Australian Competition and Consumer Commission v EDirect Pty Ltd

• Jurisdiction: Australia Federal only
• Court: Federal Court
• Judgment Date: 12 February 2008
• Neutral Citation: [2008] FCA 65

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v EDirect Pty Ltd

[2008] FCA 65

TRADE PRACTICES – misleading and deceptive conduct – consent declarations, injunctions and compliance programs – scope of Court’s power – Trade Practices Act 1974 (Cth) ss 80 and 86C, Federal Court of Australia Act 1976 (Cth) s 21

Federal Court of Australia Act 1976 (Cth) s 21

Trade Practices Act 1974 (Cth) ss 52, 58, 80, 86C, 87B,

Telecommunications Act 1997(Cth)

ICI v Trade Practices Commission (1992) 38 FCR 248

Foster v ACCC [2006] FCAFC 21

BMW Australia Ltd v ACCC [2005] FCAFC 167

Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421

Ainsworth v Criminal Justice Commission (1992) 175 CLR 564

ACCC v Real Estate Institute Industry of Western Australia Inc [1999] FCA 18 and 1387; (1999) 161 ALR 79; (1999) 95 FCR 114

ACCC v Virgin Mobile Australia Pty Ltd (No. 2) [2002] FCA 1548

ACCC v Info4PC.com Pty Ltd (deregistered) [2006] FCA 1534

ACCC v Goldy Motors Pty Ltd [2000] FCA 1885

Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (No.2) (1993) 41 FCR 89

ACCC v Midland Brick Co Pty Ltd [2004] FCA 693, (2004) 207 ALR 392

Bank of Kuwait and the Middle East v Ship MV Mawashi Al Gasseem (No.2) [2007]FCA 815

ACCC v Dataline.Net.Au Pty Ltd [2006] FCA 1427; (2006) 236 ALR 665

ACCC v Francis [2004] FCA 487

World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181

Geocanna Nominees Pty Ltd v Thirsty Point Pty Ltd [2006] FCA 1268

Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 10 CLR 216

Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191

Barton v Westpac Banking Corporation (1983) 76 FLR 101; (1983) 150 ALR 397

Swann v Downes (1978) 34 FLR 36

ACCC v Commercial and General Publications Pty Ltd [2002] FCA 900

ACCC v Target Australia Pty Ltd [2001] FCA 1326

ACCC v Econovite Pty Ltd [2003] FCA 964

ACCC v Z-Tek Computer Pty Ltd (1997) 148 ALR 339

THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v EDIRECT PTY LTD & VISHAL GUPTA & MANAN CHOPRA

NTD 13 OF 2007

REEVES J

12 February 2008

DARWIN

IN THE FEDERAL COURT OF AUSTRALIA
NORTHERN TERRITORY DISTRICT REGISTRY	NTD 13 OF 2007

BETWEEN:	THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	EDIRECT PTY LTD First Respondent VISHAL GUPTA Second Respondent MANAN CHOPRA Third Respondent

JUDGE:	REEVES J
DATE OF ORDER:	12 February 2008
WHERE MADE:	DARWIN

THE COURT DECLARES THAT:

1. Between February 2006 and March 2007, by making representations to each of the customers listed at Appendix A to this Order that mobile telecommunications services offered and provided by EDirect pursuant to various service plans were available or accessible at and around those customers’ home addresses and within their local communities, in circumstances where those services were not available or accessible in those areas, EDirect engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of section 52 of the Trade Practices Act 1974 (Cth)(the Act).

2. From at least November 2006 to March 2007, by making representations on its website at http://www.viptel.com.au (the VIPtel website) that network coverage and mobile telecommunications services offered and provided by EDirect were available and accessible Australia-wide, in circumstances where that coverage and those services were not available Australia-wide, EDirect engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of section 52 of the Act.

3. In the period August 2006 to April 2007, by making representations to each of the customers listed at Appendix B to this Order that if they purchased a mobile phone service plan from EDirect they would pay fixed monthly fees, in circumstances where pursuant to the terms of service plans between EDirect and each of the customers the monthly fees payable by each of the customers to EDirect was not fixed, EDirect engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of section 52 of the Act.

4. In the period August 2006 to April 2007, by making representations to each of the customers listed at Appendix C to this Order that if they purchased a mobile phone service plan from EDirect they could use the mobile phone provided to them by EDirect pursuant to their service plan to send pictures and/or access the internet without incurring additional charges, in circumstances where pursuant to the terms of service plans between EDirect and each of the customers sending pictures and accessing the internet incurred additional charges, EDirect engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of section 52 of the Act.

5. In or about April 2007, by making representationsto the customers identified as customers 33856, 33710, 33913, 33764 and 33719 that if they purchased a mobile phone service plan from EDirect they would be able to make a call to any mobile or landline number within Australia for the cost of an untimed local call, in circumstances where pursuant to the terms of service plans between EDirect and each of the customers all calls made from the mobile phone supplied by EDirect were charged at a timed rate, EDirect engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of section 52 of the Act.

6. In or about April 2007, by making representations to the customer identified as customer 34065 that if she purchased a mobile phone service plan from EDirect she would be able to terminate the plan at any time at no additional charge to her, in circumstances where pursuant to the terms of the service plan between EDirect and that customer if the mobile phone service plan was terminated early there was an additional charge to the customer to be calculated by a formula which included the multiplication of the number of months remaining on the service plan by the fixed monthly plan amount, EDirect engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of section 52 of the Act.

7. In or about April 2007, by making representations to the customer identified as customer 33843 that if she purchased a mobile phone service plan from EDirect she would be able to use the mobile phone provided to her by EDirect to access all the services covered by that plan all across Australia, in circumstances where those services were not available Australia-wide, EDirect engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of section 52 of the Act.

8. In or about April 2007 by making representations to:

8.1. the customer identified as customer 419184 that if he purchased a mobile phone service plan from EDirect he would save money if he used the mobile phone supplied by EDirect instead of his existing home telephone landline; and

8.2. the customers identified as customers 33949 and 33958 that if they purchased a mobile phone service plan from EDirect they would save money if they used the mobile phone supplied by EDirect instead of their existing mobile phone;

in circumstances where EDirect had no reasonable grounds for making these representations, EDirect engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of section 52 of the Act.

Section 58(b)

9. On each occasion that EDirect accepted payments from each customer as set out in Appendix A to this Order, there were reasonable grounds, of which EDirect was aware or ought to have been reasonably aware, for believing that EDirect would not be able to provide mobile telecommunication services to each of those customers within a reasonable time because EDirect knew, or ought to have reasonably known, that network coverage was not available at the home addresses or local communities of each of those customers, and by so doing EDirect engaged in conduct in contravention of section 58(b) of the Act.

Second and Third Respondents

10. The Second Respondent:

10.1. aided, abetted, counselled or procured EDirect to contravene the Act; and/or

10.2. further or alternatively, was directly or indirectly knowingly concerned in, or party to, the contravention by EDirect described in paragraphs 1, 2 and 9 of this order;

in that

10.3. he was aware of the representations that were being made on behalf of EDirect;

10.4. he was aware of all the facts and circumstances constituting the grounds for the representations;

10.5. he was aware of all the facts and circumstances by reason of which the representations were misleading or deceptive; and

10.6. he refrained (otherwise than inadvertently) from taking any steps to prevent the representations being made on behalf of EDirect.

11. The Third Respondent:

11.1. aided, abetted, counselled or procured EDirect to contravene the Act; and/or

11.2. further or alternatively, was directly or indirectly knowingly concerned in, or party to, the contravention by EDirect described in paragraphs 1, 2 and 9;

in that

11.3. he was aware of the representations that were being made on behalf of EDirect;

11.4. he was aware of all the facts and circumstances constituting the grounds for the representations;

11.5. he was aware of all the facts and circumstances by reason of which the representations were misleading or deceptive; and

11.6. he refrained (otherwise than inadvertently) from taking any steps to prevent the representations being made on behalf of EDirect.

THE COURT ORDERS THAT:

12. For a period of 4 years from the date of this Order, EDirect be restrained by itself, its servants, agents or...