FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v Chen [2002] FCA 1248

TRADE PRACTICES – contraventions of Trade Practices Act 1974 (Cth) by overseas resident relating to internet usage concerning Australian live entertainment – prima facie evidence justifying injunctions – service out of Australia – mandatory as well as prohibitive relief sought.

Trade Practices Act 1974 (Cth) ss 5, 6(3), 52, 53(c), 53(d), 55A and 80(6)

Federal Court Rules O 8 r 2(2)(a)(b) and (c)

Delco Australia Pty Ltd v Equipment Enterprises Incorporated trading as Kukla Trenchers [2000] FCA 821 cited

Business World Computers Pty Ltd v Australian Telecommunications Commission (1988) 82 ALR 499 cited

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v RICHARD CHEN

N 1039 of 2002

CONTI J

8 OCTOBER 2002

SYDNEY

THE COURT ORDERS THAT:

1.         Pursuant to Order 8 rule 2 of the Federal Court Rules, the Applicant be granted leave to serve the originating process in the proceedings, being the Application and Statement of Claim, outside the Commonwealth on terms and conditions that the Applicant employ private agents in the United States of America and/or the United Kingdom to effect personal service on the Respondent.

2.         The Respondent by himself, his servants or agents, forthwith take all steps necessary to remove from the World Wide Web and, until further order, not reinstate thereon, the Imitation Site, the Witestar Site, and the WBO Site (as those terms are defined in the Statement of Claim herein) so that those internet web sites cease to be, and until further order remain, inaccessible to persons or computers within Australia (whether or not that requires the entire removal of those sites).

3.         Until further order, the Respondent by himself, his servants or agents, be restrained from publishing, operating or maintaining the Imitation Site, the Witestar Site, or the WBO Site (as those terms are defined in the Statement of Claim herein) or any similar internet web site, in circumstances where those sites are accessible by persons or computers within Australia.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR INTERLOCUTORY JUDGMENT

1                     The Australian Competition and Consumer Commission (“ACCC”) has commenced the subject proceedings against the Respondent (“Chen”) for breaches of ss 52, 53(c), 53(d) and 55A of the Trade Practices Act 1974 (Cth) (“the Act”) relating to the storage of certain web site content, and the transmission of that web content to internet users. Chen appears to reside overseas. There are three offending internet web sites defined in the statement of claim herein, respectively entitled the “Imitation Site”, the “Witestar Site”, and the “World’s Box Office Site”. All are accessible by the general public in Australia, as well as overseas.  It is alleged that Chen has engaged in serious misrepresentations to members of the Australian public, as well as to overseas residents, concerning the obtaining of Sydney Opera House tickets.  A comprehensive statement of claim has been filed by ACCC, and service thereof outside of Australia is now sought, along with interlocutory injunctions.

2                     The orders presently sought are as follows:

“1.       Pursuant to Order 8 rule 2 of the Federal Court Rules, the Applicant be granted leave to serve the originating process in the proceedings, being the Application and Statement of Claim, outside the Commonwealth on terms and conditions that the Applicant employ private agents in the United States of America and/or the United Kingdom to effect personal service on the Respondent.

2.                 The Respondent by himself, his servants or agents, forthwith take all steps necessary to remove from the World Wide Web and, until further order, not reinstate thereon, the Imitation Site, the Witestar Site, and the WBO Site (as those terms are defined in the Statement of Claim herein) so that those internet web sites cease to be, and until further order remain, inaccessible to persons or computers within Australia (whether or not that requires the entire removal of those sites).

3.                 Until further order, the Respondent by himself, his servants or agents, be restrained from publishing, operating or maintaining the Imitation Site, the Witestar Site, or the WBO Site (as those terms are defined in the Statement of Claim herein) or any similar internet web site, in circumstances where those sites are accessible by persons or computers within Australia.”

3                     Comprehensive affidavits have been filed and read in support of the orders sought.  In relation to the order sought for service overseas, those affidavits are as follows:

Kithsiri Karunaratne (sworn 2 October 2002)

Peter Nelson (sworn 3 October 2002)

Aidan Timothy Steensma (sworn 1 October 2002))

Michelle Coco (originally sworn 1 October 2002 and re-sworn 4 October 2002)

Patrick Leslie George Sefton (sworn 1 October 2002)

In relation to the orders sought for the grant of injunctions to restrain the statutory breaches, the following additional affidavits have been filed and read:

Michelle Coco (sworn also on 4 October 2002, and filed in Court 8 October 2002)

Patrick Leslie George Sefton (sworn 8 October 2002)

4                     The affidavit material establishes the following matters:

(i)                  prima facie evidence of the alleged statutory breaches in Australia involving the use of telephonic services within subs 6(3) of the Act, and the availability of the injunctive relief sought pursuant to ss 5 and 6 of the Act, notwithstanding the absence of any contraventions by a corporation.

(ii)                The likelihood of continuation of the statutory breaches by Chen, and the sustaining of loss and damage already by members of the public both in Australia and overseas, arising out of action taken on the assumption of the authenticity of the websites.

(iii)               The apparent residence of Chen overseas, most probably in the United States of America at least when the contraventions occurred.

5                     Accordingly, I am satisfied that the Court has jurisdiction in relation to the subject proceedings for the purposes of Order 8 rule 2(2)(a), and that the ACCC has a prima facie case for the relief sought within Order 8 rule 2(2)(b) and (c) in respect of the abovementioned statutory contraventions.  In that regard, I have been assisted by the analysis of authority relating to the granting of relief of the nature here sought for contraventions of the Act which was undertaken by Von Doussa J in Delco Australia Pty Ltd v Equipment Enterprises Incorporated trading as Kukla Trenchers [2000] FCA 821, and also what was said by Gummow J in Business World Computers Pty Ltd v Australian Telecommunications Commission (1988) 82 ALR 499 at 503 concerning interlocutory mandatory injunctions.  An undertaking as to damages on the part of the ACCC is not required:  see sub s 80(6) of the Act.  No order as to costs is presently sought.

6                     The proceedings are listed in the docket of Sackville J, who was unable to preside over the proceedings today due to an earlier commitment.

Associate:

Dated:              10 October 2002