Gould v Day

REASONS FOR JUDGMENT 1 I have before me an application brought pursuant to ss 45D, 45DB and 51AC of the Trade Practices Act 1974 (Cth). The applicant, Stephen Gould, is a bankrupt. The respondents, Julian Day and Alan Manly are the only creditors who have proved in the bankruptcy. 2 The matter has come on by way of application supported by affidavit. I drew attention in the course of the hearing today to the undesirability of proceeding with such a matter by application and affidavits rather than by pleadings. However Mr Gould, principally to ensure that the matter be bought on urgently, was content for the matter to proceed on a final basis today. 3 The application seeks relief in the following terms: "The Applicant will apply to the Court for an immediate and permanent restraint against the Creditors DAY and MANLY. The Application is made on the Grounds that the Creditors breached sections 45d, 45bd and s 51ac of the Trade Practices Act 1974, in their dealings with the Applicant and his business Associations since 1996 and continue to do so with a letter distributed to an unknown number of people on 05 March 2002." Under the heading "Details of Claim", the applicant says: "On the Grounds stated in the accompanying affidavit the Applicant claims:

1. that the Creditors have abused process by writing to an unknown number of contacts re the Bankruptcy of Stephen GOULD." 4 There is a claim for interlocutory relief but that is of no consequence since, as I have said, the matter is before me for final hearing today. When I indicated to the applicant that relief could not possibly be ordered in the form claimed, he reformulated the order that he sought as follows: "An order restraining the creditors DAY and MANLY from contacting any members of the Open Interchange Consortium ("the OIC") or any names that appear on the websites of the OIC or any sponsors or known contacts of the OIC." 5 There is no evidence before me of the identity of the members of the OIC or the names that appear on the websites of the OIC. Nor is there any way of knowing the identity of sponsors or known contacts of the OIC. However, putting aside the difficulties that might be presented in making an order such as is sought, I shall deal with the claim insofar as it is based on each of the three provisions of the Trade Practices Act. If I am satisfied that the case is an appropriate one for the granting of relief, the formulation of the orders can be the subject of further discussion. However, the absence of evidence as to the identity of members of OIC and the persons with whom contact is to be restrained, highlights certain difficulties with the causes of action intended to be relied on. I shall deal separately with each of the three sections upon which the claim is based. 6 So far as is relevant, s 45D provides that, in the circumstances specified in ss 45D(3) and 45D(4), a person must not, in concert with a second person, engage in conduct: (a) that hinders or prevents a third person from supplying goods or services to a fourth person or a third person acquiring goods or services from a fourth person; and (b) that is engaged in for the purpose, and would have or be likely to have the effect, of causing substantial loss or damage to the business of the fourth person. (my emphasis) 7 Section 45D(3) provides that s 45D(1) applies if the fourth person is a corporation. Section 45D(4) provides that s 45D(1) also applies if the third person is a corporation and certain other prerequisites are satisfied. The applicant's contention is that the evidence leads to the conclusion that Day and Manly have, in concert with each other, engaged in conduct that hinders or prevents the applicant from supplying services to a body described as "Software Engineering Australia, New South Wales". The conduct relied on extends over a number of years. 8 The first matter concerns Commonwealth Bank of Australia ("CBA"). There is material before me from which an inference can be drawn that CBA agreed with members of an organisation known as Open Interchange Consortium ("OIC") to co-sponsor the development of something described as "Electronic Association Information Management prototype". The evidence indicates that in about March 1997 CBA was prepared to contribute $5,000 to the development of that prototype. 9 The applicant alleges that on 11 August 1997 Mr Manly made a complaint to CBA by telephone. The details of the complaint are unknown, but a letter of 13 November 1997 from CBA to Mr Manly refers to a complaint of 11 August 1997 and thanks Mr Manly "for your call of 11 August". The letter goes on to say that CBA had been a member and contributor to OIC for a number of years but, that at the time of the call, was in the process of reviewing its membership of the OIC. The letter said that that review had then been completed and that CBA was no longer a member of the OIC. The applicant contends that I should draw the inference that that was the result of agitation on the part of Mr Manly on 11 August 1997. 10 The second matter relates to a letter written on 20 November 1997 by Mr Manly to Ross Cameron MP, referring to federal government support of the OIC. The letter began by saying that Messrs Manly and Day were seeking Mr Cameron's assistance in persuading the federal government to cease supporting the OIC and the applicant. The letter said that the applicant had used the OIC as a source of funds to sue Messrs Day and Manly and others in matters that "usually fail or are resolved out of court". The letter asserted that the matters "are usually vexatious and used to gain money from the defendants". 11 The letter also referred to a communication, probably in September 1996, from Mr Manly to Mr Cameron relating to a proposed speaking engagement of Senator Alston, Minister for Communications and the Arts, at a lunch organised by the OIC. The letter contained the assertion that Messrs Day and Manly could no longer afford to allow the Federal Government "to actively support a bogus operation that has attacked us for over four years in vexatious litigation". The letter referred to former sponsors who had withdrawn support from the OIC, being Australian Industry Development Corporation ("AIDC") and CBA. 12 Although the letter refers to documents attached, it is not clear which documents were in fact attached to the letter. It may be that one of the documents was the CBA's letter of 13 November 1997. The letter to Mr Cameron referred to action taken by Mr Manly in contacting the officer in charge of grants for "the information industry online project". The matter exhorted Mr Cameron to get "whichever Minister to stop the application". The letter asserted that "to directly fund OIC/Gould would be indefensible". 13 The letter is a somewhat extraordinary one, although I have had no evidence from either party as to the full background concerning the writing of it. It is a letter calculated to do damage to Mr Gould and the OIC. However, it was not suggested that the letter itself was likely to have any effect on "Software Engineering Australia, New South Wales". 14 The third matter involved a facsimile communication sent on 9 December 1997 by Mr Day to Ann-Marie Kittchin of Channel Nine television station. The facsimile attached a number of documents including a document described as "[a]ffidavit dated 8 December 97 in which GOULD claims to be unemployed". The facsimile said that Mr Manly would also be faxing "supporting information". 15 The fourth matter is an e-mail sent by Mr Day on 18 December 1997 to a number of people headed "WARNING - IN THE PUBLIC INTEREST". The e-mail said: "Please be advised that Channel 9's Monday 15th program exposed Stephen Gould of the OIC as a fraud, con man and dole cheat. Please be careful in your dealings with him. Best to keep well away. If you would like further information, please call me…" A telephone number was given. The e-mail communication itself is also a somewhat extraordinary document and is clearly calculated to cause damage to the applicant. 16 The fifth matter relied on is the issue of subpoenas by this Court at the behest of Mr Day on 22 December 1997. They were issued in a proceeding in which Mr Gould was applicant and Mr Day was respondent. The proceeding was an application to set aside a bankruptcy notice, which was listed for hearing on 9 February 1998. The subpoenas were issued to CBA and to AIDC. The subpoenas required production of documents and records of any payments to the benefit of Mr Gould since January 1994. Express reference was made in the subpoena to CBA to a sum of $5,000 and in the subpoena to AIDC to a sum of $2000. I would draw the inference that there was some basis for concluding that funding to OIC in those respective sums had either been provided or foreshadowed by CBA and AIDC. 17 In any event, on 29 January 1998, Wilcox J set the subpoenas aside and directed Mr Day to notify all persons on whom they were served that they had been set aside and need not be answered. Once again, I have no evidence before me concerning that proceeding or the background to the issue of subpoenas. 18 The sixth matter relates to a decision of the Administrative Appeals Tribunal ("the Tribunal"). On 27 April 1999 the Tribunal made a decision setting aside a decision of the Secretary of the Department of Family and Community Services. The Tribunal substituted a decision that the applicant remained qualified for a Newstart Allowance at all relevant times and that payment of Newstart Allowance should not have been cancelled. I have been asked to draw the inference that the action of the Secretary was prompted by some action of Messrs Day and Manly. There is, However, I was not taken to evidence of any action by Mr Day or Mr Manly that may have induced the Secretary to take the step of cancelling any entitlement of the applicant to a Newstart Allowance. 19 The seventh matter is the conduct of a proceeding against Mr Manly commenced in the Supreme Court of New South Wales in September 1999 by the applicant. In that proceeding, the applicant sought orders restraining Mr Manly from all contact with members of Software Engineering Australia regarding Mr Gould and restraining him from distributing copies of an "A Current Affair" program. The evidence concerning the proceeding and its disposition is obscure. I was informed from the bar table by Mr Manly that, on the return of an application of interlocutory relief, he indicated to the Supreme Court that he had no intention of doing what the proceeding sought to restrain and that the proceeding was ultimately dismissed. 20 Finally, on 5 March 2002 Mr Day wrote to a number of persons, the identity of whom is not clear. However, they included a Mr Guy Blomberg. In the letter, Mr Day said that investigations indicated that Mr Blomberg was associated with Mr Gould through various entities, including the OIC. The letter referred to Mr Gould's bankruptcy on 7 September 2000 and said that his trustee in bankruptcy had informed Mr Day and Mr Manly, the only creditors, that Mr Gould had failed to respond to requests for information about his income and business affairs. Mr Blomberg was requested to produce to a firm of solicitors the documents described in some considerable detail in a schedule. 21 The letter also said: "Please note that if you fail to provide this information as requested you will be required to attend a public examination pursuant to section 81 of the Bankruptcy Act on a date to be determined by the Federal Court. On that day you will be required to bring to the Court the records set out in the Schedule below and be examined as to your knowledge of the financial affairs of Mr Gould and organisations in which he is involved." I indicated when this matter was before me for directions that I was concerned that the writing of that letter may well constitute a contempt. I indicated that I expected that a letter would be written to the recipients of the letter saying that they need not comply with it. On 15 March 2002, Ramensky Lawyers wrote in the following terms to Mr Blomberg, and I would draw the inference to the other recipients of the letter of 5 March 2002, saying: "We act for Messrs Julian Day and Alan Manly and are instructed that they sent a letter to you on 5 March 2002, requesting you to produce various documents to our office. On reviewing this letter we note that there is an error in the second last paragraph. Accordingly we request that you disregard this letter." 22 However, on the same day Ramensky Lawyers wrote another letter to the same recipients. The letter was in identical terms to the letter of 5 March 2002 except that instead of saying: "You will be required to attend a public examination pursuant to s 81 of the Bankruptcy Act." the letter said: "You may be required to attend a public examination pursuant to section 81 of the Bankruptcy Act." 23 Mr Gould has purported to commence a proceeding for contempt in respect of the conduct of Messrs Day and Manly. I will not, therefore express any view about whether the letter of 15 March 2002 might or might not be a contempt. However, I have indicated in the course of argument my view that the writing of the letter demonstrates, at least, a substantial error of judgment. 24 The actions by Messrs Day and Manly that I have described constitute the conduct alleged to be in contravention of ss 45D(1) of the Trade Practices Act. The actions cause some disquiet. However, I do not have evidence as to the whole story. For whatever reason, the parties have chosen not to place before the Court, all of the evidence concerning the relationship between the parties, not that I have invited them to do so or suggested that they should have. The question, however, is whether the evidence before me is capable of constituting conduct in contravention of s 45D. 25 The applicant says that the conduct has hindered or prevented, or would hinder or prevent, the supplying of services by him in the form of electronic association information management services. I do not know what those services are and there is no evidence as to their nature. However, one of the prerequisites of s 45D is that the conduct must hinder or prevent a person from supplying services to another person, relevantly in the present case, a corporation. 26 Whether or not "Software Engineering Australia, New South Wales" is a corporation within the meaning of the Trade Practices Act, the second prerequisite before conduct contravenes s 45D is that it is engaged in for the purpose and would have or be likely to have the effect of causing substantial loss or damage to the business of the relevant corporation. I have said that certain of the actions of Messrs Day and Manly would be calculated to cause loss or damage to the applicant. However, that is not what is proscribed by s 45D, which is concerned with what are described as "secondary boycotts". 27 There is no evidence from which I can draw any conclusion that the actions complained of would have, or be likely to have, the effect of causing substantial loss or damage to the only entity described as a corporation, namely, "Software Engineering Australia, New South Wales". There is in evidence before me a copy of a document described as: "Software Engineering Australia - NSW Agreement with OICY2KRAMP Project Partners". It is expressed to be an agreement between "Software Engineering Australia(SEA), New South Wales (NSW)" and its members and the "OICY2KRAMP Project Partners who have developed the OICY2KRAMP Due Diligence Process." 28 The document names the project partner as including "Hallisa NSW Partnership" and others, including Guy Blomberg. The document refers to "intellectual property copyright", and names Mr Gould and Hallisa NSW Partnership in a column opposite, "concept, specification, communications". The document is expressed in the first person and appears to be intended to be a document from Geoff Bowker, as "Chief Executive", acting on behalf of "Software Engineering Australia (NSW)". It contains a statement that he has been authorised to negotiate an agreement to distribute and support "OICY2KRAMP in the New South Wales Australia Region". 29 The document speaks of an understanding of the purpose of "my organisations distributing OICY2KRAMP". It is not clear what "my organisation" is. Mr Barker has signed the document on behalf of a body, which is described at the point of signature as "Software Engineering Australia (NSW) Ltd". The document has also been signed by the applicant by way of acceptance by OIC Y2K Project Partners. The document refers to "membership" and refers to a fee for affiliated membership of $250 per annum. That appears to be the only reference to money in the document. 30 I do not understand how the actions complained of could have, or be likely to have, the effect of causing substantial loss or damage to the business of the organisation described as "Software Engineering Australia, (NSW)", assuming that organisation is a corporation. It follows in my view that no cause of action has been established based on any contravention of s 45D of the Trade Practices Act. 31 Section 45DB of the Trade Practices Act provides as follows: "A person must not in concert with another person engage in conduct for the purpose and having or likely to have the effect of preventing or substantially hindering a third person……from engaging in trade or commerce involving the movement of goods between Australia and places outside Australia." (my emphasis) 32 As I understand the applicant's case, insofar as it is based on s 45DB, he asserts that Messrs Day and Manly have engaged, or threatened to engage in, conduct in concert for the purpose of having, or likely to have, the effect of preventing or substantially hindering the applicant from engaging in trade or commerce involving the movement of goods between Australia and places outside Australia. However, there is no evidence of any proposal on the part of the applicant to engage in trade or commerce involving the movement of goods between Australia and places outside Australia. 33 When invited, in the course of argument in the context of s 45D, to indicate whether he relied on conduct that hindered or prevented the supply of goods, the applicant referred to the Electronic Association Information Management Project, but was unable to explain how that constituted goods. I am not persuaded that there is any basis at all for concluding that there has been any contravention or threatened contravention of s 45DB of the Trade Practices Act. 34 Section 51AC of the Trade Practices Act generally prohibits a corporation from engaging in conduct of a certain kind, that is, in all the circumstances, unconscionable. Neither Mr Day nor Mr Manly is a corporation and I do not understand how s 51AC can be called in aid in support of the relief sought by the applicant. No attempt has been made to suggest that any of the other extending provisions of the Trade Practices Act operate to apply to any of the conduct in question, notwithstanding that it is conduct by individuals. I am not persuaded that there is any basis for relief under s 51AC. 35 Sections 45D, 45DB and 51AC are the only bases upon which relief is sought by the applicant. It follows, in my opinion, that the application must fail and accordingly it should be dismissed. 36 On 20 March 2002 the applicant filed a motion seeking the following relief against Messrs Day and Manly: "1. Permanent Injunctions and Restraint against the Respondents