Director General of the Department of Fair Trading v Sims [1999] NSWSC 1243 | Case summary

HER HONOUR : 1 S 65(1) of the Fair Trading Act 1987 ("the Act") authorises this Court, where satisfied that a person has engaged, or is proposing to engage, in conduct, inter alia, that constitutes or would constitute a contravention of a provision of Pt 5 of the Act, to grant an injunction in such terms as the Court determines to be appropriate. Sub s (2), while expressly not limiting the generality of sub s (1), specifies that such an injunction may be, or include, an injunction restraining a person for a specified period, or except on specified terms and conditions, from carrying on a business of supplying goods or services. 2 S 42 and s 46 are both provisions of Pt 5. S 42(1) provides: "A person shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive." 3 S 46 provides: "A person shall not, in relation to employment that is to be, or may be, offered by the person or by another person, engage in conduct that is liable to mislead persons seeking the employment as to the availability, nature, terms or conditions of, or any other matter relating to, the employment." 4 By summons filed on 26 November 1999 the plaintiff, the Director General of the Department of Fair Trading ("the Director General"), claims orders, both final and interlocutory, restraining the defendant, Kevin John Sims: "(i) From engaging … in conduct that is misleading or deceptive or that is likely to mislead or deceive by selling, offering for sale, providing or advertising any goods or services so as to mislead members of the public into believing that - (a) the defendant is a model agent, casting agent or employment agent; (b) the goods or services are goods or services sold or provided by a modelling agency, casting agency or employment agency; or (c) the goods or services are otherwise connected with modelling, acting or entertainment work. (ii) … from engaging in conduct in relation to employment that is to be or may be offered by the defendant or by another person that is liable to mislead members of the public seeking the employment as to - (a) the availability or the extent of the employment; (b) whether they have been accepted or chosen for any such employment; or (c) the need in order to obtain any such employment to be first registered with the defendant or to be entered into a catalogue, magazine or computer or to have a photographic portfolio, folder or album or a video prepared by the defendant. (iii) … from carrying on a business of supplying goods or services as a model agent or employment agent for such period as to the court may seem proper."

In the present application, the Director General seeks orders on an interlocutory basis only. 5 As a pre-requisite to the grant of an injunction it is necessary that the Director General establish that the defendant has engaged, or is proposing to engage, in conduct that constitutes or would constitute a contravention of s 42, s 46, or both. In order to discharge that onus, the Director General relies on a number of affidavits. 6 Firstly, he has tendered evidence of a certificate under s 157 of the Evidence Act 1995 establishing that, on 1 November 1999 the defendant was convicted in the Downing Centre Local Court on ten charges of contravention of s 46. The informations and summonses in respect of which the defendant was convicted contained particulars of the allegations made against him. A sample of the allegations will suffice for present purposes. For example, in relation to the first charge, it was alleged that on 27 February 1998 the defendant placed an advertisement in the Brisbane Courier Mail inviting applications from persons for "models for film work". A Mr Mathew Dendle replied, and was advised by the defendant that his application had been accepted and it would be necessary for Mr Dendle to obtain a modelling portfolio at a cost of $1,000. This amount Mr Dendle paid. Thereafter, in various conversations with Mr Dendle the defendant repeatedly represented that modelling work would be found for Mr Dendle. This work never eventuated. 7 The other nine charges concerned similar advertisements placed in a variety of newspapers, advertising the availability of model, film or entertainment work, the payment of various sums of money by individuals who responded to the advertisements, conversations with the defendant in which he represented that work would become available, and the failure of such work to materialise. In some cases the respondents sought work for children, and in one case for pets. 8 The charges were heard and the defendant was convicted in his absence. I was told, during the course of the present application, that the defendant had filed an application pursuant to s 100 D of the Justice Act 1902 for annulment of the convictions. There was no evidence of when the application might be heard, and no indication of any defence that the defendant might propose to mount. There was evidence that the informations and summonses had been personally served upon him and consequently of his awareness of the date of hearing, but no explanation was given for his non appearance at the hearing. 9 While I am mindful that the convictions were entered in the defendant's absence, I am satisfied that they provide prima facie evidence for a conclusion that he has engaged in conduct of the kind prohibited by s 46. 10 There was some additional evidence that points to further contraventions, and, perhaps more importantly in the light of the certificate of conviction, that the defendant proposes to continue the course of conduct of the kind that resulted in the convictions. Again, a sample will suffice. 11 Ms Emma White responded to an advertisement she read in the Central Coast Express Advocate in July 1999 for "film extras and star types". She expressed interest, and, having received documents from an organisation that called itself "Central Casting", on 2 August she sent the sum of money requested, $177. By 16 August, having heard nothing from the agency since sending the money, she telephoned and eventually spoke to a person who identified himself as Kevin Sims. On the evidence I am satisfied that this was the defendant. There were subsequent conversations in which Ms White eventually asked for a refund of her money but this was refused. The defendant claimed that "two things" had been sent to her through the mail but she had not received these. On 9 October Ms White received a message from the defendant to the effect that he had a "photo shoot" ready for the following Saturday, and asking her to return his call. Ms White had not heard from the defendant since. It is a reasonable inference from this affidavit that Ms White did not return the call as requested. 12 Ms Michelle Eden responded to an advertisement her husband initially read in the Gold Coast Bulletin. She was seeking modelling work for her five year old son. She sent photographs of the child and received a telephone call from a male who identified himself as Kevin Jay from Central Castings. She had a number of conversations with this man, during which he suggested that work would be available for the child. On 21 October she accordingly, at his request, deposited $295 in a bank account he nominated. Having heard nothing thereafter, on 31 October she telephoned, but was told that it was too soon, and that she would be contacted by the agency. On 4 November the man telephoned her husband and told him not to contact the agency, and that it was still too soon for any result. 13 On 7 August 1999 Ms Wendy Craw read an advertisement in the Sydney Morning Herald asking for film extras. She responded by sending photographs and resumes. On 28 August she received a form letter advising: "You have been unanimously approved and selected to join our brilliant new casting consultancy and agency. This new agency we feel will be highly exciting and highly lucrative to all participators. In addition to the film extras and atmosphere people we have also listed you as a possibility for appearing in television commercials, magazines and newspaper ads, TV productions, store fashion shows and in fact all facets of the highly interesting industry where people are used in ads and promotions, group scenes and live productions. This work is highly lucrative, great to participate in and great for the self esteem. You never know what it could lead to for you. … There is a subsidy fee payable to the agency. This fee is a modest $177 easily recoverable dollars. In a lot of instances this will be tax deductible - check with your accountant or local tax office. It is usually regarded as money spent in order to gain a secondary occupation." 14 On 3 September, after a telephone conversation with the defendant, Ms Craw deposited the sum of $177 into a bank account nominated by him. On 18 September Ms Craw telephoned the defendant but made contact only with an answering machine on which she recorded a message asking the defendant to return her call. On 10 October she telephoned again, and heard a different recorded message. On 31 October she telephoned again but on this occasion the telephone number had been disconnected. 15 A number of other deponents provided affidavit evidence to the effect that they read advertisements of similar kind in different newspapers published in NSW and Queensland. Only the three deponents already mentioned actually paid money, and these are, in my view, taken alone, a fragile foundation for a conclusion that the defendant's conduct was in fact misleading or deceptive. That is because of the particular dates on which money was paid, and the relatively short time that has elapsed, even now, since those payments. It should not be assumed that provision of suitable work of the kind sought would be instantaneous. It would, in my opinion, be reasonable to allow a longer time in an industry of the kind here in question. However, the evidence of Ms Craw that by 31 October the telephone was disconnected does strengthen such a conclusion. When that fact is put together with the evidence of the convictions in November it is adequate to establish that the defendant has engaged in conduct of the kind that is a pre-requisite to the grant of injunctive relief. Moreover, the evidence of these three deponents, and the others, all to the effect that advertisements of the same kind have been placed, are amply sufficient to establish that the defendant is continuing to place advertisements, to solicit money, and to make representations concerning the availability of work for those who respond to the advertisements and pay the required sums of money. I am satisfied that he is not in a position to, or does not intend to, fulfil the obligations he undertakes. I am therefore also satisfied that he proposes to engage in conduct that contravenes the relevant Part of the Act. 16 Further, there was evidence that officers of the Department of Fair Trading believe that the "Kevin Jay" to whom Ms Eden spoke, was in fact the defendant, Kevin Sims. Once again, that belief alone would be inadequate to establish the fact, but the name of the agency mentioned, "Central Casting" given to both Ms Eden and Ms White is sufficient to establish at least the relevant link with the defendant. 17 The defendant, although present throughout the hearing of this application, neither gave nor adduced evidence. While his silence cannot be used to plug any gaps in the Director General's case, his decision to take this course is of some significance. This is because his legal representative asked me to accept from the Bar table that there are many clients on the defendant's books, and that, other than those named in the informations in the Local Court proceedings, or who have sworn affidavits in these proceedings, they are to be taken as satisfied with the defendant's services. I decline to draw any such inference, or to accept that contention as relayed to me from the Bar table. 18 The Director General relied also on evidence contained in three affidavits sworn by Ms Jane Gibson, an investigator in the Department Of Fair Trading. Her evidence went to a number of relevant aspects. She gave evidence that, on 1 December 1998, a notice under s 20(2) of the Act was forwarded to the defendant, requiring him to produce specified documents by 11 December 1998. 19 S 20(2) relevantly authorises an investigator to require a person whom the Director General, on reasonable grounds, believes to be capable of giving information, producing documents or giving evidence in relation to a possible contravention of the Act, to give such information or produce such documents to the investigator. As at 25 November 1999, when Ms Gibson swore her affidavit, the defendant had failed to comply with the notice. No explanation for the failure was forthcoming. 20 Ms Gibson also deposed to attempts she had made, during 1998, to contact the defendant. On 20 October 1998 she had two telephone conversations with him. He declined, he said on legal advice, to meet officers of the Department and declined to provide details of his "contacts in the industry", even after an express undertaking of confidentiality had been given to him. He said he, at that time, had no business premises, that he anticipated having an office in the new Fox Studios at Moore Park, that he was running a legitimate business, that he had found God and was an honest person trying to do the right thing. 21 The following day the defendant telephoned Ms Gibson to say that, after discussion with his lawyer, he would like the questions she proposed to ask forwarded to him before he would consider whether to participate in a meeting. Over the following weeks a number of telephone conversations took place, the details of which it is unnecessary to relate. 22 On 16 February 1999 the defendant did meet Ms Gibson and a senior investigator, Mr Laughton. A comprehensive account of the conversation is contained in Ms Gibson's affidavit. When asked why he had failed to respond to the s 20 notice he claimed that privacy laws prevented him from giving details of clients, and otherwise declined, citing legal advice, to discuss that matter further. In a subsequent telephone conversation, on 9 June 1999, he said that he was in the process of organising "some strong financial backing" (further details of which he refused to divulge) and asked for information about individuals who had sought a refund of money paid. He refused, however, to guarantee refunds, saying that decision was one for "the Board" (otherwise unidentified). He again declined to provide any other information about his business. He gave a mobile telephone number and a post office box as contact points. 23 Finally Ms Gibson annexed part of a transcript of criminal proceedings against the defendant before the Downing Centre Local Court on 16 September 1999. The precise nature of the proceedings does not clearly emerge from the extract provided, which is limited to cross-examination of the defendant. The transcript is relied upon in relation only to questions and answers concerning the defendant's personal and/or business addresses. It is sufficient to note that, at best, the defendant's answers might reasonably be categorised as evasive. He said, for example, that he traded under his own name as Central Casting, and that the office was registered in Pitt Street, but he could not or would not disclose the number, saying "it's a new registration". He said that the registered office address was nothing more than a post office box. When asked about his residential address he said that he had been staying in a beach house in Terrigal but he did not know its address. 24 In the circumstances I am satisfied that the defendant placed numerous advertisements soliciting applications for work in the film, modelling and entertainment industries, and has sought and received payments of sums of money from various individuals who responded to those advertisements. I am satisfied that he has failed to make such work available and that he is not in a position to do so. I am therefore satisfied that he has contravened both s 42 and s 46 of the Act. Moreover, I am satisfied that, absent the issue of an injunction restraining him from doing so, he will continue to engage in such conduct. Of particular relevance in this regard is evidence that the defendant has previously been restrained by a similar injunction from engaging in similar conduct. In 1992 Studdert J made orders restraining the defendant from carrying on a business of supplying goods or services as a model agent, casting agent, advertising agent or employment agent. He also ordered the defendant to pay almost $3,000 to the Director General for payment to various claimants in that case. There was evidence before me that, again acting on legal advice, the defendant had not paid that money. 25 The injunction granted by Studdert J was granted on 25 March 1992, and to be in force for a period of five years. Accordingly, it expired on 24 March 1997. By 1998, on the evidence before me, the defendant was again actively engaged in conduct of the same or a similar kind and had come under adverse notice in relation to his business practices. That fact alone, and also taken together with the other evidence to which I have referred, satisfies me that he is proposing to engage in conduct that would constitute a contravention of provisions of Pt 5 of the Act. 26 Accordingly, it is appropriate to make orders in the terms sought. The specific orders I make are:

Director General of the Department of Fair Trading v Sims

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