DIRECTOR-GENERAL OF THE DEPARTMENT OF FAIR TRADING v Joanna MONAGHAN & 1 Ors

JUDGMENT OF : Bell J at 1 DECISION : See paragraph 204

Fair Trading Act 1987 LEGISLATION CITED : Introduction Agents Act 1997 (Vic) Introduction Agents Act 2001 (Qld) Commercial Bank of Australia Ltd v Amadio (1982-1983) 151 CLR 447 Consumer Affairs v Bona fide Consultants Pty Ltd (unreported), NSWSC, 28 March 1994 CASES CITED : Holloway v Witham (1990) 21 NSWLR Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; 77 ALJR 1853 Yorke v Lucas (1985) 158 CLR 661 DIRECTOR-GENERAL OF THE DEPARTMENT OF FAIR TRADING (Plaintiff) PARTIES : Joanna MONAGHAN (1st Defendant) David James Harold DARBY (2nd Defendant) FILE NUMBER(S) : SC 12823/02 P. Griffin (Plaintiff) COUNSEL : A.G. Diethelm (1st Defendant) In Person (2nd Defendant) D.I. Catt Solicitor (Plaintiff) SOLICITORS : The Hargreaves Practice, Solicitors (1st Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

12823/02 DIRECTOR-GENERAL OF THE DEPARTMENT OF FAIR TRADING v Joanna MONAGHAN (1st Defendant) David James Harold DARBY (2nd Defendant)

JUDGMENT 1 BELL J: The First Defendant is the proprietor of an introduction agency established in April 2000 trading under the name "Liberty Network". During the period between 6 March 2002 and 15 October 2002 the Plaintiff alleges that the First Defendant by her servants and agents engaged in conduct in respect of the supply of introduction services to certain of the clients of Liberty Network that was in all the circumstances unconscionable contrary to s 43 of the Fair Trading Act 1987 (the FTA).

2 The Second Defendant, worked at Liberty Network as the agency's "matchmaker". It is the Plaintiff's contention that he was knowingly concerned in the unconscionable conduct that is the subject of complaint. 3 By further amended summons the Plaintiff claims declaratory relief and orders for the payment of compensation to each of five of the First Defendant's clients. I shall refer to those persons in these reasons for judgment by reference to their surnames only, Mr Daniels, Mr Burns, Mr Marks, Mr Bentley and Mr Milton.

4 The Plaintiff also asks the Court to make an order permanently restraining the First and Second Defendants from carrying on the business of supplying services as an introduction agency.

5 Common to the dealings between Liberty Network and each of the five clients the Plaintiff particularises as unconscionable the following conduct: s The use of high-pressure sales techniques to persuade the client to sign for higher level services at substantially higher fees than originally quoted or paid, s harassment of the client to upgrade his file and pay a higher fee in order to obtain satisfactory introductions, s the extraction of extravagant fees for the First Defendant's services from the client disproportionate to any services provided by the First Defendant, s a failure to explain adequately or at all to the client the nature and cost of the introduction services that the First Defendant made available, s the Failure to have any or any adequate refund policy whereby members could obtain a refund of all or part of the moneys paid to the First Defendant. 6 With respect to the services provided to Mr Daniels, Mr Burns and Mr Marks the Plaintiff also particularises: s taking advantage of the emotional vulnerability of the client to extract large sums of money from him for little or no service at all, 7 With respect to the service provided to Mr Daniels and Mr Burns the Plaintiff relied on a further particular:

s The entry into a contract with (Mr Daniels/Mr Burns) being a person who had mental or intellectual limitations such that the First Defendant knew or ought to have known that he was not capable of understanding fully the terms of the contract or the nature or cost of the First Defendants services.

8 The Plaintiff relied upon an additional particular with respect to Mr Daniels: · The use of unfair tactics in that the First Defendant by her servants and agents accompanied Mr Daniels to a financial institution to ensure that he withdrew a large sum of money for delivery to the First Defendant,

9 Section 43 of the FTA provides as follows: "43 Unconscionable conduct (1) A supplier shall not, in trade or commerce, in connection with the supply or possible supply of goods or services to a consumer, engage in conduct that is, in all the circumstances, unconscionable. (2) Without limiting the matters to which the Supreme Court may have regard for the purpose of determining whether a supplier has contravened subsection (1) in connection with the supply or possible supply of goods or services, the Court may have regard to: (a) The relative strengths of the bargaining positions of the supplier and consumer, (b) whether, as a result of conduct engaged in by the supplier, the consumer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier, (c) whether the consumer was able to understand any documents relating to the supply or possible supply of the goods or services, (d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the consumer (or a person acting on behalf of the consumer) by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services, and (e) the amount for which, and the circumstances under which, the consumer could have acquired identical or equivalents goods or services from a person other than the supplier (3) A supplier shall not be taken for the purposes of this section to engage in unconscionable conduct in connection with the supply or possible supply of goods or services to a consumer only because the supplier institutes legal proceedings in relation to that supply or possible supply or refers a dispute or claim in relation to that supply or possible supply to arbitration. (4) For the purpose of determining whether a supplier has contravened subsection (1) in connection with the supply or possible supply of goods or services to a consumer; (a) The Supreme Court shall not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention, and (b) The Court may have regard to conduct engaged in, or circumstances existing, before the commencement of this Act. (5) (Repealed) (6) A reference in this section to the supply or possible supply of goods includes a reference to the supply or possible supply of goods for the purpose of re-supply or for the purpose of using them up or transforming them in trade or commerce." 10 The matters to which the Court may have regard under s 43(2)(a) - (e) are a non-exhaustive statement of the considerations that may lead the Court to conclude that the supplier has engaged in conduct that is in all the circumstances unconscionable. Unconscionability 11 It was common ground that the principles stated by the High Court in Commercial Bank of Australia Ltd v Amadio (1982-1983) 151 CLR 447 concerning unconscionability for the purposes of the common law have application when considering unconscionability for the purposes of s 43(1) of the FTA. In Amadio Mason J observed at 461: "But relief on the ground of 'unconscionable conduct' is usually taken to refer to the class of case in which a party makes unconscientious use of his superior position or bargaining power to the detriment of a party who suffers from some special disability or is placed in some special situation of disadvantage, e.g., a catching bargain with an expectant heir or an unfair contract made by taking advantage of a person who is seriously affected by intoxicating drink. Although unconscionable conduct in this narrow sense bears some resemblance to the doctrine of undue influence, there is a difference between the two. In the latter the will of the innocent party is not independent and voluntary because it is overborne. In the former the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which he is placed and of the other party unconscientiously taking advantage of that position."

Deane J, in the same case, observed at 474: "The jurisdiction of courts of equity to relieve against unconscionable dealing developed from the jurisdiction which the Court of Chancery assumed, at a very early period, to set aside transactions in which expectant heirs had dealt with their expectations without being adequately protected against the pressure put upon them by their poverty. The jurisdiction is long established as extending generally to circumstances in which (i) a party to a transaction was under a special disability in dealing with the other party with the consequence that there was an absence of any reasonable degree of equality between them and (ii) that disability was sufficiently evident to the stronger party to make it prima facie unfair or 'unconscientious' that he procure, or accept, the weaker party's assent to the impugned transaction in the circumstances in which he procured or accepted it. Where such circumstances are shown to have existed, an onus is cast upon the stronger party to show that the transaction was fair, just and reasonable: 'the burthen of shewing the fairness of the transaction is thrown on the person who seeks to obtain the benefit of the contract' (see per Lord Hatherley, O'Rorke v. Bolingbroke (1877) 2 App. Cas., at p. 823; Fry v. Lane (1888) 40 Ch.D. 312, at p. 322; Blomley v. Ryan (1956) 99 CLR 362, at pp. 428-429). The equitable principles relating to relief against unconscionable dealing and the principles relating to undue influence are closely related. The two doctrines are, however, distinct. Undue influence, like common law duress, looks to the quality of the consent or assent of the weaker party (citations omitted). Unconscionable dealing looks to the conduct of the stronger party in attempting to enforce, or retain the benefit of, a dealing with a person under a special disability in circumstances where it is not consistent with equity or good conscience that he should do so. The adverse circumstances which may constitute a special disability for the purposes of the principles relating to relief against unconscionable dealing may take a wide variety of forms and are not susceptible to being comprehensively catalogued. In Blomley v. Ryan, Fullagar J. listed some examples of such disability: 'poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary' As Fullagar J. remarked, the common characteristic of such adverse circumstances 'seems to be that they have the effect of placing one party at a serious disadvantage vis-a-vis the other'". 12 In Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; 77 ALJR 1853 the High Court discussed the concept of unconscionable conduct in a case involving a claim for equitable relief against forfeiture. In that context Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ in their joint judgment observed at [23] that the phrase "unconscionable conduct" tends to mislead in the several respects that are discussed in the succeeding paragraphs. By these proceedings the Plaintiff claims orders under the FTA in respect of unconscionable conduct engaged in by the First Defendant in the supply of services to various of her clients. Section 43 of the FTA is not confined to a consideration of the circumstances as they existed at the time of the formation of the contract but includes consideration of conduct that occurs during the course of the contract. In Holloway v Witham (1990) 21 NSWLR 70 Lee CJ at CL said at 74: "But important though it be that the Act enables the Commissioner to make applications on behalf of consumers for compensation, the real virtue in the Act, in so far as it is aimed at unfair trading, is that it enable remedies available to consumers and/or the Commissioner which are dependent, not upon breach of contract by the trader, but upon proof of specific conduct on the part of the trader as defined in the Act. The fact that the trader may by reason of the conduct engaged in be in breach of the contract, is largely irrelevant to the pursuit of remedies provided by the Act and, equally, breach of contract by the consumer will not necessarily displace the right of the consumer to the remedies provided in respect of the conduct of the supplier. In Holt v Biroka Pty Ltd (1988) 13 NSWLR 629, Kearney J held that s 4(4) of the Act, in defining "conduct", produced the result that the conduct to be considered was the whole of the conduct related to the contractual bargain and its performance and I respectfully adopt that view - it plainly carries out the purpose of the Act."

13 The Plaintiff particularised the use of high-pressure sales techniques as amounting to unconscionable conduct in all the circumstances. This is not an expression used in s 43 of the FTA. In the way the matter was argued I did not understand Mr Diethelm, who appeared on behalf of the First Defendant, or the Second Defendant to take issue with the view that high-pressure sales techniques may constitute unconscionable conduct. It may be that such techniques amount to "pressure" or "unfair tactics" within the meaning of s 43(2)(d). Equally, there may be instances where having regard to the special situation of disadvantage or disability of the client the use of such techniques may be unconscionable. In this case there is an issue as to whether the sales techniques employed by the First Defendant's staff are rightly characterised as "high-pressure" and whether one or more of the clients said to have been the subject of them was in a position of special disadvantage.

14 Each of the deponents to the affidavits read in the Plaintiff's case was cross-examined by Mr Diethelm on behalf of the First Defendant and by the Second Defendant. Two of the First Defendant's former employees gave evidence in the Plaintiff's case. The First Defendant and the Second Defendant were cross-examined on their affidavits. No former employee of Liberty Network was called in the case of either of the defendants. The five clients on whose behalf orders for compensation are sought had dealings with various of the First Defendant's staff, including Cindy Gungor, Gina and Veronica.

15 The First Defendant stated in her affidavit, sworn on 4 March 2003, that Cindy Gungor left Liberty Network without giving notice around the end of October 2002. She believed that she went to Hungary. She is not aware of where Cindy Gungor is now residing. There was no challenge to this evidence. I consider that the First Defendant's failure to call Cindy Gungor has been sufficiently explained and that no inference should be drawn that her evidence would not have assisted the case of either of the defendants. There was no explanation for the defendants' omission to call Gina, Veronica or any other member of the staff of Liberty Network as to their dealings with the five clients whose complaints form the subject of these proceedings. Despite some criticisms of the reliability of the recall of the five clients, I record my impression that each endeavoured to give a truthful account of his dealings with the First Defendant and her staff. I shall return to specific criticisms of the evidence of a number of them below. Mr Daniels 16 Mr Daniels is aged forty-eight years. He is in receipt of sickness benefits and describes himself as suffering from anxiety and depression disorder. He was diagnosed with this condition in 1993 as the result of some incident at work. Mr Daniels had undergone earlier psychiatric treatment commencing in 1974. Following the incident that led to his further treatment in 1993, Mr Daniels was prescribed a range of medication, including Prozac, Diazepam, Chloroprozeme, Effexir and Largactil. He was taking medication at the date of his dealings with Liberty Network. At the date of giving evidence his medication regime had been reduced. He said that he was only taking Effexir 75. There was no medical, or other expert evidence, concerning the effects of the medication on him.

17 Mr Daniels separated from his wife some time prior to his first contact with Liberty Network. The couple had two teenage children. It appears that Mr Daniels was considerably distressed by the loss of his marriage and family. In March 2002 he moved back into his parents' home. The failure of his marriage caused him to be very lonely and he was anxious to regain a family life. 18 Mr Daniels saw an advertisement in the Daily Telegraph for Liberty Network. He telephoned and inquired about the services offered and the price of them. He was informed that their fees were $220. He made an appointment for an interview on Saturday 4 May 2002. He kept the appointment and was interviewed by a young woman who gave him an application form to complete. She also took a Polaroid photograph of him. He completed the form and paid the fee of $220 for which he was given a receipt. The young woman told him: "You get the basic service for $220.00. Your details are put on our system and if any suitable matches are located we contact you or you can contact us." 19 At this initial interview Mr Daniels was handed a document that set out Liberty Network's scale of fees (the Scale of Fees): SCALE OF FEES $5500 - Full 12mths VIP service 1st reviewed when female requests Personal Consultation $3300 - Full 12mths MARRIAGE service 2nd reviewed when female requests Personal Consultant $1590 - 4mths PRIORITY service 6mth backup 3rd reviewed when female requests Personal Consultant 1st 4 mths $880 - 4mths EXECUTIVE service 6mth backup 4th reviewed when female requests $550 - 4mths TELEPHONE service 6mth backup 5th reviewed when female requests 6mths basic/backup service $220 - File reviewed last in order of priority & only when requested

20 Mr Daniels said that when he left Liberty Network he believed that his details would be put on a list to be matched with prospective partners. He recalled that he was to contact Liberty Network periodically to check on the results. He believed that the fee had been paid in order to remain on the list. 21 The First Defendant said that the fee of $220 covered the provision of an introduction to the client. She would act upon the assumption that the introduction was successful and she did not initiate further contact with the client. In the event that the introduction did not prove satisfactory it was open to the client to make contact with Liberty Network and request a further introduction, or introductions, in the period of six-months following the payment of the fee. 22 Mr Daniels came to pay for the top rate of membership offered by Liberty Network. There was a conflict in the evidence concerning the circumstances in which this occurred. In his affidavit Mr Daniels said that after paying the initial fee he had not been contacted by Liberty Network. On 8 May he telephoned Liberty Network and made an appointment to attend at their office that afternoon. He kept the appointment and spoke with a woman named Gina. He asked her, "Have I got a date on the weekend". During this interview Gina inquired, "How much money would you like to spend on finding the right lady." Mr Daniels said that he had enough money to pay for a deposit on a home. Gina said to him, "You should use that money with us to help change your life." Mr Daniels was shown a couple of albums containing photographs of women and invited to write down the names of any who appealed to him. He selected a number of photographs and wrote down the names of the women on a piece of paper.

23 During the course of this second interview another consultant, named Cindy, also spoke with Mr Daniels. Gina introduced Cindy to him as her "boss". Cindy showed Mr Daniels a photograph of fair-haired woman named Marina. She was described as being a forty-year-old Russian woman who was living in Cabramatta. Cindy said, "I want $5280.00 to introduce you to Marina". Mr Daniels was shown photographs of men who were said to have paid sums of this order to Liberty Network and who were now living in successful relationships as the result. Cindy said to Mr Daniels: "You've got all this money in the bank and we can change your life in six months. If you want to change your life, we can set up a date with Marina for this weekend for you but you have to come in with the money tomorrow."

Mr Daniels referred to a number of representations made during the interview with Cindy and Gina. These included: · "You're not getting any younger, we can change your life around for you," · "That money is not going to help you in the bank, you're going to die with the money,"

· "We can get you back to the life you had with a lovely caring lady", · "What have you got all the money in the bank for", · "If you don't make a change in your life now you're going to die a lonely sad man", · "We can give you a woman who will make you feel young and make life worth living", · "Are you gonna live at your parents place until you're old and grey. We can do more for you with your money than Westpac can". 24 Mr Daniels was handed a proforma contract. He told Cindy that he did not understand it. She replied, "Don't worry about that it's a contract, we'll give you your money back if you ain't satisfied. What are you worried about". Mr Daniels signed the contract. The printed terms of the document (the Guarantee of Service) provided as follows: LIBERTY NETWORK LOCAL AND INTERNATIONAL INTRODUCTOINS GUARANTEE OF SERVICE BY LIBERTY NEWTORK LOCAL AND INTERNATIONAL. I___________________________of___________________ _Post Code ____ PHONE: H( )(W) am of sound mind and able to enter into legally binding contracts.

Liberty Network hereby agrees to enter a GUARANTEE OF SERVICE with the signatory below (hereinafter referred to as Client) for the purpose of providing MONEY BACK guarantee with the above client .

The client of the above address agrees to abide by the terms and the conditions of this agreement, which are set out hereunder. CONDITIONS 1. I, the client accept that there is no limit to the number of clients of the opposite sex that I may be given the opportunity of meeting, before I find my ideal partner. My ideal partner is to be a person of the opposite sex that I shall love and who shall likewise love me.

I, the client warrant that I am genuinely wanting to marry and shall make all reasonable effort in my communications with prospective partners to locate my future wife.

In the event that I am not attracted to or satisfied with, any way, the person introduced to me I shall notify LIBERTY NETWORK immediately and either request a further contact to be chosen for me or call the office and choose for myself a further prospective wife.

I shall report on the result of each contact and shall always inform LIBERTY NETWORK should I require further contacts.

In the event that all possibility has been exhausted LIBERTY NETWORK will refund to the client the monies paid (not including administration or international phone call fees).

$____________________________ ______________________________ amount of monies paid written in words

I, ________________ have read this agreement, fully understand and am prepared to abide by the conditions.

CLIENT SIGNED ____________________ WITNESS SIGNED ________

Dated this ________________ day of ___________ 19 _________ Date month year

SPECIALING IN LONG TERM RELATIONSHIPS AND MARRIAGE P.O. BOX 910 STRATHFIELD NSW 2135. PH: 02 9744 8494 FAX: 02 97456158 25 Liberty Network's file for Mr Daniels recorded an entry made by the First Defendant on 4 May 2002 as follows: "James rang after office closed. Wanted to talk to Cindy. Asked me to tell her that he'd been thinking about it and wanted to do the personalised service - too."

There was no suggestion that the note was other than a contemporaneous one. I accept it as such. I consider that Mr Daniels' recall of the circumstances of his initial contact with Liberty Network is incomplete. In his affidavit he gave a detailed description of a young woman with whom he had spoken at the Liberty Network office on 4 May. I accept that he spoke with an employee who answered the description given. I think it probable that he also spoke to Cindy on that occasion. Although he had no recall of telephoning Liberty Network and expressing an interest in upgrading his membership, I accept that he did so. The file note in this respect supports the First Defendant's evidence.

26 While Mr Daniels recall of the details of his dealings with the staff of Liberty Network was not wholly reliable, I am satisfied that statements to the effect of those set out in paragraphs [22], [23] and [24] above were made to him by Liberty Network staff during the course of interviews. To the extent that Mr Daniels recalled the content of discussions with the First Defendant's staff I am satisfied that he gave a truthful account.

27 On Thursday 9 May Mr Daniels took time off work and attended at the Westpac Bank, Liverpool in order to make arrangements for the payment of the sum of $5280 to Liberty Network. He says that he took the cheque to Liberty Network where he, again, spoke with Gina and Cindy. In cross-examination he agreed he was unable to recall whether he paid Liberty Network by cheque or by way of a direct funds transfer. The evidence points to it being the latter. Nothing of moment turns on this. I am satisfied that Mr Daniels attended the office of Liberty Network on both 8 May and 9 May 2002. On the latter date he was given a receipt for the payment of the further sum of $5,280.

28 The Liberty Network file for Mr Daniels does not record Mr Daniels' attendances on 8 and 9 May. The file attendance record shows no contact between 4 May and 10 May when it is noted "photo shoot was re-appointed for today". The latter notation is suggestive of there having been one or more attendances between 4 May and 10 May. The file has attached to it a copy of the Scale of Fees with notations in handwriting on the back. These are consistent with Mr Daniels' recall that during the interview on 8 May he identified a number of women from photograph albums to whom he was attracted. The names of a number of women are recorded on the form and there are references to 8 May (when it would appear a photo shoot was arranged for 12 May) and 9 May when it is noted that the sum of $5,280 had been transferred by direct transfer.

29 Mr Daniels went back to Liberty Network on Friday 10 May 2002 for the photographic session. At the completion of that session Gina said to him, "Darling we got your photos now they're in the works we will be able to introduce to our girls". He enquired about Marina from Cabramatta. Gina responded saying: "I am sorry you didn't suit her liking but you've got all that money in the bank and we can help you with a new Russian bride." 30 Mr Daniels said that two other women came into the interview room making a total of four consultants who were present with him. He was shown a photograph that appeared to have been downloaded from the internet of a woman named Larissa. Gina said to him: "We're gonna get you married darling. This is gonna cost you $30,000 in government security because the Government won't pay social security to prospective brides and $5,000 to cover the airfare and immigration cost in Russia and Australia." 31 Mr Daniels protested that he could not spend this amount of money. He explained that the money that he had in the bank was to be used to buy a house. The consultants urged him to take up the offer of a prospective Russian bride. He recalled them saying things such as, "You're not getting any younger …. It could be your last chance to regain your happiness". At the same time belittling remarks were addressed to him such as, "Look at your hand (referring to nicotine stains) stop picking at your hand, stop scratching", "You're gonna die with your money in the bank, it won't help you then".

32 At the conclusion of the interview Mr Daniels had agreed to pay $35,000 to Liberty Network to be introduced to a Russian bride. He was told that a staff member would accompany him to the bank to help him transfer the funds to Liberty Network's account. 33 Mr Daniels was taken to the Burwood branch of the Westpac Bank by two Liberty Network employees, Samantha Consiglio and her cousin, Angela. He arranged for the transfer of $35,000 from his account to the Liberty Network account. Afterwards the two young employees took him to Burwood Plaza where they purchased two pairs of slacks, a shirt and a pair of shoes for him.

34 Mr Daniels was given a receipt by Liberty Network for the sum of $35,000. He signed a second Guarantee of Service. The terms of it were identical to the first save for the amount of the fee paid and the date.

35 Samantha Consiglio described the clothes buying excursion in her evidence: "If we wanted to know something we had to ask him otherwise he wouldn't talk so we thought to be nice we'd just keep talking to him. He was very agitated, scratched himself a lot." (T 215).

Mr Daniels appeared to her to have been, "pretty shocked". She spent about forty-five minutes to one hour with him. Throughout this time he was scratching the back of his hand or arm. He expressed surprise that he had spent so much money. 36 On 10 May 2002 Ms Consiglio recalled being in the Liberty Network filing room when Gina and Cindy walked in. Both were elated. Cindy said: "We've been pushing this guy to pay and we've got him".

It was about half an hour later that her cousin, Angela, told her that they were going shopping. She and Angela accompanied Mr Daniels to Burwood to purchase clothes for him.

37 On Saturday 11 May 2002 Mr Daniels went back to Liberty Network to cancel the contract. While waiting outside their office he suffered a panic attack. He went to the Burwood Police Station to seek help and he was taken to the Burwood Hospital. After about two hours he was released. He returned to Liberty Network and spoke with Gina. He was in a distressed state and he said that he wanted his money back. Gina told him that he was suffering from buyer remorse and that he had nothing to worry about. She said to him words to the effect, "If you pull out of this deal I will lose my job and that will be your fault". She left the room and Cindy came in. Cindy reassured Mr Daniels that he had nothing to worry about and that they would arrange for him to be married in six months instead of the normal twelve months. Mr Daniels reiterated that he wanted to have his money back. Cindy told him, "I don't want to hear any more about giving your money back or I will lose my job and you don't want that. The office has been in operation for the last twenty-six years and you have nothing to worry about." 38 During this interview Cindy suggested that Liberty Network would arrange to obtain a mobile phone for Mr Daniels so that he could have private conversations with prospective partners. He was taken to the Vodafone shop in Burwood and a mobile telephone was purchased for him. It was suggested that Mr Daniels needed to go out on a practice date, since he had not been dating for some time. He was given an introduction advice form with the name of a lady to contact. 39 On 16 May Mr Daniels returned to Liberty Network and spoke with Cindy. He was shown a photograph of a Russian woman named Elena. During this interview he said to Cindy, "I want my money back, I don't want any bride". Cindy reassured him that his money was safe and told him that Elena was the woman for him. He was instructed to write a letter to Elena and to bring it to Liberty Network where it would be typed and sent to their agency in Russia. The Russian agency would translate the letter and give it to Elena.

40 Mr Daniels went home and during the following week he wrote a letter to Elena. On 23 May 2002 he took his letter to Liberty Network and gave it to the receptionist. About ten days later Cindy telephoned Mr Daniels to tell him that a response had been received from Elena. Mr Daniels wrote another letter to Elena and delivered it to Liberty Network about two days later. 41 On 4 June Mr Daniels attended Liberty Network and spoke with an employee named Veronica. She told him that Elena had not been responding to contact made on his behalf and that it was proposed to select another prospective bride for him. He said that he was not interested in anyone other than Elena.

42 The following day Mr Daniels saw that there was a message recorded on his mobile phone. He telephoned the message bank and heard a recording of his conversation with Veronica of the previous day. There is no explanation for this curious occurrence. Mr Daniels complained about the matter at the time. So much was common ground. It is apparent that the event upset Mr Daniels considerably.

43 Mr Daniels was admitted to the Psychiatric Unit of the Liverpool Hospital on 27 July 2002 following what he described as a nervous breakdown. He was discharged on 10 August 2002.

44 While Mr Daniels was in hospital the Second Defendant telephoned him and offered to give him further introductions. Mr Daniels said that he wanted to have his money back. 45 Following Mr Daniels' discharge from hospital he called to Liberty Network and spoke with the Second Defendant. He was accompanied by his father. He complained that he was in no condition to get married and he asked for a refund of the moneys that he had paid. He was told that the First Defendant was "the boss" and that she was sick. The matter was left on the basis that Mr Daniels would contact the First Defendant the following day. 46 On 13 August 2002 Mr Daniels and his father again went to Liberty Network. On this occasion he spoke with the First Defendant. She agreed to refund the sum of $30,000 by weekly instalments of $300.

47 The First Defendant said that money had been solicited in advance to cover anticipated disbursements associated with the Russian bride scheme following an early failure. One of the first clients introduced by Liberty Network to a Russian woman had invited the woman to come to Australia to meet him. He subsequently refused to pay her airfare and expenses. This had led to some anxiety on the part of the affiliated Russian agency who questioned the good faith of Liberty Network's client. In her affidavit the First Defendant said: "I realised that if the process of introducing our clients to women outside Australia was going to work, we would need to be more closely involved in the actual process of bringing the woman to Australia rather than simply making the introduction and leaving it to the parties to get together". 48 Approximately ten clients were said by the First Defendant to have paid for introductions to Russian women. Of these only Mr Daniels and Mr Burns paid in advance for disbursements associated with the scheme.

49 In her affidavit the First Defendant set out the estimated of cost of bringing a Russian bride to Australia. Airfares and accommodation were put at $9,000. This was designed to cover the cost of (i) a return fare for the woman to travel to Australia to meet the client, (ii) a return fare for the client to travel to Russia for the wedding and (iii) a single fare for the woman upon her permanent relocation to Australia. The fees charged by the immigration agent in Australia were estimated to be $5,000. The wedding expenses were estimated to be $1,000 together with a further $1,000 for the costs of the photographer. A $1,000 fee was to be paid to the Russian introduction agency. In addition to these costs the First Defendant paid commission to her consultants. 50 Liberty Network worked in association with a Ukrainian introduction agency, Orchid, in connection with introductions to Russian women. The Second Defendant had set up this contact by email. No Russian women came to Australia under the Liberty Network/Orchid scheme.

51 A complaint was made on Mr Daniels' behalf to the Department of Fair Trading arising out of his dealings with Liberty Network. Two investigators attached to the Department, Mr Anderson and Mr McIntyre, attended Liberty Network on 29 September 2002 and spoke with the First Defendant. Mr Anderson put to the First Defendant the suggestion that her contract with Mr Daniels was an unconscionable one. The First Defendant did not agree with this characterisation of it but noted that she had agreed to refund Mr Daniels the sum of $30,000. Mr Anderson said that this was not satisfactory and proposed the immediate refund of the total sum paid by him. In the course of this interview the First Defendant said that the Second Defendant was an employee of Liberty Network. Mr Anderson asked to inspect Mr Daniels' file. He was told that it was not in the office. He agreed to return the following Monday to inspect it.

52 On 1 October 2002 Mr Anderson and Mr McIntyre returned to Liberty Network. On this occasion they spoke with both the First Defendant and the Second Defendant. Mr Anderson asked the latter: "Do you run the business and just use Joanne's name on the door?"

The Second Defendant denied that he was running the business. He said that his involvement was in overseeing the introductions. He said that he helped to run the place, writing the advertisements, talking to the clients and straightening the clients out. He helped the clients on matters to do with their appearance and how to conduct themselves when in the presence of a lady. 53 Mr Anderson, again, suggested that Mr Daniels be given a full refund. He put to the Second Defendant, "You are getting an interest free loan". To this the Second Defendant responded: "No we're not. How about we keep paying the $300 per week until 1 December and then sit down again and pay $30,000 then". 54 During this interview the Second Defendant referred to the business as, "his business" on a number of occasions. Mr Anderson commented on this and the Second Defendant replied: "Everyone refers to it as their business. If you asked anyone who works here they'd all say it was their business".

The Second Defendant took the active role in attempting to negotiate a settlement with respect to the Daniels matter. In the course of the interview he said: "You got me, we will pay the $40,000. We will meet again on 1 November and see if we have the money by then".

55 Mr Daniels received a number of weekly payments of $300. I was informed that it was agreed it had been repaid the sum of $5,100 at the time when the payments stopped.

Findings - Mr Daniels 56 The Plaintiff did not lead evidence of the amount for which each of the clients of Liberty Network might have received equivalent services from another supplier of introduction services. This is a consideration to which s 43(2)(e) of the FTA is directed. The Plaintiff particularised that extravagant fees had been obtained from each of the clients disproportionate to any service that was provided.

57 In all Mr Daniels paid the First Defendant the sum of $40,500. In respect of the payment of the membership fee of $5,500 Mr Daniels was offered an introduction to Marina, the Russian woman who was living in Cabramatta. After paying the balance of the fee Mr Daniels was told that Marina did not find him to her liking. No further service was offered to him for the money that he had paid to that date. Rather he was invited to make a further payment of $35,000 to secure an introduction to a Russian woman who may be a suitable marriage partner.

58 There was no basis for determining the amount of the disbursements as distinct from the profit to which the First Defendant was entitled for the service of effecting the introduction of Mr Daniels to a prospective Russian bride through the Orchid agency. Mr Deithelm acknowledged that a key problem had been the First Defendant's failure to keep disbursements separate.

59 In so far as the Russian bride introduction service is concerned much depended upon whether the client found one of the women on the agency's books to be suitable and, equally, whether that woman found the client to be suitable. Before this was known Mr Daniels paid a fee, which is said to have included provision for airfares to and from Russia and the costs of the wedding.

60 Notwithstanding the absence of any evidence concerning comparable fees for introductions both within Australia and overseas I consider that the fees obtained by the First Defendant from Mr Daniels to have been extravagant and disproportionate to any services provided to him.

61 The Plaintiff particularises that the First Defendant took advantage of Mr Daniels' emotional vulnerability to extract large sums of money from him. A particular in like terms is pleaded with respect to the First Defendant's dealings with Mr Burns and Mr Marks. Emotional vulnerability is an inexact concept. However, it does seem to me that some clients of introduction agencies are likely to be persons who are vulnerable to pressure sales techniques because of an acute awareness of their loneliness and that such individuals may be disadvantaged in dealing with the operator of an introduction service. Abadee J acknowledged emotional vulnerability in this context as a matter that may give rise to relief against unconscionable trading in Commissioner for Consumer Affairs v Bona fide Consultants Pty Ltd (unreported), NSWSC, 28 March 1994. I did not understand Mr Diethelm of the Second Defendant to submit that the taking advantage of emotional vulnerability in the way the Plaintiff particularised the case with respect to Mr Daniels, Mr Burns and Mr Marks may not constitute conduct that is unconscionable. Rather he contended that there was no evidence that the client was emotionally vulnerable, or if he was, there was no evidence that the vulnerability had been evident to the First Defendant or her staff.

62 In the case of Mr Daniels consideration of any emotional vulnerability is bound up with the evidence of his psychiatric condition. In this respect Mr Diethelm submitted that prior to Mr Daniels' breakdown on 27 July 2002 there was no reason to think that his psychiatric difficulties would have been obvious to the staff of Liberty Network. No expert evidence was called to establish the nature of Mr Daniels' psychiatric condition as at May 2002. I am nonetheless satisfied that as at May 2002 Mr Daniels was suffering from a psychiatric condition that was characterised by anxiety. I consider that it was, or should have been, evident to the staff of Liberty Network that Mr Daniels was an abnormally anxious individual. Samantha Consiglio commented on the degree of his agitation during the forty-five minutes to one hour that she spent with him.

63 The Plaintiff also particularised that the First Defendant knew or ought to have known of Mr Daniels' mental or intellectual limitations that were such as to mean he lacked the capacity to fully understand the terms of the contract or the nature or cost of the services for which he was paying. The only evidence as to Mr Daniels "mental or intellectual limitations" was the evidence of his belief that he was suffering from depression and anxiety and that he told the consultant that he did not understand the Guarantee of Service. He paid the First Defendant the sum of $40,280 over the space of two days without inquiry as to the services to be obtained or how the fee was arrived at. Taking into account Mr Daniels' account of his psychiatric condition, the evidence of Ms Consiglio to which I have referred, the inferences that I draw from the content of the interviews on 9 and 10 May 2002 and the impression that I formed of Mr Daniels as he gave his evidence (taking into account that his condition may have altered between May 2002 and the date of giving evidence) I am satisfied that it was, or should have been, apparent to the First Defendant's staff that he was an emotionally vulnerable person with some form of psychiatric difficulty or intellectual limitation.

64 In considering whether the sales techniques employed by the First Defendant's staff in their dealings with Mr Daniels involved pressure or the use of unfair tactics or was otherwise unconscionable I have regard both to their conduct and to matters personal to Mr Daniels that I am satisfied were or should have been apparent to them. It seems to me that the sales techniques described by Mr Daniels as having been employed by the Liberty Network consultants in their dealings with him on 9 and 10 May 2002 are to be characterised as involving pressure and unfair tactics within the meaning of s 43(2)(d) of the FTA. In my view the unfair tactics include sending members of staff to accompany Mr Daniels to the bank on 9 May 2002. This operated to lessen the chance that he might re-assess the wisdom of his agreement to pay such a substantial fee to Liberty Network for such an intangible benefit. Mr Daniels had been pressured by a number of consultants at his interview on 10 May to join the Russian bride scheme. The tactics employed during that interview included appeals to his fears that he was facing a lonely old age pitched against representations that Liberty Network was in a position to arrange his marriage to a woman who would care for him. Appeals of this description were interspersed with denigrating remarks calculated it might be thought to reinforce his feelings of loneliness and inadequacy. Mr Daniels' emotional vulnerability was known to the staff of Liberty Network because he had disclosed that his marriage had failed and he had returned to live with his parents.

65 I am satisfied that the First Defendant by her servants and agents in trade and commerce in connection with the supply or possible supply of services to Mr Daniels engaged in conduct that was in all the circumstances unconscionable contrary to s 43 of the FTA. I consider that Mr Daniels received no service for the fees that he paid and that it is appropriate to make a compensation order in respect of the total sum. Mr Burns 66 Mr Burns is aged fifty-three years. He has never been married. Over the past thirty years he has had few relationships. In his affidavit that was sworn on 10 October 2002 (his principal affidavit) Mr Burns states that he has suffered from depressive illnesses, emphysema and spinal decay for a number of years. As at that date he was taking prescribed medication including Effexir, Valium and Diazepam. 67 Mr Burns attended the offices of Liberty Network on 6 March 2002. He had earlier seen an advertisement for Liberty Network in the Sunday Telegraph. 68 At his first consultation Mr Burns was interviewed by Gina. He completed the Liberty Network Personal Particulars Form. During the course of the interview he was handed the Scale of Fees. Gina outlined the services available for each of the six levels of membership. Mr Burns said he would take up the $220 membership. A discussion at this initial consultation to the following effect took place: "Gina: This is the basic joining fee you get six months dating service. The further up the service you go the better the service, I have a client on the books for you. What sort of money are you prepared to spend to ensure your happiness. Burns: I have been to a dating service in 1971 and I was ripped off and I don't want that to happen again. Gina: How much would you like to spend on finding a lady. Burns: I could go to $3,000.00 if it was necessary and it I more than I had been prepared to spend (sic) Gina: Where do you have your money? Burns: In various investments. Gina: How much money have you got tied up in investments? Burns: Respectfully that's none of your business. Gina: I can upgrade you to higher plan and because of your past bad experience I will give you a discount. You will meet more ladies as you go up the scale. I have ladies now. You could be going out this Friday or Saturday night if you wished. Burns: I want an easygoing, down to earth lady with similar interests, surfing, astronomy and reading. I want some approximately my age or a few years younger, Australian or Anglo Saxon, obviously if I meet and attractive lady that good (sic) so long as we were compatible and can communicate, a slender and attractive lady, some who is slender in build similar to myself. Gina: Yes we can find a match for you. Because if you joined the higher level of service I have a match for you now and you could be going out this weekend.

… Gina: You shouldn't let money hold back your happiness. We can change your life. It's up to you. The higher plan level you take the more personal service we give your situation and the more contacts we give you. You should be looking at this plan (indicating the $3,300) and said something similar to 'It's a lot of money I know by your case is special and will need special attention, I will be your personal consultant assisted by all our staff. I can let you into the twelve month marriage service plan for $3000 giving you the discount of $300 due the past experience you told me about." (Paragraph 8) 69 Gina told Mr Burns that she could give him the phone number of a lady, named Margaret, whom he might contact as soon as he liked. Mr Burns agreed to take up the $3,300 membership plan. He paid the sum of $220 at the interview. He made a further payment that day of $1,000 by means of a credit transaction on his Visa account. He was instructed to pay the balance ($2000) as soon as possible. 70 On 11 March 2002 Mr Burns went out on a date with the woman, Margaret. She was an extremely attractive woman of an age that Mr Burns considered to be appropriate. He thought that their meeting had been a positive one. On 13 March 2002 he paid another $1,000 to Liberty Network by means of a credit transaction on his Visa account. He paid a further $1,000 by way of credit transaction on his Visa account the following day.

71 Margaret told Mr Burns that there was no chemistry between them. There was no further contact between the two. 72 On 17 March 2002 Gina gave Mr Burns the contact details of a woman named Nicole. He telephoned Nicole. She said that she was ill and not able to meet him.

73 Mr Burns was supplied with the contact details of another woman, named Susan, by Liberty Network. He telephoned Susan but she said that she was unable to go out with him because of sporting and family commitments.

74 On 31 March 2002 Mr Burns wrote a letter to Gina complaining that Liberty Network was failing to fulfil its obligation under their contract to introduce him to women who genuinely desired to meet a partner. 75 In early April 2002 Liberty Network gave Mr Burns the contact details of a woman named Connie. He telephoned Connie. She was not able to go out with him because of work commitments. 76 On 20 April 2002 Mr Burns went out on a date with a woman named Nicole to whom he had been introduced by Liberty Network. The introduction did not prove to be successful. Mr Burns was left with the impression that Nicole wished to get married in order to satisfy a condition imposed on her inheritance of a property in France. He considered that this was not a basis for a fulfilling relationship. 77 On 21 April 2002 Liberty Network supplied Mr Burns with the contact details of a woman named Maria. This contact also did not prove successful. Mr Burns was given further contact numbers of women but none of these proved suitable.

78 In early May 2002 Mr Burns attended Liberty Network and was spoken to by Cindy who told him that she had taken over from Gina as his personal consultant. Cindy said that she understood he had not been having much success with Australian and European ladies. She suggested that he should join the Liberty Network affiliated Russian dating agency. She assured Mr Burns that Russian women are brought up to be perfect wives and that they like Australian men and treat them with respect. She said that there were three or four Russian women in Melbourne who were available to meet Mr Burns. She offered to arrange to introduce him to these women to see if he was compatible with any of them. She said that the fee for this service was $4,000. Mr Burns explained that he was still paying off the $3,000 that he had paid Liberty Network and that he did not have a further $4,000 to spend. Cindy told him that she would proceed to arrange the trip and that he should pay Liberty Network as soon as possible. She said that this was an opportunity that he should not miss. At the conclusion of the interview Mr Burns had agreed to go to Melbourne to meet the Russian women and to pay Liberty Network the further sum of $4,000. 79 The following day Mr Burns telephoned Cindy and told her he was not going to pay the money. He instructed her to cancel the Melbourne trip. Cindy telephoned him later and urged him to take up the offer of the trip. He agreed to do so.

80 On 2 May 2002 Mr Burns paid Liberty network $4,000 by way of a further Visa account credit transaction. After making the payment Cindy inquired how he proposed to pay for his airfare, accommodation and meals. Mr Burns understanding at the time of the payment was that the $4,000 fee included these costs. Cindy said that the fee was payable for the introduction to the Russian women. Without obtaining his approval she amended the Visa credit transaction form to include a further $315.38 to cover these expenses. Mr Burns complained about this to Cindy, but he did not make a great deal of the matter.

81 Mr Burns travelled to Melbourne on 11 May 2002. He had been given the contact number of a woman, named Tanya, who was the Liberty Network agent in Melbourne. During the day and a half that he spent in Melbourne he was introduced to three Russian women. The first rejected him as too thin. The second, Svetlana, went out for dinner with him and an interpreter. Svetlana did not speak English. Mr Burns was left with the impression that Svetlana was looking to meet an Australian man in order to prolong her stay in this country. He did not think this was the basis of a sound relationship. The third woman to whom he was introduced was named Luba. He felt positive about his meeting with her. On his return to Sydney he was informed that Luba did not want to pursue contact with him because he was too thin.

82 Mr Burns had a further interview with Cindy on 23 May 2002. During this interview Cindy spoke of the possibility of an introduction to a Ukrainian woman. She explained that under this scheme the client was asked to select a woman from a series of photographs. He was then expected to write letters to the woman. Liberty Network would arrange for the letters to be translated and sent to the woman in the Ukraine. The client and the Ukrainian woman would correspond for a time. If prospects of a successful relationship developed the woman would be invited to come to Australia and to live in the client's home for four to six weeks to assess the prospects of a lasting union. If they appeared suited the woman would return to the Ukraine and apply to immigrate to Australia with the client as her sponsor.

83 During this interview Cindy showed Mr Burns a photograph album and he selected a photograph of an attractive woman named Elena. Elena was described as being the mother of two children. Cindy told Mr Burns that the cost of the service would be $12,700. This sum was said to cover airfares, immigration expenses, visas, inoculations and the childrens' fares. It included provision for the cost of return fares to the Ukraine for Elena and the children in the event that things did not work out.

84 Mr Burns told Cindy that he needed to think about the matter by himself. He pointed out that it involved a great deal of money and that, all up, he would have paid Liberty Network $20,000. He left the interview room and had a cup of coffee. On his return he expressed his concern about the expense. He told Cindy that he was suffering from emphysema of both lungs and a degenerative spinal condition and that he was taking heavy medication for the pain and in order to sleep. He went on to say: "I am still interested, I don't want to live the rest of my life alone. I would have to break a second investment and erode half of my investments if I agreed to this.

Cindy: You're always concerned about your money … think of what you future could be."

85 During the interview Cindy told Mr Burns that if his only concern was the money Liberty Network would be able to arrange a loan. Mr Burns said he did not wish to take out a loan. He said that he would arrange to realise an investment and pay by Visa. Cindy said to him:

"If it doesn't work out we offer a complete money-back guarantee." Cindy produced the Guarantee of Service saying: "This our contract guaranteeing our services. If you're going ahead with the Russian contacts you will have to complete the form today."

Mr Burns read the form and signed it. 86 After Mr Burns signed the Guarantee of Service he was invited to write a letter to Elena. Arrangements were made for a photographer to take photographs of him. Thereafter there was discussion about how Mr Burns would pay the additional fees. He explained that he would have to break an investment. He agreed to pay $4,000 on 23 May with the balance of $8,700.00 when the funds became available. He paid the balance on 30 May 2002. 87 On 23 May 2002 Mr Burns commenced correspondence with Elena. He continued to request that Liberty Network arrange introductions for him so that he could go out on dates. He pointed out to Cindy that he had not initially approached Liberty Network seeking a long distance penfriend. It was his wish to be introduced to women who would be interested in going out with him socially. 88 On 1 July 2002 Mr Burns wrote a further letter of complaint to Liberty Network asserting that he had been a member for four months and that he had received relatively little in the way of return for his money. He had gone out on three dates; with Margaret, Nicole and Maria. He complained about the cost of the Melbourne trip given that it had not led to any on going contact. He pointed out that an overseas penfriend did not constitute a relationship and he complained that, despite the expenditure of a considerable sum of money, he was still sitting at home alone every weekend. Mr Burns stated that if he did not receive satisfaction he would make contact with the Department of Fair Trading and seek its assistance in resolving the matter. 89 In early July Cindy contacted Mr Burns and gave him a contact number for a woman named Suzi. Mr Burns contacted Suzi by telephone. She advised that she was then too busy with business affairs, but that she would ring him back. She did not. Cindy also supplied Mr Burns with the contact details of a woman named Rosalie. Rosalie did not return Mr Burns' telephone call. 90 The Second Defendant telephoned Mr Burns and gave him the contact details of a Russian woman living in Sydney. Mr Burns did not make contact with this woman. He had been advised by the Department of Fair Trading not to continue his dealings with Liberty Network pending the investigation of his complaint. 91 The Second Defendant telephoned Mr Burns and inquired about whether contact had been made with the Russian woman. During this conversation the Second Defendant became abusive and said to him: "We all know that you are manic depressive … but you didn't have to do this" (referring to the complaint lodged by Mr Burns with the Department of Fair Trading). 92 There was no issue concerning the sums of money paid by Mr Burns to Liberty Network. Nor was there an issue concerning the nature of the services that had been provided. In his affidavit Mr Burns neglected to mention that he had been given contact details for two other women, Vinnie and Lorraine. He had spoken to each by telephone. He agreed in cross-examination that his contact with Maria extended to a meeting at the Harbord Diggers Club one Sunday afternoon when they had had a cup of tea. In all, Mr Burns agreed that he had been furnished with the contact details of nine women who were living in Sydney. 93 Mr Burns was challenged upon the basis that he had lodged a complaint with the Department of Fair Trading, but had nonetheless, continued his correspondence with Elena. It was suggested to him that he had made his complaint to the Department of Fair Trading with a view to obtaining a refund of the monies paid under his contract with the First Defendant while at the same time seeking to obtain the benefit of the introduction to Elena.

94 Mr Burns agreed that he had written to Elena on 7 October 2002. This was after his initial complaint to the Department of Fair Trading. He agreed that as at that date he was endeavouring to facilitate Elena's application to come out to Australia. His attention was directed to an assertion in his principal affidavit: "On 16 July 2002 I contacted the Department of Fair Trading, as don't believe I have received the services which were offered to me. I have not been introduced to any women who match my criteria. I have paid out $20,000 and my predicament has not changed I am still living a lonely existence." 95 It was suggested that the affidavit was misleading in that at the date of swearing it he was endeavouring to sponsor Elena to come to Australia as his fiancé.

96 I did not consider that Mr Burns intended to deceive by the omission to refer to the continuing correspondence with Elena in the latter part of 2002. Mr Burns was aggrieved with Liberty Network over what he regarded as the lack of service provided for the fees that he had paid. I accept that the complaint that he made to the Department of Fair Trading was a genuine one. As at 10 October 2002 when he swore his principal affidavit Mr Burns entertained the hope that Elena existed and that she might travel to Australia. He continued to correspond with her because of this hope. I do not find that state of affairs to be inconsistent with the assertion in this affidavit that I have set out at paragraph [94] above. The assertions in Mr Burns' principal affidavit reflected the concerns he had expressed to Cindy. He had paid approximately $20,000 to Liberty Network. He had a penfriend. He had wanted to be able to go out on weekends with a woman companion. His fading hope that something might come of the correspondence with Elena did not mean that he had received value for the fees that he had paid to Liberty Network. 97 Allied to the submission that Mr Burns' principal affidavit was intentionally misleading, was a submission touching on the circumstances in which he came to swear a second affidavit. In paragraph 35 of his principal affidavit Mr Burns stated: "Since 23 May 2002 I have been corresponding with the Russian lady Elena, we have probably exchanged about 10 letters each". In cross examination it was suggested to Mr Burns that his further affidavit, sworn on 22 November 2002, to which is annexed his correspondence with Elena, including letters written by him as late as October 2002, was prepared because the correspondence between him and Elena had come to light. The First Defendant referred to it in her affidavit that was sworn on 18 October 2002. Mr Burns said that he was not aware of the contents of the First Defendant's affidavit at the date he swore his second affidavit. I accept that to be the case. I do not find the assertion in paragraph 35 of Mr Burns' principal affidavit to be misleading.

98 Mr Diethelm invited me to find that Mr Burns' evidence was given in an unsatisfactory manner in that on occasions his answers were not responsive. This submission was advanced particularly with respect to his cross-examination by the Second Defendant. Mr Burns had a tendency, particularly when being cross-examined by the Second Defendant, to query the relevance of the question. Some allowance perhaps needs to be made for the fact that the Second Defendant was cross-examining Mr Burns on his own behalf. I accept that there had been an exchange of an unpleasant character between the two in the course of the telephone conversation that I have referred to at paragraph [91] above. Despite the unresponsive quality of some of his answers I was not left with the impression that Mr Burns was seeking to mislead. I considered him to be a truthful witness whose recall appeared to be generally reliable. To the extent that his evidence was inconsistent with the evidence of the Second Defendant I preferred his account. Findings Mr Burns 99 Mr Diethelm submitted that there was no evidence to support the contention that high-pressure sales techniques had been used to persuade Mr Burns to sign for a higher level of services than originally quoted or that Mr Burns had been harassed to upgrade his file. In this respect Mr Diethelm pointed to Mr Burns as an assertive person demonstrably capable of standing up for himself. Mr Burns had been quick to complain over what he considered to be inadequate service. At his first interview he was shown the Scale of Fees. Gina described the services that were available for each fee category. She inquired about what amount of money he was prepared to spend and he responded, "I could go to $3,000 if it was necessary". When she made further inquiries concerning his financial position he told her that it was none of her business.

100 In Mr Diethelm's submission Mr Burns received services for the fees that he paid to Liberty Network. Following payment of the initial fee of $3,000 Mr Burns was introduced to nine women who were resident in Sydney. The circumstance that the initial fee was paid over several days in instalments was said to demonstrate that Mr Burns had an opportunity to reflect before proceeding with the transaction. It was contended that it was not the fault of Liberty Network that six of the women contacted by Mr Burns were unwilling to meet him and that the three who agreed to an initial meeting did not wish to pursue further contact with him. Mr Diethelm submitted that an introduction agency can hardly be seen to guarantee the success of the introductions that it makes.

101 Turning to the payment of $4,000 for the introduction to the Russian women in Melbourne, Mr Diethelm pointed to Mr Burns' evidence that he decided not to proceed with the arrangement and that he telephoned Cindy and said: "Tough luck, no further discussion I am not paying the $4,000.00 and as you have not explained to me what it is for and you do not appear to be going to explain to me what it is for."

Again, this was relied upon as demonstrating Mr Burns' ability to deal on terms of equality with the staff of Liberty Network. 102 Generally, in Mr Diethelm's submission, there was no evidence to suggest that the sum of $4,000 was not a reasonable fee for the introduction to Tanya, the Russian introduction agent located in Melbourne. This was a potentially valuable contact for Mr Burns, as was the agreement to introduce him to the three Russian women.

103 Turning to the payment of the fee to join the affiliated agency's Russian bride scheme, Mr Diethelm pointed to the evidence that Mr Burns paid $4,000 on 23 May and the balance of $8,700 one week later. It was said that this tended to demonstrate that the payments were made because of a deliberate decision and not as the result of high-pressure sales techniques, harassment or other unfair tactics on the part of the First Defendant. Mr Diethelm submitted that there was no evidence, for the purposes of s 43(1)(e) of the FTA, of the cost of equivalent services from another supplier of introduction services.

104 Mr Burns was on medication for depression at the time of his dealings with Liberty Network. Mr Griffin did not submit that Mr Burns' psychiatric condition was such as to have been evident to the staff of Liberty Network from the outset. Rather, he contended that the operators of introduction agencies are on notice that their clients may be vulnerable people and that staff should be trained to inquire whether a new client is on any form of medication. I do not accept that to be the case. 105 I do not find that at his initial consultation with Liberty Network there was any reason for the First Defendant's staff to consider that Mr Burns may be suffering from any form of psychiatric condition.

106 The Plaintiff also particularised as unconscionable the taking advantage of Mr Burns' emotional vulnerability to extract large sums of money for little or no service. Having seen Mr Burns in the course of giving evidence, and accepting as I do the account his gives of his dealings with the staff of Liberty Network, I think it likely that his stated anxiety not to live the remainder of his life alone was palpable. While I do not consider that all the clients on whose behalf the present proceedings were brought were apparently emotionally vulnerable people I am satisfied that Mr Burns was and that his vulnerability was apparent from the time of his first interview. It is in this context that I approach the competing submissions as to whether Mr Burns was subjected to high-pressure sales techniques.

107 Taking into account Mr Burns' emotional vulnerability, I consider that the sales techniques that he describes in his principal affidavit amounted to the use of pressure within the meaning of s 43(2)(d) of the FTA and constituted unconscionable conduct in all the circumstances . I have come to the same conclusion with respect to the techniques used by Cindy to persuade Mr Burns to pay $4,000 to meet the Russian women living in Melbourne. In this respect I take into account the further contact made with him after he had decided not to proceed with the arrangement.

108 Prior to making the first of the payments to join the affiliated agency's Russian bride scheme Mr Burns told Cindy of his health problems and expressed concern about taking on financial responsibility for a woman and her two children given his age and those difficulties. However, he reiterated his desire not to live the rest of his life alone. I consider that his account of his dealings with Cindy at the time he agreed to pay for introductions to the women in the Ukraine that I have set out above evidences the use of high-pressure sales techniques.

109 Taking into account the course of the dealings between the First Defendant and Mr Burns I consider that the Plaintiff has established that as the result of high pressure sales techniques deployed against Mr Burns, an apparently emotionally vulnerable person, large sums of money were extracted from him for little or no service at all. Mr Burns paid $19,920 to Liberty Network. I reject the suggestion that he received services that were in any sense commensurate with the fees that he paid. It is true that an agency cannot offer a guarantee of the success of the introductions that it makes. However, Mr Burns was encouraged to pay substantial fees to Liberty Network for personalised service. He described himself as a person who has difficulty in making contact with people on a personal level. I am satisfied that so much would have been apparent to the consultants employed by Liberty Network. There was nothing to suggest that any attention was given to arranging to introduce Mr Burns to women who may be genuinely interested in forming any form of relationship with him. To supply Mr Burns with no more than telephone numbers, largely of women who had no interest in meeting him, seemed to me to be fairly particularised as the provision of little or no service for the fees that were obtained from him.

110 Notwithstanding the absence of evidence of the cost of equivalent services from another supplier I find that the fees obtained from Mr Burns were extravagant. I am satisfied that his position of emotional vulnerability was relied upon by the First Defendant through her servants or agents in order to extract these fees. I consider that the Plaintiff has established that the First Defendant by her servants and agents engaged in conduct in connection with the supply of introduction services to Mr Burns that was in all the circumstances unconscionable contrary to s 43 of the FTA.

111 Mr Marks was a single man aged thirty-five years at the date of his contact with Liberty Network. He was a shift worker accustomed to working six days per week on afternoon, night or early morning shifts. His work pattern had prevented him meeting women and forming a relationship. He described himself as a shy and introverted person. 112 In February 2002 Mr Marks saw an advertisement for Liberty Network in the Daily Telegraph. 113 On 20 March 2002 Mr Marks telephoned Liberty Network and spoke to Cindy. During that discussion he was told that the joining fee was $220. He sought and obtained confirmation that this was the only fee that was payable. Cindy suggested that he come in for an interview. He explained that his work commitments made it difficult for him to attend during office hours. Cindy said that he could join immediately and that he would be placed on the Liberty Network files and that he could call into the office on a later occasion. He was invited to transfer $220 to the Liberty Network account and supplied with the account details. He was given a membership number and told that a Liberty Network application form would be sent to him in the mail. Later that day Mr Marks transferred the sum of $220 to the Liberty Network bank account. 114 During the course of the following week Mr Marks received the Liberty Network "Personal Particular and Requirements Form" together with a receipt for his payment of $220. He completed the application form. During that same week Cindy telephoned him and arranged for an interview. 115 On 3 April 2002 Mr Marks attended at Liberty Network for an interview. Cindy interviewed him and told him that the agency had been established for a long time and that they had a number of nice ladies on their books. She quoted the success rate in finding the right lady for a client as being around fifty percent. 116 Mr Marks had forgotten to bring the application form with him to the interview. He was given another which he completed in the interview room. Cindy had a photograph album on the desk. She showed Mr Marks the Scale of Fees. She pointed to the $220 rate, saying: "That's just the bottom, the standard thing, but we want you to go up higher. The next one up you get a better selection of ladies and more opportunity."

Mr Marks maintained that he simply wanted the basic $220 service. He was invited to look through the photograph albums and to write down the names of any women to whom he would like to be introduced. He identified about six women in this way. Cindy said that Liberty Network would get in contact with the women and get back to him. 117 On 10 or 11 April 2002 Cindy telephoned Mr Marks and observed that he had not had a great deal of experience with women. She advised that it was necessary for him to learn how to react and be comfortable with women. She said that she wanted him to contact a lady named Marina and arrange to go to a dinner or a movie with her. 118 Mr Marks telephoned Marina. They engaged in general conversation and Mr Marks found her to be pleasant to talk to. Marina said that she was too busy to go out with Mr Marks. He spoke with her on another occasion and received the same response to the suggestion of a meeting. 119 On 11 May 2002 Cindy telephoned Mr Marks and told him that she had put his application form on the internet and that she wanted him to come in for a further interview. He agreed to do so. He attended the offices of Liberty Network on the afternoon of 17 May 2002. Cindy spoke to him and told him that she had received a reply from a woman in Russia who was interested in meeting him. She handed him a folder containing pictures of the woman who was described as being Ukrainian.

120 During the interview on 11 May Cindy asked questions about how much money Mr Marks was earning and what funds he had in the bank. He said that he had loans with AGC, the Credit Union and with Esanda. He put his outgoings as around $1,000 per month. Cindy made notes. At the conclusion she said, "I've just worked it out, you still have plenty of money to live on." She showed Mr Marks a folder containing photographs of Russian women and invited him to make a list of the names of those to whom he was attracted. During the interview she said things such as, "Russian women are better than Australian women", "They treat their husbands with respect", "We can get you married in two months to a Russian lady". 121 Mr Marks inquired about the cost of an introduction to a Russian woman. He was told that $16,000 would cover all expenses. He said that he could not afford this service and Cindy assured him that he could. She suggested that he obtain a further loan.

122 Mr Marks looked through the folder of photographs of the Russian women. He had been working the previous night and he was tired. Cindy came back into the interview room and told him that she had made contact with a finance company on his behalf. She handed him the telephone and he spoke with a woman who was apparently an officer of a finance company. They discussed the possibility of Mr Marks obtaining a personal loan in the amount of $16,000. Mr Marks decided not to proceed with a loan application. When Cindy returned and found out that he was not proposing proceeding with the loan she became aggressive in her manner with him, saying: "You're thirty-five, single, you'll never meet a female without us."

She went on to tell him of a client who had found difficulty in meeting an Australian woman and who was now happily married and living in Melbourne. She pressed him to pay the $16,000 fee saying to him, "It's your happiness. All you have to do is sign the form" referring to the Guarantee of Service. Mr Marks said he would go the Credit Union and obtain another loan. He completed the Guarantee of Service. 123 Mr Marks showed his mother a copy of the Guarantee of Service that afternoon. After this he telephoned Liberty Network and told Cindy that he wanted to cancel his membership. She responded, "You can't cancel. We don't cancel memberships, your file is put on hold." 124 On Saturday 18 May 2002 Mr Marks went to Liberty Network accompanied by his parents. He spoke with the First Defendant and said that he could not afford to proceed with the agreement and that he did not want a Russian bride. The First Defendant told him that memberships were not cancelled but that they may be put on hold.

125 In his affidavit of 21 November 2002 Mr Marks gave an account that on 13 June 2002 he received his St George Visa Card statement indicating a transaction with Liberty Network dated 16 May 2002 in the amount of $1,000. He stated that he had no recollection of attending Liberty Network on that day, nor any knowledge of how Liberty Network had come to debit his Visa Card in this sum. 126 In her affidavit sworn on 4 March 2003 the First Defendant states that a review of Mr Marks' file shows that on 21 March 2002, the day after he paid his fee to Liberty Network, a woman named Michelle, reference 39G, was informed about Mr Marks. Staff of Liberty Network had been unable to contact him as his mobile telephone service was switched off. On 2 April 2002 Mr Marks attended Liberty Network and spoke with Monica Herra requesting that his file be reviewed for a further introduction. 127 The First Defendant stated by reference to the Liberty Network file that on 11 May 2002 Mr Marks was interviewed by Cindy. Cindy appeared to have quoted $1000 for the "Priority Service" allowing Mr Marks a discount of $370.00. He paid $1,000 to Liberty Network by means of a Visa account credit transaction. The voucher for the transaction was signed by Mr Marks.

128 The Liberty Network file records that Mr Marks' introduction to Marina was provided on 14 May 2002. He contacted Liberty Network to advise that he had spoken to Marina and that they were, "Going to meet at the RSL on Sunday". On that day Mr Marks' details were sent by email to Liberty Network's affiliated agency in the Ukraine. An appointment was made for him to attend for an interview on Friday 17 May 2002. The file did not record the details of any interview on that day or any contact between Mr Marks and a finance company. The First Defendant says that she had no knowledge of any such contact. 129 The First Defendant agreed that on Saturday 18 May 2003 Mr Marks attended Liberty Network in company with his mother. He said that he wished to cancel his membership and that he could not afford to bring out a Russian lady. The First Defendant recalled saying, "I can put your file on hold until you feel ready. You're still entitled to the membership you've got". There had been no discussion concerning the $1,000 payment during the course of the discussion between the First Defendant, Mr Marks and his mother on 18 May.

130 A note on Mr Marks' Liberty Network file dated 27 June 2002 recorded by Veronica recorded: "Received phone call from Mrs Marks saying that she was Mr Marks' mum. Questioned as to why her son had paid $1,000 Visa on the 11.5.02. I told her I would call her back on (telephone number given). Called back and told her he signed for the $1,000. She said yes but what for, I told her she can ask him & she said he forgot and I said well I can't give you the info. She said what if he called and asked I said that is not a problem." 131 The Liberty Network file did not indicate that Mr Marks had followed the matter up by telephoning and enquiring about the purpose of the $1000 payment. 132 It is the defendants' case that Mr Marks paid two amounts to Liberty Network: $220 and $1,000. Service was not denied to him. He asked Liberty Network not to provide further services in his interview with the First Defendant on 18 May 2002. 133 In a supplementary affidavit that was sworn on 14 April 2003 Mr Marks corrected some of the assertions contained in his first affidavit which he said had been prepared from memory. He accepted that the events and conversations that he had said occurred at an interview on 10 or 11 April 2002 may have taken place on 11 May 2002. He did not take issue with the assertion that he attended Liberty Network offices on 11 May 2002 and that he spoke with Cindy. He recalled paying the sum of $1,000 on that occasion and being given a receipt for the same. He agreed that during his conversation with Marina an arrangement had been made for them to meet at the Rooty Hill RSL on a Sunday. This had not eventuated. He had telephoned Marina back and been told that she was too busy. 134 Mr Marks accepted that, contrary to the assertions set out in his first affidavit, he had authorised the $1,000 credit transaction on his Visa Card. His explanation as to how he had forgotten this event was that he had been tired at the time as the result of working shift work. He believed that the incident must have slipped his mind. 135 In cross-examination Mr Marks agreed that he had a recall of speaking to a woman named Michelle whose details had been provided to him by Liberty Network. He had little recall of his contact with Michelle. He did not remember ever meeting her. He recalled the telephone conversation as a short, sharp conversation. He was not able to say on how many occasions he had spoken with Michelle. 136 Mr Marks agreed that after the initial introduction supplied by Liberty Network had not worked out he had requested another introduction.

Findings - Mr Marks 137 In Mr Diethelm's submission there was nothing in the account given by Mr Marks of his contact with Liberty Network to support the contention that high-pressure sales techniques had been used to persuade him to sign for higher services at higher fees than those originally quoted, or that he had been harassed to upgrade his file. I accept that is so. The evidence discloses that Mr Marks paid an initial amount of $220 by direct deposit into the Liberty Network bank account on 20 March 2002. Thereafter he attended on 11 May 2002 and it appears he was interviewed by Cindy. At the conclusion of that interview he arranged to pay an additional $1,000. In all the circumstances I find that Mr Marks, having initially joined at the base rate, determined to upgrade his membership on 11 May 2002.

138 Mr Diethelm submitted that I would approach the evidence of Mr Marks with caution given his failure to recall the $1,000 Visa transaction. I do so. I nonetheless accept in broad outline the account that Mr Marks gave of his dealings with Cindy and the proposal that he spend $16,000 in connection with the Russian bride scheme. Despite his imperfect memory of dealings with Liberty Network the fact is that Mr Marks signed a Guarantee of Service in the amount of $16,000 on 17 May 2002. His account of the representations made to him by Cindy concerning the Russian bride scheme was consistent with other evidence concerning the promotion of this service by the Liberty Network consultants.

139 I consider that Mr Marks signed the Guarantee of Service as the result of being subjected to high-pressure sales techniques. The contract provided for the payment of an extravagant fee disproportionate to any service offered. In the event Mr Marks did not proceed to pay the fee of $16,000.

140 The Plaintiff seeks compensation for Mr Marks in the amount of $1,220. Mr Diethelm noted that Mr Marks cancelled his membership and that this was the reason that no further services had been provided in accordance with his agreement. This does not seem to me to address the substance of the complaint that the Plaintiff makes. It is the Plaintiff's contention that Mr Marks signed the Guarantee of Service agreeing to pay a $16,000 fee as the result of high-pressure sales techniques. After Mr Marks left the Liberty Network offices and had the opportunity of speaking with his mother he sought to cancel his membership. In these circumstances it was apparent that Mr Marks was not to receive any service for the $1,220 that he had paid to Liberty Network for the personalised introduction service. It was Mr Diethelm's submission that the law does not require that a business, such as that operated by the First Defendant, have a refund policy. I accept that is so. Equally, as Mr Diethelm conceded, there may be circumstances in which the failure to refund a client membership fees will be unconscionable.

141 In the circumstances in which Mr Marks sought to cancel his membership which relevantly included that he had been subjected to pressure to pay $16,000 to meet a prospective Russian bride, I consider that the refusal to refund the $1,220 that he had paid to secure "Priority service" to have be unconscionable and contrary to s 43 of the FTA. Mr Bentley 142 Mr Bentley was a single man aged twenty-five years at the time he made contact with the Liberty Network. He had moved to Sydney and he did not have any friends living there. In June 2002 he saw an advertisement for the Liberty Network in the Daily Telegraph newspaper. On 1 July 2002 he telephoned Liberty Network and spoke to Cindy. He asked how much the service cost and was told that the first consultation was free and that Liberty Network was in a position to introduce him to girls that afternoon. 143 Mr Bentley went to the Liberty Network offices on 3 July 2002. He was interviewed by Cindy and an older woman who appeared very confident. This woman gave Mr Bentley a Personal Particulars Form to complete. She inquired about his employment and whether he was saving to purchase a house. He told her that he had saved about $8,000. He explained that he wanted to meet someone with whom he socialise and see whether they were suited. He said that he was sick of going out attempting to meet girls at nightclubs. The older woman explained that there were two women on the Liberty Network books whom she considered may be suited to him; one was a fashion designer from Queensland who was away for the next two weeks and the other was a gym instructor. She described both as being around twenty-five years of age, beautiful and single. She said that she could introduce him to these women if he was interested. He asked what the cost would be. He was then shown the Scale of Fees. The consultant pointed to the fee of $5,500 recommending it as the appropriate level of membership for him. He rejected this proposal. He also rejected the $1,580 membership. When it came to the $880 membership the consultant said, "I can offer you this, for six months. At this level, I can introduce you to the two girls straight away". Mr Bentley agreed and paid $880 to Liberty Network.

144 Mr Bentley was handed a business card with an identification number on it and the words, "x six months". He was told that this was his identification number and that he would have personal service for the next six months. Cindy said that she would be his consultant. The older consultant said that she had six albums of photographs of women to show him. He was invited to pick out the women who appealed to him so that she could see the sort of girls that he liked. He looked through an album containing about thirty photographs. He selected three that were to his liking. He asked to see the other albums and was told, "We only have one album". He was confused by this assertion in light of the claim made by the older consultant.

145 Within two days of paying the sum of $880 to Liberty Network Mr Bentley rang the Department of Fair Trading to seek advice. In evidence he said that he had understood that the payment of the fee would provide him with introductions to suitable women. There had been talk of two introductions prior to his payment of the fee, but there was no mention made of these after receipt of the funds. 146 On 13 July 2002 Mr Bentley went to Liberty Network to see Cindy. He was told that she was busy and he was asked to wait in an interview room. After a lengthy interval he spoke to Cindy. He asked for a refund of his fees. Cindy said he would have to speak to one of the managers, David or Joanne. She asked if he had received information that had been sent to him concerning a woman named Nikki. Mr Bentley said that he had not. He complained about being made to wait so long to see Cindy and he insisted that he wanted a refund. Cindy gave him a Liberty Network business card with the names, "Joanne" and "David" written on the back and again said that he would have to speak to them since she was not in a position to refund his money. 147 On Monday 15 July 2002 Mr Bentley contacted the First Defendant by telephone and requested a refund of the fee of $880. He complained that he had not been given any introductions or offered any services. She said, "We can't do that. We can put your file on hold". Mr Bentley went on to discuss the possibility of a partial refund if it were considered that he had received some service for his money to-date. The First Defendant said to him that Liberty Network had sent out material to him and that she feared that he was going out with the girl and wanting his money his money back at the same time. The discussion became acrimonious. 148 The First Defendant in her affidavit suggested that Mr Bentley had confused Veronica and Cindy. Cindy is older than Veronica. It appeared likely that Veronica had been the first point of contact and that she had introduced Mr Bentley to Cindy at the initial interview. Nothing of significance turns on this. The First Defendant said that on 4 July 2002, two days after Mr Bentley joined Liberty Network, an introduction was processed relating to a woman named Nikki, reference number 18K, and sent to Mr Bentley by mail. 149 The First Defendant's account of the telephone call with Mr Bentley was at odds in some respects with his account. She recalled that Mr Bentley had commenced by asking for a refund of his money. She said that she inquired, "What is the reason?" and that Mr Bentley said, "I've got a girlfriend now and I don't need your services. Anyway you haven't done anything for me". She said that she responded by saying, "If you have a girlfriend I am quite happy to put your file on hold but you can't expect me to refund you because you want the money for something else. If you didn't get the introduction to Nikki I can do it again". 150 To the extent that there were differences between the account of the telephone call given by Mr Bentley and First Defendant I prefer his version. In this respect I have regard not only to the impression that I formed of each in the course of giving evidence but also to what seems to me to be the inherent probability of the respective accounts.

151 Mr Bentley denied that he had received the referral concerning the woman Nikki in a letter sent to him on 4 July 2002. I accepted him. He agreed that he had received details concerning a person named Tammy after 3 September 2002. He had referred that material to the Department of Fair Trading. Findings - Mr Bentley 152 The Plaintiff particularised as unconscionable the use of high-pressure sales techniques, the extraction of extravagant fees disproportionate to any service provided, the failure to adequately explain the nature and the cost of the services and the failure to have any adequate refund policy in support of the claim made with respect to Mr Bentley.

153 It does not seem to me that Mr Bentley's account of his initial interview with the Liberty Network consultant established that high-pressure sales techniques had been employed. There was nothing to suggest that Mr Bentley was a vulnerable person. A feature of the interview was the representation that Liberty Network had two attractive young women on the books to whom he could be introduced upon payment of the $880 fee. He came to be suspicious of Liberty Network's bona fides when after payment of the fee there was no further talk of effecting introductions to either of these two women. On one view of the matter this representation was a false one made to induce Mr Bentley to sign up as member of Liberty Network at the highest rate of membership that the consultant could secure.

154 The Plaintiff's case is one brought under s 43 of the FTA alleging unconscionable conduct and not one alleging misleading or deceptive conduct contrary to s 42 of the FTA. In the case of Mr Bentley it did not seem to me that there was a relevant inequality in the bargaining position as between him and the supplier nor was he under any special disadvantage by reason of apparent emotional vulnerability or otherwise. It does not seem to me that the making of a misleading representation is necessarily to be characterised as employing high pressure sales techniques such as to amount to conduct that is unconscionable (as distinct from conduct that may contravene s 42 of the FTA). In any event the matter was not conducted upon the basis that the representation as to the ability to effect introductions to the fashion designer and the gym instructor was false.

155 Mr Bentley agreed to pay $880 to Liberty Network in return for introduction services for a period of six months. Prior to agreeing to pay this sum he was shown the Scale of Fees. He was given an explanation in general terms, that is set out in paragraph 10 of his affidavit, of the services offered with respect to various levels of membership. The Scale of Fees does not impress as a clear statement of the services available for each level of membership, nonetheless I am not of the view that the Plaintiff has established there was a failure to explain the nature and cost of the services such as to make the First Defendant's conduct with respect to Mr Bentley in all the circumstances unconscionable.

156 In the absence of evidence as to fees charged by other introduction agencies for the service of providing personalised introduction services over a six month period I am not persuaded that the Plaintiff has established that extravagant fees were extracted from Mr Bentley that were disproportionate to any service that the First Defendant provided or agreed to provide.

157 As I have already noted, I do not accept that the failure to have a refund policy constitutes unconscionable conduct. Accepting as I do Mr Bentley's account of his conversation with the First Defendant, I do not find that her conduct in refusing to refund his money to have been in all the circumstances unconscionable. Mr Bentley had entered into a contract with Liberty Network for the provision of introduction services over a period of six months from 3 July 2002. He sought to cancel that contract. The First Defendant indicated a willingness to supply the services that he had been offered but was not willing to refund his money because he no longer wished the service. I am not persuaded that this stance constituted unconscionable conduct in all the circumstances for the purposes of s 43 of the FTA. Mr Milton

158 Mr Milton was a single man aged thirty-nine years when he made contact with Liberty Network. In May 2001 he saw an advertisement for the Liberty Network in the Daily Telegraph newspaper. He noted the firm's telephone number with a view to contacting them when he felt the courage to do so. On 1 October 2001 he telephoned Liberty Network and inquired about the cost of the service. He was informed that the fees would be $220. He asked what he would receive for that fee and was told: "We provide you with unlimited introductions while ever you request further introductions. Why don't you come into our office and we can discuss it further."

He did not pursue the contact on that occasion. On a subsequent date he telephoned Liberty Network again and had a conversation with a consultant in like terms.

On 10 February 2002 Mr Milton again telephoned Liberty Network and made an appointment to attend at their office at 4.00pm that day. He kept the appointment and was interviewed by the First Defendant and a consultant named Veronica. He was asked how much money he wished to spend and said that he wanted to spend as little as possible. He explained he had a previous bad experience with an introduction agency and he wished to avoid such a situation again. 159 The First Defendant explained to Mr Milton that the higher the fee he paid the more opportunity he would have of being matched to the right partner. She took him through the Scale of Fees explaining the differing level of services available. Mr Milton said that he had been quoted $220. He observed that he was now being asked to pay more. He said he would go home and think about it. The First Defendant said that his Personal Details form would be thrown in the bin and that if he decided to sign up with Liberty Network in the future he would have to come back and complete another form at a cost of $100. He asked if his form could be held for a couple of days while he thought about the matter. The First Defendant repeated that if he were to leave the form would be thrown in the bin. She emphasised that by paying for higher services Mr Milton would be improving his chances. The interview concluded with Mr Milton saying that he would pay the $220 and, if need be, he would upgrade his membership. He paid the fee with his Visa credit card. He was handed a Liberty Network reference card and told to quote the reference number when telephoning the office. 160 On 11 February 2002 Mr Milton was telephoned by a person who identified herself as Cindy from Liberty Network. She said that she had located a girl named Kylie, a schoolteacher, who would be suitable to be introduced to him. She said it would be necessary for him to come into the office and have his photograph taken. She quoted the sum of $380.00 as the cost of obtaining the photographs. 161 Mr Milton said that he did not have time to attend at the office and have his photograph taken. He considered it would be cheaper to have a photographer friend take photos of him. He said he would arrange to do this and contact Liberty Network thereafter. 162 On 18 February 2002 he received a letter from Liberty Network advising him that his details had been given to a person named Sally. He understood that Sally had been supplied with his telephone number and that she would ring him. He received no calls from Sally. 163 On 1 March 2002 Mr Milton telephoned Liberty Network and spoke with Cindy, informing her that he had not been contacted by Sally. Cindy said she would chase the matter up. During this call Mr Milton complained that he had signed up with Liberty Network on 10 February and that he had not received any introductions. Cindy said she would follow up the introduction to Sally and that she had another introduction that may suit Mr Milton. She explained that this woman was going away to New Zealand for a holiday and would not be available for an introduction for a fortnight. She offered to endeavour to arrange another introduction for Mr Milton in the meantime.

164 During the telephone conversation with Cindy on 1 March 2002 Mr Milton asked for a refund of his money. He said that he was not happy with the service that had been provided. Cindy responded that, "We can't give you your money back but we can give you an introduction". She said that she would have to talk with Joanne and get back to Mr Milton.

165 On 8 March Mr Milton telephoned Liberty Network and asked to speak to Cindy. He was told she was not available. He left a message for Cindy or Joanne to call him back. Later that day he received a telephone call from the First Defendant. He complained that he was unhappy with the service that had been provided. The First Defendant refused his request for a refund.

166 On 3 June 2002 Mr Milton received a telephone call from a person who identified himself as David from Liberty Network. David said that he had an introduction for Mr Milton, a nice girl named Jacqui who was a nurse. Mr Milton asked for Joanne to give him a call. 167 On 4 June 2002 the Second Defendant again telephoned Mr Milton. During this conversation the Second Defendant said to him: "I went through your file and I have discovered that you have a complaint in with the Department of Fair Trading. What are you going to do about Jacqui? She has been in contact with us yesterday and she is matched with you."

Mr Milton asked to speak with Joanne. The Second Defendant said to him, "What are you going to do about contacting Jacqui" I don't give a shit whether you contact her or not. You can take your complaint to arbitration and take a day off work and Joanne can take the day off work. You may win the case or lose. What are you going to do?" Mr Milton repeated his request that he speak with Joanne. 168 Mr Milton spoke with the First Defendant by telephone. She inquired what he was going to do about the introduction to Jacqui. During this conversation she said, "This introduction has nothing to do with Fair Trading contacting me on Friday and you receiving an introduction on Monday". 169 In cross-examination Mr Milton agreed that he had indicated in his application form that he was interested in being matched to a woman of notably small stature. He agreed that it had been drawn to his attention that this would restrict the number of women that he might be introduced to. He said he had also been told that his preference in this respect would not present a problem. Findings - Mr Milton 170 The Plaintiff contends that Mr Milton was subject to high-pressure sales techniques designed to persuade him to sign for a higher level of service at a substantially higher fee than that originally quoted and that he was harassed to upgrade his file and pay a higher fee in order to obtain satisfactory introductions.

171 Mr Milton was told that the higher the fee paid the better the opportunity that Liberty Network would have of finding him the right partner. However, he was given a detailed breakdown of the services offered at each of the level of fees and he chose to join at the base rate.

172 While it may be that the First Defendant's assertion that the initial interview was complimentary and that Mr Milton's application form would be thrown in the bin if he went home to think about whether he wanted to pay for the higher level of service was a form of high pressure sales technique it is not suggested to have operated on Mr Milton to cause him to pay for a higher level of service than he requested.

173 The Plaintiff does not press as a particular of the unconscionable conduct alleged with respect to Mr Milton the extraction of extravagant fees disproportionate to any services provided to him.

174 The remaining particular of unconscionable conduct was the failure to have a refund policy. For reasons already given, I do not accept it was necessary to have a refund policy. The circumstances surrounding the First Defendant's dealings with Mr Milton do not seem to me to be such as to make the failure to refund his fees unconscionable conduct within the meaning of s 43 of the FTA. The Liability of the Second Defendant 175 The Plaintiff seeks a declaration that the Second Defendant was knowingly concerned in the conduct of the First Defendant, as set out in paragraphs 1 - 5 of the further amended summons, contrary to s 65(1)(e) of the FTA.

176 Section 65(1) of the FTA relevantly provides: "Where, on the application of the Minister, the Director-General or any other person, the Supreme Court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute: (e) being in a way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision, the Court may grant an injunction in such terms as the Court determines to be appropriate." 177 A person cannot be knowingly concerned in a contravention of the FTA unless he has knowledge of the essential facts constituting the contravention: Yorke v Lucas (1985) 158 CLR 661 per Mason ACJ, Wilson, Deane & Dawson JJ at 670. 178 The evidence relied upon by the Plaintiff to establish that the Second Defendant was knowingly concerned in the unconscionable conduct of the First Defendant is based upon the role that he is said to have played at Liberty Network. In the Plaintiff's submission the Second Defendant was active in running the business of Liberty Network jointly with the First Defendant. He described himself as being "the boss". He gave instruction to consultants and trainee consultants in the techniques to be employed in interviewing clients.

179 Ms Herra observed that the Second Defendant, "Controlled everything that went on in the office. He always said, 'I am the boss. But, if anyone asks, you are the boss'". Ms Herra had not seen much of the First Defendant, as she tended to be in and out of the office. When Ms Herra obtained money from a client and placed it on the board the Second Defendant alone was the one able to deal with it. 180 In cross-examination Ms Herra agreed that the Second Defendant expressed a philosophy that people working in a business should feel a sense of ownership of the business. She agreed that that was part of his staff training. She agreed that in the course of instilling this philosophy the Second Defendant would encourage staff to refer to themselves as "the boss" of the business.

181 When Mr Bentley spoke to Cindy about a refund he was instructed to speak to the managers, Joanne or David. She recorded the names of each of them on the card.

182 When Mr Anderson spoke with the First and Second Defendant concerning Mr Daniels it was the Second Defendant who effectively conducted the discussion and who referred on more than one occasion to the business of Liberty Network as "my business". 183 The Second Defendant gave evidence that he was employed by Liberty Network. It is noteworthy that he appeared to have a different impression as to the basis of his bonus payments to the account given by the First Defendant. The lack of certainty in this respect was to my mind consistent with a view that the Second Defendant, as a matter of fact, had an interest in the profits of Liberty Network greater than any salary and bonus entitlement under any contract of employment. 184 With respect to the dealings between Liberty Network and Mr Daniels, Samantha Consiglio said that before she left the Liberty Network office to take Mr Daniels shopping the Second Defendant told her, "Just be nice to him". I am satisfied that the Second Defendant knew of the unconscionable conduct relied upon by the Plaintiff with respect to Mr Daniels. This view seemed to me to be consistent with a number of the assertions contained in the Second Defendant's affidavit sworn on 10 March 2003. Thus the Second Defendant recalls Mr Anderson asserting that, "James is not capable or wanting to meeting anyone" and that he responded: "That is one of the reasons that we arrange to repay him the money".

The Second Defendant also asserts that during this discussion with Mr Anderson he said: "I am not going to admit to you that the business does not have the money to repay James instantly but I am going to tell you that I am not going to risk losing the business and letting down all our clients because we have no liquidity. We are not going to be closed by you. … Joanne and I have put into place safeguards to ensure that any further disbursement money received will be held in a special account. We will make the money by attracting more clients to our local service." 185 I am satisfied that the Second Defendant was aware of the dealings between Liberty Network and Mr Burns. Passages in his affidavit seemed to me consistent with such a view. After Mr Burns complained to the Department of Fair Trading I am satisfied that it was the Second Defendant who spoke to him by telephone on more than one occasion seeking to effect an introduction with a Russian lady in Sydney. 186 In his affidavit the Second Defendant makes assertions consistent with a view that he acted, in conjunction with the First Defendant, as a de-facto proprietor of the business. Thus at p 77 he states: "In Liberty I also insisted that in the event that if anything about a prospective client appeared different from the norm I was to be told, so I could interview that person personally." 187 The evidence established that the Second Defendant was present at the offices of Liberty Network six days per week. I am satisfied that he was knowingly concerned in the conduct of the First Defendant that I have found to be unconscionable contrary to s 43 of the FTA with respect to Mr Daniels, Mr Burns and Mr Marks. The Relief 188 The Plaintiff seeks declarations that during the periods specified with respect to each of the five named clients the First Defendant engaged in conduct that was in all the circumstances unconscionable and that the second defendant was knowingly concerned in that conduct. I propose to make declarations in the terms that are sought with respect to the dealings between the First Defendant (with which the Second Defendant was knowingly concerned) and Mr Daniels, Mr Burns and Mr Marks.

189 The Plaintiff also seeks orders for the payment of specified sums to compensate each of the five named clients for their loss arising out of their dealings with the First Defendant. Provision is made for the grant of such relief under s 72(1) of the FTA. Such an order may be made against a person who was involved in the contravention of the FTA: s 72(2). The Plaintiff seeks orders for compensation as against each of the Defendants. The claim includes the payment of interest pursuant to s 94 of the Supreme Court Act 1970 from the date of the payment by the client to the Defendants their servants or agents. I consider that orders for compensation in the amounts sought with respect to Mr Daniels, Mr Burns and Mr Marks to be appropriate. Interest calculated in accordance with Schedule "J" of the Supreme Court Rules 1970 will be included in the amount of the compensation ordered.

190 The compensation for sought on behalf of Mr Daniels is in the amount of $35,400. Interest will be allowed on this sum from 10 May 2002.

191 The compensation sought on behalf of Mr Burns is $19,920. Interest will be allowed on this sum from 30 May 2002.

192 The compensation sought on behalf of Mr Marks is $1,220. Interest will be allowed on this sum from 11 May 2002.

193 The Plaintiff also claimed orders pursuant to s 65(1) and (2) of the FTA restraining each of the First and Second Defendant permanently from: (i) Personally, or by any servant or agent, carrying on the business of supplying services at an introduction agency; (ii) being a director, secretary, officer of, or engaged in, the management of any company carrying on the business of supplying services as an introduction agency; and (iii) being the servant or agent of or independent contractor to any person or company carrying on the business of supplying services at an introduction agency. 194 As an alternative to the relief sought in paragraph [193] above, the Plaintiff claimed orders pursuant to s 65(1) and (2) of the FTA that each of the First and Second Defendants be restrained themselves, their servants or agents from carrying on the business of supplying services as an introduction agency, except on the following terms and conditions: (i) That they provide to all clients and potential clients a written explanation of the nature of the services to be provided; the time in which such services are to be provided and the frequency and manner of provision thereof and the cost of each such service; (ii) that they not use undue harassment or coercion to persuade clients to sign for introduction services and to up-grade introduction services; and (iii) that a five (5) clear business day cooling off period be provided to any client entering into an agreement for the provision of services enabling that client to cancel his or her membership within five (5) business days of signing an agreement for the supply of those services. A client is entitled to a full refund of all moneys paid in respect of that agreement by providing written notice before the end of five (5) clear business days after the agreement is signed;

195 Section 65(1) of the FTA provides that where on the application of the Plaintiff, the Supreme Court is satisfied that a person has engaged in conduct that constitutes a contravention of a provision of Pt 5 of the FTA (which includes s 43 - unconscionable conduct) the Court may grant an injunction in such terms as it determines to be appropriate. Subsection (2) provides that without prejudice to the generality of ss (1) an injunction may include one restraining a person from carrying on a business of supplying goods or services for a specified period or except on specified terms and conditions.

196 The First Defendant is aged thirty years. Since leaving school she has been continuously engaged in the introduction agency business. She has both been employed by introduction agencies and operated her own agencies. The introduction agency business has been her livelihood. The Second Defendant has also spent the bulk of his working life in the introduction agency business.

197 In determining what, if any, relief to grant pursuant to s 65 of the FTA it is open to me to have regard to the whole of the conduct of the First Defendant said to contravene the provisions of s 43 of the Act: Holloway at 75. The power to restrain a person from carrying on the business of supplying goods or services is not intended to be punitive but rather is designed to protect the public: Holloway at 88. 198 The introduction agency business in New South Wales is not the subject of regulation. In Commissioner for Consumer Affairs v Bona Fide Consultants Pty Ltd Abadee J, at pp 19 and 20, drew attention to the absence of regulation of the industry in the context of discussing the potential vulnerability of clients of the industry. To my mind the present case illustrates the concerns that his Honour expressed in Bona Fide Consultants.

199 The Introduction Agents Act 1997 (Vic) provides for a system of registration of introduction agents. Provision is made for introduction agreements disclosing the type and levels of service provided, the price of each level of service and the method of payment, the current size of the membership database and the method of introducing clients, together with the agent's complaint procedures. Provision is made under the Victorian legislation for a cooling off period of three days. Section 27 of the Act places restrictions on the amount of any prepayment for services. 200 The Introduction Agents Act 2001 (Qld) appears to have been modelled in on the Victorian legislation in a number of respects. It provides a system of licensing of introduction agents. The cooling off period provided under the Queensland legislation is three days.

201 Mr Diethelm submitted that the First Defendant had maintained membership records and client files in a satisfactory manner. I accept that to be the case. Clients were issued with receipts for the services to which they subscribed. Mr Diethelm acknowledged that the supervision of staff had been inadequate and that the failure to make provision to account separately for monies received by way of disbursements was a matter of concern.

202 I am not persuaded that the Plaintiff has established that this is an appropriate case in which to make an order permanently restraining the Defendants from carrying on the business of supplying services as an introduction agency. I am conscious of the need to consider the protection of the public. I am of the view that orders imposing conditions on the Defendants' conduct of any future introduction agency business in this State can adequately address this latter concern.

203 I consider that the Plaintiff has established that it is appropriate that the Defendants have conditions placed upon them with respect to the supply of introduction agency services in New South Wales. The Scale of Fees did not clearly set out the nature of the services to be provided for each level of fees. Clients were pressured into signing for higher level services than originally quoted. Notwithstanding that the introduction agency business is not regulated in this State, I am persuaded that the Plaintiff has established that the Defendants should be required to allow clients of any introduction agency operated by one or other or both of them a cooling off period. I am not persuaded that the period should exceed that which is fixed as the industry standard in the other eastern States.

204 ORDERS 1. Declare that during the period from on or about 25 April 2002 to 13 August 2002, the First Defendant by her servants and agents in trade or commerce in connection with the supply of services at an introduction agency, namely, Liberty Network, to Mr Daniels engaged in conduct that was in all the circumstances unconscionable contrary to s 43 of the Fair Trading Act 1987;

2. Declare that during period from on or about 6 March 2002 to 15 October 2002, the First Defendant by her servants and agents in trade or commerce in connection with the supply of services at an introduction agency, namely, Liberty Network to Mr Burns, engaged in conduct that was in all the circumstances unconscionable contrary to s 43 of the Fair Trading Act ; 3. Declare that during the period from on or about 20 March 2002 to 18 May 2002, the First Defendant, by her servants and agents in trade or commerce in connection with the supply of services at an introduction agency, namely, Liberty Network to Mr Marks, engaged in conduct that was in all the circumstances unconscionable contrary to s 43 of the Fair Trading Act 1987; 4. Declare that the Second Defendant was knowingly concerned in the conduct of the First Defendant referred to in orders (1), (2) and (3) above contrary to s 65(1)(e) of the Fair Trading Act . 5. Pursuant to s 65(1) and (2) of the Fair Trading Act the First and Second Defendants be restrained themselves, their servants or agents, from carrying on the business of supplying services as an introduction agency in New South Wales, except on the following terms and conditions: (i) that they provide to all clients and potential clients a written explanation of the nature of the services to be provided; the time in which such services are to be provided and the frequency and manner of provision thereof and the cost of each such service; and

(ii) that they not employ harassment or coercion to persuade clients to sign for introduction services and to upgrade introduction services, and

(iii) that a three (3) clear business day cooling off period be provided to any client entering into an agreement for the provision of services enabling that client to cancel his or her membership within three (3) business days of signing an agreement for the supply of those services. A client is entitled to a full refund of all moneys paid in respect of that agreement by providing written notice before the end of three (3) clear business days after the agreement is signed.

The Defendants and each of them are to pay to the Plaintiff for payment out to each of the persons named in Schedule 1 below (being the persons more fully described in the further amended summons) the sum of money set for the against the person's name:

Schedule 1 Mr Daniels $40,523.78 Mr Burns $22,704.98 Mr Marks $ 1,396.28

The First and Second Defendants are to pay the Plaintiff's costs as assessed or agreed.

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