FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v Jones (No 2) [2010] FCA 371

UPON THE UNDERTAKING OF THE RESPONDENT by his counsel to deliver to his solicitor, Ann Christine Kinghan of Kinghan & Associates, within 7 days a list (the client list) of the type described by paragraphs 3 and 4 of the orders made by Logan J on 5 March 2010;

AND UPON THE UNDERTAKING OF ANN CHRISTINE KINGHAN, in the event that the respondent supplies the client list to her in accordance with the respondent’s undertaking, within 7 working days from the date of the receipt of the client list to send or transmit a copy of Schedule “A” to the interlocutory orders made on 5 March 2010 to each person on the client list at the postal, email or facsimile address disclosed on the client list;

THE COURT ORDERS THAT:

1.                  The time for compliance with order 3 of the interlocutory orders made on 5 March 2010 be extended until seven days after the hearing and determination of the respondent's application for an extension of time within which to seek leave to appeal from those orders, or such later date as may be fixed by the Court.

2.                  Ann Christine Kinghan file and serve an affidavit by 5 May 2010 deposing as to compliance with the undertakings noted above.

3.                  The applicant has leave to discontinue the motion and statement of charge filed 31 March 2010.

4.                  The respondent pay the applicant’s costs of and incidental to the respondent's oral application of 14 April 2010 to extend time for compliance with paragraph 3 of the orders of 5 March 2010.

5.                  As to the costs of the applicant’s motion filed 31 March 2010:

5.1              the respondent pay the applicant’s costs of and incidental thereto up to and including 30 March 2010;

5.2              otherwise, there be no order as to the costs of that motion.

6.                  The costs of the directions hearing of 14 April 2010 be reserved.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

1                     On 5 March 2010, for reasons which I gave ex tempore that day (Australian Competition & Consumer Commission v Jones [2010] FCA 205), I made a number of interlocutory orders.  Those orders were as follows: 

THE COURT ORDERS THAT:

1          The Respondent be restrained, until further order, whether by himself or his servants or agents or otherwise howsoever, in trade or commerce, from making any representation to the effect that the occurrence or growth of cancer or any medical condition can be prevented or successfully treated by any means whatsoever unless the Respondent:

1.1        first has obtained:

1.1.1     from a person then registered with a medical practitioners board to practise medicine in Australia; or

1.1.2     from a professor, associate professor, reader, senior lecturer or lecturer then teaching or researching in medicine at an Australian university;

written advice certifying that the proposed treatment is in the opinion of that person supported by reliable scientific evidence or expert medical opinion and is believed to be effective and safe;

1.2        at the time of making the representation, prominently discloses details of the said advice, including the name, qualifications and position of the person providing the said advice; and

1.3        retains a copy of the said advice and provides a copy of the same to the applicant within 7 days of a him receiving the certificate.

2          The Respondent, at his own expense, shall, within seven (7) days of this order, cause a notice in the form of Schedule A attached hereto to be published and to remain continuously in place, until further order, on the home page of the following websites:

2.1        www.darryljoneshealth.com.au; and

2.2        any other website controlled, owned, operated or maintained by the respondent that, at the date of this application, offers or promotes goods or services associated with the treatment or prevention of cancer or any other medical condition whatsoever;

and shall take all reasonable steps to ensure that such notice shall:

2.3        be a size that consists of at least 40% of the screen area;

2.4        be clearly viewable immediately on screen after the web page is accessed;

2.5        not be blocked by a pop up blocker;

2.6        remain on screen until closed by the person accessing that website; and

2.7        not require a further selection of hyperlinks or scrolling on the screen to be seen.

3          An order that, within fourteen (14) days of making this order, the respondent shall provide the Applicant with a list of all persons who, in the last twelve (12) months preceding this order:

3.1        have made an agreement with, or payment to, the respondent or to another person with the knowledge and consent of the respondent, to be supplied with goods or services associated with the treatment or prevention of cancer; or

3.2        were supplied or provided by the respondent, or by another person with the knowledge and consent of the respondent, with copies of the following documents:

3.2.1     the document entitled "The Truth About Overcoming Cancer";

3.2.2     the document entitled "An Entirely Different Approach to Cancer"; or

3.2.3     any other document containing representations to the effect that there are:

3.2.3.1  reasonable grounds; and

3.2.3.2  a reliable and current scientific or medical basis;

to represent that:

3.2.3.3  the reduction or elimination of glucose from the diet; or

3.2.3.4  taking laetrile, also known as amygdaline, also referred to as "vitamin B17";

are treatments that:

3.2.3.5  are effective in the treatment or prevention of cancer;

3.2.3.6  have been proven to bring even the worst cancers under control; or

3.2.3.7together with an exercise program recommended by him, are preferable to treating cancer by pharmaceutical drugs, radium therapy, surgery or chemotherapy.

4          An order that the list to be provided in accordance with order 3 shall also contain the last known address, including electronic address, and telephone number, if known to the Respondent, of each listed person together with the amount each such person paid.

5          An order that the Respondent shall provide to each person in the said list, at the last known address supplied for each such person, a copy of:

5.1        the notice in Schedule A attached hereto; and

5.2        these orders;

within fourteen (14) days of this order.

6          Costs be reserved.

2                     The Australian Competition and Consumer Commission (the Commission) formed the view that order 3 of those orders has not been complied with.  As a result, the Commission applied for Mr Jones to show cause why he should not be dealt with for contempt of court for non-compliance with the orders of 5 March 2010, in ways more particularly described in the statement of charge, which was filed in the proceeding on 31 March 2010.

3                     The statement of charge is in the following terms: 

1          On 5 March 2010 the Honourable Justice Logan made orders in this matter (“the orders”), including the following:

3.         An order that, within 14 days of making this order, the respondent shall provide the applicant with a list of all persons who, in the last 12 months preceding this order:

3.1        have made an agreement with, or payment to, the respondent or to another person with the knowledge and consent of the respondent, to be supplied with goods or services associated with the treatment or prevention of cancer; or

3.2        were supplied or provided by the respondent, or by another person with the knowledge and consent of the respondent, with copies of the following documents:

3.2.1     the document entitled “The Truth About Overcoming Cancer;”

3.2.2     the document entitled “An Entirely Different Approach to Cancer”; or

3.2.3     Any other document containing representations to the effect that there are:

3.2.3.1  reasonable grounds; and

3.2.3.2  a reliable and current scientific or medical basis;

to represent that:

3.2.3.3  the reduction or elimination of glucose from the diet; or

3.2.3.4  taking laetrile, also known as amygdalin, also referred to as “vitamin B17”;

are treatments that:

3.2.3.5  are effective in the treatment and prevention of cancer;

3.2.3.6  have been proven to bring even the worst cancers under control; or

3.2.3.7  together with an exercise program recommended by him, are preferable to treating cancer by pharmaceutical drugs, radium therapy, surgery or chemotherapy.

2          The respondent was present in Court when the orders were pronounced.

3          The orders were entered on 5 March 2010.

4          A sealed copy of the orders bearing the endorsement specified in O.37 r.2(3) of the Federal Court Rules was personally served on the respondent on 11 March 2010.

5          The respondent did not provide the applicant with the list required by paragraph 3 of the orders by 22 March 2010.

6          The respondent has not provided the applicant with the list required by paragraph 3 of the orders as at the date hereof.

7          The respondent did not comply and continue not to comply with paragraph 3 of the orders, by the conduct set out at paragraphs 5 and 6 above.

4                     Of particular relevance in the statement of charge is order 3 of the orders made on 5 March 2010.  That required particular action by Mr Jones within 14 days of the making of that order. 

5                     Today is the day appointed for the hearing of the Commission’s contempt application.  On that application being called on for hearing, an application was made on behalf of Mr Jones that the time for compliance with order 3 of the orders made on 5 March 2010 be extended until seven days after the hearing and determination of any appeal arising from the application for extension of time, within which to seek leave to appeal from the orders of 5 March 2010.  That particular extension of time application was filed on Friday, 9 April 2010. 

6                     In addition to that application, and by way of consequential relief, it was further sought today that the need for a notice of motion and service thereof in respect of the application for extension of time for compliance with order 3 be dispensed with.  Those latter procedural aspects of the application pronounced orally were not opposed by the Commission.  What was opposed was whether to grant the extension of time sought. 

7                     It was common ground on the hearing of the application for an extension of time, firstly, that it ought to be considered prior to the contempt application and, secondly, that there existed power under the rules to grant the extension sought.  Each of these seems to me to be a correct proposition.  As to the existence of power to extend time, O 3 r 3 provides:

(1)        The court or a judge may by order extend or abridge any time fixed by the Rules or by any judgment or order.

(2)        The time may be extended under this rule, or any other rule allowing for an extension of time (unless the rule provides otherwise):

(a)        before or after the time expires;  and

(b)        whether or not an application for extension is made before the time expires.

8                     And then para (3):

The period within which a person is required by rules or by any order to serve, file or amend any pleading or other document may be extended by consent without an order for extension.

9                     This is a case where Mr Jones, in effect, seeks, after the expiry of the time limited by an order, an extension of the time for which that order provided for the doing of an act.  That, though, seems to me, one of the types of situations for which O 3 r 3 provides.  An effect of granting the extension sought would be to remove such the element of non-compliance from such non-compliance as may, to date, otherwise have occurred in relation to order 3 of those made on 5 March 2010. 

10                  The case came before me on 5 March 2010 in circumstances of some urgency in respect of a matter touching on a question of public health.  Given that background, it is understandable why the Commission would regard the question of compliance within time as one warranting close scrutiny.  Further, unless we, as a society, regard the administration of justice as nothing more than a façade, orders made in the judicial branch of government by superior courts, unless and until such an order is set aside, should be complied with.  To countenance anything other than such a view of orders made by the country’s judiciary is, in effect, to countenance anarchy or whimsy in relation to compliance.  I am not one who would, in any way, countenance such a view of judicial orders. 

11                  Having said that, the existence of O 3 r 3, underscores another aspect of our justice system, which is an ability to take into account the application of the exercise of judicial power in the circumstances of particular cases with all of the attendant human virtues and frailties that attend those cases.  It also contemplates that, after the expiry of a time limited by an order, in taking into account those frailties, there may be a need to strike a balance between them and serious consequences which might otherwise attend a failure to do an act within the time ordered.  This seems to be one of those cases to me. 

12                  On behalf of Mr Jones, it was put forward that one reason for his non-compliance in respect of the 14 day period allowed arose from the burdens that attended him, not only as a result of the making of the orders on 5 March 2010 but more widely in his personal situation.  The latter materially includes proceedings quite unrelated to the present to which he is a party in the Family Court.  They most recently were before that court yesterday.  Further, I was informed, without objection, that those proceedings were on foot as at 5 March 2010. 

13                  I am mindful of the burden that any citizen would face with parallel proceedings before different courts in terms of the call that makes on one’s time.

14                  It was also put forward that there were many other consequential actions that, as Mr Jones saw it, were necessary in light of the making of orders on 5 March 2010.  He formed the view, and it is not material for the present to reflect on whether that was a prudent or impudent view, that he ought, in light of the orders, wind up the business he was then undertaking and also a related business.  That, in turn, and perhaps, in any event, in light of the orders made, had an impact in respect of cash flow, which had downstream effects for him in relation to a need to change residences and undertake other activities associated with the winding up of businesses.  In turn, that change of residence seems to have led, understandably enough, to a heightening in his difficulty in readily communicating with legal practitioners; that in the sense that his communication by internet became unavailable on site as opposed to by internet café and, further, by telephone in that he had a limitation in terms of chancy mobile phone coverage as opposed to landline access. 

15                  Taking all of such matters into account, though, I am left in a situation, so far as the question of extension is concerned, where it was possible for Mr Jones at least to undertake compliance with, or at least compliance as he saw it, with order 5 of those orders made on 5 March 2010.  It seems to be a condition precedent, at least to endeavouring to comply with the fifth of those orders, that a list of clientele has to be generated.  Order 3 contemplated, by way of what one might term an audit fail safe, a dispatch of such a list to the Commission.  It seems to me to be a rather small step, additionally, to take if one is endeavouring to comply with order 5, also to send off the list referred to in order 3. 

16                  Thus, were the only consideration in respect of an extension questions of burdens that otherwise faced Mr Jones after 5 March 2010 or, indeed, information not available on 5 March 2010 to me in respect of his personal circumstances, I would not regard those in themselves as providing a basis upon which to extend time.

17                  There is another factor which intrudes, which is evidence from para 13 of the first of Mr Jones’ affidavits, read today.  That factor is that he wishes, and indeed has throughout March wished, to challenge the ability of the Court to make the orders of 5 March 2010, including in particular order 3.  It seems to me that, apart from the burdens that he has faced in business as well as personal affairs, underpinning all of that is a genuine belief on his part that he need not comply with order 3 because it was not an order made within power.  As I have said though, unless and until an order of a superior court is set aside it must be complied with. 

18                  Mr Jones, I am satisfied on present materials, did face many diversions on his time throughout March and up to and including 9 April 2010.  I am also satisfied that he faced something of a difficulty immediately in securing legal advice.  It may very well be, at least with the wisdom of hindsight, that he did not appreciate the need to move with despatch with his challenges, particularly having regard to the limited time within which an application for leave to appeal had to be filed.  It may also be that his need all along for legal advice and moving with despatch was only ultimately brought home to him upon face to face conference with his legal advisers.

19                  There is filed now, on 9 April 2010, also an application for an extension of time within which to seek leave to appeal and associated with that an application for a stay of orders made on 5 March 2010.  Perhaps appreciating that a stay of an order, the time for compliance with which has expired, was not of terribly great utility, the application for an extension came to be made today.

20                  In theory, it is possible for me, notwithstanding that I am the author of the order of 5 March 2010, also to entertain the extension of time and associated leave to appeal application and the stay application.  Indeed, it was the initial request to the registry made on Mr Jones’ behalf that I hear such applications today.  On reflection, in relation to that request, it seemed to me that the interests of justice were better served by another judicial officer considering the question of leave and whether an extension should be given within which to seek leave as well as any associated stay.

21                  Perhaps it might be thought that that also ought to inform the question of who should decide the extension of time application but that is also linked with the Commission’s application for contempt. 

22                  In the course of the hearing today, Mr Jones came to offer an undertaking to provide his solicitor, within seven working days, with a copy of a list of his clients.  His solicitor in turn has undertaken in writing in the form set out in exhibit 2, that in the event that she is supplied by Mr Jones with that list to, within seven working days from the date of receipt of such list, send or transmit a copy of Schedule A to the orders made by me on 5 March 2010 to each person on such list at the post or telegraphic address disclosed on that list.  That of course is not completely what was envisaged by order 3, which was giving the list to the Commission.

23                  I would certainly not wish it to be thought that it is possible for Mr Jones to dictate how ancillary relief ought to be granted.  Nonetheless, in terms of the legitimate concern which the Commission raises in relation to questions of public health, the undertakings, collectively, do offer a level of comfort in terms of drawing to the attention of particular persons the making of orders on 5 March 2010.  I regard that as a fact relevant to the question of an extension of time.

24                  Also relevant is that there is a need, as I see it, to preserve the efficacy of the challenge which Mr Jones would seek to make to the orders made on 5 March 2010.  It seems to me as if the way of preserving the efficacy of that application for an extension of time within which to seek leave to appeal has only crystallised late.  That lateness though is no reason for refusing to entertain, or, for that matter, not to grant the extension.

25                  There is a serious consequence potentially that attends non-compliance with order 3, if indeed it were to prove to be the case that I was satisfied beyond reasonable doubt that there had been non-compliance with that order.  It is necessary to put that in a conditional tense in that, whilst the Commission has read material in support of the contempt application which establishes, prima facie, non-compliance, I have not heard and determined that application given the extension application.  Further, and as I alluded at the outset of these reasons, a consequence of granting nunc pro tunc the extension, even after the time period has elapsed, would be, in effect, to absolve such non-compliance as has occurred.

26                  What persuades me to grant the extension sought in the end is that the question of the power to make ancillary orders of the kind which order 3 is an exemplar is not one which I would describe as frivolous.  Further, having observed Mr Jones under cross-examination today and considered each of his affidavits, I am quite certain that he genuinely wishes to prosecute his application for an extension of time within which to seek leave to appeal, and that he is a proud man who has, in the face of, in the end, an understandable insistence on the part of the Commission in relation to compliance, finally come to the view that it is not for him to decide whether to comply but rather he must, as any citizen would have to, seek to challenge the making of the orders.  He has, I am further satisfied, had particular difficulty from his personal and business circumstances, in moving with the despatch that might otherwise have been expected. 

27                  There is an element, in granting of an extension, in tempering justice with mercy and I find that particularly persuasive in relation to Mr Jones’ circumstances.  That is so, even though I readily acknowledge that the case is one which is serious in terms of the substantive proceeding, having regard to the nature of the conduct alleged and its intersection with a very real interest in public health issues.  In that regard, and as I have already indicated, I find the undertakings proffered persuasive.  Also persuasive is the knowledge that Mr Jones is not presently in business.  Further, his conduct, when one had regard to the burdens which he faces or has faced personally and in business since 5 March 2010, does, in my opinion, provide an explanation for why it is that he has not made the application for an extension until today.  I remind myself that a person in Mr Jones’ circumstances does not command, as does the Commission, all of the resources of a nation state.

28                  For these reasons then the order that I propose to make upon the undertakings which have been given is that the time for compliance with order 3 of the orders made on 5 March 2010 be extended until seven days after the hearing and determination of the application for an extension of time within which to seek leave to appeal from the orders made on 5 March 2010 or such later date as may be fixed by the Court.

29                  As to the costs in respect of the application for the extension of time within which to comply with order 3, O 62 r 23 of the Federal Court Rules is relevant.  That provides that where a party applies for an extension of time, he shall, unless the court otherwise orders, pay the costs of and occasioned by the application or any order made on or in consequence of the application.  So far as today’s hearing of the application for extension of time is concerned, there was not, understandably and properly, advanced on behalf of Mr Jones, any submission which would seek to contradict the prima facie position.  So much was sought on behalf of the Commission, and in my opinion such an order ought to be made. 

30                  The more difficult question is what to do in respect of the costs, which are consequential costs, relating to the notice of motion for contempt which has been rendered futile by what one might term the absolution granted by the extension of time. 

31                  A review of the exchange of correspondence that occurred over the course of March and into the first week of April this year discloses that, within the time for compliance with order 3, it was drawn to the attention of the solicitor for the Commission that Mr Jones intended to challenge the order.  Thereafter, though, it was not until 9 April 2010 that a challenge was formally filed in court. 

32                  In between that initial signification by letter, on 17 March 2010 and 9 April 2010 there was other correspondence.  In particular, by letter on 30 March 2010, Mr Jones’ solicitors set out in some detail the proposed challenge and gave a draft of an associated notice of motion.  The letter was not, as has been accurately observed, accurately accompanied by any affidavit.  Nonetheless, it is evident from the solicitor’s letter that an explanation for delay is given.  One does not, in practice, in my opinion, start with the proposition that statements deliberately made apparently on instructions by a legal practitioner are to be treated as of no moment.  Rather, it is evident from the text of the letter that there are subjects which one might reasonably apprehend would become the subject of affidavit.  A counsel of perfection would certainly have been that an affidavit or at least the text of the proposed affidavit accompany the letter.  Nonetheless, that letter of 30 March 2010, in my opinion, did manifest in a way in which I can well understand was hitherto viewed with a degree of suspicion, the intention to prosecute a challenge to the orders made on 3 March 2010. 

33                  Whilst reasonable people might reasonably differ as to whether, in the face of the letter of 30 March 2010 the application for contempt ought to have been filed, my view, particularly having regard to the role of the Executive Government of the Commonwealth in litigation, is that it was a step which need not have been taken at that point.  There is, I fully accept, something of an element of hindsight in that.  Nonetheless, it does seem to me, in terms of discretion, that there is a point in respect of consequential costs which calls for some differentiation.  In so observing I bear in mind that the application for an extension of time within which to seek leave to appeal was not filed in the end until 9 April 2010.  As I observed in respect of that application - of the extension application itself, Mr Jones did not have at his command all of the resources of a nation state such as does the Commission.  I am of a firm view that he did in the end, as manifested by the 30 March 2010 letter, move with a degree of diligence, and that the letter of 30 March 2010 was not one lightly to set aside in the context of making a decision as to whether to, the following day, file the notice of motion.

34                  Thus, the position in which I find myself is one where, taking into account the events that occurred prior to 9 April 2010 is as follows.  The costs in respect of the contempt application occasioned by today should, in my view, be bifurcated in this way: 

(a)                the costs of and incidental to the notice of motion filed on 31 March 2010 up to and including 30 March 2010 should be paid by Mr Jones; and

(b)                thereafter in respect of that application, there should be no order as to costs. 

35                  As to the application itself, the Commission has sought leave to discontinue.  That, in my opinion, is an appropriate stance to take.  I grant leave to discontinue, but that leave is granted on terms as to costs which I have already signified.

Associate:

Dated:         19 April 2010