FEDERAL COURT OF AUSTRALIA

Australian Communications and Media Authority v JER Pty Ltd [2012] FCA 1198

THE COURT ORDERS THAT:

1.    Pursuant to section 39(2)(d) of the Spam Act 2003 (Cth), JER Pty Ltd (JER) comply with clause 5.2.2 of the Undertaking given by JER and accepted by the Australian Communications and Media Authority (ACMA) on 19 October 2011, by:

1.1    providing to ACMA the following quarterly reports required under clause 5.2.2 of the Undertaking that are outstanding as at the date of these orders:

1.1.1    for reporting period 19 October 2011 to 19 January 2012 inclusive, by 5 November 2012;

1.1.2    for reporting period 20 January 2012 to 19 April 2012 inclusive, by 19 November 2012;

1.1.3    for reporting period 20 April 2012 to 19 July 2012 inclusive, by 3 December 2012; and

1.2    providing to ACMA all quarterly reports required under clause 5.2.2 of the Undertaking as follows:

1.2.1    for reporting period 20 July 2012 to 19 October 2012 inclusive, by 17 December 2012;

1.2.2    for reporting period 20 October 2012 to 19 January 2013, by 4 February 2013;

1.2.3    for reporting period 20 January 2013 to 19 April 2013, by 3 May 2013;

1.2.4    for reporting period 20 April 2013 to 19 July 2013, by 2 August 2013;

1.2.5    for reporting period 20 July 2013 to 19 October 2013, by 4 November 2013.

2.    JER pay a contribution to ACMA's costs of the proceeding as agreed or taxed.

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

REASONS FOR JUDGMENT

1    The applicant (‘ACMA’) is a federal regulator of communications and media. The respondent (‘JER’) is a nightclub promoter that has traded, at least since March 2010, under the name ‘Urban Agent’. This case concerns the SMS messages that JER sent to prospective partygoers in an attempt to coax them into attending its parties (or those of its clients).

The facts

2    Pursuant to a statement of agreed facts filed on 16 October 2012, the parties have agreed the salient details of what happened. This statement is expressed to have been agreed to ‘for the purposes of s 191 of the Evidence Act 1995 (Cth)’, meaning that the facts therein are not disputed between the parties for the purposes of this proceeding.

ACMA’s investigation

3    Part of JER’s promotion strategy includes the sending of SMS messages to various members of the public. It appears that ACMA became suspicious in late 2010 or early 2011 that some of the recipients of these SMS messages did not consent to being sent JER’s nightclub promotion material. ACMA also suspected that JER had neglected properly to identify itself in the SMS messages and had failed to provide what was described as a ‘functional unsubscribe facility’.

4    Following ACMA’s investigation, which included the provision by JER of responses to ACMA’s enquiries, ACMA formed a ‘preliminary view’ that ss 17 and 18 of the Spam Act 2003 (Cth) (‘the Act’) had been breached. It is necessary to make some brief comments about these provisions.

Sections 17 and 18 of the Spam Act

5    These sections are rather dense (perhaps overly so) but, for present purposes, they provide that:

(a)    a person must not send ‘commercial electronic messages’ that have an ‘Australian link’ unless the sender identifies themselves and provides their contact details: s 17(1);

(b)    a person must not send non-designated ‘commercial electronic messages’ that have an ‘Australian link’ unless those messages provide the recipient with an opportunity to request that they no longer be sent such messages: s 18(1); and

(c)    a person must not engage in certain conduct ancillary to (a) and (b) above: ss 17(5) and 18(6).

6    There are also a number of defences set out in ss 17 and 18 which are not presently relevant.

7    The definition of ‘commercial electronic message’, which is contained in s 6, is somewhat lengthy. It is almost two pages in length and, if one includes the definition of ‘electronic message’ (s 5), which it incorporates, the length extends to almost three pages. It is no small irony that the self-described ‘basic definition’ of ‘commercial electronic message’ takes up 45 lines of text.

8    For present purposes, however, it suffices to say that an SMS message sent by a nightclub promoter to a prospective patron that seeks to promote a particular nightclub or event is a ‘commercial electronic message’: s 6(1)(e).

9    The topic of ‘designated commercial messages’ is the subject of Schedule 1 to the Act. That category of communication includes (a) messages that consist only of factual information and some specified additional information and (b) certain types of messages sent by certain types of institutions (such as government bodies, charities and educational institutions). Although the phrase ‘factual information’ is not defined, Greenwood J held in Australian Communications and Media Authority v Atkinson [2009] FCA 1565 at [13] that promotional messages are not factual information and it seems to me, with respect, that this conclusion must be correct. It should come as no surprise that nightclub promotion companies do not fall into any of the types of institution specified in Schedule 1.

10    Likewise, the definition of ‘Australian link’, which appears in s 7, does not presently need to be explored in any detail beyond the observation that a ‘commercial electronic message’ sent by a company that conducts its business in Blakehurst, New South Wales (as JER does) has such a link: s 7(b)(ii).

The undertaking

11    Because the proscriptions in ss 17(1) and 18(1) (as well as their ancillary counterparts) are civil penalty provisions, ACMA was entitled to bring proceedings in this Court to seek the imposition of such a penalty: see ss 17(7), 18(8) and 26(1).

12    In order to ameliorate that possibility, JER offered on 11 October 2011 to provide an undertaking pursuant to s 38 to address ACMA’s concerns. This undertaking was accepted by ACMA on 19 October 2011.

13    The form of the undertaking was annexed to the statement of agreed facts. The undertaking is four pages long and consists of seven clauses. In it, JER undertook, inter alia, to:

(a)    develop a training programme to ensure that JER complied with the requirements of the Act;

(b)    submit the programme to ACMA for approval;

(c)    implement the programme in the training of relevant staff;

(d)    review the content of all outgoing ‘commercial electronic messages’, prior to their being sent, to ensure that they comply with ss 17 and 18; and

(e)    report to ACMA quarterly in writing in relation to JER’s compliance with (d). This reporting was to include, at a minimum, the date and text of each SMS campaign. Reports were to be provided within 10 working days of the end of each quarterly period.

14     In addition, JER undertook to pay ACMA $4,500 in relation to the previous contraventions of the Act.

15    The undertaking was expressed to have effect for 24 months from the date of its acceptance by ACMA (that is, until 19 October 2013).

Enforcement of the undertaking

16    The dispute in these proceedings relates to that part of the undertaking described at (e) above, which were cll 5.2.2 and 5.3.3. They should, for reasons that will be come apparent, be set out in full:

5.2.2    For the duration of the Undertaking [JER] will provide to the ACMA quarterly reports in writing in relation to the Company’s compliance with clause 5.2.1 for the preceding three months. This report must include, as a minimum, the date and text of each commercial electronic message campaign.

5.2.3    [JER] will provide each report referred to in clause 5.2.2 to the ACMA no later than 10 Business Days after the end of the applicable period.

17    Clause 5.2.1 contained the obligation I have summarised at (d) above.

18    The first, second and third quarterly reports were due on 2 February, 3 May and 2 August 2012 respectively, but it would seem that JER did not provide any of these reports to ACMA. On my calculations, the fourth quarterly period has ended, but the report is not yet due (though it will be shortly).

19    On 27 September 2012, ACMA commenced proceedings in this Court to enforce the undertaking, as it was entitled to do under s 39 of the Act. It requested that JER be ordered to provide the outstanding reports. It also sought an order for costs.

20    JER has now agreed, broadly speaking, that the Court should give ACMA the relief that it seeks. Specifically, it has agreed to consent orders that:

(a)    require JER to provide the three outstanding reports on specified dates;

(b)    require JER to provide the five future reports (i.e. those that have not yet fallen due) on specified dates; and

(c)    require JER to pay a contribution to ACMA’s costs.

21    This is not, however, a complete capitulation by JER. The orders submitted to the Court by consent set out a timetable for the provision of the outstanding reports that is considerably more lenient than the 14 days sought by ACMA in its originating application. JER has also been given some leniency in providing the report for the fourth quarterly period; that is, it has been given longer than the 10 days specified in the undertaking. It seems that this leniency has been granted to give JER time to ‘catch up’.

Consideration

22    Although a statement of agreed facts pursuant to s 191 of the Evidence Act and a form of orders that have been agreed between the parties have been provided to the Court, I must still be satisfied that the relevant contravention has been established: s 39(2) (‘If the Federal Court is satisfied that the person has breached a term of the undertaking…’).

23    Has the relevant contravention been established? It should be noted that s 39(2) does not require me to be to be satisfied that JER has contravened the requirements of ss 17 and 18 of the Act. I need only be satisfied that JER has breached a term of the undertaking. Given that the time for providing the first three reports has come and gone and given that the parties have agreed that no reports have been provided, I am so satisfied.

24    Since I am satisfied that the undertaking has not been complied with, ACMA is entitled by s 39(2)(a) to orders directing JER to comply with the term of the undertaking that has been breached.

25    Many of the time requirements of the original undertaking have now passed and, as a matter of strictness, may no longer be enforced. As noted above at [21], JER has been granted some leniency beyond the 10 days contemplated by cl 5.2.3 (set out above at [16]). Some of the orders sought are not, therefore, orders directing JER to comply with cl 5.2.3 and are not, consequently, orders which may be made under s 39(2)(a) (which is how the parties have described them).

26    Another issue with the proposed orders is that they purport to direct compliance with cl 5.2.3 of the undertaking. As can be seen above at [16], cl 5.2.3 is not a provision with which it is possible to comply. Instead, it merely imposes a time limit on the substantive obligation in cl 5.2.2. I do not see how, when many of the time limits have been changed, this proposed order can be viewed as an enforcement of the original time limit. In reality, the proposed orders seek to enforce cl 5.2.2 in relation to the past and to modify the timetable for its operation into the future.

27    The proposed orders are, therefore, orders neither pursuant to s 39(2)(a) nor, as the parties have formulated them, orders enforcing cl 5.2.3.

28    It is possible, however, to achieve the end sought by the parties. Section 39(2)(d) confers a power to make ‘any other order that the Court considers appropriate’. In that context, it is relevant to observe that: (a) JER has, to this point, failed completely to comply with the reporting requirements of the undertaking; and, (b) has consented to being ordered to comply with the future reporting requirements. An order under s 39(2)(d) to enforce cl 5.2.2 within some time limit is, therefore, warranted.

29    I am, therefore, satisfied that the orders are appropriate, so long as the reference to ‘section 39(2)(a)’ is amended to read ‘section 39(2)(d)’ and ‘clause 5.2.3’ is amended to read ‘clause 5.2.2’.

Associate:

Dated:    30 October 2012