FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v ACM Group Limited (No 2) [2018] FCA 1115

ORDERS

THE COURT ORDERS THAT:

1.    Within 21 days the parties should seek to agree orders which give effect to these reasons for judgment, including as to costs. If they are unable to agree, within that time each should file a proposed set of orders and brief submissions in support (not exceeding 5 pages). The party should indicate whether it is content for the orders to be settled on the papers without a further oral hearing.

2.    The parties should propose, within 21 days, draft directions for the further conduct of the proceeding relating to relief, preferably by consent.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

GRIFFITHS J:

Introduction

1    The respondent company (ACM) is a debt collector which purchases debts from other entities. ACM’s representatives are engaged in recovering these acquired debts. This is usually done by telephone calls being made to the debtor by ACM’s representatives, who generally operate from a call centre, in this case one located in the Philippines. ACM also sends various different types of letters to debtors, demanding payment of the acquired debts.

2    The applicants (the Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investments Commission (ASIC)) allege that, in respect of two debtors, ACM’s representatives engaged in conduct which is misleading or deceptive, unconscionable, or constituted undue harassment or coercion in contravention of relevant provisions of either the Australian Consumer Law (ACL) (see Sch 2 to the Competition and Consumer Act 2010 (Cth) (the CCA)) or the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act).

3    As noted above, both the ACCC and ASIC are applicants in the proceeding. One of the issues which requires determination is whether or not ACM’s conduct was in relation to financial services or in connection with the supply, or possible supply, of services which are financial services, in which case the relevant provisions of the ASIC Act apply. If not, it is common ground that the allegations against ACM fall to be determined by reference to the ACL. This matter is considered under issue (e) of the agreed statement of issues (see [217] ff below, where I explain why I consider that it is the ACL which applies.

Outline of the applicants’ case

4    By way of introduction and drawing on the Originating Application and the Concise Statement (both dated 1 June 2016), the claims made by the ACCC/ASIC against ACM may be summarised as follows.

5    At all relevant times, ACM carried on the business, in trade or commerce, of purchasing debts owed by consumers to corporations, including Telstra, and then attempting to recover part or all of the debt amount, including by developing workable repayment solutions by providing payment plans or financial accommodation by way of additional time for payment of a debt. The proceeding relates to conduct engaged in by ACM with respect to two debtors, who are referred to by the pseudonyms CT and JR.

(a) Debtor CT

6    On or around 25 June 2010, Telstra assigned to ACM a debt of $5,768.53 (CT Debt) owed to Telstra by CT in respect of the provision of telecommunications services, in exchange for payment to Telstra of $334.57 by ACM.

7    On 1 October 2007, CT suffered three strokes over a period of a few hours. Since that time, he has been unable to continue his work as a contractor for a courier company and no longer works. He has been living at a care facility since early 2008 and is expected to remain living in a care facility for the rest of his life. He has had difficulty communicating verbally as a result of the strokes, and is able only to express one or two words at a time. His sole source of income is a government disability support pension.

8    The applicants claim that ACM was at all material times aware that CT had suffered a stroke, had difficulty speaking, was living in a care facility, received a government disability support pension, and could not afford to pay the CT Debt. ACM was repeatedly informed of these facts during 2011 to 2014 in telephone conversations between ACM representatives and members of CT’s family, and staff of the care facility in which CT lived. ACM recorded these conversations in its “Ledger Card Report” for CT. During April 2012, an ACM representative noted CT’s circumstances and added entries to the Ledger Card Report stating “DONT CALL NUMBER ON FILE” and “READ NOTES – LOOK AT FILES”. Less than one month later, a different ACM representative resumed ACM’s attempts to contact CT as set out below.

9    ACM representatives telephoned the care facility in which CT lived on numerous occasions during 2011 to 2014, on each occasion asking to speak to CT. On at least 40 occasions in that period, ACM representatives spoke to staff of the care facility and asked to speak to CT, and on six of those occasions, ACM representatives spoke to CT on the telephone.

10    On each of those six occasions that an ACM representative spoke to CT, he was asked to verify his identity but, because of his disability, he was not able to verify his identity nor to speak in full sentences. Instead, he said a few words on each occasion, such as “stroke”, “no”, “nursing home” and “speech” in order to convey that he could not speak because he had had a stroke and lived in a nursing home.

11    In addition, between 29 April 2011 and 12 June 2015, ACM sent at least 20 letters to CT demanding repayment of the CT Debt. These comprised two categories of letters which the applicants contend contained misleading or deceptive representations to CT.

12    Letters in the first category (Seven Day Demand Letters) were headed “Final Notice” (sent on at least three occasions), “Notice of Intention to Commence Legal Proceedings” (sent on at least seven occasions) or “Urgent Notice” (sent on at least four occasions). They included statements that unless the balance of $5,768.53 was paid within seven days of the date of the letter, legal proceedings involving court costs to CT may commence without further notice, and that failing receipt of payment (or, in the case of some letters, a phone call regarding a satisfactory arrangement), ACM may forward CT’s account to its solicitors without further notice. At least 14 Seven Day Demand Letters were sent to CT between 29 April 2011 and 12 June 2015.

13    Letters in the second category (48 Hour Demand Letters) were headed “48 Hour Demand” and included a statement that ACM recommended that CT make immediate payment of $5,768.53 to avoid legal proceedings which may commence 48 hours from the date of the notice. There was a further statement in bold and capital typeface that unless payment was received within 48 hours, legal proceedings through ACM’s solicitors may be commenced without further notice and that CT may incur resultant costs. 48 Hour Demand Letters were sent to CT on at least six occasions between 29 April 2011 and 12 June 2015.

14    The applicants claim that at the relevant times CT’s circumstances did not meet ACM’s internal requirements as to when a decision would be made, or instructions given, to commence legal proceedings.

15    The applicants contend that the Seven Day Demand Letters and the 48 Hour Demand Letters contained the following representations respectively, which were not true and/or that ACM did not have reasonable grounds for making them to a debtor:

(a)    that ACM intended shortly to commence legal proceedings against CT to recover its debt if it was not paid within 48 hours, when it did not intend to do so and/or did not have reasonable grounds for so stating; and

(b)    that ACM intended shortly to commence legal proceedings against CT to recover its debt if it was not paid within seven days, when it did not intend to do so and/or did not have reasonable grounds for so stating.

16    These phone calls and letters were in connection with the Telstra services which gave rise to the CT Debt and/or in connection with the possible supply of a payment plan and/or financial accommodation by ACM by way of an extension of time to pay off the CT Debt fully.

17    In respect of CT, the applicants contend as follows:

(a)    during the period 3 May 2011 to 3 February 2015, ACM engaged in specified conduct that was, in all the circumstances, unconscionable, in connection with the supply or possible supply of services to CT by Telstra, in contravention of s 21(1)(a) of the ACL;

(b)    further or in the alternative to paragraph (a), during the period 3 May 2011 to 3 February 2015, ACM engaged in conduct that was, in all the circumstances, unconscionable, in connection with the supply or possible supply of financial services to CT by ACM (being a payment plan and/or financial accommodation by way of an extension of time to fully pay off the CT Debt) in contravention of s 12CB(1)(a) of the ASIC Act;

(c)    as a result of specified representations made by ACM, ACM engaged in conduct (on each occasion that a letter was sent) during the period 29 April 2011 to 12 June 2015 that was misleading or deceptive, or likely to mislead or deceive, in contravention of s 18 of the ACL, or in the alternative, s 12DA(1) of the ASIC Act;

(d)    by reason of its conduct, during the period 29 April 2011 to 12 June 2015, ACM used undue harassment in connection with the supply of services by Telstra to CT in contravention of s 50(1)(a) of the ACL, or in connection with the payment for those services, in contravention of s 50(1)(b) of the ACL; and/or

(e)    further or in the alternative to paragraph (d), by reason of that same conduct, during the period 29 April 2011 to 12 June 2015, ACM used undue harassment in connection with the supply or possible supply of financial services to CT by ACM (being a payment plan and/or financial accommodation by way of an extension of time to fully pay off the CT Debt), in contravention of s 12DJ(1) of the ASIC Act.

(b) Debtor JR

18    On or around 27 June 2014, Telstra assigned to ACM a debt of $3,149.51 owed to Telstra by JR (JR Debt) in respect of the provision of telecommunications services. The applicants’ claims are as follows.

19    As at 3 September 2014, JR was employed part-time as a secretary, was a single mother of three children, received Centrelink benefits and could not afford to pay the JR Debt to ACM. ACM was aware of each of these matters from that date because JR provided that information to ACM’s representative, Mr Rolf Francisco during a telephone call on 3 September 2014.

20    On 3 September 2014, Mr Francisco telephoned JR while she was in a carpark with her daughter. This phone call was in connection with the Telstra services which gave rise to the JR Debt and/or in connection with the possible supply of a payment plan and/or financial accommodation by ACM by way of an extension of time to pay off the JR Debt fully. Mr Francisco advised JR that ACM had commenced preparing the documents that would be used for legal action against JR, that ACM management was planning for a summons to be drawn, issued and served upon JR soon so that ACM could recover the debt in full, and that if a default was listed on her credit file, JR would not be able to obtain credit for the next five to seven years. Mr Francisco said words to the effect of “And I know with three kids, credit is very important to you, right?”

21    The terms of the representations which the applicants claim were made by Mr Francisco (and therefore ACM) to JR are as follows:

(a)    that ACM had commenced preparing the documents that would be used for potential legal action against her, when it had not;

(b)    that ACM was planning for a summons to be drawn, issued and served upon JR soon to recover the debt in full, when it was not planning to do so and/or did not have reasonable grounds for so stating; and

(c)    that if a default was listed upon JR’s credit file, JR would not be able to obtain credit for the next five to seven years, when ACM did not have reasonable grounds for so stating.

The applicants contend that these representations were not true and/or that ACM did not have reasonable grounds for making them.

22    JR was stunned, felt threatened and was greatly concerned by the matters said by Mr Francisco. She felt flustered and railroaded into agreeing to payment on the basis that if she did not, service of a summons was imminent. JR offered to pay ACM $1000 in an attempt to stop the threatened court proceedings. This amount represented the total of her pay and Centrelink benefits for a fortnight and, if JR made this payment, she knew she would not have enough to cover rent for that fortnight. She provided her debit card number to Mr Francisco, but ultimately this payment was not made following suspension of the debt as a result of a complaint to the Telecommunications Industry Ombudsman (TIO).

23    In respect of JR, the applicants contend as follows:

(a)    ACM engaged in specified conduct that was, in all the circumstances, unconscionable, in connection with the supply or possible supply of services to JR by Telstra, in contravention of s 21 of the ACL;

(b)    further or in the alternative to paragraph (a), ACM engaged in conduct that was, in all the circumstances, unconscionable in connection with the supply or possible supply of financial services to JR by ACM in contravention of s 12CB(1)(a) of the ASIC Act;

(c)    as a result of the specified representations made by ACM, ACM engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of s 18 of the ACL, or in the alternative s 12DA(1) of the ASIC Act;

(d)    by reason of the conduct outlined in [20] to [22] above, on or about 3 September 2014, ACM used coercion in connection with the supply of services by Telstra to JR in contravention of s 50(1)(a) of the ACL, or the payment for those services, in contravention of s 50(1)(b) of the ACL; and/or

(e)    further or in the alternative to paragraph (d), by reason of that conduct, ACM used coercion in connection with the supply or possible supply of financial services to JR by ACM (being a payment plan and/or financial accommodation by way of an extension of time to fully pay off the JR Debt), in contravention of s 12DJ(1) of the ASIC Act.

24    The applicants contend that the conduct of each of the ACM representatives in respect of both CT and JR was in trade or commerce and was engaged in on behalf of ACM within the scope of its representatives’ actual or apparent authority, and thus was also engaged in by ACM, by reason of s 139B(2) of the CCA and/or s 12GH of the ASIC Act and s 769B of the Corporations Act 2001 (Cth).

25    On 23 September 2016, ACM filed a response to the Concise Statement. It is unnecessary to summarise that response because it is reflected in both the summary of ACM’s submissions and my consideration and determination of the relevant issues later in these reasons for judgment. In brief, however, ACM denied that it had contravened any law or that the applicants were entitled to any of the relief sought by them.

26    On 4 July 2016, the Court ordered that the issue of whether ACM had contravened the law as alleged in the Concise Statement be tried separately from, and in advance of, the determination of what relief should be granted (including penalty).

Agreed facts

27    Many, but not all, of the facts alleged by the applicants in their Concise Statement were agreed by ACM. As will shortly emerge, however, other important facts were disputed. It is convenient to first set out the facts as agreed by the parties before addressing the evidence.

28    ACM carried on the business, in trade or commerce, of purchasing debts owed by consumers to corporations, including Telstra, and then attempting to recover part of or the entire debt amount, including by developing workable repayment solutions by providing payment plans or financial accommodation by way of additional time for payment of a debt.

29    On or around 25 June 2010, Telstra assigned to ACM the CT Debt in the amount of $5,768.53 owed to Telstra by CT in respect of the provision of telecommunications services, in exchange for payment of $334.57 by ACM.

30    CT suffered from a stroke on or around 1 October 2007. He has been a resident of a care facility since January 2008. As at 2011, CT was 54 years old.

31    At all material times since about October 2008, CT’s former spouse (LH) held a power of attorney over CT's financial affairs and she has managed CT's finances since then.

32    During telephone conversations and letters between representatives of ACM and other persons between about 25 June 2010 and 2014, ACM was given information about CT’s health, condition, location, financial position and welfare payments, as recorded in the ACM Ledger Card Report for CT (CT Notes).

33    The entries in the CT Notes dated on and prior to 25 June 2010 (6:41:54 PM) record dealings and communications involving representatives of Telstra and other persons prior to the assignment of the CT Debt to ACM.

34    An entry in the CT Notes dated 25 June 2010, but relating to events prior to that date, records that LH had indicated that she was happy to pay the outstanding debt as soon as possible and would visit the Telstra shop with an authorisation letter from CT/proof of disability for transfer of ownership. The entry also records that LH was satisfied with the resolution. A further entry on 25 June 2010 records that LH had been looking after CT’s accounts while he was in and out of hospital and that CT had been permanently disabled since December. The entry recorded that LH was frustrated because of the massive bills and was requesting to transfer the service to prepaid.

35    There is no record in the CT Notes that those steps were in fact undertaken by LH or anyone else on behalf of CT.

36    An entry in the CT Notes dated 25 June 2010, but relating to events prior to that date, records that on an unknown date a representative of Telstra had spoken to CT and CT said that he had lost his wallet and was waiting to get a replacement credit card. The entry records “adv ptp $470.45 via cc” 21 October and “$608.97 via cc” 3 November (where “adv ptp” means “advised promised to pay” and “cc” means “credit card”).

37    On or about 18 May 2011, ACM received a letter on the letterhead of a person, “ET”, purporting to be CT’s daughter, containing information as to CT’s circumstances.

38    On 18 May 2011, a representative of ACM telephoned CT’s son, NT. NT informed the ACM representative that there was no one by the name of ET in the family. NT said that his mother was his father’s power of attorney and that she was at work and unreachable.

39    An entry was made in the CT Notes on 24 April 2012 to the effect that the telephone number listed on file for CT should not be called.

40    On about 40 occasions during 2011 to 2014, ACM representatives telephoned the care facility where CT resided.

41    ACM representatives rang and spoke to CT on the telephone on only six occasions between 2011 and 2014, being 13 July 2011, 5 October 2011, 11 January 2012, 19 September 2012, 1 July 2014 and 20 November 2014.

42    When the ACM representatives rang and spoke to CT in the conversations referred to immediately above, they asked him to verify his identity.

43    On 31 July 2012, a representative of ACM received a telephone call from CT’s nurse or carer, Ms Joanna Pigram, at the care facility where CT resided informing them that CT was in an aged care hospital and did not know what “this is regarding”, apparently referring to a letter received at the care home addressed to CT from ACM. The representative of ACM spoke with CT and obtained verbal authority to speak with Ms Pigram, and informed Ms Pigram what the bill was regarding. Ms Pigram then is recorded as having told CT who claimed that LH was meant to be looking after the account. On the same day Ms Pigram informed the ACM representative that CT was in no position to pay this debt as he was in an aged care hospital and can't “pif” (i.e. pay anything towards the debt).

44    On 13 August 2012, a representative of ACM received another telephone call from Ms Pigram at the care facility where CT resided as she had had a telephone message from ACM left at her workplace. Ms Pigram informed the ACM representative that she had been just helping out as CT cannot speak properly but she no longer wished to be involved with the debt and asked to be removed from the account. She said that CT’s ex-partner was supposed to be sorting it out.

45    On 17 May 2013, a representative of ACM rang and spoke with a woman (Laura) at the care facility where CT resided and asked whether CT was suffering from a medical condition. Laura advised that he had suffered from a stroke. Laura was asked to fax through documents and is noted to have agreed to send them off. There is no record in the CT Notes as to those documents being received by ACM.

46    On 18 October 2013, a representative of ACM rang and spoke with a woman, Shequel, at the care facility where CT resided. She is recorded in the CT Notes as having informed the ACM representative that CT “cant speak clearly need to visit him if I need to speak with him”.

47    On 17 January 2014, a representative of ACM rang and spoke with a woman (Rhonda) at the care facility where CT resided who then passed the representative on to Shequel who described herself as CT’s carer. She informed the ACM representative that CT can’t speak clearly on the phone and it would be better if he came to talk to CT personally.

48    On 23 June 2014, a representative of ACM rang and spoke with a woman at the care facility where CT resided. The representative asked how long CT had been there but the woman said that she could not disclose that information because it was a private issue.

49    On 24 June 2014, a representative of ACM rang and spoke with a nurse, Jenny, who was assigned to CT, at the care facility where CT resided. Jenny told them that CT was not capable of speaking. She said that ACM should visit CT to talk to him. The CT Notes for that date record that there is no third party authorised person on the account.

50    On 3 September 2014, a representative of ACM rang and spoke with a woman, Jennie, at the care facility where CT resided. She said that she “told us many times” that “if you want to speak to [CT] [you] must visit him”. The ACM representative asked for a copy of CT’s medical record that he is in a medical condition and the woman is recorded as saying that she would arrange that for him. There is no record in the CT Notes as to those documents being received by ACM. The CT Notes record that on this occasion “verification of customer/contact has been cancelled”.

51    On 28 October 2014, a representative of ACM rang and spoke with a woman, Vanessa, at the care facility where CT resided. She said that CT did not want to speak to the ACM representative and that it would be much better to call in the morning and someone would assist. The CT Notes record that on this occasion “verification of customer/contact has been cancelled”.

52    In the period between 29 April 2011 and 12 June 2015, ACM sent 20 letters to CT:

(a)    some of the letters were entitled “Final Notice” and stated that if the balance owing was not paid, legal proceedings “could be commenced” and that ACM “may forward your file to [its] solicitors”;

(b)    some of the letters were entitled “Notice of Intention to Commence Legal Proceedings” and stated amongst other things that, if the balance owing was not paid, legal proceedings “could be commenced” and ACM “may forward your file to [its] solicitors”;

(c)    some of the letters were entitled “Urgent Notice” and stated amongst other things that, if the balance owing was not paid, legal proceedings “may commence” and that ACM “may forward your account to [its] solicitors”; and

(d)    some of the letters were entitled “48 Hour Demand” and stated amongst other things that, “We recommend that you make immediate payment to avoid legal proceedings which may commence 48 hours from the date of this notice” and “legal proceedings through our solicitors may be commenced without further notice”.

53    When CT received letters from ACM, his practice at first was to read them and then put them in a pile and send the pile of letters to his ex-wife, LH, every two or three months. Sometimes, CT did not bother sending the letters on to LH and simply threw them out. He does not know what LH did with them after he sent them to her. After a while, CT stopped reading the letters from ACM beyond the ACM logo and heading.

54    The CT Debt was in connection with services provided to CT by Telstra.

55    There is nothing in ACM’s file for CT (prior to proceedings being issued in this case) that records receipt by ACM of any medical reports, medical certificates, doctor’s/hospital’s records or other documents that verified or confirmed CT's condition or his financial circumstances beyond the matters referred to in the CT Notes.

56    On or around 27 June 2014, Telstra assigned to ACM the JR Debt in the amount of $3,149.41 owed to Telstra by JR in respect of the provision of telecommunications services.

57    An ACM representative, Mr Rolf Francisco, telephoned JR on 3 September 2014 regarding monies owing by her in connection with services provided to her by Telstra.

58    Since 2012, Mr Francisco was an employee of Advanced Credit Management (Philippines) Pty Limited and was located in and worked as Relationship Manager at a call centre in the Philippines.

59    JR informed Mr Francisco on that date that she was employed part-time as a secretary, was a mother of three children and received Centrelink benefits.

60    In that telephone conversation, Mr Francisco suggested that JR make a payment of about $1,500 towards the JR Debt by that Friday.

61    During that conversation, Mr Francisco said to JR words to the following effect:

(a)    “They’re already preparing the documents that would be used for potential legal action against you”;

(b)    “Any time soon what management is planning is for a summons to be drawn, issued and served against you so that we can recover the debt in full”;

(c)    “Your name would not be listed as a default with VEDA, Dunn and Bradstreet and Experian, so your credit file will be safe from any default. Because were that to happen, you wouldn’t be able to obtain credit for the next five to seven years”; and

(d)    “And I know with three kids, credit is very important to you. Right?”.

62    During that conversation and after the matters referred to above, JR:

(a)    said that she could definitely come up with $1,000 by Friday, 5 September 2014;

(b)    said also that “then because my income is limited, the following Friday I get my Centrelink, so I could give you 500 from that”; and

(c)    later said, “I can do the thousand even today”.

63    The transcripts of Mr Francisco’s telephone conversations with JR were agreed by the parties, save that there was a minor disagreement concerning a part of the transcript for the first conversation which occurred on 3 September 2014 (which disagreement has little material significance).

64    In the first telephone conversation on 3 September 2014, JR provided her debit card details to Mr Francisco to allow a $1,000 payment to be processed, but the debit card details she provided did not allow ACM to process the $1,000 payment.

65    JR and Mr Francisco had a further two telephone conversations on 3 September 2014 and then another two telephone conversations on 5 September 2014.

66    The conduct of ACM’s representatives in dealing with CT and JR as set out above was conduct of an employee or agent within the actual or apparent authority of ACM.

The applicants’ witnesses

(a) JR

67    JR swore two affidavits dated 4 August 2016 and 7 February 2017 and was cross-examined at some length by ACM.

68    JR deposed that by about October or November 2013, she had incurred a debt in the sum of $3,149.41 in relation to various telecommunication plans which she had entered into with Telstra, including a plan called the Telstra Entertainer Max Bundle. In or about July 2014, JR complained to Telstra because she could not access some of the services she understood were to be provided under that plan but for which she was being charged. Unsatisfied with Telstra’s response, on 23 July 2014 JR lodged a complaint with the TIO. At the time, she wanted to enter into a payment arrangement with Telstra whereby she repaid $20 per week and to have any credit default withdrawn. Telstra sent a letter to JR on 2 September 2014, in which it stated that it was sorry that it could not reach a mutually agreeable solution but that it had done all it could to resolve the issues raised by JR.

69    Unbeknown to JR, the Telstra debt was acquired by ACM. JR deposed that, on 3 September 2014, she received three phone calls from Mr Francisco. During the first telephone call, JR said that she had previously offered to pay the debt off in $20 per week instalments. She deposed that she was very concerned when Mr Francisco told her that “any time soon what management is planning is for a summons to be drawn, issued and served against you so that we can recover the debt in full” and that she became more concerned and anxious when he told her that “frankly, they’re already preparing the documents that would be used for potential legal action against you”. JR then deposed that Mr Francisco said that if she made a payment of $1500, ACM would hold off potential legal action against her and her credit file would be safe from any defaults. He said that if any credit defaults were listed in her name, she would not be able to obtain credit for the next five to seven years and that, with three children, a good credit rating was very important to her. At the time of this first telephone call, JR said that she was in her car with her daughter.

70    JR deposed that she knew the consequences of a bad credit rating after having herself worked for a retail store in debt collection, including that it affects a person’s ability to access credit for utilities, telephone and mortgages and acts as a black mark against a person’s name. She was afraid of the consequences for her and her children.

71    JR deposed that she realised she could not afford to pay $1500, felt panicked at the prospect of proceedings being commenced against her, and offered to pay $1000 to ACM even though she could not immediately afford it, to prevent ACM from issuing a summons. JR provided her debit card details to Mr Francisco, but asked him to email her verification documents of his identity before processing payment. She said that she felt rattled for days after the phone call. She said that Mr Francisco did not email her the verification documents.

72    JR gave evidence of two further telephone conversations she had with Mr Francisco on 3 September 2014. In one of those conversations, Mr Francisco asked her for her email address, which she provided to him. She deposed that after the third telephone conversation on 3 September 2014 she googled “ACM” and found a reference to a Court judgment against it and that she read the first 20 pages or so of that judgment.

73    JR deposed that, on 4 September 2014, she phoned Telstra and asked why ACM was calling in relation to a debt JR said that she owed to Telstra. The Telstra representative told her that Telstra sells their long standing debts to ACM and would review her file and hold the debt until it was “transferred across”. JR understood that to mean that she would have no communications from ACM or any other debt collection company until the matter was clarified.

74    JR deposed that she received two further telephone calls from Mr Francisco on 5 September 2014. She said that she felt that she had no choice but to comply with the demand for payment because of the imminent threat of a summons being issued against her and her being listed as a default with credit reporting agencies. She deposed that she told Mr Francisco that she felt that she had been coerced. On or about that day, JR made a second complaint to the TIO.

75    JR was cross-examined at some length. It was put to JR that her claims of coercion and harassment were not genuine and were informed by her own research, which had revealed Perram J’s reasons for judgment in Australian Securities and Investments Commission v Accounts Control Management Services Pty Ltd [2012] FCA 1164 (ACM 2012). (The Court found there that ACM and its predecessor entity had engaged in misleading or deceptive conduct, as well as conduct which was unduly harassing and coercive, contrary to relevant provisions of the ASIC Act arising from telephone calls made by outward-bound call centre employees pursuing recalcitrant debtors). JR denied that her reading of ACM 2012 caused her to complain that Mr Francisco had used undue harassment and coercion. I accept her denial.

76    It was also put to JR that, prior to the fourth telephone conversation, all her previous three telephone conversations with Mr Francisco had been polite and courteous. She agreed but added that, at the time, she felt anxiety about the situation, which emotion was not revealed in the written transcripts. I accept that evidence.

77    JR impressed me as an honest and truthful witness. I have no reason to doubt the veracity of her evidence. On several occasions, the Court had to remind ACM’s counsel of the need to put questions fairly to JR. This reflected a tendency on Counsel’s part to be highly selective in matters which were put to JR by taking statements from the written transcript of the telephone conversations out of context.

78    I do not accept ACM’s submission that JR changed her mind about her willingness to pay off the debt by subsequently raising false accusations of coercion and harassment. Having listened to the primary telephone conversation, and the various matters that were put to her by Mr Francisco, I accept that she genuinely felt threatened, coerced and harassed by his conduct. These matters were then reduced to writing by JR in a further complaint to the TIO relatively shortly after the last of her telephone conversations with Mr Francisco. It remains to be determined, however, whether that conduct amounts to “undue harassment or coercion” for the purposes of s 50 of the ACL.

(b) CT

79    CT swore an affidavit dated 4 August 2016. He was not required for cross-examination.

80    CT deposed that on 1 October 2007 he suffered three strokes over a period of a few hours. Following the strokes, he underwent a period of rehabilitation and was admitted to a care facility in January 2008.

81    At the time of swearing his affidavit, CT said that he was unable to use his right arm and was dependent on a walking stick to support his right leg. He said that although his speech had improved since 2008, he could generally only say one or two words at a time and could not type in full sentences. He mostly communicated with gestures and occasionally by writing, or typing single words.

82    CT deposed that since his strokes, he has been unable to work and his sole source of income is a government disability support pension. He said that he does not own, and has never owned, any real property. His former wife holds a power of attorney over his financial affairs, which she began holding twelve months after he first suffered the strokes.

83    CT gave evidence that at the time of his strokes, he had a personal mobile phone on a Telstra plan that he used for work purposes. He paid the bills himself and requested reimbursement from his employer for work-related calls.

84    CT received a letter from ACM on 19 April 2011, which confirmed a debt amount due of $5,768.53, being the CT Debt. The letter included a statement that “we hope the information provided will assist you in finalising this account as a matter of urgency, to prevent any further action”. CT deposed that he could not afford to pay the CT Debt since suffering the strokes. After receiving the letter dated 19 April 2011, CT recalled receiving one or two letters from ACM each month over a period of about four years, which all related to the CT Debt. The letters asked for payment within either 48 hours or seven days and mentioned that legal proceedings may commence without further notice if the debt was not paid within the time period. CT said that after reading at least 10 of these letters, he stopped reading subsequent letters from ACM as he could not afford to pay the CT Debt.

85    CT deposed that he felt stressed when reading the ACM letters and believed ACM would start proceedings. Some of the letters also referred to a “satisfactory arrangement” being reached with ACM to settle his account which CT said he understood to be a reference to entering into a payment plan with ACM, which CT said he could not afford.

86    After receiving the letters from ACM in 2011, CT sent a letter to his former wife to ask her to get ACM to stop. He said that he did not know whether she did so or what ACM’s response was.

87    CT deposed that he also personally received phone calls from ACM. On the six or so occasions he spoke to an ACM representative, CT recalls the ACM representative saying words to the effect “I need to verify your identity. Please state your date of birth”. CT that he responded with words such as “stroke”, “nursing home” and “no” to convey that he could not speak or pay the debt because of the strokes. He said that the phone calls from ACM made him feel angry, frustrated and stressed as he could not communicate with ACM representatives, found their accents hard to understand, and believed ACM would commence legal proceedings against him.

88    CT deposed that, on at least another six occasions, ACM called the care facility where CT lived. CT instructed two of his regular nurses that he did not want to talk to ACM and the nurses said that they would not let them speak to him. No representative from ACM ever came to visit CT. I accept all of CT’s unchallenged evidence (see [232] below).

(c) Dr Penny Knowlden

89    Dr Penny Knowlden, a general practitioner (GP), swore an affidavit on 8 February 2017. She was not required for cross-examination. Dr Knowlden deposed that CT has been her patient since at least 1998. Since December 2007, she has been CT’s regular GP and she visits him for a consultation approximately once per month.

90    Dr Knowlden gave evidence in relation to the physical issues that CT suffers as a result of the stroke, including that he is dysphasic, meaning that he has trouble speaking. He can form sentences but it takes him some time to complete them and he can only speak a few words at a time. Dr Knowlden has not noticed much improvement in his speech over the period she has been treating him since the strokes.

91    Dr Knowlden deposed that CT’s ability to care for himself is limited, expects that he will live in a care facility for the rest of his life and is unlikely to be able to work again. I accept all of Dr Knowlden’s evidence.

(d) Mr Richard Fleming

92    Mr Fleming swore an affidavit dated 5 August 2016, exhibiting various documents, and was cross-examined. Mr Fleming was, at that time, General Manager, Enforcement – ACT Branch, Enforcement Division of the ACCC. He was ultimately responsible for supervising ACCC staff who were conducting an investigation into ACM. The documents exhibited to Mr Fleming’s affidavit included notices issued between July and September 2015 by ACCC to ACM to furnish information and produce documents pursuant to s 155(1)(a) and (b) of the CCA which related to matters that may constitute a contravention of ss 18 and 50 of the ACL. Such matters included sending letters to CT containing such representations as “notice of intention to commence legal proceedings” and “48 hour demand” and telephoning CT on a number of occasions between 2011 and 2015 in relation to his debt, as well as JR in relation to her debt in 2014. Mr Fleming also exhibited responses, and documents produced pursuant to those notices, by ACM or its solicitors. Similar s 155 notices sent to Telstra between July and October 2015, and responses and documents produced by Telstra in relation to those notices were also exhibited.

93    I found Mr Fleming to be a truthful witness. Much of his cross-examination went to irrelevant issues in circumstances where the relevant documents speak for themselves. Some of the documents to which Mr Fleming was taken include Telstra debt collection documents which at first glance appear to contain similar language to that of ACM’s correspondence to CT. For example, a letter titled “Final Demand – Telstra Debt” was sent from Creditech on behalf of Telstra to CT on 19 October 2009. A template letter was provided, that used the language “may refer the debt to a collection agency which may involve legal action” and “we may provide details of your payment default to a credit reporting agency” (emphasis added). Notices on Telstra letterhead dated 23 December 2009, 16 March 2010 and 26 March 2010, also feature the text “SUSPENSION NOTICE” and “ACCOUNT OVERDUE”. It is not clear, however, that these were the letters that were actually received by CT. The letter dated 19 October 2009 was not provided the Court – just the pro forma letter – and the two Telstra notices are addressed to CT at a residential address. As at the date of those letters, CT had already suffered strokes, had been in hospital and was then in a care facility. Further, the CT Debt was assigned to ACM on or around 25 June 2010.

94    There were five Telstra invoices in evidence issued between 28 November 2009 and 28 May 2010 which indicate that some payments were made in respect of CT’s account during the period late November 2009 to May 2010. The point was made as to whether the ACCC had taken this material into account. The difficulty I have is that it is unclear who paid the amounts. For example, there is an email from LH to a Telstra representative dated 23 August 2009 which suggested that LH paid for her ex-husband’s landline. It is also important to match up the relevant account numbers because it seems that the account numbers on the Telstra invoices do not accord with the account number which is the subject of the debt assigned to ACM.

95    Mr Fleming was asked questions relating to a document titled “Debt collection guideline: for collectors and creditors” issued by ASIC in October 2005 (then known as Regulatory Guide 96) (2005 Guidelines) and the revised version issued by ASIC and ACCC in July 2014. Emphasis was given to the material relating to “frequency of contact” at page 12 of the 2005 Guidelines, which provided a guideline of no more contact than three times per week or ten times per month (being when contact is actually made rather than attempted contact). As Dr Stern SC pointed out, however, the Guidelines have to be read as a whole, including the material at page 30 of the 2005 Guidelines relating to interactions with debtors at a special disadvantage (see further [243] and [244] below).

ACM’s witnesses

(a) Mr Paul Brabazon

96    Mr Brabazon swore four affidavits dated 31 March 2017, 3 July 2017, 21 July 2017 and 27 July 2017. Mr Brabazon deposed that he had been Chief Operating Officer (COO) of ACM since April 2008 and has worked in the financial services industry since at least 1974.

97    Mr Brabazon gave evidence in relation to the information that is normally included in a debtor’s consumer credit report. According to Mr Brabazon, all of the defaults or other information relating to an individual during the retention period specified in s 20W of the Privacy Act 1998 (Cth) (being 5 years for a simple default, up to 7 years for a serious credit infringement) can be provided to a credit provider.

98    Regarding the issues concerning CT, Mr Brabazon deposed that he made enquiries of CT’s account and that all ACM employees (including the last three operators who telephoned CT), had attended ACM’s required training sessions, reviewed policies and manuals and passed relevant examinations. Mr Brabazon gave oral evidence that during the period when the letters were sent to CT from ACM in relation to debt recovery, ACM did in fact commence legal processes against customers who had debts over $3,000 or owned real property. He stated that ACM would not commence legal proceedings if someone was solely on a pension and had no assets. He said that depending on individual circumstances, ACM may not commence legal proceedings against someone if, for example, ACM received a certification from a doctor which suggested the person was actually incapacitated or in hospital for longer periods.

99    Mr Brabazon deposed that debtors frequently lied to avoid paying debts. For that reason, ACM requested corroborating documentary evidence to support claims made by debtors about health issues or financial inability to pay a debt. Mr Brabazon said that no medical reports, certifications or records verifying or confirming CT’s condition or financial circumstances were provided at any time during ACM’s dealings with CT.

100    Mr Brabazon also referred to a document titled “Debt collection guideline: for collectors and creditors” issued in February 2016 by the ACCC and ASIC (2016 Guidelines). It contains a recommendation at clause 5(c) that a debtor not be contacted more than 3 times per week or 10 times per month and that unduly frequent contacts may amount to undue harassment or discrimination.

101    Regarding CT’s debt to Telstra, Mr Brabazon deposed that on 25 June 2010, Telstra assigned CT’s debt of $5,768.53 to ACM. This was one of several thousand debts assigned to ACM by Telstra. Typically, Telstra assigned a debt after failing in its own attempts to collect the debt. When a debt was assigned to ACM, Telstra provided ACM with records containing such information as steps taken by Telstra to collect the debt and whether the debtor owned or rented real property. Mr Brabazon deposed that in his experience, Telstra used the letter “O” to record on its file that a customer owned real property. He said that the inclusion of the letter “O” in the relevant records for CT indicated that he owned real property.

102    Mr Brabazon gave evidence of ACM’s DebtSmart system, which automatically puts an account on hold if its status is changed to “Customer Disputes Account”. The hold period is 14 days to allow further information to be provided in respect of the dispute, and would be automatically lifted if no such information was provided. The CT Notes indicated the status of CT’s account had changed to “Customer Disputes Account” on 16 December 2014, and an entry on 31 December 2014 records that further information was not provided within the requisite time period.

103    In additional oral evidence in chief given with the leave of the Court, Mr Brabazon said that in his experience working in the finance industry, it is very difficult for persons who have delinquencies listed on their consumer credit report, unless very minor, to obtain further credit or finance. He said the circumstances which ACM took into account during the period 2011-2015 as to whether or not to commence legal proceedings against a debtor included whether there were unpaid accounts, as well as other criteria such as whether the amount exceeded $3,000 (it was originally $5,000), any assets owned by the debtor and whether the debtor was in employment and therefore the company could garnishee the remuneration. He said that not all these criteria were inflexible and that in a particular case the $3,000 minimum level of debt might not be applied.

104    Mr Brabazon was asked in cross-examination why statements from a carer or nurse would not provide sufficient proof of a debtor’s medical condition. His initial answers were non-responsive and designed to advance ACM’s interests. Ultimately, he appeared to accept that persons other than a doctor might be able to give such confirmation. He said that oral statements from nursing staff could be a form of proof, but he then immediately added, self-servingly, why would nurses take the phone over to CT if he was not able to speak. He then added that “nurses aren’t doctors either” . Mr Brabazon said that having listened to the tape he got the impression that CT was able to speak reasonably. He was challenged on this by reference to his lack of professional qualifications to assess stroke victims. I found his evidence also to be self-serving.

105    Mr Brabazon acknowledged that it was open to ACM to ask CT’s son to obtain a medical report and that ACM could also have written to CT at the nursing home and seek his consent to release his medical records and provide a statement of financial circumstances. Mr Brabazon said that if ACM had CT’s ex-wife’s email address, ACM could have tried to contact her and ask for a medical report.

106    Mr Brabazon gave evidence about the relationship between ACM and Australia Post. Up until around 2010, ACM processed its own debt correspondence but from that date it entered into a contract with Australia Post (which was not in evidence). He explained that the general practice was for ACM to provide electronic data to Australia Post, usually on a Friday, with a view to Australia Post then generating hardcopy letters and dispatching them within a timeframe stipulated in the contract. He said that the letters were dated in a way which anticipated the likely day the letter would be delivered. Thus, if a letter which was sent out by Australia Post is expected to be received the following Monday, the letter would bear the date of the following Monday.

107    When asked what monitoring ACM had of the actual date of delivery, Mr Brabazon said that all bulk deliveries included “test letters” sent to ACM staff, including himself, so that the date of receipt could be noted and Australia Post’s performance monitored by ACM. In response to a question from the Court, however, he confirmed that no such tests were done in respect of people who lived out of Sydney.

108    Mr Brabazon was asked various questions about his experience from 2001 to the present regarding credit defaults. His answers were to the effect that he had only limited direct knowledge and he relied on what he learned from industry contacts and friends. He said that he was involved in 2006 with studying credit card arrangements in Australia when he was working in Poland. Mr Brabazon agreed that any decision whether or not to advance a person credit relied upon a consideration of a number of different factors, of which one might be an adverse credit listing. He also acknowledged that under Australian law, if a debt is settled or paid in full, a notation must be added to the credit listing.

109    Mr Brabazon was cross-examined on the Privacy Fact Sheet 38 dated May 2014 from the Office of the Australian Information Commissioner. Mr Brabazon agreed that ACM had policies in place throughout 2011 to 2015 applicable to requests for hardship assistance. Further, he agreed that it was inaccurate to say that ACM could list a debt with a credit reporting bureau as a default in the case of someone was in a position of potential financial hardship.

110    Mr Brabazon was cross-examined at some length on whether there had been compliance with ACM’s policies and procedures in its dealings with both CT and JR. He was taken to that part of the report prepared for ACM in September 2016 by Anteris Consulting titled “Review of Compliance Environment” (Anteris Report) which described changes to ACM’s policy concerning financial hardship and vulnerable customers following Perram J’s judgment in ACM 2012. Mr Brabazon confirmed that, having regard to what JR told Mr Francisco on 3 September 2014 as to her financial circumstances, Mr Francisco was authorised to accept any payment proposal that was offered by JR, no matter how long it would take to repay the debt, pursuant to ACM’s policy as described in the Anteris Report. He also confirmed that having accepted such a payment proposal, legal proceedings would not be commenced.

111    Mr Brabazon accepted that, having regard to JR’s financial circumstances as disclosed to Mr Francisco on 3 September 2014, she could have been referred to ACM’s hardship team. He reiterated that JR’s offer to pay $20 per week should have been accepted. Later in his cross-examination, however, Mr Brabazon said that while it was inconsistent with ACM’s policy to say that management was demanding a full payment from JR to avoid recovery action, that did not mean that Mr Francisco was not able to ask for full payment. Further, he added that because JR was working, and agreed to pay half the debt, he did not think that she was in hardship.

112    Mr Brabazon ultimately accepted that Mr Francisco’s statement to JR that management was demanding a full payment was inaccurate and in breach of ACM’s policy as described in the Anteris Report and that the request that JR pay half the amount was contrary to the same policy. But he then said that it all depends upon how the discussion unfolds, and that JR could have had $4 million in a bank account. He said that by asking for a large amount of money that may come forth with a larger amount of money. Mr Brabazon appeared reluctant to make concessions which ought reasonably to have been made. His reluctance may have been attributable to an abiding concern to advance ACM’s interests in the proceeding.

113    Mr Brabazon was cross-examined about the processes for initiating legal action as described in the Anteris Report. The Report described changes which had been made to ACM’s legal referral process such that only a Relationship Manager could refer a matter to the ACM Legal Processing & Collections Team after complying with specific directions set out in the ACM Legal Process Policy (MSP709-11). The Report stated that, among other things, the Legal Process Policy required the Relationship Manager to undertake a thorough assessment of a customer’s circumstances and mandates completion of the Legal Checklist on DebtSmart. Should the checklist be completed satisfactorily, the Relationship Manager must then gain approval for litigation by completing a Legal Approval Form, which required sign off from the relevant Section Manager. At this point, “the file will be locked down in DebtSmart (via the Legal compliance button” and automatically transferred to the Legal Processing & Collections Team, who would then undertake what was described as a final quality check, including an assessment for hardship or other sensitive issues. Finally, the Report noted that ACM’s Legal Processing & Collections Team would liaise with external solicitors throughout the process and provide instructions where necessary.

114    The Legal Checklist pro forma in evidence required details to be completed in relation to a range of matters depending upon the nature of the proposed legal action and whether it is a bankruptcy, a garnishee order or an examination.

115    Mr Brabazon acknowledged that there were various levels of management, at least three, between an ACM Relationship Manager and the Legal Processing & Collections Team. He agreed that either the Relationship Manager, or someone higher in the chain of command, had to carry out a thorough assessment of the customer’s circumstances before referring a matter to the Legal Processing & Collections Team. When he was asked if Mr Francisco was in a position to say anything to JR on 3 September 2014 about whether there was any possibility of the matter being referred to the Legal Processing & Collections Team, he responded by saying that he didn’t know because he wasn’t there. He then said he wasn’t aware of whether Mr Francisco had carried out any assessment of the customer before the telephone conversation. Mr Brabazon then rather stubbornly resisted accepting certain assumptions that were put to him by the applicants’ Senior Counsel about what occurred. Mr Brabazon’s attitude did not assist his credibility.

116    Mr Brabazon acknowledged that ACM’s Legal Process Policy (MSP709-11), as described in the Anteris Report, required a Legal Checklist to be completed by the Relationship Manager, and that only if the checklist is completed satisfactorily is the Relationship Manager in a position to seek approval for litigation by completing a legal approval form, which then needs to be signed-off by the Section Manager. This was the position throughout 2011 to 2015 to the best of his recollection. He also accepted that ACM’s Legal Processing and Collections Team had a right to reject any recommendation to litigate and it was only when the team decided to proceed that the matter was referred to external solicitors for litigation. Mr Brabazon confirmed that throughout 2011 and 2015, it was only after a matter was referred to external solicitors that any documents for the purposes of legal proceedings would be prepared.

117    Mr Brabazon was cross-examined on an ACM customer Ledger Card Report with several entries dated 22 August 2012. He avoided directly answering the question that if there was no entry on DebtSmart recording the status of a matter as “Legal – Preparing Documents”, it could be inferred that no decision had been made to prepare legal documents in respect of a debtor. He drew an unconvincing distinction between preparing for litigation and preparing legal documentation.

118    Mr Brabazon was cross-examined at some length on the issue of the accuracy of the reference to “O” in the Telstra documents generated in the period 2006-2008, which ACM subsequently obtained in respect of the CT Debt. It was put to Mr Brabazon that whether a debtor in fact owned real property would have to be checked as part of the internal legal processes. Mr Brabazon said that this could be done at any time of the internal process and not just by the Relationship Manager. Mr Brabazon ultimately agreed that the issue of home ownership would have to be checked before the file was sent to external solicitors.

119    Mr Brabazon confirmed that ACM’s policy was that “staff shouldn’t mention any legal situation whatsoever unless they have approval from the Section Manager or Team Leader”. He also said that it would have been inappropriate for a Relationship Manager during the period 2011 to 2015 to refer to legal proceedings in communications with a debtor until a decision had been taken that legal proceedings would commence.

120    When asked about the propriety of the many letters which ACM sent to CT relating to legal proceedings, Mr Brabazon emphasised the significance of the use of the words “may” and “could”. Mr Brabazon was also cross-examined on the propriety of sending a “NOTICE OF INTENTION TO COMMENCE LEGAL PROCEEDINGS” letter before a decision had been made to commence legal proceedings. He agreed that such a letter would be “entirely inappropriate” under certain circumstances but, again, he emphasised that the letters sent to CT did not use the word “will” and instead used “may”.

121    Mr Brabazon was taken to various internal ACM policies produced in response to s 155 notices, including a document titled “Legal Approval Flow Chart - Prior to Commencement of Legal Action”. He said that he was not sure if this policy was in place in 2012, but he accepted that it was after then. The document stated that Relationship Managers, Senior Relationship Managers or Team Leaders cannot discuss legal action with a customer unless preapproved by a Section Manager. It also stated that Section Manager approval must be noted on the Note History, or a signed approval uploaded to the relevant customer account. Mr Brabazon confirmed that the system in place between 2012 to 2015 was that, once Section Manager approval had been received, even then a Relationship Manager could not discuss possible enforcement actions. Mr Brabazon agreed that it was probable that until there had been at least a number of attempts to resolve settlement of the customer’s account by ACM, a Relationship Manager should not even get to the stage of preparing a checklist, but added that there could be exceptions.

122    Mr Brabazon was also cross-examined on an ACM policy titled “General Guide Criteria before processing an account for Legal” (General Guide). Criteria 3 of the General Guide provided that “There needs to be sufficient information to confirm that the customer is a. Receiving an income and is employed full time b. Owns property c. Owns a business”. Mr Brabazon stated the document was only a general guide and there could be exceptions. It was then put to Mr Brabazon that, having regard to the General Guide and JR’s personal circumstances, it was highly unlikely that ACM would ever issue proceedings against her. Mr Brabazon responded by saying that while he did not know about the word “highly”, he agreed that “it could be unlikely, yes”.

123    When it was put to Mr Brabazon that, based on the General Guide, it was “impossible” that ACM would ever issue proceedings against JR because she was working part-time, did not own property, did not run a business and was on Centrelink benefits, Mr Brabazon said that it would have been “unlikely”.

124    When similar questions were put to him regarding the unlikelihood of legal proceedings against CT, Mr Brabazon said that it was “unlikely” that any litigation would ever have been brought against CT.

125    Mr Brabazon was taken to an ACM document dated May 2010 which included information on job descriptions for a collection officer. In particular, he was taken to page 7 of that document and the statement there that a collector “may discuss matters regarding an account only with the account owner, the debtor, (unless you obtain authorisation in the form of a written letter from the debtor to discuss the account with a third party)”. Mr Brabazon said that this was subsequently modified to also allow verbal authorisation to be given upon approval by either the Senior Relationship Manager or Team Leader.

126    Mr Brabazon was taken in cross-examination to a document titled “ACM Group Ltd Training Booklet – Rules and Regulations” dated July 2010. He confirmed that this document applied to all ACM staff from July 2010. He confirmed that ACM policy during the period 2010 to 2015 was that a minimum arrangement of $20 per fortnight could be accepted if ACM received a Centrelink statement verifying low income. Mr Brabazon acknowledged that JR’s Centrelink statements should have been requested to verify that she was in fact receiving Centrelink payments. When it was put to Mr Brabazon that it was “entirely inappropriate” for Mr Francisco to put pressure of any sort upon JR to reach an arrangement during the 3 September 2014 telephone call, he initially disagreed, saying that this was because JR was working. He ultimately accepted that Mr Francisco should have asked JR to provide the Centrelink information as required by the policy.

127    Mr Brabazon was cross-examined on a document titled “ACM Group Ltd Staff Compliance” which was updated on 17 October 2013 (Staff Compliance Document). His attention was drawn to a statement in that document that: “ACM Staff Members are never to say to a customer that they are discussing their account or referring their account to in-house Lawyers or Legal Department/Team” but that they “may state that they may discuss potential legal action with their Manager” (emphasis in original). Earlier in cross-examination, Mr Brabazon agreed in respect of a document titled “Legal Process” dated 14 December 2012, that the policy as stated in that document was that collectors could not tell debtors that legal action will be commenced or may be commenced in circumstances where ACM had not started legal action. When it was put to Mr Brabazon that it was entirely inappropriate for Mr Francisco to have said to JR that legal documents were being drawn up, Mr Brabazon said that it would have been appropriate if Mr Francisco had been told by his manager to discuss legal action but that if this had not occurred then it would have been inappropriate. Mr Brabazon confirmed that according to the Staff Compliance Document, it was ACM policy throughout the period 2011 to 2015 that collectors should never talk about legal action to any customer who was receiving welfare payments and where ACM held verification documents. He agreed that that policy also applied where verification had not yet been requested.

128    Mr Brabazon was taken to a document dated 20 February 2014 and headed “ACM Group Ltd Hardship Training”. His attention was drawn to statements at page 5 of that document that “Some customers will state that they are in Financial Hardship” and “With other customers Relationship Manager (RM) will need to discuss with the customer their financial situation and make a decision as to their suitability for the HARDSHIP PROGRAM contained in this training material” (emphasis in original). Mr Brabazon accepted that throughout the period 2011-2015, the onus was on the Relationship Manager to find out whether or not a customer would be suitable for the Hardship Program, and that was a step all Relationship Managers should have done before requesting any payment from a particular debtor. Mr Brabazon’s attention was drawn to a part of the document which stated:

If the customers (sic) financial situation is obvious and you have supporting documentation e.g.

(a)    They are on Centrelink.

(b)    They want to make a $20 a fortnight payment ($10 a week).

Accept the arrangement. …

129    It was then put to Mr Brabazon that JR was one of the “paradigm situations”, in circumstances where she had offered to pay $20 per week and having regard to her financial situation. Mr Brabazon responded by saying that “you could reasonably assume that that could be the case, although she did offer to pay half of the debt, $1,500…”. This is one of several examples when Mr Brabazon resisted accepting that conduct of his staff in relation to both CT and JR was inconsistent with ACM policy in force at the relevant time, where objectively that plainly was the case.

130    This is further illustrated by Mr Brabazon’s response to the proposition that CT would have been eligible for the Hardship Program and should have been put into it rather than being subjected to four years of telephone calls and correspondence. Mr Brabazon initially accepted that proposition. He then added that ACM had put in place a “sensitive word report” whereby each night the ACM system searches for certain sensitive words in any account which is then referred to a senior representative so that the account is actioned properly and this system was not in place during 2011 to 2015.

131    When Mr Brabazon was pressed as to whether it was “wholly unreasonable” to keep calling and writing to CT, Mr Brabazon equivocated by saying that he did not know and that there were reasons both positive and negative. Ultimately, and only after he was pressed several times, Mr Brabazon agreed that CT should have been processed as a candidate for hardship.

132    The applicants did not invite the Court to make an adverse credibility finding regarding Mr Brabazon. I regret to say that Mr Brabazon was not an impressive witness. I do not suggest that his evidence was untruthful but he was often unresponsive to questions and sought to advance ACM’s interests. As the summary of his evidence indicates, he failed to make concessions which ought reasonably to have been made and he was unreasonably defensive in some of his responses in cross-examination. I have approached his evidence with caution even though I make no adverse credibility finding.

(b) Mr Ryan Clarke

133    Mr Clarke swore an affidavit dated 13 March 2017 and with the leave of the Court he gave his evidence by video link to Manilla. He came across as an honest and reliable witness and I have no hesitation in accepting his evidence. He ceased working with ACM in October 2016, after working with the group for approximately ten years, and now works for a totally unconnected company. He has no reason to advance ACM’s interests. He demonstrated a good familiarity with the relevant policies and guidelines of both ACM and the ACCC which were applicable during the time when he worked with the ACM group. He gave frank answers to the inappropriateness of stating that a repayment arrangement of say, $20 a week, will only be considered if a large upfront payment were made.

134    In his affidavit, Mr Clarke deposed that he was employed by Advanced Credit Management (Philippines) Pty Limited (ACM Philippines). He was Branch Manager at the ACM Philippines call centre in Manila for approximately 4 years. He previously worked as Section Manager at ACM Group Limited or its predecessor Accounts Control Management Services Pty Ltd in Sydney for approximately 6 years.

135    Mr Clarke gave evidence about his role at ACM Philippines during September 2014 and the hierarchy of staff. He was the only Branch Manager at ACM Philippines. He deposed that Section Managers reported directly to the Branch Manager. Section Managers were, in turn, responsible for overseeing Team Leaders and Senior Relationship Managers. Team Leaders and Senior Relationship Managers were positioned above call centre operators.

136    At any one time, Mr Clarke was in charge of approximately 300,000 customer accounts and up to 200 internal staff. He said that it was usual for him to have around 30 to 40 conversations per day with staff in relation to customer accounts.

137    ACM Philippines did not have an internal legal department during the time that Mr Clarke worked there. Mr Clarke gave evidence as to the process that ACM followed where a customer disputed liability in relation to an outstanding debt. Key aspects of the process included:

(a)    The company from whom ACM Group purchased an account debt (initial creditor) would confirm whether a customer was fully, partially or not liable for an outstanding debt.

(b)    Information provided by the initial creditor or a customer would be noted on a customer’s ledger on ACM Philippines’ internal computer database (DebtSmart) and the Team Leader or Senior Relationship Manager would automatically be alerted to follow up the account.

(c)    The Team Leader or Senior Relationship Manager would review the documentation and instruct a Relationship Manager as to how to proceed, including contacting a customer.

(d)    A hardcopy Legal Checklist would be created once inquiries of a customer’s willingness to pay the debt had been made, and if a Team Leader or Senior Relationship Manager thought that an account should be referred to ACM Group’s legal department in Sydney for legal action. Occasionally, the Legal Checklist would be prepared before contacting a customer.

(e)    If a Relationship Manager approached Mr Clarke and advised that a customer indicated a willingness to make a payment, he would securely dispose of the Legal Checklist immediately.

138    Mr Clarke deposed that as the Branch Manager, he had authority to decide whether legal action would be commenced. By contrast, Team Leaders and Senior Relationship Managers could only request or recommend that legal action to be taken.

139    Mr Clarke deposed it was preferable to receive payments from a customer without commencing legal action. If a customer was willing to make payments he said that his usual practice was to defer any further consideration of legal action, at least while those payments continued to be made. No details from the Legal Checklist were inserted onto a customer’s ledger on the DebtSmart system if this occurred, including the fact that the document itself had been prepared.

140    Mr Clarke gave evidence as to the usual process where a Legal Checklist was not discarded. Details from the Legal Checklist would be inserted into a customer’s ledger and the status of the customer’s account on the on-line DebtSmart System would be updated to “preparing legal documents” (LDOC). This triggered a notification being sent to the legal department, which issued instructions to external solicitors.

141    Mr Clarke said that he implemented the use of a hard copy Legal Checklist as a further step before an account could have its status changed to LDOC because the status of accounts was being changed to LDOC on occasions that were not appropriate for legal referral.

142    Mr Clarke deposed that he did not recall specific details about Mr Francisco’s communications with JR, but he recalled having one or two conversations with Mr Francisco around September 2014, when Mr Francisco came into Mr Clarke’s office and told him that a customer on the phone was willing to pay $1,500 that day in respect of her account and also that Mr Francisco thought that a Legal Checklist had been filled out in respect of this customer. Mr Clarke deposed that Mr Francisco gave him the customer’s account reference number which Mr Clarke used to locate the Legal Checklist which had been prepared. He said that given the customer’s willingness to make a payment, he decided in accordance with usual practice that the account would not be sent the legal department and he threw the document into his secured bin.

143    Mr Clarke gave evidence of assisting in the training of junior staff on an ad hoc basis, and participating in general group on-the-job training on an almost weekly basis, which included training on procedure, process and practice updates.

144    Under cross-examination, Mr Clarke said that in September 2014 there were about 200 staff in ACM Philippines, 90 percent of whom were Relationship Managers. The job hierarchy in ascending order was Relationship Manager, Senior Relationship Manager, Team Leader, Section Manager and, at the top, was the Branch Manager. He said that any decision to refer a file to the legal department had to be made at the level of either Section Manager or Branch Manager.

145    Mr Clarke said that he had no recollection of having a conversation with Mr Francisco regarding a debtor called JR, but he recalled having one or two conversations with him around September 2014. He was taken to [18] of his affidavit and the reference to the $1,500 figure being raised by Mr Francisco. He said he remembered that particular figure because Mr Francisco normally did not secure payments in that amount. Mr Clarke was quite adamant that he recalled Mr Francisco coming into his office and mentioning the $1,500 figure. I accept this evidence. As will shortly emerge, I find that it was Mr Francisco who first mentioned the figure of $1,500 to Mr Clarke, and not vice versa. This issue is relevant to the truth of what Mr Francisco told JR during the first of their telephone conversations on 3 September 2014.

146    Mr Clarke confirmed that the Legal Checklist which he had on the account the subject of his conversation with Mr Francisco was in hardcopy form and that he had not prepared it himself. He explained that LDOC status meant that consideration was being given to the matter being referred to the legal department. He also said that it was possible for a Legal Checklist to be prepared instead of, or before, putting an account into LDOC status. He agreed that in 2014, before an LDOC file is submitted to the legal department, either a Section Manager or Branch Manager had to make a decision to refer the file to the legal department.

147    Mr Clarke was asked questions concerning ACM’s policies as recorded in a document titled “ACM Group Limited Training Booklet – ASIC Guidelines and ACM Group Rules and Regulations” updated on 28 July 2014. Mr Clarke agreed that if a person on Centrelink offered $20 per week, he would have advised that that payment arrangement should be accepted. He also confirmed that if a customer indicated a willingness to make a payment, he would not have commenced preparing a Legal Checklist, and would have discarded any existing Legal Checklist. Mr Clarke was taken to a copy of the pro forma Legal Checklist. He confirmed that a similar pro forma was in place in 2014. Mr Clarke said that it was his recollection that the Legal Checklist was completed by either a Senior Relationship Manager or a Team Leader and was then forwarded either to him or to a Section Manager.

148    I accept all of Mr Clarke’s evidence. He impressed me as an honest witness who attempted to answer questions put to him frankly and responsively. He properly acknowledged when he had no recollection of a particular event. He is no longer associated with ACM and showed no sign of seeking to advance its interests. Where there is any inconsistency between Mr Clarke’s evidence and that of Mr Francisco, I prefer Mr Clarke’s evidence unreservedly.

(c) Mr Rolf Francisco

149    Mr Francisco swore an affidavit dated 10 March 2017. He was required for cross-examination in person (see Australian Competition and Consumer Commission v ACM Group Limited (No 1) [2017] FCA 799). Mr Francisco gave evidence about what occurred in relation to JR’s account in early September 2014 and his and ACM Philippines’ practices at that time.

150    Since 2012, Mr Francisco has worked as a Relationship Manager at the call centre for ACM Philippines in Manilla, Philippines. He said that during his shifts (between 8.00am to 5.00pm), he usually made hundreds of telephone calls per day to customers.

151    On 1 August 2014, JR’s account was allocated to him electronically. He said that he did not take action at that time because a dispute had been lodged with Telstra. He reviewed the notes for JR on 2 September 2014 and saw that a colleague had spoken to a Telstra representative who said that JR was liable for the debt and was interested in paying $20 per week to reduce her debt. After receiving a confirmation email that JR was still liable for the debt to Telstra, JR’s account status was then changed to “Priority Follow Up”.

152    On 2 or 3 September 2014, and before speaking to JR, Mr Francisco said that he had a discussion with Mr Clarke, who told him that a Legal Checklist had been prepared for JR and that he should speak to her and see if she was willing to make a payment. I interpolate that it is significant that Mr Francisco did not state in his affidavit that Mr Clarke told him to ask JR whether she would make a payment of $1,500. Mr Francisco deposed he would on occasion be asked to investigate whether an account was worth pursuing such as by looking into a customer’s employment status, whether they owned real property and whether the debt was over $2,500.

153    Mr Francisco said that he then phoned JR. He said that, at that time, he believed, based on his discussion with Mr Clarke, that ACM’s management was taking steps for legal action to be taken against her. He obtained information from JR, including her family situation and expenses. He said that he then discussed with Mr Clarke JR’s offer to pay $20 per week. Mr Clarke told him that he was willing to enter into a payment plan and not go ahead with the Legal Checklist so long as JR also made a lump sum payment of about half the debt within the week. Mr Francisco said that he then resumed his conversation with JR. He later told Mr Clarke about his conversation with JR and Mr Clarke said he would get rid of the Legal Checklist. Mr Francisco then had several follow up phone calls with JR regarding the processing of her payment of $1,000, which had been declined.

154    Mr Francisco gave evidence in relation to the training he undertook at ACM, which is mandatory for all staff and completed every three months. He said he had attended all required training sessions, reviewed the policies and manuals and completed all examinations as required by ACM. Such training included training on respectful communications and identifying vulnerable customers, negotiations, problem solving, hardship and ACM’s DebtSmart system. He said he is familiar with ASIC’s debt collection guidelines.

155    Mr Francisco gave oral evidence in person, including his cross-examination. He accepted that he had limited information about credit listings in Australia, apart from that which he had obtained during the course of his employment. He was unable to recall what his targets were in September 2014, but some indication is that his current monthly target is $25,000 and his daily target is $1,250. He says that on a good day he will speak to 10 customers if he is lucky. He also initially said that he had no recollection of any conversation on 3 September 2014 apart from that which was triggered by having heard the recordings in preparing his affidavit. He did say at the outset, however, that he spoke with Mr Clarke on 3 September 2014.

156    Mr Francisco said that Mr Clarke was directly supervising his work because it was a new file which ACM had taken over from Telstra. Mr Francisco said that he can specifically recall talking to Mr Clarke on that day because he had to sign off in respect of any agreement with JR to pay $1,000 or more.

157    Mr Francisco was asked a series of questions regarding the distinction between a Legal Checklist and the issue of a summons. His evidence suggested that, in his own mind, he may have equated a Legal Checklist with commencing proceedings, but he also agreed that a Legal Checklist and a summons were very different. Mr Francisco acknowledged that the Legal Checklist was not a “legal document at all”, and described it as “an internal document”.

158    Mr Francisco was then asked to comment on the actions he took relative to ACM’s policies, including the policies contained in the document titled “ACM Group Limited Training Booklet – ASIC Guidelines and ACM Group Rules and Regulations” updated on 28 July 2014. Mr Francisco’s attention was drawn to that part of the Training Booklet which stated that no legal action is to commence without authorisation from the Team Leader or Section Manager. When it was put to him that he knew on 3 September 2014 that no such authorisation had been given, he responded by saying that Mr Clarke told him that “legal action might commence, so he was already drafting the checklist”. I do not accept that evidence. I prefer Mr Clarke’s evidence on this matter, which is to the effect that it was Mr Francisco who raised the possible existence of a Legal Checklist when he came into Mr Clarke’s office and also told him that JR, who was holding on the phone, was willing to pay $1,500.

159    Mr Francisco’s oral evidence on this matter is also inconsistent with his affidavit. In his affidavit he said that he recalled Mr Clarke saying to him that a legal checklist had been prepared for JR and that Mr Francisco should speak to her and see if she was willing to make a payment. His evidence under cross-examination was that Mr Clarke told him that “legal action might commence, so he was already drafting the checklist”. He then later said that he told JR that legal action was commencing “because I was told that legal action would commence”. I reject that evidence. I do not accept that Mr Clarke told Mr Francisco before Mr Francisco spoke to JR that a Legal Checklist had been prepared or that he should ask JR whether she was willing to make a payment. Nor do I accept that Mr Clarke told Mr Francisco that legal action might or would commence against JR.

160    In view of the significance to the applicants’ case concerning JR, it is desirable to elaborate upon why I reject Mr Francisco’s evidence on these matters.

161    Having regard to what Mr Francisco said to JR in their first conversation on 3 September 2014, it is particularly important to focus upon Mr Francisco’s written and oral evidence as to whether Mr Clarke told him on 3 September 2014 that he should ask JR to make a payment of $1,500 upfront before her offer to pay $20 per week should be accepted. The first thing to note is that there is no reference to any such instruction from Mr Clarke in Mr Francisco’s affidavit. The topic was, however, the subject of lengthy cross-examination. Mr Francisco was shown a copy of Mr Clarke’s affidavit. He was shown Mr Clarke’s evidence that he recalled that Mr Francisco had come into his office and told him that the customer on the phone was willing to pay $1,500 in respect of her account and that Mr Francisco thought that a Legal Checklist had been filled out for the customer. Mr Francisco initially stated that he recalled telling Mr Clarke “that it’s $1,500 and then $20 weekly after that”. Mr Francisco then said that in a conversation he had with Mr Clarke before he spoke with JR, he “was instructed to deliver the news that legal action would commence and asked if she was willing to make a payment”. Mr Francisco was taken to the transcript of his conversation with JR and to his statement that, while he was not rejecting the offer of $20 a week, “our management is really demanding for full payment before full recovery action ensues”. When he was pressed as to the accuracy of that statement, Mr Francisco said that it was standard practice to ask for full payment before entering into a payment arrangement with a customer. But then he said that he could not remember whether anyone in management had told him to demand full payment from JR. I do not accept that ACM management was demanding for full payment of the JR Debt. I find that Mr Clarke did not tell him to demand full payment from JR.

162    Nor do I accept Mr Francisco’s evidence that Mr Clarke told him to ask for a payment of $1,500. When it was put to Mr Francisco that his statement to JR that he “had a heated discussion with one of the members of the senior staff” was not true because he had not discussed the matter with Mr Clarke before he had obtained JR’s agreement to pay the $1,500 figure, he said “I really don’t remember”. Later in cross-examination, when it was put to him that no one told him that ACM required JR to pay half of the balance on the JR Debt, he said “I can’t remember”. I find that it was Mr Francisco who came up with the $1,500 figure, not Mr Clarke. Mr Francisco suggested that figure to JR with a view to extracting a large payment from her as a precondition to considering her proposal to pay $20 per week. As noted above, where there is an inconsistency in the evidence of Mr Francisco and Mr Clarke, I prefer Mr Clarke’s evidence.

(d) Mr Bruce Brew

163    Mr Brew swore an affidavit dated 30 March 2017 to which a medicolegal report was annexed. Mr Brew was not required for cross-examination. Mr Brew is a Neurologist and Professor of Medicine (Neurology). He has been a qualified medical practitioner since 1978 and has been a neurologist since 1986. He has published over 400 papers on various aspects of neurology and authored three books.

164    The instruction letter dated 10 March 2017 sent by the solicitors for the respondent asked Mr Brew to provide a report relating to both general and specific issues in stroke. These included the prevalence of strokes and the varying symptoms, effects, severities and recovery prospects among stroke victims. In his report, Mr Brew stated that in general, two-thirds of people who survive a stroke are disabled to varying extents. Further, the timeframe from recovery is usually about two years, with most of the improvement occurring within the first few months.

165    ACM’s solicitors sought Mr Brew’s opinion as to what conclusions could be drawn about a stroke victim based on the information provided in relation to CT. The instruction letter stated that at the relevant time, ACM was only told that the debtor had suffered a stroke or strokes, had difficulty speaking, was receiving care and was not currently working. Mr Brew reported that it would be reasonable to conclude that CT had been significantly affected by a stroke, as he was receiving care and had difficulty speaking. Mr Brew also stated it was reasonable to deduce that, as CT was receiving care, he had likely obtained the maximal chance of recovery already and that his current disabilities were likely to be permanent. Further, CT was more likely than not to continue to have difficulty speaking, although the nature of that difficulty was unclear. Mr Brew said it was reasonable to conclude that CT would not be able to return to work or earn an income.

166    Counsel for ACM, Mr Zahra, submitted that the key findings of Mr Brew’s report included that there were various types of strokes in a range of available recoveries. Mr Zahra submitted that even assuming CT’s actual condition, the prognosis by an expert professor of neurology was uncertain, and a debt collector would be in a more inferior position.

Some relevant legal principles

167    Before addressing each of the issues which the parties agree require determination, it is convenient to outline some relevant legal principles relating to relevant provisions in the ACL. There was substantial agreement between the parties on these principles.

The Briginshaw standard

168    It was common ground that the ACCC carried the onus of proof on each of the elements of the relevant causes of action to the requisite civil standard and having regard to the gravity of the matters alleged (see s 140(2) of the Evidence Act 1995 (Cth) (the Evidence Act) and Briginshaw v Briginshaw (1938) 60 CLR 336 (Briginshaw) at 361 and 362. As ACM submitted, the Court must assess whether, in all the circumstances, ACM’s conduct contravened the relevant provisions of the ACL concerning misleading or deceptive conduct, undue harassment, coercion and unconscionable conduct and that this could involve the making of serious findings with grave consequences which the Court would not lightly make (see Watson v Foxman (1995) 49 NSWLR 315 at 318-319 per McClelland CJ in Eq).

Misleading or deceptive conduct

169    Section 18(1) of the ACL provides as follows:

18    Misleading or deceptive conduct

(1)    A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

…

170    The debate between the parties relates not so much to the relevant legal principles but rather to their application to the particular facts and circumstances here. I did not understand ACM to challenge the applicants’ statement of the relevant principles, which may be summarised as follows.

171    Conduct involving a statement or representation is misleading or deceptive, or likely to mislead or deceive, if it has a tendency to lead into error, in the sense that there is a sufficient causal link between the conduct and error on the part of persons exposed to that conduct, in this case, CT and JR. Whether or not conduct amounts to a misrepresentation is a question of fact to be decided by considering what is said or done against the background of all relevant surrounding circumstances (see Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 (Taco Bell) at 202 per Deane and Fitzgerald JJ). The conduct complained of must be viewed as a whole. As Gibbs CJ said in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; 149 CLR 191 at [199]:

It would be wrong to select some words or act, which, alone, would be likely to mislead if those words or acts, when viewed in their context, were not capable of misleading. It is obvious that where the conduct complained of consists of words it would not be right to select some words only and to ignore others which provided the context which gave meaning to the particular words. The same is true of acts. …

172    Intention is not a necessary element of the cause of action (see Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 (Global Sportsman)) at 88). The question of whether or not any loss was suffered by the conduct is irrelevant to the issue of liability (see ACCC v Dell Computers Pty Ltd [2002] FCA 847 at [32]).

173    In the case of representations as to future matters, it is necessary to determine whether ACM had reasonable grounds for making such representations. The effect of s 4(1) of the ACL is that if a person makes a representation with respect to any future matter and the person does not have reasonable grounds for making the representation, the representation is taken to be misleading. Furthermore, the effect of s 4(2) of the ACL is that, for the purposes of applying s 4(1), the person is taken not to have had reasonable grounds for making the representation unless evidence is adduced to the contrary. Whether or not there are reasonable grounds for making a representation is a question of fact to be determined as at the date of the making of the representation (see Sykes v Reserve Bank of Australia (1999) 88 FCR 511). It is insufficient that the person making the representation had a genuinely held view that the representation was not misleading or deceptive (see Cummings v Lewis (1993) 41 FCR 559). There will not be reasonable grounds for making a representation if, at the time it was made, the person who made it did not have facts sufficient to induce in the mind of a reasonable person a basis for making the representation, which is to be assessed objectively and not by reference to the maker’s subjective state of mind (see ACCC v Jones (No 5) [2011] FCA 49 at [32] per Logan J, applying George v Rockett (1990) 170 CLR 104).

174    The Court must determine whether, as a question of fact, relevant representations are false, misleading or deceptive or are likely to mislead or deceive (see ACCC v Telstra Corporation Limited [2004] FCA 987; 208 ALR 459 at [49] per Gyles J).

175    As noted above, it is also a question of fact for the Court to determine whether representations were in fact made in the terms alleged having regard to what was said and done against the background of all relevant surrounding circumstances (see Taco Bell at 202). This is of some significance in the current proceedings because ACM submits that, having regard to the terms of the representations in the letters which were sent to CT (in both the Seven Day Demand and the 48 Hour Demand Letters) and to the context and surrounding circumstances in which they were sent, the Court should find that the alleged representations were not made.

176    Moreover, even if the Court is satisfied to the Briginshaw standard that the alleged representations were in fact made, ACM contended that the representations were not misleading or deceptive having regard to the surrounding circumstances. To the extent that the alleged representations were made and were in respect of future matters, ACM contended that it had reasonable grounds to make the representations. Further, while it may be relevant to identify what ACM knew about CT’s medical or financial position, it was not relevant to inquire as to what his position was in actual fact, so submitted ACM.

177    Insofar as the alleged misleading or deceptive conduct relating to JR is concerned, ACM conceded that the representation set out at [21(a)] above was made, but disputed that the rest of the representations allegedly made by Mr Francisco in his first telephone conversation with JR on 3 September 2014 were in fact made (see [21(b)] and [21(c)] above). In any event, ACM submitted that the alleged representations were not misleading or deceptive having regard to the evidence of Mr Francisco and Mr Clarke.

Undue harassment or coercion

178    Section 50(1) of the ALC provides as follows:

50    Harassment and coercion

(1)    A person must not use physical force, or undue harassment or coercion, in connection with:

(a)    the supply or possible supply of goods or services; or

(b)    the payment for goods or services; or

(c)    the sale or grant, or the possible sale or grant, of an interest in land; or

(d)    the payment for an interest in land.

Note: A pecuniary penalty may be imposed for a contravention of this subsection.

179    Again, the parties were in substantial agreement as to the relevant legal principles, however, unsurprisingly, ACM gave particular emphasis to the need to take into full account the nature and realities of debt collecting. ACM relied upon French J’s observations in ACCC v McCaskey [2000] FCA 1037; 104 FCR 8 (McCaskey) at [48] regarding the hard business of debt collection:

… a consumer who owes money to a supplier can expect repeated unwelcome approaches requesting payment of the debt if he or she does not pay. No doubt such approaches might also qualify as harassment. If legitimate demands are reasonably made, on more than one occasion, for the purpose of reminding the debtor of his or her obligation and drawing the debtor’s attention to the likelihood of legal proceedings if payment is not made, then that conduct, if it be harassment, is not undue harassment. If, however, the frequency, nature or content of the approaches and communications associated with them is such that they are calculated to intimidate or demoralise, tire out or exhaust a debtor rather than convey the demand and an associated legitimate threat of proceedings, the harassment will be undue.

180    In the context of s 50, it is established that the term “harassment” has its ordinary meaning (see McCaskey at [47] per French J), which includes conduct which tends to intimidate, embarrass, ridicule, shame or otherwise distress the person to whom the conduct is targeted. It is important, however, to note that the prohibition in s 50 is on “undue harassment”. As Hill J noted in ACCC v The Maritime Union of Australia [2001] FCA 1549; 114 FCR 472 (Maritime Union) at [62]:

62.    It is clear that the word “undue” suggests that what is done must, having regard to the circumstances in which the conduct occurs, extend beyond that which is acceptable or reasonable. It thus adds, as French J observes at paragraph 48 in McCaskey, “an extra layer of evaluation”. The word “undue”, when used in relation to harassment, ensures that conduct which amounts to harassment will only amount to a contravention of the section where what is done goes beyond the normal limits which, in the circumstances, society would regard as acceptable or reasonable and not excessive or disproportionate. …

181    Justice Hill also observed in Maritime Union at [59] and [62] that the terms “undue” qualifies “harassment” and not “coercion” (see further below).

182    It might be noted that while allegations of undue harassment are made against ACM in relation to CT, no such allegation is made against JR. Moreover, allegations of coercion are made against JR, but not CT.

183    In ACM 2012, Perram J made some observations at [14]-[17] concerning the prohibition in s 12DJ(1) of the ASIC Act and the then applicable s 60 of the Trade Practices Act 1974 (Cth), which I consider are equally applicable to s 50 of the ACL:

14.    In the present circumstance, the only words which matter are ‘use physical force or undue harassment or coercion’. The first matter which is clear is that the rule is against undue harassment rather than mere harassment. The content of the word ‘undue’ will vary with the circumstances. In the context which is the confronting business of debt collection, it is likely to have a significant impact. By definition, the class of person who find that they have fallen into the hands of a debt collection agency are likely to be those who, for whatever reason, have not met their legal obligations. The necessary context is one, therefore, in which the law of contract and the ordinary usages of lending have failed to secure compliance by the debtor with his or her obligation to repay. It is not to be expected in such cases that the debt collector must proceed as if at a prayer meeting. There are, of course, limits to everything. In Australian Competition and Consumer Commission v McCaskey (2000) 104 FCR 8 at 27 [48] French J thought that, in the context of debt collection, if the frequency, nature or content of approaches and communications from the debt collector were such that they were ‘calculated to intimidate or demoralise, tire out or exhaust a debtor rather than convey the demand and an associated legitimate threat of proceedings, the harassment will be undue’. This view was endorsed by Hill J in Australian Competition and Consumer Commission v Maritime Union of Australia (2001) 114 FCR 472 at 485 [60] and by Foster J in Ahmed v Harbour Radio Pty Ltd (2009) 180 FCR 313 at 321-323 [33]. It is with this test that I will assess the unduly harassing or coercive nature of the calls before me.

15.    Turning then to coercion, there is some debate as to whether ‘undue’ qualifies only ‘harassment’ or whether, instead, it qualifies ‘coercion’ as well. For the reasons given by Hill J in Australian Competition and Consumer Commission v Maritime Union of Australia at 485 [58] it is likely that French J did regard ‘coercion’ as being governed by ‘undue’. Hill J reached the contrary view; that is, that ‘undue’ did not qualify ‘coercion’ (see 485-486 [59]-[62]). I agree with the views of Hill J to which I have nothing to add.

16.    Consequently, all that is required is ‘coercion’. That, however, is a stronger word than harassment. It connotes, as Hill J observed in Australian Competition and Consumer Commission v Maritime Union of Australia at 485 [61], some negation of choice or freedom to act.

17.    Of course, whether any particular discussion or conversation is revealed to be unduly harassing or coercive will depend not upon a line-by-line analysis but, rather, on the overall impression.

184    For completeness, I respectfully agree with the views expressed by Hill J and Perram J to the effect that the term “undue” qualifies “harassment” but not “coercion”. Although that view is different from that expressed by French J in McCaskey, French J’s judgment nevertheless contains very helpful guidance on the meaning and application of what was then s 60 of the Trade Practices Act 1974 (Cth), which was in substantially similar terms to the current s 50(1) of the ACL. His Honour said at [48]:

48.    The word “harassment” as used in s 60 must serve two broad purposes. It describes a range of conduct, in connection with the supply of goods or services which involve, inter alia, applying repeated pressure to a consumer who is under no pre-existing obligation to acquire. It also describes conduct in relation to a consumer who is under an unfulfilled obligation to pay for goods or services. Given the range of cases that it can cover, the question whether or not there is harassment involves evaluative judgment. The word “undue” adds an extra layer of evaluation which is more relevant to the case of debt recovery than to the sale of goods or services. Repeated unwelcome approaches to a potential acquirer of goods or services could qualify as harassment and, so qualified, require very little additional evidence, if any, to attract the characterisation of “undue harassment”. On the other hand a consumer who owes money to a supplier can expect repeated unwelcome approaches requesting payment of the debt if he or she does not pay. No doubt such approaches might also qualify as harassment. If legitimate demands are reasonably made, on more than one occasion, for the purpose of reminding the debtor of his or her obligation and drawing the debtor’s attention to the likelihood of legal proceedings if payment is not made, then that conduct, if it be harassment, is not undue harassment. If, however, the frequency, nature or content of the approaches and communications associated with them is such that they are calculated to intimidate or demoralise, tire out or exhaust a debtor rather than convey the demand and an associated legitimate threat of proceedings, the harassment will be undue.

185    I also respectfully adopt and apply what French J had to say in McCaskey at [51] and [52] concerning the notion of “coercion”, particularly in the context of debt collecting (subject to what I have said above regarding the term “undue” not qualifying “coercion):

51.    The collection of debts may involve coercion in the sense that the debtor is subjected to the pressure of the demand and the legitimate threat of civil process for recovery with the additional cost and damage to credit which that can involve. Such pressure may be thought of as coercion but is entirely legitimate and not “undue”. Where the demand includes content which does not serve legitimate purposes of reminding the debtor of the obligation and threatening legal proceedings for recovery but is calculated otherwise to intimidate or threaten the debtor, then the coercion may be undue. So if a threat is made of criminal proceedings, or of the immediate seizure and sale of house and property, a remedy not available in the absence of retention of title or some form of security, the coercion is likely to be seen as undue. The threat of criminal proceedings itself may be an offence against State laws. Quite apart from content the manner or circumstances of a demand or communication, including the language used, the time and place at which it is made and the person to whom it is communicated, may go beyond the legitimate purposes of drawing attention to the existence of the obligation and the consequences for non-compliance. Again such a communication may amount to undue coercion. Obvious examples include the use of personally abusive or obscene language, conveying the demand to uninvolved family members, particularly children, or conveying the demand through a third party in order to embarrass the debtor when the debtor could reasonably have been the subject of a direct communication. Each case will turn on its own facts. Some useful examples of situations that may give rise to contraventions of s 60 are set out in the ACCC guidelines entitled “Debt Collection and the Trade Practices Act” published in July 1999. As pointed out of course that publication is not a statement of the law. It can only be a guide. The recovery of unpaid debts can be pursued with firmness, determination and civility. It can do all those things without resorting to bullying, bluff, misrepresentation or stand-over tactics. If it does the first and avoids the second it is unlikely to contravene the law.

52.    A supplier of goods or services or a debt collector, in deciding upon the approach to be taken to a debtor, should ask the question:

“Are the content, the timing, the location and other circumstances of my demand for payment reasonably calculated to remind the debtor of his or her obligation, specify a time within which it must be satisfied and indicate that civil proceedings for recovery will be instituted if payment is not made?”

This is not a script for the form of demand. Rather it is a statement of the legitimate purpose to be served in pursuing payment for goods or services acquired by a consumer. The content, the manner, the timing and the location of a demand for payment may be made in a variety of ways, all of which may be legitimate according to the circumstances provided they serve that essential purpose. This is to say nothing about the desirability of flexible approaches to debtors in difficulty through no fault of their own. Nor does it say anything about the desirability of negotiated settlements and recognising that if a debtor has a number of debts to different suppliers, a realistic approach to repayment arrangements may be necessary. A creditor who disregards these considerations may be cutting off his nose to spite his face, but s 60 has nothing to say about that.

Unconscionability

186    It is desirable to set out the relevant parts of ss 21 and 22 of the ACL, which came into force on 1 January 2012:

21    Unconscionable conduct in connection with goods or services

(1)    A person must not, in trade or commerce, in connection with:

(a)    the supply or possible supply of goods or services to a person (other than a listed public company); or

(b)    the acquisition or possible acquisition of goods or services from a person (other than a listed public company);

engage in conduct that is, in all the circumstances, unconscionable.

…

(3)    For the purpose of determining whether a person has contravened subsection (1):

(a)    the court must 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 section.

(4)    It is the intention of the Parliament that:

(a)    this section is not limited by the unwritten law relating to unconscionable conduct; and

(b)    this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour; and

(c)    in considering whether conduct to which a contract relates is unconscionable, a court's consideration of the contract may include consideration of:

(i)    the terms of the contract; and

(ii)    the manner in which and the extent to which the contract is carried out;

and is not limited to consideration of the circumstances relating to formation of the contract.

22    Matters the court may have regard to for the purposes of section 21

(1)    Without limiting the matters to which the court may have regard for the purpose of determining whether a person (the supplier) has contravened section 21 in connection with the supply or possible supply of goods or services to a person (the customer), the court may have regard to:

(a)    the relative strengths of the bargaining positions of the supplier and the customer; and

(b)    whether, as a result of conduct engaged in by the supplier, the customer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and

(c)    whether the customer was able to understand any documents relating to the supply or possible supply of the goods or services; and

(d)    whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the customer or a person acting on behalf of the customer 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 customer could have acquired identical or equivalent goods or services from a person other than the supplier; and

(f)    the extent to which the supplier's conduct towards the customer was consistent with the supplier's conduct in similar transactions between the supplier and other like customers; and

(g)    the requirements of any applicable industry code; and

(h)    the requirements of any other industry code, if the customer acted on the reasonable belief that the supplier would comply with that code; and

(i)    the extent to which the supplier unreasonably failed to disclose to the customer:

(i)    any intended conduct of the supplier that might affect the interests of the customer; and

(ii)    any risks to the customer arising from the supplier's intended conduct (being risks that the supplier should have foreseen would not be apparent to the customer); and

(j)    if there is a contract between the supplier and the customer for the supply of the goods or services:

(i)    the extent to which the supplier was willing to negotiate the terms and conditions of the contract with the customer; and

(ii)    the terms and conditions of the contract; and

(iii)    the conduct of the supplier and the customer in complying with the terms and conditions of the contract; and

(iv)    any conduct that the supplier or the customer engaged in, in connection with their commercial relationship, after they entered into the contract; and

(k)    without limiting paragraph (j), whether the supplier has a contractual right to vary unilaterally a term or condition of a contract between the supplier and the customer for the supply of the goods or services; and

(l)    the extent to which the supplier and the customer acted in good faith.

…

187    Again, there was substantial agreement between the parties as to the relevant principles relating to unconscionable conduct for the purposes of the ACL. The applicants emphasised the importance of s 21(4)(a) (as introduced on 1 January 2012) and the statement therein that it is the Parliament’s intention that the section not be limited by the unwritten law relating to unconscionable conduct, with the consequence that s 21 is therefore wider than s 20 (see NRM Corporation Pty Limited v ACCC [2016] FCAFC 98 at [160]).

188    ACM submitted, and I accept, that unconscionable conduct is not a finding to be made lightly. I also accept that there is a difficulty in defining with precision the content and limits of unconscionable conduct (see the observations of Allsop P as his Honour then was in Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389; 15 BPR 29,699 at [92]).

189    Some guidance is provided by the observations of the Full Court in ACCC v Lux Distributors Pty Ltd [2013] FCAFC 90 (Lux Distributors) at [41], which must be read in the light of the particular facts and circumstances of that case:

41.    In our view, the above conduct was unconscionable. It is unnecessary to deal with the cases on s 51AB of the TPA and s 21 of the ACL in any detail. The word “unconscionability” means something not done in good conscience: for example, Hurley v McDonald’s Australia Ltd [1999] FCA 1728 at [22]; ACCC v Allphones Retail Pty Ltd (No 2) [2009] FCA 17; 253 ALR 324 at [113]; Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389 at [291], [293], and the cases discussed therein. No argument was put that required any consideration of the authorities. Notions of moral tainting have been said to be relevant, as often they no doubt are, as long as one recognises that it is conduct against conscience by reference to the norms of society that is in question. The statutory norm is one which must be understood and applied in the context in which the circumstances arise. The context here is consumer protection directed at the requirements of honest and fair conduct free of deception. Notions of justice and fairness are central, as are vulnerability, advantage and honesty.

190    It is relevant to also note the further guidance provided by a differently constituted Full Court in Paciocco v Australia and New Zealand Banking Group Ltd [2015] FCAFC 50; 236 FCR 199 (Paciocco Full Court) at [347], which also reflects the particular facts and circumstances there:

347.    In all the circumstances, in particular, the lack of any proven predation on the weak or poor, the lack of real vulnerability requiring protection, the lack of financial or personal compulsion or pressure to enter or maintain accounts, the clarity of disclosure, the lack of secrecy, trickery or dishonesty, and the ability of people to avoid the fees or terminate the accounts, I do not consider the conduct of ANZ to have been unconscionable. To do so would require the court to be a price regulator in banking business in connection with otherwise honestly carried on business in which high fees were extracted from customers.

191    As the applicants noted, this statement in Paciocco Full Court was referred to with apparent approval by the High Court in Paciocco v Australia and New Zealand Banking Group Ltd [2016] HCA 28; 258 CLR 525 at [292] per Keane J (with whom French CJ and Kiefel J agreed).

192    Finally, reference should be made to the following recent observations of Beach J in Australian Securities and Investments Commission v Westpac Banking Corporation (No 2) [2018] FCA 751 (Westpac) at [2177], with which I respectfully agree:

2177.    ASIC referred to my decision in Australian Competition and Consumer Commission v Get Qualified Australia Pty Ltd (in liquidation) (No 2) [2017] FCA 709 at [60] to [63] and also Paciocco v Australia and New Zealand Banking Group Ltd (2015) 236 FCR 199 at [296]. In ACCC v Get Qualified Australia Pty Ltd (in liquidation) (No 2) I applied Paciocco and summarised the principles that were applicable to the cognate provisions in the Australian Consumer Law, in terms that are equally applicable to ss 12CB or 12CC (and which neither party disputed before me), as follows:

First, “unconscionability” means something not done in good conscience or conduct against conscience by reference to the norms of society. But that is to be understood and applied in the context of trade or commerce, but including consumer protection objectives directed at the requirements of honest and fair conduct free of deception. But one must be careful in using the phrase “norms of society” to ensure that the identification thereof is not interlarded with some distorted subjective view of social philosophy. It is fraught with risk to move beyond the explicit and implicit norms enshrined in and bounded by the statutory language of ss 21 and 22 construed in context, being trade or commerce, notwithstanding the apparent breadth of s 21(4) and the non-limiting prefatory words of s 22(1). Moreover, the evaluation of unconscionability must not be decontextualised from the particular case under consideration.

Second and relatedly, in order to determine whether conduct is unconscionable, it is necessary to look at all the conduct, by “[s]tanding back and looking at the whole episode”.

Third, as the norms of society include statutory prohibitions on deceptive conduct … deceptive practices … can form part of the “whole episode”, for the purpose of assessing whether, in all the circumstances, the conduct in question is unconscionable.

Fourth, s 22(1) of the ACL sets out a non-exhaustive list of factors to which the Court may have regard for the purpose of determining whether a person has contravened s 21. The matters enumerated assist in understanding the scope of the meaning of unconscionable conduct, but the presence of one or more matters contained in s 22(1) (or indeed their absence) is not necessarily determinative. (citations omitted)

193    The following additional general principles are also relevant to these proceedings. First, although a finding of unconscionability should not be made lightly, it is unnecessary to show a high level of moral obloquy, however, it requires more than a finding that conduct is unfair. In Kobelt v Australian Securities and Investments Commission [2018] FCAFC 18; 352 ALR 689 (Kobelt) (a case of unconscionability under the ASIC Act) Besanko and Gilmour JJ stated that features such as “dishonesty, trickery, predatory or overbearing behaviour, choice or the absence of choice, disadvantage, vulnerability and exploitation all remain relevant matters” and that while “moral obloquy” has a role to play in determining whether or not conduct is unconscionable, it should not be used as a substitute for the statutory words (see at [192] and at [193]). That is not to say, however, that unconscionability necessarily involves dishonesty (see Paciocco Full Court at [262] per Allsop CJ).

194    Secondly, as the applicants submitted, the focus is substantially on the conduct of ACM and how CT and JR’s circumstances were or ought to have been perceived by the ACM representatives who were dealing with their matters.

195    Thirdly, the relevant statutory provisions should not be applied in a vacuum or bubble removed from the facts, surrounding circumstances and context in which the relevant conduct occurred. Appropriate regard must be paid to the particular circumstances in which the conduct has occurred. This includes the fact that the conduct took place in the context of ACM’s business as a debt collector. As Perram J remarked in ACM 2012 at [14], this is a “confronting business” and it “is not expected in such cases that the debt collector must proceed as if at a prayer meeting”.

Determination of Agreed statement of issues

196    It is convenient to now turn to the parties’ agreed statement of issues filed on 22 June 2017 and to determine those issues having regard to the principles outlined above and relevant findings of fact (the wording of some issues has been amended to reflect my finding that the ACL applies and not the ASIC Act). It should be noted that it is an agreed fact that a total of 20 letters in the two categories (Seven Day Demand letters and 48 Hour Demand Letters) were sent in the period between 29 April 2011 and 12 June 2015 (see [52] above). I proceed on the basis of that agreed figure, even though not all of those 20 letters were put into evidence.

(a)    Whether the Seven Day Demand Letters from ACM to CT made representations that ACM intended shortly to commence legal proceedings against CT to recover the CT Debt if it was not paid within seven days.

197    As noted above, the Seven Day Demand Letters which ACM sent to CT came in different forms. Some of the letters were headed “FINAL NOTICE”, others were headed “NOTICE OF INTENTION TO COMMENCE LEGAL PROCEEDINGS”, while others were headed “URGENT NOTICE” (emphasis all in originals).

198    It is desirable to set out the terms of each of the three types of Seven Day Demand Letters, all of which were written on ACM Group Ltd letterhead.

(a)    Letters headed “FINAL NOTICE”

The CT Notes, which were in evidence, contain entries which record that ACM sent letters in this form to CT on 13 May 2011, 12 August 2011 and 30 September 2011 in the period 29 April 2011 to 12 June 2015. A letter in this form was in evidence. It contained the following text (emphasis in original):

As all previous demands for payment have been ignored, we have been instructed to inform you that unless the balance due is paid prior to 23/05/2011 legal proceedings involving court costs to you could be commenced without further notice.

Payment should be made to ACM Group Ltd and sent direct to this Office prior to 10.00 am on 23/05/2011 by one of the methods described below.

Alternatively immediately contact Abraham on 02 9018 7697 or for country areas (toll free) on 1800 673 668

FAILING OUR RECEIPT OF YOUR PAYMENT, WE MAY FORWARD YOUR FILE TO OUR SOLICITORS WITHOUT ANY FURTHER NOTICE.

Other “FINAL NOTICE” letters were in substantially similar terms.

(b)    Letters headed “NOTICE OF INTENTION TO COMMENCE LEGAL PROCEEDINGS”

Four letters in this form dated 3 May 2011, 20 June 2011, 8 July 2014 and 20 January 2015 were in evidence. They were headed “NOTICE OF INTENTION TO COMMENCE LEGAL PROCEEDINGS”. The letter dated 20 June 2011 contained the following statements (emphasis in original):

We have been instructed to inform you that unless the balance due amount is paid prior to 27/06/2011 legal proceedings involving court costs to you could be commenced without further notice.

Payment should be made to ACM Group Ltd and sent direct to this Office prior to 10.00 am on 27/06/2011.

Alternatively immediately contact Marin on 02 9018 7697 or for country areas (toll free) on 1800 673 668.

FAILING OUR RECEIPT OF YOUR PAYMENT, WE MAY FORWARD YOUR FILE TO OUR SOLICITORS WITHOUT ANY FURTHER NOTICE.

Other “NOTICE OF INTENTION TO COMMENCE LEGAL PROCEEDINGS” were in substantially similar terms.

(c)    Letters headed “URGENT NOTICE”

Three letters in this form dated 21 October 2014, 2 December 2014 and 3 February 2015 were in evidence. The CT Notes contain entries which record that letters in this form were sent to CT on 18 July 2014 (noting “Delivery Date: 24/07/14”), 17 October 2014 (noting “Delivery Date: 21/10/14”), 28 November 2014 (noting “Delivery Date: 02/12/14”) and 30 January 2015 (noting “Delivery Date: 03/02/15”). The letter dated 3 February 2015 contained the following statements (emphasis in original):

As all previous demands for payment have been ignored, we are informing you that unless the balance due is paid prior to 10/02/2015 legal proceedings involving court costs to you may commence without further notice.

Payment should be made to ACM Group Ltd and sent direct to this Office prior to 10.00 am on 10/02/2015 by one of the methods described below.

Alternatively, to discuss a satisfactory arrangement to settle this account, immediately contact Roger on 02 9018 7699 or for country areas (toll free) on 1800 673 668 and enter your ACM reference number: 5488935.

FAILING OUR RECEIPT OF YOUR PAYMENT, OR PHONE CALL REGARDING A SATISFACTORY ARRANGEMENT, WE MAY FORWARD YOUR ACCOUNT TO OUR SOLICITORS WITHOUT ANY FURTHER NOTICE.

Other “URGENT NOTICE” letters were in substantially similar terms.

199    The statements and representations set out in these various pro forma letters should not be looked at in isolation or merely by comparing some of their contents with the terms of letters of demand sent by other bodies such as Telstra. Rather, they need to be assessed in the context of ACM’s conduct as a whole. This requires consideration to be given not only to the entire body of each form of letter and the language used therein, but also to any evident system of conduct by ACM in sending these letters. It appears that the different forms of letters were sent as part of a broad system or practice which involved sending different pro forma letters at different times with a view to having the debt paid. The system or practice is not always consistent. For example, ACM sent CT a letter dated 3 May 2011 in the form of the “NOTICE OF INTENTION TO COMMENCE LEGAL PROCEEDINGS” pro forma in relation to the debt of $5,768.53. That was followed by a letter dated 16 May 2011 in the form of the “FINAL NOTICE” pro forma for the same debt amount. That was then followed by a letter dated 6 June 2011 in the form of the “48 HOUR DEMAND” pro forma for the same debt amount. This letter includes a reference to there having been “no response to a letter that we forwarded to you recently regarding the outstanding amount of $5,768.53”. The 48 Hour Demand letter was then followed by a letter dated 20 June 2011 which again is in the form of the “NOTICE OF INTENTION TO COMMENCE LEGAL PROCEEDINGS” pro forma. It referred to the same debt amount but gave a different contact person within ACM to that mentioned in the earlier letter in the same form dated 3 May 2011.

200    The evidence does not disclose if a letter in the form of the “URGENT NOTICE” pro forma was sent by ACM to CT in this period in 2011, but, as noted above, letters in that form were sent to him on four occasions in the period 21 October 2014 to 3 February 2015. On at least one occasion, such a letter was sent in relatively close proximity to a “NOTICE OF INTENTION TO COMMENCE LEGAL PROCEEDINGS” pro forma (see the letters dated 3 February 2015 and 20 January 2015 respectively).

201    Focusing on the correspondence which ACM sent to CT during the period 3 May 2011 to 20 June 2011, which correspondence should be viewed as a whole and in context, I find that the Seven Day Demand Letters did contain the pleaded representation that ACM intended shortly to commence legal proceedings against CT to recover the CT Debt if it was not paid within seven days.

202    The sequence of the letters sent in that period commences with a letter dated 3 May 2011 which is a “NOTICE OF INTENTION TO COMMENCE LEGAL PROCEEDINGS” pro forma. Even if that letter were viewed in isolation from the letters which followed in relation to the same debt amount, I consider that it contained the pleaded representation. The character of the letter is highlighted by its heading. The words “NOTICE OF INTENTION TO COMMENCE LEGAL PROCEEDINGS” are given particular emphasis because they are written in large capitals and bold type script. Although the body of the letter contains the terms “could be commenced without further notice” (emphasis added) and uses the word “may” in the sentence “FAILING OUR RECEIPT OF YOUR PAYMENT, WE MAY FORWARD YOUR FILE TO OUR SOLICITORS WIHTOUT ANY FURTHER NOTICE”, viewed in context and as a whole I find that this letter, even when viewed in isolation from the other letters which were sent to CT either around this time or during the wider 4 year period raised by the applicants, contained the pleaded representation. The words “could” and “may” would reasonably be read in the light of the prominent heading to the pro forma letter, the terms of which strongly suggest that ACM intended shortly to commence legal proceedings against CT. The word “intention” is a strong and unqualified word. It necessarily casts a particular complexion and character to the body of the letter.

203    In making this finding, I also take into account ACM’s concession in [19] of its closing submissions that there is evidence that CT believed that legal proceedings would be commenced. ACM stated that this concession applied to the extent that it is relevant for the Court to take into account CT’s conduct or belief on receiving the letters. In my view, that conduct or belief is relevant in circumstances where the correspondence is directed to an individual and not to the public at large (see Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; 238 CLR 304 at [26]). CT was not required for cross-examination. I accept his evidence that when he read the “NOTICE OF INTENTION TO COMMENCE LEGAL PROCEEDINGS” letters, he believed that ACM was shortly going to start proceedings against him to recover the CT Debt unless he paid the debt within the time stated in the letters. I also accept his evidence that when he saw the letters “URGENT NOTICE”, “FINAL NOTICE” and “48 HOUR DEMAND”, he thought to himself that ACM was going to sue him if he did not pay. I reject ACM’s submission that this evidence is inconsistent with CT’s actions in placing some of the letters in a pile, passing them on to LH every few months or throwing them out. CT explained in his affidavit at [20] that he reached a point where he stopped reading ACM’s letters because he knew what they would say, he had no way of paying the debt, and the letters stressed him when he read them. Nor do I accept ACM’s submission that CT would not have continued to hold his belief when the letters kept arriving over several years without any legal proceedings actually being commenced. I see no reason why CT’s unchallenged affidavit evidence should not be accepted.

204    Nor do I accept ACM’s submission that some adverse inference should be drawn from the fact that CT never submitted medical documentation to ACM in describing his medical condition. There is no evidence that CT knew that this was what he had to do in order to have ACM stop contacting him. CT was not required for cross-examination and I see no basis for drawing any adverse inferences against him on these matters.

205    Nor do I accept ACM’s submission that the Court should find that CT was trying to avoid payment or that ACM was being positively deceived. None of these matters were put to CT for comment because he was not required for cross-examination. As to the letter from ET, even if it were accepted that its authenticity is highly questionable given NT’s statement that there was no one by the name of ET in the family, there is no evidence to link the writing of the letter to CT himself.

206    The same findings concerning the pleaded representation is made with respect to the other letters using this particular pro forma which ACM sent to CT during the period 29 April 2011 to 12 June 2015.

207    I make similar findings in respect of the letters headed “FINAL NOTICE”. In the case of the letter dated 16 May 2011, it was sent approximately two weeks after the 3 May 2011 letter headed “NOTICE OF INTENTION TO COMMENCE LEGAL PROCEEDINGS”. Its heading “FINAL NOTICE” had a compounding effect on what was set out in the earlier “NOTICE OF INTENTION TO COMMENCE LEGAL PROCEEDING” pro forma letter. That connection is reinforced by the reference in the first paragraph of the letter to “all previous demands for payment have been ignored”. Moreover, the reference in the final paragraph of the letter to “WE MAY FORWARD YOUR ACCOUNT TO OUR SOLICITORS WITHOUT ANY FURTHER NOTICE”, when viewed in the context of the entirety of the letter and other correspondence which ACM sent to CT, supports the view that the letter contained a representation that ACM intended shortly to commence legal proceedings against CT to recover the debt if it was not paid (or other satisfactory arrangements made). For similar reasons to those given above, this finding is not avoided by the fact that the letter uses the words “could” and “may”.

208    These findings are further reinforced, at least for the period May to June 2011, by the fact that ACM subsequently sent CT the letter dated 6 June 2011 (a “48 HOUR DEMAND” pro forma letter) and a second “NOTICE OF INTENTION TO COMMENCE LEGAL PROCEEDINGS” dated 20 June 2011, all in the same amount. More broadly, as part of the context, a fair reading of statements which were contained in individual letters must take into account all the other previous letters of demand sent by ACM to CT.

209    I also find that the pleaded representation was made in the letters headed “URGENT NOTICE”. Although there is no evidence that any letter in this pro forma was sent by ACM to CT in 2011, the CT Notes which is in evidence discloses that four such letters were sent to him during the period July 2014 to February 2015. The 3 February 2015 letter was sent approximately two weeks after ACM sent CT a letter dated 20 January 2015 in the “NOTICE OF INTENTION TO COMMENCE LEGAL PROCEEDINGS” pro forma. Both letters were in the same amount of $5,768.53 as was the subject of the letters sent in 2011. The letters need to be viewed holistically and not in isolation from each other. This is reinforced by the fact that the “URGENT NOTICE” letter made express reference to “all previous demands for payment have been ignored”. As noted above, I also accept CT’s evidence as to his belief and state of mind when he received these letters, for the reasons I have given above.

(b)    If a representation in the terms of (a) was made by ACM, whether ACM intended, at the time the representation was made, shortly to commence legal proceedings against CT to recover the CT Debt if it was not paid within seven days and/or whether ACM had reasonable grounds for so stating to CT.

210    In the light of the findings in relation to issue (a), it is necessary to determine this issue. There is some uncertainty as to whether the pleaded representation is a representation as to a present or future matter. On one view, it is a representation as to ACM’s state of mind at the time the representation was made when each of the relevant letters was sent to CT. In this sense, the representation was not a prediction or projection about anything that would occur in the future but rather was a representation about a present intention. I prefer this characterisation of the representation even though it had within it a condition subsequent based upon a failure to make payment of the CT Debt (or make a satisfactory payment arrangement) within the specified time.

211    In any event, even if ACM believed that CT owned property this alone would not mean that the representation was true. Mr Brabazon ultimately accepted that there were many other internal processes which had to be gone through satisfactorily before a decision was made to commence legal proceedings against CT. Although information forwarded to ACM by Telstra may have indicated that he owned property prior to the CT Debt being assigned to ACM, this was not in fact the case and ACM made no further inquiries on the issue.

212    As to other relevant matters, as the CT Notes reveal,ACM was told several times CT had had a stroke, had difficulty communicating, could not pay the debt, was disabled and was living in a care home. ACM submitted that, as far as it knew, there was at least some prospect of CT’s position improving or him inheriting or receiving sufficient money to clear his debt. I reject that submission, which is unsupported by any evidence. ACM also submitted that CT had used excuses for non-payment of the CT Debt to Telstra prior to any health problems, for example on 18 October 2006 he told Telstra he had lost his wallet and was waiting on replacement credit cards to make a payment. There is no evidence that this excuse given by CT was untrue, and in any event, the relevant circumstances here pertain to ACM’s conduct which occurred after CT had suffered a stroke. It is true that neither CT nor his family provided any written documentation to confirm his medical or financial position. But they were not asked to do so and ACM was informed by several people who were independent of CT and his family that he could not pay the debt, had suffered a stroke and had lived in a care facility from at least 2011. All these matters clearly put ACM on notice that CT was suffering hardship. Many of these matters were recorded by ACM’s representatives in the CT Notes. Those notes also include information which apparently was passed by Telstra to ACM when it assigned the CT Debt, which includes a reference to CT having suffered a stroke and that he was permanently disabled (see the entry dated 25 June 2010). Moreover, on six of the forty occasions upon which ACM representatives telephoned the care facility and were put through to CT, the CT Notes record that the representatives were unable to obtain even basic information from CT because of his difficulty speaking. These matters are recorded in the CT Notes.

213    I reject ACM’s submission that the Court should not find that it had no intention of commencing proceedings against CT because the evidence demonstrated that it had commenced legal proceedings against about six hundred debtors during the period 2011 to 2015. The fact that ACM resorted to legal proceedings in what it itself described as a small number of cases as a percentage of total debtors has little, if any, relevance to CT’s individual personal and medical circumstances as described above. This is the case even if some of those other proceedings related to debts of about the same size as those owed by CT. The evidence does not disclose the personal circumstances of those other debtors or whether those circumstances could be reasonably be compared with those of CT.

If I am wrong in finding that the representation was to a present matter, and, instead, related to a future matter, I would nevertheless conclude that ACM did not have reasonable grounds for making the representation for the same reasons as those given above in respect of my primary finding.

(c)    Whether the 48 Hour Demand Letters from ACM to CT made representations that ACM intended shortly to commence legal proceedings against CT to recover its debt if it was not paid within 48 hours.

214    The CT Notes record that six such letters were sent by ACM to CT between 29 April 2011 and 12 June 2015. A copy of one such letter dated 6 June 2011 is in evidence. It is headed “48 HOUR DEMAND” and contains the following text:

We have had no response to a letter that we forwarded to you recently regarding the outstanding amount of $5768.53.

We recommend that you make immediate payment to avoid legal proceedings which may commence 48 hours from the date of this notice.

Alternatively immediately contact Benjamin on 02 9018 7697 or for country areas (toll free) on 1800 673 668 to discuss a satisfactory arrangement to settle this account.

UNLESS PAYMENT IS RECEIVED WITHIN 48 HOURS, LEGAL PROCEEDINGS THROUGH OUR SOLICITORS MAY BE COMMENCED WITHOUT FURTHER NOTICE AND YOU MAY INCUR RESULTANT COSTS.

215    For similar reasons to those given above in respect of the Seven Day Demand Letters, I find that the pleaded representation was made in the “48 HOUR DEMAND” pro forma letters.

(d)    If a representation in the terms of (c) was made by ACM, whether ACM intended, at the time the representation was made, shortly to commence legal proceedings against CT to recover the CT Debt if it was not paid within 48 hours and/or whether ACM had reasonable grounds for so stating to CT.

216    For similar reasons to those given above in relation to the Seven Day Demand Letters, I also find that ACM had no such intention and, alternatively, did not have reasonable grounds for making the pleaded representation.

(e)    Whether ACM engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the Australian Consumer Law or s 12DA(1) of the ASIC Act by making any of the above representations to CT in the Seven Day Demand and 48 Hour Demand Letters.

217    There is a threshold issue as to whether the claims against ACM are to be determined by reference to the relevant provisions of the ACL or those in the ASIC Act. For the following reasons, I find that the case against ACM falls to be determined by reference to relevant provisions of the CCA and ACL. The substantially comparable provisions in the ASIC Act do not apply because the conduct of ACM which is the subject of these proceedings does not involve the provision of a “financial service” as defined in the ASIC Act, which is an essential precondition for the relevant provisions of that legislation to apply.

218    The relevant provisions are to be found in Pt 2 of the ASIC Act which deals with consumer protection in relation to financial services. For the purposes of Div 2 of Pt 2, “financial service” is defined in s 5(1) of the ASIC Act as having the meaning given by s 12BAB. Relevantly, s 12BAB(1)(g) provides that, subject to an exception which is not relevant, a person provides a financial service if they:

provide a service (not being the operation of a derivative trade repository) that is otherwise supplied in relation to a financial product…

219    For the purposes of Div 2 of Pt 2, “financial product” is defined in s 5(1) as having the meaning given by s 12BAA. A general definition of “financial product” is set out in s 12BAA(1) which, in broad terms, provides that for the purposes of Div 2 of Pt 2, a financial product is a facility through which, or through the acquisition of which, a person does one or more of the following things:

(a)    makes a financial investment;

(b)    manages financial risk;

(c)    makes non-cash payments.

220    For completeness, it might also be noted that s 12BAA(7) sets out a list of specific things that are financial products (subject to s 12BAA(8)) and that the latter provision provides a list of specific things that are not financial products.

221    As noted above, the applicants allege that ACM’s conduct contravened provisions in the ASIC Act relating to misleading or deceptive conduct (s 12DA); harassment and coercion (s 12DJ) and unconscionability (s 12CA). Each of those provisions relates to conduct which is engaged in relation to or in connection with financial services (or, in the case of s 12DJ, harassment or coercion in connection with the supply or possible supply of financial services to a consumer or the payment for financial services by a consumer).

222    In ACM 2012, ASIC submitted that s 12BAB(1)(g) of the ASIC Act applied to the relevant conduct in that proceeding. The effect of that provision is that, for relevant purposes, a person provided a financial service if they “provide a service that is otherwise supplied in relation to a financial product”. ASIC submitted that the “financial product” in respect of which ACM provided a service was the underlying bank loan and credit card contracts which had previously existed between each relevant debtor and his or her original creditor (namely the National Australia Bank or the Commonwealth Bank). These contracts had been assigned to ACM. Justice Perram accepted that these loan contracts and credit card contracts were financial products within the meaning of s 12BAA (see ACM 2012 at [333] and [340]).

223    I accept the applicants’ submission that there is an important distinguishing feature in the present case. That is because the debts owed to ACM by the debtors in ACM 2012 in respect of which ACM’s conduct was found to have been misleading or deceptive, unduly harassing and coercive arose from credit card accounts and personal loan facilities. Justice Perram held that there was a provision of a service to each debtor on each occasion that more time to pay was extended such that, given that the underlying bank and credit card contracts were financial products, this service was provided “in relation to a financial product” for the purposes of s 12BAB(1)(g) of the ASIC Act (see ACM 2012 at [342]) which rendered it a “financial service” under s 12BA(1). Justice Perram found it unnecessary to determine whether ASIC would also have been entitled to relief under equivalent provisions in the then Trade Practices Act 1975 (Cth) (at [349]).

224    That is to be contrasted with the position here. The underlying contracts for each of CT and JR were with Telstra and were for the provision of telecommunication services (Telstra Services). The conduct of ACM which is the subject of this proceeding is conduct in relation to the Telstra Services, or in connection with the supply or possible supply of the Telstra Services or the payment of those services for the purposes of ss 21 and 50 of the ACL. The conduct in question is not conduct in relation to or in connection with a financial service so as to attract the counterpart provisions in the ASIC Act. Unlike the provision of credit card accounts and personal loan facilities, the Telstra Services are not “financial services” within any of the meanings of that concept in s 12BAB(1) of the ASIC Act, including paragraph (g).

225    For these reasons, I find that the relevant provisions in these proceedings are those in the ACL and not the ASIC Act. This accords with the position advanced by ACM and with the primary position advanced by the applicants.

226    As to whether ACM contravened s 18 of the ACL, I accept the applicants’ submission that the representation that ACM intended shortly to commence legal proceedings against CT to recover the CT Debt if it was not paid within seven days was untrue. At the time that each of the letters was sent to CT, there is no evidence that ACM had made any decision or given any instructions to commence legal proceedings against CT. Moreover, on the evidence before the Court, before either of those things could occur, the following steps would have needed to be taken:

(a)    A Section Manager or Branch Manager, as well as ACM’s legal team, would have to approve that course;

(b)    the Legal Checklist would have to be completed and the requirements contained therein satisfied; and

(c)    ACM would need sufficient information to confirm that CT received an income and was employed full-time, or own property or a business, that he was not suitable for ACM’s Hardship Program for reasons including being a recipient of Centrelink benefits or a pension, or by reason of any medical conditions.

227    There is no evidence that any of these steps were taken. There is no evidence of ACM completing a Legal Checklist in respect of CT or that any authorised person within ACM had decided to commence proceedings against CT. Significantly, a s 155 Notice was issued by the ACCC to ACM requiring production of information relating to any oral communications between ACM and another person concerning commencing legal proceedings for debt recovery against CT, to which ACM responded by saying that there were no such notes in its possession.

228    I reject ACM’s submission that the representation was not untrue by analogy with the situation where a lawyer writes a letter on behalf of a client stating that legal proceedings may be commenced if a demand is not met within a specified time. ACM submitted that such a lawyer would be at risk of being found to have engaged in misleading or deceptive conduct if the lawyer did not have instructions to commence proceedings before sending such a letter. There are two reasons why the analogy is inapt. First, if it be the case that the lawyer did not have instructions to make such a statement, such conduct could be misleading or deceptive and beyond the lawyer’s retainer or authority. Secondly, and in any event, the hypothesis is inapt to the circumstances here. The hypothesis advanced by ACM is that the letter from the lawyer states that legal proceedings “may” be commenced if a demand is not met within a specified time. The hypothesis does not take into account the very different context provided by the history and sequence of correspondence sent by ACM to CT in the present proceeding and, in particular, the ramification of the prominent heading in the “NOTICE OF INTENTION TO COMMENCE LEGAL PROCEEDINGS” pro forma letter, which were sent on at least four occasions during the relevant period and provided relevant context for the proper characterisation of the statements contained not only therein but also statements made by ACM to CT in the other correspondence which it sent to CT during the relevant four year period.

229    In making these findings I have applied the Briginshaw standard having regard to the gravity of the allegations against ACM and their consequences for ACM if the allegations are upheld.

(f)    Whether the Seven Day Demand and 48 Hour Demand Letters: (i) demanded payment; (ii) threatened legal proceedings against CT.

230    This issue overlaps substantially with issues (a) and (c). For reasons set out above in respect of those issues, I also find that this issue should be answered affirmatively. In making that finding in respect of both the Seven Day Demand and 48 Hour Demand Letters I have applied the Briginshaw standard.

(g)    Whether CT had suffered from a stroke as a result of which, he was unable to work and was expected to remain living in a care facility for the rest of his life.

231    Again, applying the Briginshaw standard, I am comfortably satisfied that the evidence establishes that CT had suffered from a stroke and that, consequently, he was unable to work and was expected to remain living in a care facility for the rest of his life. These facts are comfortably established by the unchallenged evidence of both CT and Dr Knowlden (see [80]-[82] and [90]-[91] above). The fact that CT had suffered a stroke, lived in a care facility and could not pay the CT Debt is also repeatedly recorded in the CT Notes based upon information supplied by staff at CT’s care facility and CT’s family.

(h)    Whether CT was unable to pay (or make arrangements for the payment of) the CT Debt.

232    Applying the Briginshaw standard, I also find this matter to have been comfortably established by the evidence, particularly the unchallenged evidence of CT himself (see [82] and [84] above). There is no rigid principle that the Court is obliged to accept the evidence of a witness if it is unchallenged by cross-examination, but a failure to challenge the evidence of a witness bears upon the weight to be given to the witness’s evidence and also to whether the party who calls the evidence has discharged any evidentiary onus (see UnitingCare NSW.ACT v Hancock [2014] FCA 391 at [28] per Buchanan J).

(i)    Whether ACM was told that CT had suffered a stroke, had difficulty speaking, was living in a care facility, received a government disability support pension and could not afford to pay the CT Debt.

233    Again, after applying the Briginshaw standard, I am comfortably satisfied that these matters are established. In particular:

(a)    the CT Notes record that on many occasions ACM was informed that CT had suffered a stroke (see in particular, the CT Notes dated 18 April 2011, 18 May 2011, 13 July 2011, 5 October 2011, 24 April 2012, 17 May 2013, 1 July 2014, 29 August 2014 and 20 November 2014);

(b)    the CT Notes also record the many times ACM was told that CT had difficulty speaking (see CT Notes for 18 April, 2011, 18 May 2011, 13 July 2011, 5 October 2011, 11 January 2012, 24 April 2012, 13 August 2012, 19 September 2012, 18 October 2013, 17 January 2014, 24 June 2014, 1 July 2014, 12 August 2014 and 29 August 2014);

(c)    the CT Notes contain numerous references to the fact that CT was living in a care facility (see the CT Notes for 18 April 2011, 13 July 2011, 24 April 2012, 31 July 2012, 19 September 2012, 8 May 2014, 24 June 2014, 1 July 2014 and 29 August 2014);

(d)    leaving aside questions as to the authenticity of the authorship of the letter from ET, I am satisfied that that letter nonetheless told ACM that CT received a disability pension; and

(e)    as noted at [43] above it is an agreed fact that on 31 July 2012, and as recorded in the CT Notes for that day, CT’s nurse or carer at the care facility (Ms Pigram) told ACM that CT was in no position to pay the debt and could not pay anything towards it.

(j)    Whether any or all of the matters set out in (i) above were in fact true.

234    Again, after applying the Briginshaw standard, I am comfortably satisfied that all of the matters set out in issue (i) were in fact true. There is no reason to doubt the accuracy of the matters recorded in the CT Notes or the matters to which CT personally deposed in his affidavit and in relation to which there was no cross-examination.

(k)    Whether ACM’s conduct as pleaded in the Concise Statement was in connection with the supply of services or payment for those services to CT and JR such that the relevant provisions relating to misleading or deceptive conduct, undue harassment, coercion and unconscionable conduct are those contained in the Australian Consumer Law.

235    For the reasons given in [217] ff above, the issue should be answered affirmatively.

(l)    Whether ACM’s representatives’ conduct in sending the Seven Day Demand and the 48 Hour Demand Letters to CT and making the telephone calls, as pleaded and particularised, used undue harassment in connection with the supply of services or the payment for those services in contravention of s 50(1)(a) and/or s 50(1)(b) of the Australian Consumer Law.

236    As French J observed in McCaskey at [48] (see [184] above) the question whether or not there is harassment involves an evaluative judgement and the word “undue” adds an extra layer of evaluation. In carrying out that evaluative judgement it is important not to lose sight of what Perram J described in ACM 2012 at [14] as “the confronting business of debt collection”. I accept that this is an environment in which debtors and their allies may provide a debt collector with false information and that, depending upon the circumstances, the debt collector may be entitled to be sceptical of some of the information it receives from such sources. One example of this experience appears to be the fictitious letter written by ET to ACM, noting, however, that that letter was not the subject of any direct evidence and CT was not cross-examined as to the extent, if any, of his knowledge or participation in its preparation. It was in the very context of debt collecting, however, that French J said in McCaskey at [48] that harassment will be undue if the frequency, nature or content of approaches and communications from the debt collector were such that they were “calculated to intimidate or demoralise, tire out or exhaust a debtor rather than convey the demand and an associated legitimate threat of proceedings”.

237    Although it was common ground that there is no such person as ET, many of the statements made in ET’s letter dated 13 May 2011 are supported by other evidence, namely that CT had suffered a massive stroke and was a full time resident of a care facility, has no assets, no employment and was living solely on his disability pension, that he will remain in the care facility for his entire life and that he has lost the capacity to communicate.

238    In conducting the evaluative judgment, it is relevant to take into account the principles and factors described above, but also the following matters which arise in this particular case:

(a)    the fact that CT, who was the target of ACM’s conduct, was a person who was permanently disabled from a stroke, unable to speak without difficulty and was living in a care facility with no apparent source of income apart from a government disability benefit;

(b)    the duration of ACM’s conduct which is the subject of the applicants’ allegation of undue harassment extended over several years and involved ACM representatives telephoning CT’s care facility on approximately 40 occasions during that period and actually speaking to CT on six occasions, as well as sending 20 letters of demand in various forms over that four year period;

(c)    those letters contained representations which I have found to be misleading or deceptive. That is not to say that such a finding is an essential step to concluding that conduct constitutes undue harassment, but it is a relevant factor in this proceeding; and

(d)    CT has given unchallenged evidence that he found the phone calls and correspondence to be distressing and he said that the phone calls made him feel angry and frustrated. I accept that evidence, as I also accept CT’s evidence that he believed that ACM would commence legal proceedings against him having regard to the phone calls and the correspondence.

239    I reject ACM’s submission that the relevant conduct does not amount to undue harassment. First, I reject ACM’s contention that the 34 occasions on which ACM called the care facility but failed to speak directly with CT are not relevant. It is evident from the CT Notes that, as could reasonably be expected, CT was aware of at least some of the calls made by ACM to the care facility even though the ACM representative was not put through to him directly. This is evident, for example, from the CT Notes dated 31 July 2012, 15 October 2014 and 28 October 2014. Furthermore, CT gave evidence, which I accept, that on at least six occasions he was told that ACM had phoned for him.