CATCHWORDS
PRACTICE AND PROCEDURE - application to stay or strike out parts of statement of claim as disclosing no reasonable cause of action - cannot be said that no real question of fact or law to be determined - real question whether facts as pleaded established contravention of Trade Practices Act 1974 (Cth) ss.57, 61(2A).
Trade Practices Act 1974 (Cth) ss.57, 61(2A)
General Steel Industries Inc. v. Commissioner for Railways (NSW) (1964) 112 CLR 125 (Applied)
Munnings v. Australian Government Solicitor (1994) 68 ALJR 169
Queensland Aggregates Pty. Ltd. v. Trade Practices Commission (1981) 57 FLR 314
Trade Practices Commission v. My Life Corporation Pty. Ltd. (ACN 054 040 327)
No. QG169 of 1994
Cooper J., Brisbane, 2 June, 1995
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
No. QG 169 of 1994
BETWEEN:
TRADE PRACTICES COMMISSION
Applicant
AND:
MY LIFE CORPORATION PTY. LTD.
(ACN 054 040 327)
Respondent
JUDGE MAKING ORDER:Cooper J.
WHERE MADE: Brisbane
DATE OF ORDER: 2 June, 1995
MINUTES OF ORDER
THE COURT ORDERS THAT:
1. The respondent's notice of motion be dismissed.
2. The respondent pay the applicant Trade Practice Commission its costs of and incidental to the notice of motion to be taxed if not agreed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
No. QG 169 of 1994
BETWEEN:
TRADE PRACTICES COMMISSION
Applicant
AND:
MY LIFE CORPORATION PTY. LTD.
(ACN 054 040 327)
Respondent
CORAM: Cooper J.
PLACE: Brisbane
DATE: 2 June, 1995
REASONS FOR JUDGMENT
By notice of motion the respondent My Life Corporation Pty. Ltd. ("My Life") seeks orders that so much of the claim of the applicant Trade Practices Commission ("the TPC") as seeks relief in consequence of alleged contraventions of section 57 and section 61(2A) of the Trade Practices Act 1974 (Cth) ("the Act") be stayed or in the alternative, that paragraphs 3 to 11 and 15 to 23 relating to the section 57 claim, and paragraphs 12 to 14 and 24 to 26 relating to the section 61(2A) claim, of the statement of claim be struck out.
Section 57 of the Act provides :-
"A corporation shall not, in trade or commerce, induce a consumer to acquire goods or services by representing that the consumer will, after the contract for the acquisition of the goods or services is made, receive a rebate, commission or other benefit in return for giving the corporation the names of prospective customers or otherwise assisting the corporation to supply goods or services to other consumers, if receipt of the rebate, commission or other benefit is contingent on an event occurring after that contract is made."
Section 61(2A) of the Act provides :-
"(2A) A corporation also contravenes this section if the corporation promotes, or takes part in the promotion of, a scheme under which -
(a) a payment is to be made by a person who participates, or who has applied or been invited to participate, in the scheme to or for the benefit of the corporation or another person who takes part in the promotion of the scheme or to or for the benefit of another person who participates in the scheme; and
(b) the inducement for making the payment is the holding out to the person who makes or is to make the payment the prospect of receiving payments from other persons who may participate in the scheme.
(3) For the purposes of sub-section (1), (2) or (2A) -
(a) a prospect of a kind mentioned in that sub-section shall be taken to be held out to a person whether it is held out so as to confer on him a legally enforceable right or not;
(b) in determining whether an inducement or attempt to induce is made by holding out a prospect of a kind mentioned in that sub-section, it is sufficient if a prospect of that kind constitutes or would constitute a substantial part of the inducement; and
(c) any reference to the making of a payment to or for the benefit of a person shall be construed as including the making of a payment partly to or for the benefit of that person and partly to or for the benefit of one or more other persons."
On the hearing of the application the TPC handed up a proposed further amended statement of claim which it submitted pleaded a case which established a breach of the relevant sections of the Act. That document has been marked "A" and placed on the file for the purpose of identification.
In support of the case alleging a breach of section 57 of the Act, the TPC pleaded, so far as is relevant :-
"3. At all material times the respondent:-
3.1 was the promoter of a scheme known as the `My Life Surviving 2000 Business Plan' (`the S Plan');
3.2 engaged in the promotion of the S Plan by its servants or agents;
3.3 produced or alternatively caused to be produced a product described as a food supplement, going under the name `BioGen';
3.4 engaged in such promotion and production from in or about 1991;
3.5 prepared, printed and disseminated or alternatively caused to be prepared, printed and disseminated to members of the public information booklets in relation to the S Plan and forms of application for membership of the S Plan;
3.6 conducted or caused to be conducted seminars with members of the public in respect of the S Plan.
Particulars
The information booklets, progressively prepared, printed and produced up to September 1994, are those exhibited to the affidavit of K J McDonald and M J Winfield filed herein on 24th November 1994.
The application forms are also exhibited to such affidavits.
The applicant cannot particularise the seminars until completion of interlocutory steps.
4 The information booklets and application forms were distributed to and the seminars conducted with members of the public for the purpose of inducing such persons to apply for membership of the S Plan.
5. The
S Plan as currently structured from August 1994 but at all previous
times similarly structured, consists of:-
5.1 an obligation in any member of the public interested in participating in the S Plan to apply to the respondent for membership of such scheme;
5.2 upon acceptance of an application for membership:-
5.2.1 the member then making six, monthly, but then continuing, payments of $20.00 to the applicant;
5.2.2 the member receiving each month a copy of a `Surviving 2000' booklet;
5.2.3 the member receiving then a 200 gram jar of BioGen at the conclusion of such six month period;
5.2.4 the maintenance of an account (journal
not trust) of a member with the respondent to be credited with payments
made by the member, debited for BioGen purchased and credited with income from
further memberships (described below);
5.2.5 the member requesting or encouraging another person or other persons to apply for membership in the S Plan;
5.2.6 upon such other person or persons applying for and gaining membership in the S Plan, the payment of income by the respondent from the account to the member in respect of moneys paid by such other person or persons under the scheme and moneys paid by any further person or persons which the other person or persons caused to join the S Plan;
5.2.7 incentive income payments being made by the respondent to the member if income from members introduced reached certain levels;
5.2.8 the ability of the member to purchase further `positions' in the matrix of introduced members.
Particulars
Particulars of the S
Plan, as structured from August 1994, are contained in the information
booklets and the application forms referred to in paragraph 3 hereof together
with the content of seminars the subject of video recordings exhibited to
the said affidavits of McDonald and Winfield. the subject of video recordings exhibited
to the said affidavits of McDonald and Winfield. The applicant cannot particularise the
seminars until completion of interlocutory steps. The relevant parts of the information
booklets are:-
(a) Exhibit `MJW6' - from the fifteenth
sheet headed `An Introduction to a Business Opportunity Proudly Australian'
up to but excluding the thirty-second sheet headed `My-Care Integrated Charity
Plan';
(b) Exhibit `MJW7' - from the twenty-second sheet headed `International Business Program' up to but excluding the said thirty seventh sheet headed `My-Care International Charity Program';
(c) Exhibit `MJW8' - from the ninth sheet headed `The My-Life International Business Program' up to but excluding the seventeenth sheet headed `My-Life International Business Program'.
Previously the S Plan was structured in the same manner except with variations as to the timing and amount of payment. As structured at all material times prior to August 1994 these differences consisted in the making of 12 payments, monthly, in the sum of $10.00 and with a payment of $40.00 at the end of such period to obtain a jar of BioGen. The particulars of the same are contained in Exhibit `MJW5' from the eighth sheet headed `The Surviving 2000 Business Plan' up to but excluding the thirty-second sheet headed `My-Life Integrated Charity Plan'.
6 In reliance upon the content of the information booklets, the application forms and the seminars members of the public applied for and were admitted to membership of the S Plan and participated in the S Plan.
Particulars
Such members of the public were the members who so applied and were admitted. Such persons were some 60,000 in number and included Gregory Ronald Keays, Paul Orr and Helen Henderson Bailleau. The applicant cannot give further particulars prior to conclusion of interlocutory steps.
- Section 57 of the Act:
7 At all material times the respondent was a corporation within the meaning of the Act.
8 At all material times the respondent was engaged in trade or commerce within the meaning of the Act.
Particulars
Such trade or commerce consisted in:-
8.1 the dealing in the monthly information booklets;
8.2 the dealing in the sale of BioGen;
8.3 the facility afforded to persons to apply for membership of and participated in the S Plan.
.....
10 In conducting the S Plan the respondent represented to each prospective member that:-
10.1 such prospective member;
10.2 after, and not before or upon, joining the
S Plan;
10.2 after, and not before or upon, joining the S Plan and thereby contracting to acquire goods (namely the `Surviving 2000' booklets referred to in paragraph 5.2.2 and the BioGen referred to in paragraph 5.2.3) and services (namely the facility to increase income as described in paragraphs 5.2.4 - 5.2.8);
10.3 would be paid money by the respondent;
10.3 would receive a benefit in the form of money;
10.4 consequent upon another person or other
persons being introduced to the S Plan by such member and gaining membership of
and participating in the S Plan.
10.4 in return for that prospective member assisting the respondent to supply goods (namely the `Surviving 2000' booklets referred to in paragraph 5.2.2 and the BioGen referred to in paragraph 5.2.3) and services (namely the facility to increase income as described in paragraphs 5.2.4 - 5.2.8) to other prospective members (who would acquire the goods and services as consumers) by procuring those other prospective members to apply for membership in the S Plan;
10.5 the said benefit in the form of money, being that described in paragraphs 5.2.6 and 5.2.7, was contingent on events occurring after the contract referred to in paragraph 10.2 was made, namely the event of admission to membership in the S Plan of those other purported members as alleged in paragraph 5.2.6 and the event of the reaching of certain levels of income from members introduced as alleged in paragraph 5.2.7.
Particulars
The representations are contained in the material referred to in paragraph 5 hereof. The relevant parts of the material are particularised in paragraph 5.
10A. By reason of the conduct alleged in paragraph 10, the respondent induced the prospective members to acquire goods (namely the `Surviving 2000' booklets referred to in paragraph 5.2.2 and the BioGen referred to in paragraph 5.2.3) and services (namely the facility to increase income as described in paragraphs 5.2.4 - 5.2.8).
10B. The said prospective members induced to acquire goods and services as alleged in paragraph 10A were, and acquired the said goods and services as, consumers.
Particulars
The applicant relies upon Section 4(B) of the Act. It says further that the price of the goods and services did not exceed $40,000.00 and, further, that the said prospective members induced to acquire the goods did not acquire the goods, or hold themselves out as acquiring the goods, for the purpose of re-supply or for the purpose of using them up or transforming them, in trade or commerce, in the course of process of production or manufacture or of repairing or treating other goods or fixtures on land.
11 In the premises the respondent, in conducting the scheme, contravened Section 57 of the Act.
.....
15 At all material times the respondent:-
15.1 was the promoter of a scheme known as `International Charity Program' (`the ICP Plan');
15.2 engaged in the promotion of the ICP Plan by its servants or agents;
15.3 produced or alternatively caused to be produced a product, described as nutrient-rich cookies, going under the name `BioLite';
15.4 engaged in such promotion and production from in or about 1994;
15.5 prepared, printed and disseminated or alternatively caused to be prepared, printed and disseminated to members of the public information booklets in relation to the ICP Plan and an application for membership of the ICP Plan;
15.6 conducted or caused to be conducted seminars with members of the public in respect of the ICP Plan.
Particulars
The information booklets, progressively prepared, printed and produced up to September 1994, are those exhibited to the said affidavits of McDonald and Winfield. The applicant cannot particularise the seminars until completion of interlocutory steps.
The application form is also exhibited to such affidavits.
16 The information booklets and application forms were distributed to and the seminars conducted with members of the public for the purpose of inducing such persons to apply for membership in the ICP Plan.
17 The ICP Plan consists of:-
17.1 an obligation in any member of the public interested in participating in the ICP Plan to apply to the respondent for membership of such scheme;
17.2 upon acceptance of an application for membership:-
17.2.1 the member making six, monthly, but then continuing payments of $64.00 to the applicant;
17.2.2 the member purchasing, at the conclusion of
such six month period a box of BioLite which would could be
retained by the respondent and contributed to be utilised for charitable
purposes in needy overseas countries;
17.2.3 the maintenance of an account (by journal
and not trust), of the member with the respondent to be credited with
payments made by the member, debited for BioLite notionally purchased and
credited with income from further memberships (described below);
17.2.4 the member requesting or encouraging other
persons to apply for membership in the ICP Plan;
17.2.5 upon such other person or persons applying for and gaining membership in the ICP Plan, the payment of income by the respondent from the account to the member in respect of moneys paid by such other person or persons under the scheme and in respect of any moneys paid by any further person or persons which the other person or persons caused to gain membership of the ICP Plan;
17.2.6 incentive income payments being made by the respondent to the member if income to the members introduced reached certain levels;
17.2.7 the ability of the member to purchase further `positions' in the matrix of introduced persons.
Particulars
Particulars
of the ICP Plan are contained in the information booklets and application forms
referred to in paragraph 15 hereof together with the content of seminars the
subject of video recordings exhibited to the said affidavits of McDonald and
Winfield together with the content of seminars the subject of video
recordings exhibited to the said affidavits of McDonald and Winfield. The applicant cannot particularise the
seminars until completion of interlocutory steps. The relevant parts of the information
booklets are:-
(a) Exhibit `MJW6' - from the thirty-second sheet headed `My-Care Integrated Charity Plan' to the end thereof;
(b) Exhibit `MJW7' - from the thirty seventh sheet headed `My-Care International Charity Program' to the end thereof;
(c) Exhibit `MJW8' - from the seventeenth sheet headed `My-Life International Business Program' to the end thereof.
18 In
reliance upon the content of the information booklets, and the
application forms and the seminars, members of the public applied for
and were admitted to membership of the ICP Plan and participated in the ICP
Plan.
Particulars
Such members of the public were the members who so applied and were admitted. Such persons were some 9,000 in number and included Gregory Ronald Keays, Paul Orr and Helen Henderson Bailleau. The applicant cannot give further particulars prior to conclusion of interlocutory steps.
- Section 57 of the Act:
19 The applicant refers to and relies upon paragraph 7 hereof.
20 At all material times the respondent was engaged in trade or commerce within the meaning of the Act.
Particulars
Such trade or commerce consisted in:-
20.1 the matters particularised in paragraph 8 hereof;
20.3 the dealing in the sale of BioLite;
20.3 the facility afforded to persons to apply for membership of and participate in the ICP Plan.
.....
22 In conducting the ICP Plan the respondent represented to each prospective member that:-
22.1 such prospective member;
22.2 after, and not before or upon, joining the
ICP Plan;
22.2 after, and not before or upon, joining the ICP Plan and thereby contracting to acquire goods namely the BioLite referred to in paragraph 17.2.2) and services (namely the facility to increase income as described in paragraphs 17.2.3 - 17.2.7);
22.3 would be paid money by the respondent;
22.3 would receive a benefit in the form of money;
22.4 consequent upon another person or other
persons being introduced to the ICP Plan by such member and gaining membership
of and participating in the ICP Plan, and upon a
further person or persons being so introduced and participating below such
other person or persons.
22.4 in return for that prospective member assisting the respondent to supply goods (namely the BioLite referred to in paragraph 17.2.2) and services (namely the facility to increase income as described in paragraphs 17.2.3 - 17.2.7) to other prospective members (who would acquire the goods and services as consumers) by procuring those other prospective members to apply for membership in the ICP Plan;
22.5 the said benefit in the form of money, being that described in paragraphs 17.2.5 and 17.2.6, was contingent on events occurring after the contract referred to in paragraph 17.2 was made, namely the event of admission to membership in the ICP Plan of those other purported members as alleged in paragraph 17.2.5 and the event of the reaching of certain levels of income from members introduced as alleged in paragraph 17.2.6.
Particulars
The representations are contained in the material referred to in paragraph 17 hereof. The relevant parts of the material are particularised in paragraph 17.
22A. By reason of the conduct alleged in paragraph 22, the respondent induced the prospective members to acquire goods (namely BioLite referred to in paragraph 17.2.2) and services (namely the facility to increase income as described in paragraphs 17.2.3 - 17.2.7).
22B. The said prospective members induced to acquire goods and services as alleged in paragraph 22A were, and acquired the said goods and services as, consumers.
Particulars
The applicant relies upon Section 4(B) of the Act. It says further that the price of the goods and services did not exceed $40,000.00, and further, that the said prospective members induced to acquire the goods did not acquire the goods, or hold themselves out as acquiring the goods, for the purpose of re-supply or for the purpose of using them up or transforming them, in trade or commerce, in the course of process of production or manufacture or of repairing or treating other goods or fixtures on land.
23 In the premises the respondent, in conducting the scheme, contravened Section 57 of the Act."
In support of the section 61(2A) claim the TPC, so far as is relevant, pleaded :-
"12 The applicant refers to and relies upon paragraph 7 hereof.
13 Under
the S Plan:
13.1 a payment made by any member thereunder;
13.2 was paid by such member to the respondent;
13.3 such payment was made for the benefit of
another member participating in the S Plan, where such other member caused or
encouraged the paying member or person above the paying member to join and
participate in the S Plan;
13.4 a substantial part of the inducement for
the paying member to make a payment was to, in turn, receive through My Life
payment of money from other persons, namely persons caused or encouraged by
such paying member to join and participate in the S Plan or persons below such
paying member who were caused or encouraged by a member below to join and
participate in the S Plan.
13. At all material times the S Plan was and is a scheme under which:-
13.1 a payment was and is to be made by a participant therein or a person who has applied or been invited to participate therein;
13.2 to or for the benefit of the respondent;
13.3 and to or for the benefit of another participant in the S Plan, where that participant caused or encouraged the paying member or other members to join and participate in the S Plan;
13.4 a substantial part of the inducement for the payer to make a payment was the holding out to the payer of the prospect of receiving payments from other persons who might participate in the scheme.
Particulars
The payments in
question were to be made by the other persons to the respondent and past on by
the respondent to the payer.
The payments in question were to be received:-
(i) from the other persons (as participants in the scheme) through the respondent; or,
(ii) from the respondent itself (as participant in the scheme).
14 In the premises, the respondent, in conducting the scheme, contravened Section 61(2A) of the Act.
.....
24 The applicant refers to and relies upon paragraph 7 hereof.
25 Under
the ICP Plan:
25.1 a payment or payments made by any member
thereunder;
25.2 was paid by such member to the respondent;
25.3 such payment was made for the benefit of
another member participating in the ICP Plan where such other member caused or
encouraged the paying member or a person above the paying member to join and
participate in the ICP Plan;
25.4 a substantial part of the inducement of the
paying member to make any payment was to, in turn, to receive, through My Life,
payment of money from other persons participating in the scheme, namely persons
caused or encouraged by such paying member to join and participate in the ICP
Plan or persons below such paying member who were caused or encouraged by a
member below such paying member to join and participate in the ICP Plan.
25. At all material times the ICP Plan was and is a scheme under which:-
25.1 a payment was and is to be made by a participant therein or a person who has applied or been invited to participate therein;
25.2 to or for the benefit of the respondent;
25.3 and to or for the benefit of another participant in the ICP Plan, where that participant caused or encouraged the paying member or other members to join and participate in the ICP Plan;
25.4 a substantial part of the inducement for the payer to make a payment was the holding out to the payer of the prospect of receiving payments from other persons who might participate in the scheme.
Particulars
The payments in
question were to be made by the other persons to the respondent and past on by
the respondent to the payer.
The payments in question were to be received:-
(i) from the other persons (as participants in the scheme) through the respondent; or,
(ii) from the respondent itself (as a participant in the scheme).
26 In the premises, the respondent, in conducting the scheme, contravened Section 61(2A) of the Act."
The respondent contends that as pleaded in paragraphs 3 - 5 inclusive, the S Plan involves an applicant for membership acquiring a service - the payment of money for introducing new members - where that payment is also alleged to be the benefit for the purposes of section 57 of the Act. Put simply, the respondent contends that for the purposes of section 57 the "rebate commission or other benefit" must be different and separate from the "services" acquired. It submits that the essence of section 57 is that the conditional benefit offered is a collateral or extraneous benefit which will have the effect, if the condition is fulfilled, of reducing the price paid for the goods or services acquired. In the pleaded case, the respondent submits the benefit does not go to reducing the price of the goods and services acquired, it is in fact the service acquired. The respondent makes the same submission in relation to the ICP Plan pleaded in paragraphs 15 - 17 inclusive.
The respondent further contends that section 61(2A) of the Act requires by paragraph (b) that the payment which constitutes the inducement must be made "from other persons who may participate in the scheme". Thus it submits a payment from the promoter falls outside the conduct proscribed by section 61(2A).
The TPC submits that the conduct pleaded falls within the terms of section 57 and is thereby prohibited conduct. The service acquired as pleaded in paragraph 10.2 and 10A is "the facility to increase income as described in paragraphs 5.2.4 - 5.2.8". The "benefit" for the purposes of section 57 is pleaded in paragraphs 10.3, 10.4 and 10.5 as "a benefit in the form of money ..." being that described in 5.2.6 and 5.2.7. The TPC accordingly contends that there is no common identity of the service acquired and the benefit pleaded as the respondent asserts. Further, the TPC contends that the benefit does not have to be one which operates to reduce the price paid for the service. The TPC makes the same submissions in respect of the ICP Plan.
In respect of the alleged contravention of section 61(2A), the TPC in paragraphs 13 and 13.4 pleads that a substantial part of the inducement was "the prospect of receiving payments from other persons who might participate in the Scheme." In this respect the TPC has pleaded the language of the section itself. The particulars given are :-
"The payments in question were to be received:-
(i) from the other persons (as participants in the scheme) through the respondent; or,
(ii) from the respondent itself (as participant in the scheme)."
The TPC submits that in law and fact the use of the respondent as a conduit for the payments cannot take the arrangement outside the ambit of the section if the payment in fact comes from another participant as part of the scheme. Further, the TPC submits there is no basis to exclude from the operation of the section cases where a corporation adopts two roles in relation to a particular scheme; that of promoter and also that of participant.
The approach of the court to applications to strike out or stay proceedings was summarised by Barwick CJ. in General Steel Industries Inc. v. Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129-130, where his Honour said :-
"... It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action - if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; `so obviously untenable that it cannot possibly succeed'; `manifestly groundless'; `so manifestly faulty that it does not admit of argument'; `discloses a case which the Court is satisfied cannot succeed'; `under no possibility can there be a good cause of action'; `be manifest that to allow them' (the pleadings) `to stand would involve useless expense'.
At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or `so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument'; `so to speak apparent at a glance'.
As I have said, some of these expressions occur in cases
in which the inherent jurisdiction was invoked and others in cases founded on
statutory rules of court but although the material available to the court in
either type of case may be different the need for exceptional caution in
exercising the power whether it be inherent or under statutory rules is the
same. Dixon J. (as he then was) sums up a number of authorities in Dey v. Victorian Railways Commissioners
(1949) 78 C.L.R. 62 where he says (1949) 78 C.L.R., at p.91: `A case must be very clear indeed to justify
the summary intervention of the court to prevent a plaintiff submitting his
case for determination in the appointed manner by the court with or without a
jury.
The fact that a transaction is intricate may not disentitle the court to
examine a cause of action alleged to grow out of it for the purpose of seeing
whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real
question to be determined whether of fact or law and that the rights of the
parties depend upon it, then it is not competent for the court to dismiss the
action as frivolous and vexatious and an abuse of process.' Although I can agree with Latham C.J. in the same case when he
said that the defendant should be saved from the vexation of the continuance of
useless and futile proceedings (1949) 78 C.L.R., at p. 84, in my opinion great
care must be exercised to ensure that under the guise of achieving expeditious
finality a plaintiff is not improperly deprived of his opportunity for the
trial of his case by the appointed tribunal.
On the other hand, I do not think that the exercise of the jurisdiction
should be reserved for those cases where argument is unnecessary to evoke the
futility of the plaintiff's claim.
Argument, perhaps even of an extensive kind, may be necessary to
demonstrate that the case of the plaintiff is so clearly untenable that it
cannot possibly succeed."
(See also Munnings v. Australian Government Solicitor (1994) 68 ALJR 169 at 170).
Applying these tests to the proceedings before me and the pleading in its proposed further amended form, it cannot be said that there is no real question of law or fact to be determined as to the proper construction of sections 57 and 61(2A) of the Act and whether the facts as pleaded, if proved, establish a contravention of those sections.
The
construction of the pleaded scheme contended for by the respondent is too
narrow. It is not the payment of money
which is the relevant service. The
relevant service is the ability to participate in the scheme as a member which
carries with it an opportunity to earn money by introducing new members. In this respect the scheme as pleaded is
analogous to the work contracts the subject of Queensland Aggregates Pty.
Ltd. v. Trade Practices Commission (1981) 57 FLR 314 (F.C.) at
318-319. Nor am I persuaded that "rebate, commission or other
benefits" should be read as being limited to situations where the
price is reduced on the happening of the contingency. The genre of
the category is a "benefit"
contingently received in the circumstances provided for in the section. A rebate is a benefit which takes the form of
a reduction or return in part of the price paid. However, commissions and other benefits prima facie have no necessary
relationship to the price paid.
The construction of section 61(2A) contended for by the Commission is clearly not untenable. Additionally, there may be questions of fact as to the source of the money and its treatment by the respondent before it is paid to a participant which will determine the matter one way or the other.
The notice of motion is dismissed with costs.
THE COURT ORDERS THAT:
1. The respondent's notice of motion be dismissed.
2. The respondent pay the applicant Trade Practice Commission its costs of and incidental to the notice of motion to be taxed if not agreed.
I certify that this and the preceding seventeen (17) pages are a true copy of the reasons for judgment herein of his Honour Justice Cooper.
Date: 2 June, 1995
Associate
Counsel for the Respondent/Applicant
on the Notice of Motion: Mr. S. Couper with Mr. M. Hinson
Solicitor for the Respondent/Applicant
on the Notice of Motion: Barker Gosling
Counsel for the Applicant/Respondent
on the Notice of Motion: Mr. K. Dorney Q.C. with Mr. R. Douglas
Solicitor for the Applicant/Respondent
on the Notice of Motion: Australian Government Solicitor
Date of Hearing: 17 May, 1995
Place of Hearing: Brisbane
Date of Judgment: 2 June, 1995
