52 of the Trade Practices Act, 1974 (Cth). 19. Further or in the alternative, in the premises as aforesaid, the respondent in trade or commerce, in connection with the supply or possible supply by the respondent of membership goods and services to its members and prospective members, or in connection with the promotion by any means of the supply by the respondent of membership goods and membership services to its respective membership subscribers as aforesaid- (a) falsely represented the membership products, namely, the respondent's credit reports about named consumers (ie, the applicant and each other respective group member), were of a particular standard and/or quality, (b) falsely represented that membership services namely, the respondent's credit reports about named consumers (ie, the applicant and each other respective group member), were of a particular standard or quality, and/or (c) falsely represented that membership goods or membership services, namely, the respondent's credit reports about named consumers (ie, the applicant and each other respective group member), had uses or benefits they do not have, in breach of s 53 of the Trade Practices Act 1974 (Cth). 20. The applicant and each of the other group members made separate applications for credit to various subscribers of the respondent from time to time since 12 March 2004. Applicant's particulars The applications were made by the applicant to the various subscribers referred to in the particulars to para 14 above on or about the dates set out in those particulars. 21. Acting in reliance upon the respondent's conduct in supplying the credit reports and making the representations in each of the credit reports referred to in paras. 2(d) & 15 above, the subscribers either refused to provide the applicant and each of the other respective group members with credit, or alternatively offered credit to the applicant and to each other respective group member at an increased cost and/or at less favourable terms than would have been otherwise offered by the respective subscriber to the applicant or to the respective group member, and/or lost the chance to obtain credit on more favourable terms and conditions. Applicant's particulars The applicant will supply, prior to hearing and in accordance with the orders of this Honourable Court, full details of his claim for loss and damage 22. By reason of the aforesaid facts, matters and circumstances the applicant and each of the other group members has suffered respective loss and damage by the respondent of the kind pleaded in paragraph 2(f) above. Applicant's particulars The applicant will supply, prior to hearing and in accordance with the orders of this Honourable Court, full details of his claim for loss and damage, including the circumstances in which the loss or damage arose.

Negligence 23. In the premises as aforesaid, the respondent owed the applicant and each of the other group members respective duties of reasonable skill and care, the content and scope of which encompassed that- (i) The respondent was obliged to take reasonable steps at all material times to ensure that personal information relating to the applicant and each of the other respective group members, contained in the respondent's respective credit reports, and supplied by the respondent to any of the respondent's subscribers, was and were accurate, up to date, complete and not misleading. Particulars (a) Common law principles; (b) Privacy Act 1988 (Cth), s 18(G)(a) & s 6; (c) Privacy Act 1988 (Cth), s 18R; (d) Privacy Act 1988 (Cth), s 14 & the "Information Privacy Principles" thereto, Principle 7(1) & Principle 8; (e) Privacy Act 1988 (Cth), s 16(2); (f) Credit Reporting Code of Conduct issued pursuant to s 18 of the Privacy Act 1988 (Cth); (g) The respondent knew or ought reasonably have known that the persons to whom the respondent's assertion was disclosed, made and/or published would rely upon that information in deciding whether to provide credit, finance or loans to the applicant and each of the other group members respectively, and, if so, on what terms; (h) The respondent knew or ought have reasonably have known or foreseen that if the respondent's assertion was untrue, false or misleading it may cause or materially contribute to the applicant and each of the other respective group members the injury, loss, harm or damage specified and particularised in paragraph 2(f) above. (ii) The respondent was obliged to take reasonable steps at all material times, by way of making appropriate corrections, deletions and additions, to ensure that personal information relating to the applicant and each of the other respective group members, contained in the respondent's respective credit reports, and supplied by the respondent to any of the respondent's subscribers, was and were accurate, up to date, complete and not misleading. Particulars (a) Common law principles; (b) Privacy Act 1988 (Cth), ss 18J(1) & s 6; (c) Privacy Act 1988 (Cth), s 18R; (d) Privacy Act 1988 (Cth), s 14 & the "Information Privacy Principles" thereto, Principle 7(1) & Principle 8; (e) Privacy Act 1988 (Cth), s 16(2); (f) Credit Reporting Code of Conduct issued pursuant to s 18 of the Privacy Act 1988 (Cth); (g) The respondent knew or ought reasonably have known that the persons to whom the respondent's assertion was disclosed, made and/or published would rely upon that information in deciding whether to provide credit, finance or loans to the applicant and each of the other group members respectively, and, if so, on what terms; (h) The respondent knew or ought have reasonably have known or foreseen that if the respondent's assertion was untrue, false or misleading it may cause or materially contribute to the applicant and each of the other respective group members economic loss of the kind particularised in paragraph 2(f) above. 24. The information set out in Schedule 'A' below to these pleadings was supplied by the respondent in the respondent's credit reports from time to time during the relevant period to various membership subscribers of the respondent. Applicant's particulars The applicant repeats the particulars set out under para 14 above. 25. The data, information and/or representations supplied by the respondent in its credit reports referred to in paras. 2(d) and 15 above were false and misleading and were supplied by the respondent to various subscribers of the respondent in breach of the respondent's respective duties of reasonable skill and care to the applicant and each of the other respective group members. The respondent's Honour System (as defined and explained at paras. 10(f) and 10(g) above) was inherently negligent as it was systematically susceptible to the making of assertions by the respondent (as defined in paras. 2(d) and 15 above) to the respondent's membership subscribers which were false and misleading in relation to the applicant and each of the other respective group members from time to time. Particulars of Respondent's breaches of duty to the Applicant (a) The respondent failed to take any steps or any reasonable steps to check: (i) The accuracy of the matter in Schedule 'A'; (ii) That the inclusion of the information of and concerning the applicant recorded and stored in the respondent's credit information files, and supplied by the respondent in its credit reports to subscribers of the respondent relating to the applicant, was in accordance with the requirements of the Privacy Act 1988 as pleaded and particularised above. (b) The respondent did not take any steps, or any reasonable steps, to ensure that personal information contained in its credit information file for the applicant and each other group member with regard to the respondent's assertion (as defined above) was accurate, up to date, complete and not misleading in breach of section 18G of the Privacy Act 1988 (Cth). (c) The respondent's practice of supplying credit reports about the applicant and each group member to the Respondent's subscribers with regard to the respondent's assertion (as defined above) breached information privacy principles Rule 5 & Rule 8, applicable to the respondent pursuant to Privacy Act 1988 (Cth) ss 14, 15(2) & 16. (d) The respondent should have implemented a pre-acceptance checklist to be completed by each subscriber before such subscriber was permitted to add an alleged default listing to the respondent's data base; such a checklist should have required the subscriber to indicate each of the required steps had been taken and on what date sufficient to indicate that the Privacy Act and the Internet User Guide requirements had been met in relation to the applicant's and each other group member's respective defaults. (e) The respondent did not have any, or any adequate, measures in place to ensure that any and every person (principal, servant or agent) who was authorised or permitted to add, update or amend information relating to the applicant's and each other group member's credit worthiness in the respondent's databases, (including any negative default type information), had been adequately trained in and was competent to apply the correct criteria that had to be satisfied before any such negative default information could properly be included in the respondent's databases for future inclusion in the respondent's respective credit reports relating to the applicant and each other group member. 26. By reason of the respondent's negligence and breaches of duty, the applicant and each other group member has suffered loss and damage of the kind pleaded in paragraph 2(f) above. Applicant's Particulars The applicant will supply, prior to hearing and in accordance with the orders of this Honourable Court, full details of his claim for loss and damage, including the circumstances in which the loss or damage arose. 27. The applicant and each other group member respectively claims: (i) Damages; (ii) Interest; (iii) Costs; (iv) Injunctive relief to restrain the respondent from supplying or representing the respondent's assertion (as defined above) to any of its membership subscribers; (v) Declaration that the respondent engaged in conduct in breach of sections 52 and 53 of the Trade Practices Act 1974 (Cth) in supplying credit reports that included information and data which included representations in or to the effect of the respondent's assertion (as defined above) to the respondent's membership subscribers from time to time; (vi) Mandatory injunction ordering the respondent to publish corrective representations. (vii) Further or other orders as the Court deems fit.

DATED March 2008 The applicant seeks relief as specified in the application This pleading was prepared by PW Bates of Counsel. This pleading has been carefully checked by counsel and Christine Beshay, solicitor and found to be correct so far as form is concerned.

Account Type: Advertising Association Code: Principal's Account :

Original Date: 01/02/2005 Original Amount: $33728.00

Privacy Act 1988(Cth)ss 14, 15(2)

Trade Practices Act 1974(Cth)

Pt IVA Trade Practices Act 1974(Cth)ss 52, 65A

Federal Court Act 1979(Cth)

applicant or any other respective group member). Particulars Privacy Act 1988(Cth)

Particulars Privacy Act 1988(Cth)

I will often refer to "the applicants" in the plural, even though the two notices of motion with which these reasons are concerned were each filed in only one of the proceedings (being the Bailey proceeding or the Knochell proceeding) as outlined below. It is common ground that the two motions have application to all nine proceedings. 3 The Bailey proceeding is the lead proceeding. Down to the present time all interlocutory steps have been taken in the Bailey proceeding on the basis that they would also have application to the other eight proceedings. Unfortunately, the solicitors representing the applicants discovered that they had misspelt Ms Knochell's first name as "Zashca". They filed the notice of motion to which I refer below in the Knochell proceeding rather than in the Bailey proceeding, apparently in order to seek an order that Ms Knochell's name as it appears in the title of the Knochell proceeding be corrected (I note, in passing, that they also wrongly stated Veda's name as "Veda Advantage Information Service and Solutions Limited" rather than "Veda Advantage Information Services and Solutions Limited" on the notice of motion and supporting affidavit). This has led to the anomaly that whereas until the present time all interlocutory steps have been taken in the Bailey proceeding, of the two motions to which the present reasons relate, one is brought by Ms Knochell in the Knochell proceeding, while the other is brought by Veda in the Bailey proceeding. 4 Of the nine class actions, three relate to events in New South Wales, three to events in Victoria, and the remaining three to events in Queensland. 5 In Bailey v Veda Advantage Information Services and Solutions Limited [2007] FCA 1664 (the Earlier Reasons), I described the general nature of the nine proceedings as follows (at [3]-[6]): 3 All nine are brought by individuals on behalf of themselves and others whose complaints concern information provided by Veda to credit providers relating to the creditworthiness of the applicants and of the group members they respectively represent. Veda is a credit reporting agency, that is to say, it is a corporation that carries on a credit reporting business (I am using expressions taken from the Privacy Act 1988 (Cth), ss 6 and 11A). 4 Credit providers subscribe to Veda in order to have the benefit of information related to the creditworthiness of individuals who apply to them for credit. Veda maintains credit information files on a computer database in relation to individuals. The credit providers who subscribe are able to access, by computer, the credit information files that are part of the system set up by Veda. In addition, the subscribers themselves may update the information on those files by providing information known to them concerning individuals. 5 Accordingly, Veda's subscribers are both the suppliers of information to the credit information files and the recipients of information from those files. I was told that on the final hearing there will be considerable evidence concerning the way in which the system just outlined operates. 6 In the way in which the proceedings have been cast, each of the three relates to the reporting of a particular kind of problem associated with a person's creditworthiness. In the case of proceeding NSD 368/2007 in which Ms Szyczew is the applicant, the complaint is that the word "Bankrupts" was recorded and conveyed to subscribers in respect of Ms Szyczew and the members of the group on whose behalf she sues. In the case of proceeding NSD 371/2007 in which Mr Bailey is the applicant, the complaint is that the expression "Clearouts" or "Clearouts (watched)" was recorded and conveyed to subscribers in respect of Mr Bailey and the members of the group on whose behalf he sues. I infer that what is meant by those expressions is that the person, owing money, has ceased to be contactable. In proceeding NSD 393/2007 in which Mr Knochell is the applicant, the complaint is that the expression "Payment Default" was recorded and conveyed to subscribers in respect of Mr Knochell and the members of the group on whose behalf he sues.

The first remaining claim - the claim under s 52 of the TP Act 19 Veda submits that s 65A of the TP Act supplies a complete answer to the applicants' claim based on the alleged contravention of s 52 of that Act, so that that claim has no reasonable prospect of success. So far as relevant, s 65A provides: (1) Nothing in section 52 … applies to a prescribed publication of matter by a prescribed information provider, other than: (a) a publication of matter in connection with: (i) the supply or possible supply of goods or services; (ii) … (iii) the promotion by any means of the supply or use of goods and services; or (iv) … where: (v) the goods or services were relevant goods or services … (vi) ... (b) … (2) For the purposes of this section, a publication by a prescribed information provider is a prescribed publication if: (a) … the publication was made by the prescribed information provider in the course of carrying on a business of providing information; or (b) … (3) In this section: prescribed information provider means a person who carries on a business of providing information … relevant goods or services in relation to a prescribed information provider, means goods or services of a kind supplied by the prescribed information provider … 20 According to paras 14 and 15 of the PFASOC, Veda supplied to its members credit reports that contained representations. The issuing of the credit reports is the conduct by Veda that is said to have contravened s 52 of the TP Act. 21 It is not disputed that Veda carries on a business of providing information and is therefore a "prescribed information provider". Nor is it in dispute that Veda issued the credit reports in the course of carrying on that business, with the result that the issuing of each of them was a "prescribed publication" within the definition in s 65A(2). It follows that the issuing of each credit report was a prescribed publication of a matter to which, by reason of s 65A(1), s 52 of the TP Act does not apply, unless the issuing of the credit report falls within the s 65A(1)(a) exception. 22 For that exception to apply, the publication of the credit reports must be in connection with the supply, possible supply or promotion by any means of the supply or use, of goods and services. The applicants have referred to Veda as having supplied both goods and services. I need not decide whether this analysis is correct and will proceed on the assumption that it is. On this basis, apparently the credit reports are the relevant goods, and the conveying of the information contained in them is the relevant service. The applicants also plead (in para 10(d) of the PFASOC) that the "Internet Service Guide" (also known as the "User Guide") was one of the Veda's goods or services. For present purposes, I accept that it and the information contained in it are also within the expression "goods or services of a kind supplied by the prescribed information provider" within the definition of "relevant goods or services" in s 65A(3). It is therefore the credit reports and the User Guide, and the supplying of the information conveyed by them that are the "goods or services" referred to in paras (i) and (v) of s 65A(1)(a). (Henceforward, for convenience, I will refer simply to the credit reports and sometimes to the User Guide, in each case as including the conveyance of the information contained in them.) 23 For the applicants' argument to succeed, the publication of the credit reports must be in connection with the supply, possible supply or promotion by any means of the supply or use, of credit reports or the User Guide. The applicants raise no complaint of a publication of misleading matter in the User Guide. They plead only that the credit reports themselves have contravened s 52. 24 The applicants submit that there was a cross promotion of "enhanced reports". I infer that this expression refers to the instances of credit reports pleaded in paras 10(h)(ii) and 10(h)(iii) of the PFASOC. The enhanced reports are therefore themselves credit reports. At the hearing, counsel for the applicants attempted to explain how this promotion occurred. He seemed to suggest that the supply of the credit reports themselves was in connection with the supply, possible supply, or promotion of the supply or use, of the credit reports or "enhanced reports". The authorities stand against that analysis: Horwitz Grahame Books Pty Ltd v Performance Publications Pty Ltd (1987) 8 IPR 25 at 29; Advanced Hair Studios Pty Ltd v TVW Enterprises Ltd (1987) 18 FCR 1 at 10-11; Lovatt v Consolidated Magazines Pty Ltd (1988) 12 IPR 261 at 273; Bond v Barry [2007] FCA 1484 at [42]. 25 The kind of situation that would be within the exception would be, by way of hypothetical example, a promotion by Veda that if a subscriber used (and therefore paid for) the reporting services supplied by Veda above a certain number of times over a certain period, a reduced charge would apply. If, in such a case there was in fact no applicable reduced charge, s 65A would not render s 52 inapplicable to Veda's promotional misstatement, because the making of the statement would have been a publication of matter in connection with the supply or possible supply of the credit reports. 26 Counsel for the applicants also suggested that the User Guide promoted the supply or use of the credit reports. He stated that the User Guide "explain[s] how in order to get a better value for [a] credit report…you should also order the enhanced report…". The PFASOC nowhere alleges that the User Guide contains such a statement. In any event, I am not persuaded that by reason of this promotion within the User Guide, the credit reports are published in connection with the promotion of the supply or use of the Veda's goods and services so as to enliven s 65A(1)(a) in relation to the credit reports. It may be that the publication of the User Guide, if it contains the statements alleged, is in connection with the promotion of the supply or use of Veda's credit reports. But the PFASOC does not complain that the User Guide contravened s 52 of the TP Act. 27 The applicants' and represented claimants' cases are quite straightforward. The only representations of which complaint is made are those contained in the credit reports. They fall squarely within s 65A(1) and therefore nothing in s 52 applies to them. 28 The nine proceedings, in so far as they are founded on an alleged contravention of s 52 of the TP Act, cannot succeed.

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