FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Halkalia Pty Ltd (No 3) [2017] FCA 522

ORDERS

THE COURT ORDERS THAT:

1.    The fourth respondent be imprisoned for the following periods:

(a)    in respect of Charge 1 – three months;

(b)    in respect of Charge 2 – five months;

(c)    in respect of Charge 3 – three months;

(d)    in respect of Charge 4 – three months;

(e)    in respect of Charge 5 – three months;

(f)    in respect of Charge 6 – five months;

(g)    in respect of Charge 7 – three months; and

(h)    in respect of Charge 8 – three months;

with each sentence to be served concurrently with each other sentence.

2.    The fourth respondent be imprisoned for a period of five months with:

(a)    the first two weeks being served in any event; and

(b)    the balance of the sentence being suspended from execution on condition that the fourth respondent refrain from contravening any of the orders made herein and binding on him on 28 May 2012 for a period of two years from the date on which the suspension takes effect.

3.    A warrant issue for the committal of the fourth respondent to prison for a period of two weeks.

4.    The fourth respondent pay the applicant’s costs of the application on an indemnity basis.

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

REASONS FOR JUDGMENT

TRACEY J:

1    By interlocutory application in this proceeding, the applicant, the Australian Competition and Consumer Commission (“the ACCC”) sought declarations that the fourth respondent, Mr Laurence Glynne Hann, is guilty of contempts of this Court for breaching orders made by it in 2012. The ACCC also seeks orders that Mr Hann be imprisoned and fined for these contempts.

2    Mr Hann has admitted the contempts and, for the reasons which follow, will be sentenced to a period of imprisonment.

THE FACTUAL BACKGROUND

3    In 2011, the ACCC commenced this proceeding seeking declarations and other orders against three proprietary limited companies and two natural persons, one of whom was Mr Hann. The proceeding arose out of the making of representations by the respondents — mostly in newspaper advertisements, but also orally — concerning the availability of business opportunities.

4    As I explained in Australian Competition and Consumer Commission v Halkalia Pty Ltd (No 2) [2012] ATPR ¶42-399 at 45,519; [2012] FCA 535 at [24] (“Halkalia (No 2)”), a typical advertisement contained the following text:

Sales distribution business part time, light parcels genuine unique opportunity for purchase amount of $10,000. Potential earnings for 3–4 days per week approximately $800 to $1,000 for the Mature Aged Group, 1800 267 583.

5    It was alleged that the respondents’ conduct conveyed misrepresentations relating to the prospective earnings of the business advertised for sale. It was alleged that the conduct was misleading or deceptive within the meaning of the Trade Practices Act 1974 (Cth) (“the Act”), in broad terms because there were no reasonable grounds for the representations and because the representations were contrary to fact.

6    The allegation against Mr Hann was that he had engaged in both primary contraventions of the Act and that he was also involved in contraventions by each of the three corporate entities.

7    In order to explain Mr Hann’s involvement, it is convenient to start with a declaration made by this Court on 28 May 2012 in Halkalia (No 2) in respect of the first respondent (“Declaration 1”). It is typical of the declarations made in respect of the other corporate respondents:

1.    The first respondent, between 10 February 2010 and 10 April 2010, in trade or commerce:

(a)    in contravention of s 52 of the Trade Practices Act 1974 (Cth) (“the TPA”), engaged in conduct that was misleading or deceptive or likely to mislead and deceive; and

(b)    in contravention of s 59(2) of the TPA, made false or misleading representations concerning the profitability of a business activity in which it invited other persons to participate, requiring the investment of money by them and the performance by them of work associated with the investment,

by causing the publication of the 84 advertisements described in items 1 to 84 of Schedule A to these orders, by which the first respondent represented by each advertisement that:

(i)    the advertised business, once acquired by a purchaser, had the potential to generate weekly earnings for the purchaser in the stated amount (projected earnings);

(ii)    there was a realistic prospect that the advertised business, once acquired by a purchaser, would generate the projected earnings; and

(iii)    there was a reasonable basis for potential purchasers to expect that the advertised business would generate the projected earnings,

whereas in fact:

(A)    the first respondent did not have reasonable grounds for making any of the representations;

(B)    the advertised business, once acquired by a purchaser, did not have the potential to generate the projected earnings;

(C)    there was no realistic prospect that the advertised business, once acquired by a purchaser, would generate the projected earnings; and

(D)    there was no reasonable basis for potential purchasers to expect that the advertised business would generate the projected earnings.

8    Declaration 5 was that Mr Hann was directly or indirectly knowingly concerned in and a party to, or aided and abetted, counselled or procured, contraventions by each of the corporate respondents, including the contravention set out in Declaration 1. Declaration 7 related to the primary liability of Mr Hann, and was as follows:

7.    The fourth respondent, in trade or commerce in contravention of s 59(2) of the TPA, made false or misleading representations concerning the profitability of a business activity in which he invited other persons to participate, requiring the investment of money by them and the performance by them of work associated with the investment:

(a)    by causing certain letters to be sent by mail between about June 2007 and April 2010 to persons who had expressed an interest in acquiring a distribution business, by which the fourth respondent represented that:

(i)    the advertised business, once acquired by a purchaser (and established, fully established or after a start up period as the case may be), had the potential to generate weekly earnings for the purchaser in the stated amount (projected earnings);

(ii)    there was a realistic prospect that the advertised business, once acquired by a purchaser (and established, fully established or after a start up period as the case may be), would generate the projected earnings;

(iii)    there was a reasonable basis for potential purchasers to expect that the advertised business once acquired by a purchaser (and established, fully established or after a start up period as the case may be), would generate the projected earnings;

whereas in fact:

(A)    the fourth respondent did not have reasonable grounds for making any of the representations;

(B)    the advertised business, once acquired by a purchaser, did not have the potential to generate the projected earnings;

(C)    there was no realistic prospect that the advertised business, once acquired by a purchaser, would generate the projected earnings; and

(D)    there was no reasonable basis for potential purchasers to expect that the advertised business would generate the projected earnings;

and

(b)    by making the statements in certain telephone conversations between April 2007 and December 2009 concerning an advertised distribution business, by which the fourth respondent represented that:

(i)    the advertised business, once acquired by a purchaser, had the potential to generate weekly earnings for the purchaser in the stated amount (projected earnings);

(ii)    there was a realistic prospect that the advertised business, once acquired by a purchaser, would generate the projected earnings;

(iii)    there was a reasonable basis for potential purchasers to expect that the advertised business, once acquired by a purchaser, would generate the projected earnings;

whereas in fact:

[as per 7(a)(A)–(D) above.]

9    In addition to the declarations, I made orders, including the following which related to Mr Hann:

9.    Pursuant to s 232 of Schedule 2 of the Competition and Consumer Act 2010 (Cth) containing the Australian Consumer Law (“the ACL”), each of the first, second, third and fourth respondents be restrained, for a period of 15 years from the date of the court’s order, whether by themselves, their agents, servants or howsoever otherwise, in trade or commerce, from carrying on a business or supplying goods or services:

(a)    by which or in connection with which persons are invited to invest money or perform work; or

(b)    by which or in connection with which any claim is made that moneys or profits earned by the sale of goods or services are donated to charity; or

(c)    where the goods or services concerned are or include household cleaning products.

10.    Pursuant to s 232 of the ACL, each of the first, second, third and fourth respondents be restrained, for a period of 15 years from the date of the court’s order, whether by themselves, their agents, servants or howsoever otherwise, in trade or commerce, from:

(a)    inviting any person to invest money or perform work in a business activity; or

(b)    making any representation concerning the profitability of a business activity in respect of which the respondent invites any person to invest money or perform work.

11.    Pursuant to s 232 of the ACL, the fourth respondent be restrained, for a period of 15 years from the date of the court’s order, whether by himself, his agents, servants or howsoever otherwise, in trade or commerce, from being in any way directly or indirectly, knowingly concerned in or a party to, or aiding and abetting, counselling or procuring conduct of any of the first, second or third respondents or any other corporation, in carrying on a business or supplying goods or services:

(a)    by which or in connection with which persons are invited to invest money or perform work; or

(b)    by which or in connection with which any claim is made that moneys or profits earned by the sale of goods or services are donated to charity; or

(c)    where the goods or services concerned are or include household cleaning products.

12.    Pursuant to s 232 of the ACL, the fourth respondent be restrained, for a period of 15 years from the date of the court’s order, whether by himself, his agents, servants or howsoever otherwise, in trade or commerce, from being in any way directly or indirectly, knowingly concerned in or a party to, or aiding and abetting, counselling or procuring conduct of any of the first, second or third respondents or any other corporation, in:

(a)    inviting any person to invest money or perform work in a business activity; or

(b)    making any representation concerning the profitability of a business activity in respect of which the respondent invites any person to invest money or perform work.

10    The orders of particular relevance to this application are 9(a)–(c), 10(a), 11(a)–(c), and 12(a).

THE PROGRESS OF THIS APPLICATION

11    It is necessary to say something about the way in which this application has come to be determined. It was filed on 14 December 2015, together with a statement of charge, which detailed eight charges of contempt. The charges alleged breaches by Mr Hann of the orders identified at paragraph [10] above. Eleven affidavits and an outline of evidence were lodged at the same time and in support of the application. The application was listed for hearing on 11 March 2016. Mr Hann was served with a notice of listing and with all of the ACCC’s filed material.

12    On 17 February 2016, Mr Hann was served with a letter from the ACCC’s solicitors reminding him of the 11 March 2016 hearing and asking which of the ACCC’s witnesses he required to be made available for cross-examination. There is evidence that, on 19 February 2016, Mr Hann telephoned the ACCC’s solicitors and informed them that he did not require any witnesses to be made available for cross-examination.

13    On 7 March 2016, the ACCC filed an outline of submissions and a chronology of alleged facts.

14    Subsequently, Mr Hann requested a six-month adjournment of the hearing on medical grounds. Orders were made by consent on 10 March 2016 adjourning the hearing to 30 June 2016 and allowing Mr Hann to file and serve affidavit material and written submissions by 27 May 2016. No such material was filed.

15    On 3 May 2016, the ACCC filed an amended outline of submissions, further particulars of its statement of charge, and four further affidavits. There was evidence that Mr Hann was served with that material, under cover of a letter confirming that the hearing was fixed for 30 June 2016 and asking Mr Hann to inform the ACCC which of its witnesses he required to be made available for cross examination.

16    On 24 June 2016, the ACCC filed a solicitor’s affidavit setting out steps that had been taken with a view to contacting Mr Hann, and annexing correspondence from his former solicitors to the effect that they no longer acted for him.

17    On 30 June 2016, when the matter was called on, Mr Hann did not appear. Senior Counsel for the ACCC relied almost entirely upon its written submissions, and in so far as elaboration was required, Senior Counsel stayed within the confines of those written submissions. That was quite proper: the purpose of proceeding in that way was to ensure that nothing was submitted in Mr Hann’s absence that had not already been put in material that had been served on him.

18    It transpired that, when he was called, Mr Hann had been in the precincts of the Court, but outside the wrong courtroom. That was discovered very shortly after the Court adjourned, and so the hearing was resumed. Mr Hann submitted, in effect, that he was not in a position to make substantive oral submissions that day. I ordered that, by 29 July 2016, Mr Hann file and serve any written submissions in answer to the charges filed by the ACCC. The ACCC was given until 12 August 2016 to reply. While I made an order that the further hearing be adjourned to a date to be fixed, I indicated that the necessity for such a hearing depended on whether written submissions were filed and, if so, the nature of those submissions.

19    Mr Hann filed no written submissions. The ACCC was content for the application to be determined on the papers. Shortly afterwards, the Court was advised that new solicitors had been appointed to act for Mr Hann. The Court subsequently made orders by consent setting out a timetable for Mr Hann to file and serve written submissions in answer to the contempt charges, and for the ACCC to file and serve any reply submissions.

20    On 29 September 2016, the Court was advised that Mr Hann admitted his liability for each of the charges of contempt contained in paragraphs 1 to 8 of the statement of charge filed on 14 December 2015 and, on 5 October 2016, the parties proposed consent orders giving effect to those admissions. On 7 October 2016, the Court made declarations that Mr Hann was guilty of each charge.

APPLICABLE LAW AND OVERVIEW OF CHARGES

21    It will be necessary, in due course, to go to each of the eight charges in detail. In substance, they alleged that Mr Hann, at various times between 2013 and 2015, carried on a business or supplied goods or services, invited other persons to perform proscribed work, and was involved in such conduct by corporations, thereby contravening parts of the orders made on 28 May 2012.

22    The Court’s power to punish contempt of court is conferred by s 31 of the Federal Court of Australia Act 1976 (Cth), which provides as follows:

31    Contempt of Court

(1)    Subject to any other Act, the Court has the same power to punish contempts of its power and authority as is possessed by the High Court in respect of contempts of the High Court.

(2)    The jurisdiction of the Court to punish a contempt of the Court committed in the face or hearing of the Court may be exercised by the Court as constituted at the time of the contempt.

23    In order to find that Mr Hann is guilty of contempt, the Court must be satisfied beyond reasonable doubt of the following five matters (Advan Investments Pty Ltd v Dean Gleeson Motor Sales Pty Ltd [2003] VSC 201 at [31] (Gillard J), cited with approval in Deckers Outdoor Corporation Pty Ltd v Farley (No 6) [2010] FCA 391 at [130] (Tracey J); Hurd v Zomojo Pty Ltd [2015] FCAFC 148 at [28] (Besanko and Gilmour JJ) and [164] (Beach J agreeing); Humane Society International Inc v Kyodo Senpaku Kaisha Ltd (2015) 238 FCR 209 at 212; [2015] FCA 1275 at [9] (Jagot J); AGL Energy Limited v Hardy [2017] FCA 420 at [42] (O’Callaghan J)):

(1)    an order was made by the Court;

(2)    the terms of the order are clear, unambiguous and capable of compliance;

(3)    the order was served on the alleged contemnor or excused in the circumstances, or service dispensed with pursuant to the rules of Court;

(4)    the alleged contemnor has knowledge of the terms of the order; and

(5)    the alleged contemnor has breached the terms of the order.

24    Having taken legal advice and pleaded guilty to each of the charges, Mr Hann must be taken to have accepted that each of these elements has been established in respect of each charge: cf R v O’Neill [1979] 2 NSWLR 582 at 588 (Moffit ACJ) and 596 (Begg and Cantor JJ), cited with approval in Hoffman v Chief of Army (2004) 137 FCR 520 at 535–536, 572; [2004] FCAFC 148 at [45] (Black CJ, Wilcox and Gyles JJ) and [226] (Lindgren J agreeing).

25    In each case Mr Hann stands charged with engaging in “wilful and contumacious” contempt of court. In Humane Society at [11], Jagot J adopted the following summary of the classes of contempt given by Biscoe J in Burwood Council v Ruan [2008] NSWLEC 167 at [7]:

There are three classes of contempt: technical, wilful and contumacious. Technical contempt is where disobedience of a court order (or undertaking to the court) is casual, accidental or unintentional. Wilful contempt is where the disobedience is more than that, but is not contumacious. Contumacious contempt is where there is a specific intention to disobey a court order or undertaking to the court, which evidences a conscious defiance of the court’s authority. Although a contempt may be established, in the circumstances of the case the court may decide not to make any order. The element of intention is relevant to whether any order should be made and, if so, to punishment.

The offending which Mr Hann acknowledges is, therefore, of a most serious character.

EVIDENCE RELIED UPON BY THE ACCC

26    The ACCC relied upon the following affidavits:

(1)    the affidavit of Mr David Arthur Ross Shiels, process server, sworn 4 December 2015;

(2)    the affidavit of Ms Fiona Gai Grant, Assistant Director of the ACCC, sworn 4 December 2015;

(3)    the affidavit of Mr Trevor Richard Blackall affirmed 10 December 2015;

(4)    the affidavit of Mr Alan Jeffery Pasfield sworn 10 December 2015;

(5)    the affidavit of Ms Cecily Jane Tilley affirmed 10 December 2015;

(6)    the affidavit of Ms Kylie Danielle Little affirmed 10 December 2015;

(7)    the affidavit of Mr Adrian Gordon Ferguson sworn 11 December 2015;

(8)    the affidavit of Mr Glenn Rex Wright affirmed 11 December 2015;

(9)    the affidavit of Mr Kelvin Lyall Foote affirmed 10 December 2015;

(10)    the affidavit of Ms Barbara Louise Meriton affirmed 11 December 2015;

(11)    the affidavit of Ms Zoe Panagiotopoulos sworn 11 December 2015; and

(12)    the second affidavit of Mr Shiels sworn 21 December 2015.

27    The second affidavit of Mr Shiels dated 21 December 2015 was an affidavit of service in respect of (inter alia) the other 11 affidavits.

28    The ACCC also relied upon a third affidavit of Mr Shiels sworn 18 February 2016. This was an affidavit of service in respect of a letter to Mr Hann from the solicitors for the ACCC reminding him of the hearing on 11 March 2016 and asking him to inform them which of the ACCC’s witnesses he required to be made available for cross-examination.

29    The ACCC relied further upon the following affidavits:

(1)    the affidavit of Mr Pierre Guy Millard affirmed 19 April 2016;

(2)    the affidavit of Mr John Matthew Garrihy affirmed 21 April 2016;

(3)    the affidavit of Mr Paul Herbert Chatfield affirmed 22 April 2016;

(4)    the affidavit of Mr Kevin James John Love, a solicitor employed by the ACCC’s solicitors, affirmed 3 May 2016; and

(5)    the fourth affidavit of Mr Shiels sworn 6 May 2016.

30    The fourth affidavit of Mr Shiels sworn 6 May 2016 was an affidavit of service in respect of (inter alia) the other four affidavits.

31    The ACCC also relied upon two further affidavits of Mr Love affirmed 1 March 2016 and 24 June 2016.

32    Following Mr Hann’s guilty plea, I made orders by consent on 7 October 2016 for the filing of further affidavit material in relation to the issue of punishment for the contempts. The ACCC subsequently filed, and relied upon, the following affidavits:

(1)    the affidavit of Ms Patricia Lesley Fancke affirmed 20 October 2016;

(2)    the second affidavit of Ms Barbara Meriton affirmed 26 October 2016;

(3)    the second affidavit of Mr Pierre Guy Millard affirmed 27 October 2016; and

(4)    the third affidavit of Ms Barbara Meriton affirmed 15 March 2017.

CHRONOLOGY OF EVENTS

33    The circumstances in which the contempts arose are explained in these affidavits. The following account is drawn from them.

Conduct prior to judgment in Halkalia (No 2)

34    In late 2009, in connection with what I described in Halkalia (No 2) as the “Heartlink business” (see at [39]–[40]), a price list was distributed to potential purchasers of a sales distribution business. It was entitled “Heartlink (Community Benefit Products) Wholesale Price List November 2009”. This price list included a “Heartlink Bulk Products” list for “5lt Container Single Item Buy”. On that list were products including dish, floor, and wool wash liquids, spray and wipe cleaner, air freshener, chlorinated cleaner, grill and oven cleaner, shampoo, truck and car wash, engine degreaser, and industrial hand cleaner. A similar price list, dated July 2010, was also distributed. The products on the July 2010 “Bulk Products” list included all of those I have mentioned in relation to the November 2009 list (except wool wash and shampoo), in 5-litre and 15-litre varieties.

Tasman Chemicals

35    Tasman Chemicals Pty Ltd (“Tasman Chemicals”) supplied Mr Hann with the products that he, in turn, contrary to the Court’s orders, supplied to retailers or consumers. Tasman Chemicals’ products included kitchen and housekeeping cleaning products, hand soaps, and sanitisers.

36    Ms Barbara Meriton, credit manager of Tasman Chemicals, first had contact with Mr Hann in December 2013, not long after she commenced in that role. She deposed that Mr Hann had, at that time, an existing account with Tasman Chemicals. The account number was 308054. Annexed to Ms Meriton’s affidavit were invoices issued by Tasman Chemicals in respect of that account. Review of those invoices reveals that the invoices dated between 8 August 2012 and 13 November 2013 inclusive were issued to “Heartlink Enterprises P/L”. Invoices between 19 December 2013 and 31 March 2015 inclusive were issued to “Mature Age Group Charity Association”. This was a reference to Mature Age Group Charity Association Inc, ABN 75 657 912 488 (“Mature Age Group”). Invoices from 8 April 2015 to 30 November 2015 inclusive were issued to “Green Triangle Community Group”, which is the trading name of Green Triangle Community Contributors Association Inc, ABN 59 296 404 562 (“Green Triangle”).

37    Tasman Chemicals also issued monthly statements of account. Those dated between August 2012 and November 2015, were addressed, at various times, to Mature Age Group and — especially toward the end of the period — to Green Triangle.

38    The circumstances in which the change from the Mature Age Group to Green Triangle occurred were explained by Ms Meriton. On or about 6 December 2013, Ms Meriton telephoned Mr Hann in respect of unpaid accounts. He did not answer but returned the call on 10 December 2013. A conversation followed to this effect:

[Ms Meriton]: “I’m just ringing about an outstanding account you have with Tasman Chemicals. At the moment you’ve got about $2,800 owing for more than 60 days.”

[Mr Hann gave an explanation for the lateness in payment, which is not here relevant]

[Mr Hann]: “I’m currently getting new people on board to sell the products I’m getting from you. So that should help. Part of the problem is that my customers haven’t paid me yet either. That makes it hard for me to pay what I owe you.”

[Ms Meriton]: “I understand.”

[Mr Hann]: “I should also let you know that the business has changed its name from Heartlink to the Mature Age Group Charity Association. Don’t address the invoices to Heartlink Enterprises anymore thanks. Yeah, I’m working with a charity now.”

[Ms Meriton]: “Okay Mr Hann, I’ll amend our customer database.”

39    Ms Zoe Panagiotopoulos was an administration officer with Tasman Chemicals, and had responsibility for processing sales of products to customers. Since at least mid-2012, Ms Panagiotopoulos had received purchase orders from “Mature Age Group Charity Association Inc”. These purchase orders had been addressed to Tasman Chemicals and marked for her attention. In the course of dealing with purchase orders, Ms Panagiotopoulos regularly spoke with Mr Hann by telephone. From mid-2012 up to about September 2014, Ms Panagiotopoulos spoke with Mr Hann some two or three times a week. After September 2014, she spoke with him a few times per month. During those telephone conversations, Mr Hann told Ms Panagiotopoulos on a number of occasions that he owned and ran a charity and that he had a number of volunteers who worked for him. Ms Panagiotopoulos’s last conversation with Mr Hann, prior to the making of her affidavit on 11 December 2015, occurred on 23 November 2015.

Events prior to November 2014

40    Mr Adrian Ferguson was the owner and director of Ferguson’s Diesel Services Pty Ltd (“Ferguson’s Diesel”), an automotive business that specialised in truck and bus repairs in Mount Gambier. From about March 2013, Mr Ferguson had dealings with a person who he subsequently identified as Mr Hann. In or around that month, Mr Hann visited Ferguson’s. Mr Hann said to Mr Ferguson words to the following effect:

I’m Laurie. I’m part of a group of retired old blokes who have got together and started selling cleaning stuff to make some money. We sell to other companies in the area like G&R and Moreland. Some of the money will go to charity.

41    Mr Hann then handed to Mr Ferguson a list of cleaning products with prices. He asked Mr Ferguson to nominate which school to sponsor, and Mr Ferguson nominated Moorak Primary School. Mr Ferguson ordered some hand wash and truck wash. Mr Hann called Mr Ferguson regularly thereafter to “ask how the hand cleaner is going” and to ask whether Mr Ferguson wanted to order any more. Mr Ferguson deposed that Ferguson’s Diesel used hand cleaner at a rate of around one 15-litre bottle per month.

42    The invoices issued to Ferguson’s Diesel bore Green Triangle’s trading name and its ABN, as well as an “1800” telephone number. All of these invoices, except one, bore an email address beginning with “gbplocal”.

43    Similar events occurred with Mr John Garrihy. Mr Garrihy was a manager in forestry operations at Porthaul, which trades in the bulk transport and civil contracting industries. In around June 2013, Mr Garrihy had dealings with a man he later identified as Mr Hann.

44    Mr Garrihy deposed that, in or about June 2013, Mr Hann telephoned him and they had a conversation to this effect:

[Mr Hann]: “Hi, I’m Laurie. I’ve been dealing with Porthaul for a while now. I distribute cleaning products to businesses in Mount Gambier and Portland. It’s a non-profit and the work is done by volunteers. We donate the proceeds from the sales to charities.”

[Mr Garrihy]: “Hi, I’m John.”

[Mr Hann then mentioned a number of charities based in Mount Gambier with which he said that he dealt, the names of which Mr Garrihy could not recall.]

[Mr Hann]: “I’m calling to check in and see if you need any truck wash.”

45    Since that time, Mr Hann had contacted Mr Garrihy every ten weeks or so to see if Porthaul required additional cleaning products. Mr Garrihy dealt only with Mr Hann, who either called on him at work, or telephoned him. Over the period from September 2013 to August 2015, Mr Garrihy ordered from Mr Hann seven units of 200-litre truck wash and one unit of 15-litre truck wash. Mr Hann issued invoices on each occasion, and delivered the truck wash in person. All of the invoices given by Mr Hann to Mr Garrihy for Porthaul bore Green Triangle’s trading name and ABN, as well as its “1800” telephone number. Many of the invoices bore the “gbplocal” email address.

46    From around February 2014, Mr Pierre Millard had dealings with a person whom he knew as “Laurie” and whom he later identified as Mr Hann.

47    Mr Millard was a workplace administration co-ordinator at LV Dohnt & Co Pty Limited (“LV Dohnt”), a logging company. In February 2014, Mr Hann approached Mr Millard while the latter was at work and a conversation to the following effect ensued:

[Mr Hann]: “Hi, I’m Laurie. I’m from Green Triangle Community Group. We sell cleaning products to companies in the local area.”

[Mr Millard]: “Hi. I’m Peter.”

[Mr Hann]: “The money goes back to the local community.”

[Mr Millard]: “Sure, I like doing the right thing by supporting the local community. I’m mostly interested in hand wash. I’ll give that a try.”

48    On 11 February 2014, Mr Hann delivered one 15-litre unit of hand cleaner and one 15-litre unit of engine degreaser, and issued an invoice. Thereafter, Mr Hann would telephone Mr Millard every three months or so to see if he needed more product. On one occasion Mr Millard called Mr Hann, after LV Dohnt had run out of hand wash. Mr Millard deposed to having ordered the following products from Mr Hann:

(1)    on 25 August 2014, two units of 15-litre hand cleaner;

(2)    on 2 February 2015, three units of 15-litre hand cleaner and four units of 5-litre hand cleaner;

(3)    on 21 April 2015, four units of 5-litre hand cleaner;

(4)    on 8 July 2015, four units of 5-litre hand cleaner and one unit of 15-litre hand cleaner; and

(5)    on 20 November 2015, two units of 15-litre hand cleaner and four units of 5-litre hand cleaner.

49    On every occasion that Mr Hann delivered product to LV Dohnt, he issued an invoice. The invoices bore Green Triangle’s trading name and ABN, as well as its “1800” telephone number. Many of the invoices also bore the “gbplocal” email address.

50    Mr Glenn Wright was service manager at the Noel Barr Toyota dealership, in Mount Gambier. In or around May 2014, a person whom Mr Wright described as “an older gentleman with grey hair … [who] looked like he was in his late 60s or early 70s” came to the dealership, after making an appointment to see Mr Wright. That person said words to this effect:

I’m from the Green Triangle Community Group and I’m here to sell you some cleaning products. If you nominate someone to sponsor I will give them an amount of money from Noel Barr Toyota.

51    Mr Wright could not recall whom he nominated, but thought that it might have been Port MacDonnell Football Club. The man said, “[t]he club won’t hear about it or get money every time you buy a product, but they will get a donation from time to time”. Mr Wright was shown some hand cleaner, which he purchased, and some tyre shine, which the man also tried to sell to him. The man subsequently “cold call[ed]” Mr Wright from time to time to ask for a new order, and Mr Wright bought products irregularly — perhaps once every four months. Mr Wright always bought hand cleaner, which cost around $70 per 15-litre unit, and which was delivered personally by that man.

52    Mr Wright paid for the product with cheques made out to “Green Triangle Community Group”. He was invoiced when products were delivered. There were six invoices in evidence before me, dated 7 May 2014, 23 September 2014, 28 November 2014, 17 February 2015, 20 May 2015, and 11 September 2015. All of those invoices, except for those dated 17 February 2015 and 20 May 2015, bore Green Triangle’s trading name, ABN, “1800” number and the “gbplocal” email address. These two exceptions were issued by “Gambier Budget Products”, which (as I will come to explain) was the name of the business conducted by Mr Trevor Blackall.

53    I accept that Mr Hann was the person who approached Mr Wright at Noel Barr Toyota and that it was Mr Hann who caused the deliveries which were subsequently invoiced by Green Triangle.

54    I am less confident that Mr Hann was responsible for the deliveries to which the February and May 2015 invoices relate. I think that it is reasonable to hypothesise that it was Mr Blackall, and not Mr Hann, who supplied Mr Wright on those occasions. This hypothesis is borne out by Mr Blackall’s affidavit evidence, which was that he delivered cleaning products to Noel Barr Toyota on those dates, on specific instructions from Mr Hann.

55    Mr Kelvin Foote was manager of Dean & McCabe Windmills Pty Ltd (“Dean & McCabe”), a manufacturer of “Varcoe” windmills located in Mount Gambier. Mr Foote had some dealings, in or around mid-2004, with a person who he later identified as Mr Hann.

56    Mr Foote deposed that words to the following effect were said to him by Mr Hann at Dean & McCabe’s premises in around mid-2014:

[Mr Hann]: “I am selling cleaning products. … A group of old blokes get together to bottle the products. Some of the money will go to charities.”

57    Mr Hann did not say which charities would benefit. Mr Foote did not buy any products. Mr Hann did, however, give him a sample. Mr Foote said to Mr Hann that, once the sample had been used up, Dean & McCabe would order some more. Every now and again, Mr Hann returned to Dean & McCabe and asked Mr Foote about “how [they] were going with the samples”.

58    Sometime in 2015, Mr Trevor Blackall, with whom I shall presently deal, attended Dean & McCabe’s premises. Mr Blackall was known to Mr Foote through a familial association. Mr Foote bought from Mr Blackall a 20-litre bottle of hand cleaner.

Mr Blackall’s involvement and events thereafter

59    Mr Trevor Blackall was a member of the Limestone Coast branch of the Ulysses Club. The Ulysses Club is a social club for motorcyclists over the age of 40 years. In or about November 2014, Mr Blackall visited a Mr J Kroon at the latter’s house. Mr Kroon was the President of the Limestone Coast branch. While Mr Blackall was at Mr Kroon’s house, Mr Kroon received a telephone call, which he put on speakerphone. As a result, Mr Blackall could hear the conversation. The caller was Mr Hann.

60    Mr Hann said words to the following effect to Mr Kroon:

Call me Laurie. I’m looking for someone to help do deliveries for me and I’d like to get the Ulysses Club involved. It’s a delivery job and you’ll need about $500 worth of stock to start with. You’ll also need about 3 metres by 3 metres of storage space.

61    Mr Kroon said that he was too busy to take on the work. Mr Blackall said words to the effect that he was interested in taking on the work and that Mr Hann should “come over so that we can talk more about what’s involved”. Mr Blackall provided his address and telephone number to Mr Hann, and Mr Hann agreed to visit.

62    Later, in or around November 2014, Mr Hann visited Mr Blackall in his home in Mount Gambier. A conversation to the following effect ensued:

[Mr Hann]: “I am part of the Green Triangle Community Group which is a charity. The Group uses the money made from selling things to give vouchers to other charities so they can raise money. I want you to keep some stock at your house, which you’ll deliver to clients. The stock is cleaning products.”

[Mr Blackall]: “I want to be involved.”

[Mr Hann]: “You will be responsible for deliveries to Mount Gambier and Millicent in South Australia and will do the invoicing. I’ll handle the charity side of the business. The clients choose which charities the vouchers go to. You should get your own business name and ABN for the invoices and think about setting up a post box. You don’t need to pay me anything to set up the business.”

63    Mr Blackall then registered the business name “Gambier Budget Products”, ABN 42 880 075 986. He set up a post office box in his name in Mount Gambier East, and he set up a separate bank account for the business “Gambier Budget Products”.

64    In January 2015, Mr Hann commenced providing Mr Blackall with cleaning products, which Mr Blackall was to deliver. Mr Hann mentioned that his supplier was a company called “Tasman Chemicals”. Mr Blackall deposed that, between 21 January 2015 and 14 July 2015, Mr Hann delivered cleaning supplies to Mr Blackall approximately once every three weeks, and that, on each occasion, Mr Blackall was given an invoice, which was issued using the name and ABN of the “Green Triangle Community Group” business. Mr Hann delivered both 5-litre and 15-litre containers to Mr Blackall. Mr Hann also gave to Mr Blackall stickers reading “Gambier Budget Products” for Mr Blackall to affix to the containers. Mr Blackall had not arranged for those stickers to be printed. Mr Blackall had, on average, six of each kind of product in stock at any time. Mr Hann also gave to Mr Blackall a “Commercial Wholeale Price List” for the products that Gambier Budget Products was to on-sell to customers. This price list had the name “Gambier Budget Products” printed on it, the “1800” number used by Green Triangle, and the “gbplocal” email address. Mr Blackall did not arrange for this price list to be printed or have any say in setting the prices.

65    In January 2015, Mr Blackall started delivering products to customers. Almost every Sunday, Mr Hann telephoned Mr Blackall and told him the names of businesses to which Mr Blackall was to deliver stock in the coming week, and the products to deliver. On delivery, Mr Blackall issued an invoice under the Gambier Budget Products ABN. The four invoice books covering the period 21 January 2015 to 31 July 2015 were retained by Mr Blackall. Mr Blackall also retained a separate invoice book for what he referred to as “reseller customers”, which I will deal with shortly.

66    Mr Blackall deposed that his four primary invoice books showed that he had made 109 separate deliveries to 60 different persons or entities over the period covered by the invoice books. Mr Blackall said that deliveries to 43 of those persons or entities — on 84 separate occasions — had been made on Mr Hann’s express instructions. The balance of the deliveries had been to persons or entities that Mr Blackall knew whom he supplied without direct instructions from Mr Hann.

67    Mr Blackall also deposed that Mr Hann had told him that he (Mr Hann) sometimes delivered 220-litre barrels to larger clients himself, and that, when he did so in the Mount Gambier area, he would pay $20 to Mr Blackall. Mr Blackall said that he noticed payments received in his Gambier Budget Products bank account from “Green Triangle”, which he thought related to the barrels, although he never received any paperwork from Mr Hann in relation to the payments.

68    In late January 2015, Mr Blackall commenced “sales training” with Mr Hann. He deposed that, over the first six months of 2015, he and Mr Hann visited businesses in Millicent and Mount Gambier for “sales trips” on four or five separate occasions. On later occasions, they travelled to areas beyond Mr Blackall’s allocated responsibility, such as Penola and Naracoorte. Mr Blackall said that appointments were never made. Upon arrival, Mr Hann would say words to this effect: “I am Laurie Hann and this is Trevor from Gambier Budget Products. I’m here to drop off some samples to see if you’re interested in buying anything.” Mr Hann would then name some of the businesses that used his products and say words to the effect that the prospective customer could “nominate a local charity and every so often we will donate a cheque to [the] nominated charity”. Mr Hann would then show the prospective customer a folder that he carried containing what he described as photos of the other businesses that used his products and charitable donations that he made.

69    Mr Blackall also deposed that he delivered goods to what he described as “reseller customers”, that is, retailers who would then on-sell the product to the ultimate consumer. Mr Blackall made eight such deliveries to six such reseller customers, over the period 14 April 2015 to 6 July 2015. In or around April 2015, Mr Hann gave to Mr Blackall a price list titled “Reseller Cost Pricelist” containing the price at which reseller customers would purchase product from Mr Blackall. Mr Blackall did not arrange for the price list to be printed, and did not have involvement in setting the prices. The “Reseller Cost Pricelist” bore the name “Gambier Budget Products”, but the “1800” telephone number and the “gbplocal” email address at the bottom of the price list were the same number and address as appeared on Green Triangle’s product lists and invoices.

70    One of the reseller customers recorded in Mr Blackall’s reseller invoice book was “GT Industrial Sales”, a business with which Mr Alan Pasfield was associated, and to which Mr Blackall delivered product on 14 April 2015.

GT Industrial Sales

71    Mr Pasfield was part-owner of GTIS Nominees Pty Ltd, which traded as GT Industrial Sales (“GT Industrial”). GT Industrial is located in Mount Gambier and is a supplier of industrial hardware and engineering products.

72    In or about April 2015, two men attended GT Industrial’s premises. The men had not made an appointment, and they were not known to Mr Pasfield. One of the men had grey hair and a stout build, and was (in Mr Pasfield’s estimate) around 65 years of age. That man said to Mr Pasfield that he was from Portland and, pointing to the other man, said words to this effect: “This is my Mount Gambier distributor. We distribute cleaning products to a lot of other companies in the area.” Mr Pasfield said in reply something like, “I’m not really interested because we already sell cleaning products”. The man responded with words to the effect of, “The cleaning products we sell are bottled on a volunteer basis and some of the profits go to local charities”.

73    The man handed Mr Pasfield a dark green price list and a yellow price list. He showed Mr Pasfield a folder containing details of companies in the local area that Mr Pasfield understood bought products from the man. Mr Pasfield recalled seeing company logos and names of local companies, including some logging companies and engineering companies. The man then said words to the following effect:

How about you take some products on a consignment basis and run it as a sideline business. I will invoice you when the products are delivered, but you only need to pay once the goods are sold.

Mr Pasfield agreed.

74    In or around April 2015, GT Industrial received a delivery from Gambier Budget Products. The delivery was of five bottles of hand cleaner and one bottle of industrial degreaser. The invoice from Gambier Budget Products was annexed to Mr Pasfield’s affidavit and bore the same “1800” number that appeared on the Green Triangle invoices. Some months later, in July 2015, Mr Pasfield instructed an employee to register the products in GT Industrial’s computer systems and place them on the shelves for sale.

75    It was not disputed that the grey-haired stoutly-built man with whom Mr Pasfield had dealings in April 2015 was Mr Hann.

Southeast Motor Company

76    Mr Paul Chatfield was parts manager at Southeast Motor Company (“Southeast Motors”), located in Naracoorte, South Australia. From about February 2015, Mr Chatfield had dealings with a person who he later identified as Mr Hann.

77    In or around February 2015, Mr Chatfield had a conversation with Mr James Bradley, Southeast Motors’ principal. Mr Bradley told Mr Chatfield that a man named Laurie had visited Southeast Motors and that an agreement had been made that Southeast Motors would buy cleaning products from him. Between 16 February 2015 and 21 November 2015, Southeast Motors ordered two units of 15-litre truck wash, two units of 200-litre truck wash, and two units of 5-litre liquid soap. On most of the four occasions on which goods were delivered, they were delivered by Mr Hann who handed Mr Chatfield an invoice. The four invoices each bore Green Triangle’s trading name, ABN and “1800” telephone number. All but one of the four invoices bore the “gbplocal” email address.

Mr Hann’s visit to Mac’s Hotel and its aftermath

78    Ms Kylie Little, duty manager at Mac’s Hotel in Mount Gambier, has twice crossed paths with Mr Hann. I made brief reference, at [53] of Halkalia (No 2), to Ms Little having invested her redundancy payout with Mr Hann and having lost it. That was their first interaction. The second meeting occurred at around 4:00 pm on 17 July 2015, at Mac’s Hotel. At that time, another staff member asked Ms Little where the manager, Mr Craig Redford, was, as there were two men in the bistro bar asking for him. Ms Little attended upon the two men. She immediately recognised one of them as Mr Hann. A conversation to this effect followed:

[Ms Little]: “What can I help you with?”

[Mr Hann]: “I was just wondering if Craig is available.”

[Ms Little]: “No problem, I’ll just go and see if he is.”

79    Ms Little went to speak with Mr Redford. She had a conversation with him along the following lines:

[Ms Little]: “There is a guy here to see you. I have dealt with him before. He is a conman. Please, please don’t do any business with him.”

[Mr Redford]: “It’s okay Kylie. Just give me a minute.”

[Ms Little]: “Just believe me Craig. He will probably give you sob stories, but he is a conman. Please don’t buy anything from him.”

[Mr Redford]: “Just go back to the gaming room and I’ll deal with it.”

80    Mr Redford went to speak with Mr Hann. Ms Little went outside for a break. While on her break, Mr Hann and the other man, with whom Mr Hann had attended Mac’s Hotel, walked past. Words to this effect were said:

[Ms Little]: “Hello. Do you remember me[?]”

[Mr Hann]: “I kind of thought I recognised you.”

[Ms Little]: “You ripped me off $15,000. Not only that, you ripped my family off $15,000. And you didn’t have the balls to show up in court to defend yourself.”

[Mr Hann]: “I had a heart problem. It wasn’t my fault.”

[Ms Little]: “Don’t you ever come near me again. Don’t you ever come to the hotel again.”

81    During the conversation, the man who had come to Mac’s Hotel with Mr Hann walked away from Ms Little and Mr Hann. After these exchanges, Ms Little walked back toward the hotel. Mr Hann followed. Ms Little turned to him and said, “I told you, don’t you ever come back into this hotel again”. Mr Hann then walked away.

82    This account is supported by Mr Blackall’s evidence. He deposed that, in or around July 2015, he and Mr Hann attended Mac’s Hotel. Mr Hann spoke with a man named “Craig” in Mr Blackall’s presence. Mr Hann left a copy of a price list at the hotel and also gave a copy to Mr Blackall. A copy of the price list was in evidence. It was much the same as other price lists, in that it bore the name “Gambier Budget Products”, and had the same “1800” telephone number and “gbplocal” email address as appeared on Green Triangle’s product lists and invoices. It also bore the phrase, “A unique concept idea from some members of the Ulysses Motorcycle Club”. Mr Blackall had not arranged for the price list to be printed.

83    Mr Blackall deposed that, when he and Mr Hann were leaving Mac’s Hotel, a woman who said her name was Kylie “confronted” Mr Hann. Mr Blackall walked away because he did not want to be involved.

84    After her conversation with Mr Hann outside Mac’s Hotel, Ms Little returned to the gaming area of the hotel to speak with Mr Redford. She conducted a Google search on a computer in front of Mr Redford and showed him the first search result, which was a media release by the applicant in this matter — the ACCC — about a past case involving Mr Hann. While Mr Redford read the media release Ms Little looked at a price list that Mr Redford had left on his desk. The price list was annexed to Ms Little’s affidavit. It was identical to the “Commercial Wholesale Price List” annexed to Mr Blackall’s affidavit.

85    Mr Blackall gave evidence that, after the confrontation between Ms Little and Mr Hann, he and Mr Hann got into a car and drove away. When in the car, a conversation to the following effect occurred:

[Mr Hann]: “I need to explain to you about what just happened.”

[Mr Blackall]: “That has nothing to do with me.”

[Mr Hann]: “I need to tell you about my history. I was sentenced to jail for 3 years but I got out in 3 months. I expected that something like this would come up at some point and I would have to tell you about it.”

86    Mr Hann then showed to Mr Blackall papers that he had in his car “which related to his past”. The two men spoke for nearly an hour in the car, and, in the end, Mr Blackall was convinced that Mr Hann had done nothing wrong.

87    A few days later, Mr Blackall’s wife told him that someone named Kylie Little had made a comment on a Facebook page dedicated to Limestone Coast Community News to the effect that Mr Hann was “illegally selling cleaning products” and that he was a “con man”. Mr Blackall and his wife then conducted an internet search for Mr Hann, and found information that Mr Hann had been involved in a business called Heartlink and that the ACCC had “taken him to court for deception”.

88    On 19 July 2015, Mr Blackall set about severing ties with Mr Hann. He telephoned Mr Hann and the two men had a conversation to this effect:

[Mr Hann]: “You shouldn’t worry about anything. People will forget all about it in a few weeks.”

[Mr Blackall]: “I don’t want anything more to do with you. I still have about $3,000 worth of stock at my house and I want you to get rid of it.”

[Mr Hann]: “I don’t have enough money to buy back all of the stock, but I’ll give you some more orders to fill instead.”

89    At the end of July 2015, Mr Hann visited Mr Blackall’s house and removed approximately $1,200 worth of stock, of which Mr Blackall had taken delivery but for which he had not yet paid. Before giving the stock back to Mr Hann, Mr Blackall used a black marker to cross through the name “Gambier Business Products” on the product labels. Mr Blackall delivered no further product after 28 July 2015. On 31 July 2015 he deposited $713 into Mr Hann’s bank account in respect of outstanding invoices. There ended Mr Blackall’s involvement with Mr Hann.

Events subsequent to Mr Blackall’s involvement

90    On 31 July 2015, Mr Pasfield (the part-owner of GT Industrial, whom I mentioned above) received a telephone call from Mr Hann. A conversation to this effect followed:

[Mr Hann]: “It’s Laurie here. My man in Mount Gambier and I have had a falling out. He wasn’t doing the right thing by me.”

[Mr Pasfield]: “This sort of thing happens in business sometimes.”

[Mr Hann]: “I want to drop in to change the labels on the cleaning products over to the new business name. While I’m there, I’d like to drop off some truck wash as well.”

[Mr Pasfield]: “No worries. See you then.”

91    Ms Cecily Tilley, the administration supervisor and assistant manager of GT Industrial, was at work in or around August 2015, when she was told by another employee that a man wanted to see her at the counter. When she attended the counter, the man told her his name, though she could not remember it at the time that she made her affidavit. The man said words to this effect:

I’m from Green Triangle Community Group. Gambier Budget Products aren’t handling the cleaning products any more. I want to get the paper work back off you. Also, I’ve stuck some new stickers on the products.

92    Ms Tilley gave to the man either the original invoices received by GT Industrial in relation to the cleaning products, or copies thereof. Copies of these invoices were annexed to her affidavit. The man then handed her an invoice numbered 456, which again was annexed. The invoice was dated 5 August 2015. It bore Green Triangle’s trading name, ABN, the “gbplocal” email address, and “1800” telephone number. Ms Tilley then had a conversation with the man to this effect:

[Ms Tilley]: “These products are under consignment, so there is no rush on us paying it.”

[The man]: “I am also here to drop off the truck wash and to give you one free bottle of hand gel so that you can reduce the price on your hand gel products.

[Ms Tilley]: “You have charged me for two engine degreasers when you only gave me one.”

[The man]: “I’ll be back next week to drop off the extra engine degreaser then.”

93    The man then showed Ms Tilley a blue folder containing details and pictures of a number of truck companies in the area that he said used his products and also picture of the vouchers that he said his business had provided to local charities. He said words to this effect:

We give back to charities by buying gift vouchers from businesses that carry our goods.

94    Ms Tilley later identified the man with whom she spoke in August 2015 as Mr Hann.

95    When Mr Pasfield returned to work at GT Industrial after a period of leave, he noticed that the cleaning products had new labels, written on which were the following: “High Quality Products”; “packaged and distributed by pensioners”; and “G.C.G. P.O. Box 3181, Mt Gambier S.A. 5290”. Mr Pasfield annexed to his affidavit two invoices from Green Triangle Community Group: invoice 455, dated 31 July 2015; and invoice 456, dated 5 August 2015. Both invoices bore Green Triangle’s trading name, ABN, the “gbplocal” email address, and the “1800” telephone number.

96    On 20 September 2015, at Mac’s Hotel, Ms Little saw a bottle of air freshener in the cleaner’s laundry. The bottle had printed on it the name “Green Triangle Budget Products”, the word “sample”, and Green Triangle’s telephone number. It had the words “air freshener” written on it with black marker.

97    Later that day, Ms Little telephoned the “1800” number on the Gambier Budget Products price list, which was the same as the number printed on the bottle of Green Triangle’s air freshener. The call went to an answering machine. She could not recall the content of the recorded message, but she recognised Mr Hann’s voice. She left a message to the effect that she wanted to order some washing powder and fabric softener and left her number. On the following morning, Ms Little received a telephone from call from a different telephone number. She had the following conversation with a person whom she identified as Mr Hann:

[Mr Hann]: “Hello. You wanted to order some products from me – some washing powder and fabric softener.”

[Ms Little]: “Oh yeah. I was just wondering if you could deliver those by tomorrow. A friend put me onto you.”

[Mr Hann]: “What’s your name?”

[Ms Little]: “Carly French.”

[Mr Hann]: “I probably can’t get it to you by tomorrow. Where are you located[?]”

[Ms Little]: “Mount Gambier.”

[Mr Hann]: “We probably won’t have anyone over there to deliver until the end of the week. Is that going to be a problem[?]”

[Ms Little]: “Is there any chance I can pick something up from you[?]”

[Mr Hann]: “Well, we are in Portland. Over the border.”

[Ms Little]: “That’s okay. I’m actually going to Portland tomorrow.”

[Mr Hann]: “Oh no. It’s out in the sticks. Out in a shed, on a farm.”

[Ms Little]: “Oh okay. I guess you will call me back.”

[Mr Hann]: “Okay. I’ll call you back later in the week.”

98    In the months that followed, Tasman Chemicals continued to deliver product on the Green Triangle Community Group account, and Green Triangle issued invoices to Ferguson’s Diesel, Southeast Motors, and LV Dohnt. As mentioned above, on or around 23 November 2015, Mr Hann spoke with Ms Panagiotopoulos at Tasman Chemicals and shortly after — on 30 November 2015 — placed what was the final order recorded in the materials put before me.

99    On 14 December 2015, the ACCC filed its statement of charge alleging the various contempts.

100    On 23 December 2015, Mr Hann delivered two 200-litre drums of truck wash to Porthaul, and handed Mr Garrihy an invoice which (as with the others) bore Green Triangle’s trading name and ABN. A few days before the delivery, Mr Garrihy had placed an order.

101    In February 2016, Mr Hann telephoned Mr Garrihy and asked whether he required any product. Mr Garrihy said words to the effect of, “No, thanks”.

102    In mid-February 2016, Mr Hann telephoned Mr Millard at LV Dohnt and said words to the effect that he was “coming up [Mr Millard’s] way in a few days and [was] calling to see if [Mr Millard] want[ed] more stock”. Mr Millard said that he wanted more hand cleaner. Mr Hann delivered four units of 5-litre hand cleaner on 18 February 2016. Again an invoice was issued to LV Dohnt bearing Green Triangle’s trading name, ABN and “1800” number (though the “gpblocal@gmail.com” email address was omitted). Mr Millard deposed that he has not had any contact with Mr Hann since the telephone call.

103    At around 9:00 am on 21 March 2016, Mr Chatfield at Southeast Motors received a telephone call from Mr Hann and had a conversation with Mr Hann to the following effect:

[Mr Hann]: “It’s Laurie from Green Triangle Group. Do you need any hand cleaner or truck wash? I don’t think you have tried our hand cleaner before. Our hand cleaner is full of moisturisers and it prevents skin from cracking.”

[Mr Chatfield]: “Some of our blokes have sensitive hands so the real test it whether it works or not.”

[Mr Hann]: “I can drop you off a 500 gram sample if you would like and you can trial it.”

[Mr Chatfield]: “That’s fine.”

[Mr Hann]: “The good thing about it is that some of the proceeds go to community groups like football clubs and cricket clubs – all your local community groups.”

[Mr Chatfield]: “Sure.”

104    Mr Hann said that he would deliver the sample but, as at the date of Mr Chatfield’s affidavit, namely 1 April 2016, that had not occurred.

105    On 19 April 2016, Mr Hann telephoned Mr Garrihy of Porthaul and a conversation followed to this effect:

[Mr Hann]: “How are you going for truck wash?”

[Mr Garrihy]: “Actually, we are a bit short.”

[Mr Hann]: “I’m coming your way next week if you need a couple of drums.”

[Mr Garrihy]: “That’d be great.”

Mr Garrihy deposed that he had not had any contact with Mr Hann since that day.

106    This summary of relevant events is possible because of the detailed investigative work undertaken by the ACCC. It was these events which led to the laying of the contempt charges against Mr Hann on 14 December 2014, as well as the filing of the further particulars on 3 May 2016.

107    Subsequent to Mr Hann’s guilty plea, and the declarations made with respect to that plea on 7 October 2016, the ACCC filed, and relied upon, further affidavit material from Mr Millard of LV Dohnt, Ms Meriton of Tasman Chemicals, and Ms Fancke. These affidavits disclose the following evidence.

108    Mr Millard deposed that, he received telephone calls from Mr Hann on 17 June 2016 and 6 October 2016. In the first call, Mr Hann called to “see if [Mr Millard] needed anything”, by which Mr Millard understood to mean cleaning products, as they were the only products that he purchased from Mr Hann. Mr Millard said to Mr Hann words to the effect that, “no we don’t need anything”. In the second call, on 6 October 2016, Mr Hann said to Mr Millard words to the effect of, “I’m just calling to see how you are off [sic] for hand cleaner”, to which Mr Millard indicated that he had no need for hand cleaner at the moment.

109    Ms Meriton deposed that, from 11 December 2015 to 21 February 2017, Mr Hann continued to purchase cleaning products from Tasman Chemicals using the Green Triangle account. Copies of the invoices issued to the Green Triangle account were annexed to Ms Meriton’s affidavits. On four separate occasions during this period, Mr Hann purchased two units of 200-litre Tru Grit, a hand cleaner, most recently on 21 February 2017. Other purchases during this period included “heavy duty degreaser”, truck wash, dishwashing liquid and laundry liquid.

110    Ms Fancke’s evidence, which I will deal with in due course, concerned the registration of Green Triangle in South Australia in January 2012.

THE CHARGES

111    The statement of charges filed by the ACCC on 14 December 2015 set out eight charges against Mr Hann, supported by particulars. In May 2016, the ACCC filed further and better particulars of the statement of charge, setting out further particulars in relation to charges 2, 3, 6 and 7.

112    By his plea, Mr Hann admitted to the charges contained in paragraphs 1 to 8 of the statement of charge filed 14 December 2015.

Charge 1

113    The first charge, together with the relevant particulars, was that:

1.    In the period from in or about November 2014 until in or about July 2015, you, in trade or commerce, carried on a business or supplied goods or services by which or in connection with which persons were invited to perform work, and thereby deliberately, voluntarily and knowingly breached paragraph 9(a) of the order made by the Honourable Justice Tracey on 28 May 2012 in this proceeding … , in wilful and contumacious disregard for that Order, and are guilty of contempt of Court.

Particulars

1.1    Particulars regarding the Order are contained in Schedule 1.

1.2    On 2 June 2012, a process server, Mr David Shiels, served on you a sealed copy of the Order, bearing an endorsement pursuant to rule 46.01 of the Federal Court Rules 2011 (Cth), by leaving it with you at … [your address].

1.3    You have had knowledge of the Order since at least 2 June 2012.

1.4.    In the period from in or about 2013 until at least in or about August 2015, you carried on a business which involved, amongst other things, the sale and supply of cleaning products.

1.5.    On a date in or about November 2014, you invited members of the Ulysses Club to perform work in connection with carrying on a business or supplying goods. In particular, during a telephone conversation with Mr Jerry Kroon (President, Limestone Coast Branch, Ulysses Club) and Mr Trevor Blackall, you said words to the following effect:

“Call me Laurie. I’m looking for someone to help do deliveries for me and I'd like to get the Ulysses Club involved. It's a delivery job and you'll need about $500 worth of stock to start with.”

1.6.    On a subsequent date in or about November 2014, you invited Mr Trevor Blackall to perform work in connection with carrying on a business or supplying goods. In particular, you said to Mr Blackall, in person at Mr Blackall's residence in Mount Gambier, South Australia, words to the following effect:

(a)    “I am part of the Green Triangle Community Group which is a charity. The Group uses the money made from selling things to give vouchers to other charities so they can raise money. I want you to keep some stock at your house, which you'll deliver to clients. The stock is cleaning products.”; and

(b)    “You will be responsible for deliveries to Mount Gambier and Millicent in South Australia and will do the invoicing. I'll handle the charity side of the business. The clients choose which charities the vouchers go to.”

1.7.    During the period from in or about January 2015 until in or about July 2015, you supplied cleaning products to Mr Blackall, for him to then deliver or supply to other persons including:

(a)    on your specific instructions, to the 43 entities specified in Schedule 2, on the dates specified therein;

(b)    to the 7 further entities specified in Schedule 3 following a sales visit by you and Mr Blackall, on the dates specified therein; and

(c)    to the 17 further entities specified in Schedule 4, on the dates specified therein.

1.8.    In or about early April 2015, in the course of attending at the business address of GTIS Nominees Pty Ltd trading as GT Industrial Sales (GT Industrial) located at 32 Margaret Street, Mt Gambier, South Australia, you said to Alan Pasfield (Part Owner, GT Industrial) words to the following effect:

“How about you take some products on a consignment basis and run it as a sideline business. I will invoice you when the products are delivered, but you only need to pay once the goods are sold.”

(Emphasis in original.)

Charge 2

114    Charge 2 and its particulars were as follows:

2.    In the period from in or about March 2013 until at least 5 August 2015, you, in trade or commerce, carried on a business or supplied goods or services by which or in connection with which claims were made that moneys or profits earned by the sale of goods or services were donated to charity, and thereby deliberately, voluntarily and knowingly breached paragraph 9(b) of the Order, in wilful and contumacious disregard for that Order, and are guilty of contempt of Court.

Particulars

2.1.    The particulars at paragraph 1 above are repeated.

2.2.    In the period from in or about January 2015 until in or about July 2015, in the course of selling cleaning products in the presence of Mr Blackall, including your sales visits to the persons set out in Schedule 3, as part of your sales pitch to potential customers you:

(a)    said to potential customers words to the following effect:

(i)    “I’m here to drop off some samples to see if you're interested in buying anything.”; and

(ii)    “You can nominate a local charity and every so often we will donate a cheque to your nominated charity.”; and

(b)    showed potential customers a folder containing copies of documents purporting to be:

(i)    photographs of other customers who use products supplied by you; and

(ii)    receipts relating to donations you had previously made to charities.

2.3.    In or about March 2013, in the course of attending at the business address of Ferguson’s Diesel Services at 365 Commercial Street West, Mount Gambier, South Australia to sell and supply cleaning products, you:

(a)    said to Adrian Ferguson (Owner and Director) words to the following effect: “I’m part of a group of retired old blokes who have got together and started selling cleaning stuff to make some money.” and “Some of the money will go to charity.”; and

(b)    asked Mr Ferguson to nominate a school to sponsor.

2.4.    In or about mid-2014, in the course of attending at the business address of Mt Gambier Automatics at 3/7 Blackwood Street, Mount Gambier, South Australia to sell and supply cleaning products, you said to Haydn Rowley (Owner and Operator) words to the following effect:

(a)    “I am selling cleaning stuff to raise money.”; and

(b)    “The money raised will be distributed to charity as we see fit.”

2.5.    In or about May 2014, in the course of attending at the business address of Noel Barr Toyota at 35 Bay Road, Mount Gambier, South Australia to sell and supply cleaning products, you said to Glenn Wright (Service Manager) words to the following effect:

(a)    “If you nominate someone to sponsor I will give them an amount of money from Noel Barr Toyota.”; and

(b)    “The club won't hear about it or get money every time you buy a product, but they will get a donation from time to time.”

2.6.    In or about mid-2014, in the course of attending at the business address of … [Dean] & McCabe Windmills at 2 Ramsay Avenue, Mount Gambier, South Australia to sell and supply cleaning products, you said to Kelvin Foote (Manager) words to the following effect:

(a)    “I am selling cleaning products.”; and

(b)    “Some of the money will go to charities.”

2.7.    In or about early April 2015, in the course of attending at the business address of GT Industrial located at 32 Margaret Street, Mt Gambier, South Australia as noted in particular 1.8 above to sell and supply cleaning products, you said to Alan Pasfield (Part Owner, GT Industrial) words to the following effect:

“The cleaning products we sell are bottled on a volunteer basis and some of the profits go to local charities.”

2.8.    On 5 August 2015, in the course of attending at the business address of GT Industrial at 32 Margaret Street, Mt Gambier, South Australia to sell and supply cleaning products, you said to Cecily Tilley (Assistant Manager, GT Industrial) words to the following effect:

“We give back to charities by buying gift vouchers from businesses that carry our goods.”

(Emphasis in original.)

115    Particulars 2.9 to 2.11 were added by way of the further particulars of the statement of charge, filed on 3 May 2016, and provide as follows:

2.9.    In or around June 2013, in the course of attending at the business of Porthaul at 2 Kalina Court, Portland, Victoria to sell and supply cleaning products you:

(a)    said to John Garrihy (Manager in Forestry Operations) words to the following effect: “I distribute cleaning products to business in Mount Gambier and Portland. It's a non-profit and the work is done by volunteers. We donate the proceeds from the sales to charities.”; and

(b)    mentioned to Mr Garrihy the names of some charities in Mount Gambier which you claimed to deal with.

2.10.    In around February 2014, in the course of attending at the business address of LV Dohnt & Co Pty Limited and offering to supply cleaning. products to that business, you said to Pierre Millard (also known as Peter Millard, Workplace Administration Coordinator) words to the effect: “Hi, I'm Laurie. I'm from Green Triangle Community Group. We sell cleaning products to companies in the local area. … The money goes back into the local community.”

2.11.    On or about 21 March 2016, in the course of telephoning Paul Chatfield, Parts Manager at Southeast Motor Company at 83 Ormerod Street, Naracoorte, South Australia, and offering to supply hand cleaner and/or truck wash to that business, you said words to the effect: “The good thing about it is that some of the proceeds go to community groups like football clubs and cricket clubs—all your local community groups.”

(Emphasis in original.)

Charge 3

116    Charge 3 and its particulars were as follows:

3.    In the period from in or about March 2013 until at least 3 November 2015, you, in trade or commerce, carried on a business or supplied goods or services where the goods or services concerned were or included household cleaning products, and thereby deliberately, voluntarily and knowingly breached paragraph 9(c) of the Order, in wilful and contumacious disregard for that Order, and are guilty of contempt of Court.

Particulars

3.1.    The particulars at paragraph 1 and particular 2.2 above are repeated.

3.2.    You supplied cleaning products:

(a)    to Mr Blackall on multiple occasions in the period between about 21 January 2015 and 17 July 2015,

(b)    as described in particular 1.7 above, to other persons, by way of delivery or supply by Mr Blackall of products which you provided to him, including:

(i)    on your specific instructions, to the 43 entities specified in Schedule 2, on the dates specified therein;

(ii)    to the 7 further entities specified in Schedule 3 following a sales visit by you and Mr Blackall, on the dates specified therein; and

(iii)    to the 17 further entities specified in Schedule 4, on the dates specified therein; and

(c)    to other persons directly, including the entities specified in Schedule 5, on the dates specified therein.

3.3.    The cleaning products referred to in particular 3.2 above were, or included, household cleaning products.

117    Particulars 3.4 and 3.5 were added by way of the further particulars of the statement of charge, filed on 3 May 2016, and provide as follows:

3.4    You supplied household cleaning products to L.V. Dohnt & Co Pty Limited on or about 11 February 2014, 25 August 2014, 2 February 2015, 21 April 2015, 8 July 2015, 20 November 2015 and 18 February 2016.

3.5    You supplied household cleaning products to Southeast Motor Company on or about 21 April 2015 and 20 November 2015.

Charge 4

118    Charge 4 and its particulars were as follows:

4.    In the period from in or about November 2014 until in or about July 2015, you, in trade or commerce, invited one or more persons to perform work in a business activity, and thereby deliberately, voluntarily and knowingly breached paragraph 10(a) of the Order, in wilful and contumacious disregard for that Order, and are guilty of contempt of Court.

Particulars

4.1.    The particulars to paragraph 1 above are repeated.

Charge 5

119    Charge 5 and its particulars were in these terms:

5.    In the period from in or about November 2014 until in or about July 2015, you, in trade or commerce, were directly or indirectly, knowingly concerned in or a party to, or aided and abetted, counselled or procured, conduct of a corporation in carrying on a business or supplying goods or services by which or in connection with which persons were invited to perform work, and thereby deliberately, voluntarily and knowingly breached paragraph 11(a) of the Order, in wilful and contumacious disregard for that Order, and are guilty of contempt of Court.

Particulars

5.1.    The particulars to paragraph 1 above are repeated.

5.2.    The corporation whose conduct you were directly or indirectly, knowingly concerned in or a party to, or aided and abetted, counselled or procured, was Green Triangle Community Contributors Association Inc … [(“Green Triangle”)].

Charge 6

120    This charge and its associated particulars were as follows:

6.    In the period from in or about March 2013 until at least 5 August 2015, you, in trade or commerce, were directly or indirectly, knowingly concerned in or a party to, or aided and abetted, counselled or procured, conduct of a corporation in carrying on a business or supplying goods or services by which or in connection with which claims were made that moneys or profits earned by the sale of goods or services were donated to charity, and thereby deliberately, voluntarily and knowingly breached paragraph 11(b) of the Order, in wilful and contumacious disregard for that Order, and are guilty of contempt of Court.

Particulars

6.1.    The particulars at paragraph 2 above are repeated.

6.2.    The corporation whose conduct you were directly or indirectly, knowingly concerned in or a party to, or aided and abetted, counselled or procured, was … [Green Triangle].

121    Particular 6.3 was added by way of the further particulars of the statement of charge, filed on 3 May 2016, and provided as follows:

6.3.    The particulars at paragraph 2 above are repeated.

Charge 7

122    This charge and its associated particulars were as follows:

7.    In the period from in or about March 2013 until at least 3 November 2015, you, in trade or commerce, were directly or indirectly, knowingly concerned in or a party to, or aided and abetted, counselled or procured, conduct of a corporation in carrying on a business or supplying goods or services where the goods or services concerned were or included household cleaning products, and thereby wilfully and contumaciously breached paragraph 11(c) of the Order, in wilful and contumacious disregard for that Order, and are guilty of contempt of Court.

Particulars

7.1.    The particulars to paragraph 3 above are repeated.

7.2.    The corporations whose conduct you were directly or indirectly, knowingly concerned in or a party to, or aided and abetted, counselled or procured, was… [Green Triangle].

123    Particular 7.3 was added by way of the further particulars of the statement of charge, filed on 3 May 2016, and provides as follows:

7.3.    The particulars at paragraph 3 above are repeated.

Charge 8

124    Charge 8 and its particulars were as follows:

8.    In the period from in or about November 2014 until in or about July 2015, you, in trade or commerce, were directly or indirectly, knowingly concerned in or a party to, or aided and abetted, counselled or procured conduct of a corporation in inviting one or more persons to perform work in a business activity, and thereby deliberately, voluntarily and knowingly breached paragraph 12(a) of the Order, in wilful and contumacious disregard for that Order, and are guilty of contempt of Court.

Particulars

8.1.    The particulars to paragraph 1 above are repeated.

8.2.    The corporations whose conduct you were directly or indirectly, knowingly concerned in or a party to, or aided and abetted, counselled or procured, was … [Green Triangle].

125    As already noted, Mr Hann pleaded guilty to each of these charges in September 2016. The guilty pleas were made in respect of the statement of charge filed on 14 December 2015. It is not material that Mr Hann’s plea did not refer to the further particulars that were filed on 3 March 2016. Nor is it material that the ACCC, in its Amended Outline of Submissions filed on 3 May 2016, indicated that it did not press the particulars in paragraphs 2.4 and 2.5 of the statement of charges.

126    The parties proposed consent orders giving effect to Mr Hann’s pleas, and I subsequently made the following declarations on 7 October 2016:

THE COURT NOTES THAT THE FOURTH RESPONDENT, MR LAURENCE GLYNNE HANN, ADMITS LIABLIITY FOR EACH OF THE CHARGES FILED ON 14 DECEMBER 20[15].

THE COURT DECLARES THAT:

1.    The Fourth Respondent is guilty of contempt of this Court for breaching paragraph 9(a) of the order made by the Honourable Justice Tracey on 28 May 2012 (the Order) by engaging in the conduct referred to in paragraph 1 of the Statement of Charge filed on 14 December 2015 (the Statement of Charge).

2.    The Fourth Respondent is guilty of contempt of this Court for breach paragraph 9(b) of the Order by engaging in conduct referred to in paragraph 2 of the Statement of Charge.

3.    The Fourth Respondent is guilty of contempt of this Court for breaching paragraph 9(c) of the Order by engaging in the conduct referred to in paragraph 3 of the Statement of Charge.

4.    The Fourth Respondent is guilty of contempt of this Court for breaching paragraph 10(a) of the Order by engaging in the conduct referred to in paragraph 4 of the Statement of Charge.

5.    The Fourth Respondent is guilty of contempt of this Court for breaching paragraph 11(a) of the Order by engaging in the conduct referred to in paragraph 5 of the Statement of Charge.

6.    The Fourth Respondent is guilty of contempt of this Court for breaching paragraph 11(b) of the Order by engaging in the conduct referred to in paragraph 6 of the Statement of Charge.

7.    The Fourth Respondent is guilty of contempt of this Court for breaching paragraph 11(c) of the Order by engaging in the conduct referred to in paragraph 7 of the Statement of Charge.

8.    The Fourth Respondent is guilty of contempt of this Court for breaching paragraph 12(a) of the Order by engaging in the conduct referred to in paragraph 8 of the Statement of Charge.

127    During the hearing on 30 June 2016, I asked counsel for the ACCC whether the goods referred to in the charges were “household cleaning products”. I did so because orders 9 and 11 made on 28 May 2012 restrained Mr Hann from carrying on a business or supplying goods or services “where the goods or services concerned are or include household cleaning products.”

128    The ACCC responded that, even if products were not used within a household — i.e., even if they were used in businesses — they could nevertheless objectively be described as “household cleaning products” and that, even if I were to reject that submission, many of the people supplied by Mr Blackall without specific instructions by Mr Hann purchased products for use in the home. Senior counsel for the ACCC continued:

And this is all part of the business carried on by Mr Hann, and I submit that that will overcome the concern that your Honour has raised. … [W]e still have the evidence of Mr Blackall demonstrating how the business conducted by Mr Hann, for which Mr Blackall was working, included the supply of household cleaning products to a good number of customers.

(Emphasis added.)

129    By his pleas Mr Hann has accepted that some at least of the cleaning products which he distributed or caused to be distributed were properly described as “household cleaning products”. This is consistent with evidence that the products marketed by Mr Hann included dishwashing liquid, floor washing cleaners and grill and oven cleaners.

130    Shortly thereafter, the ACCC turned the focus of its submissions to charge 7, which alleged that Mr Hann was “knowingly concerned in or a party to … conduct of a corporation in carrying on a business or supplying goods or services where the goods or services concerned were or included household cleaning products”. Counsel for the ACCC submitted that this charge “relates to Mr Hann being knowingly concerned in the conduct of the corporation, which is the Green Triangle Community Contributors Association Inc, Incorporated. And those sales would include the sales by Mr Blackall”.

131    Counsel then referred to the invoice books annexed to Mr Blackall’s affidavit and submitted — or perhaps conceded — that the invoices did not carry Green Triangle’s name, and continued:

So it’s not the evidence, your Honour, that these sales referred to in paragraph 35 for [sic] Mr Blackall’s evidence were under the invoices of the Green Triangle Community Contributors Association Incorporated … .

132    It was then submitted that Mr Blackall had been recruited to work for Green Triangle. Again, it is worth setting out the submission in some length:

So right from the outset Mr Blackall is recruited to work for the organisation described to him as the Green Triangle Community Group, which allows your Honour to conclude that that is the corporation referred to as the Green Triangle Community Contributors Association Incorporated. And you will see then at paragraph 17, Mr Blackall sets up his own business name, which is Gambier Budget Products. And he operates his business through — he operates his distribution business through that business name. But then at paragraph 24, your Honour sees Mr Blackall says that Mr Hann invoiced him for the stock he delivered using the Green Triangle Community Group business name, with an ABN — and specified … [that] Laurie [Hann] was the only person he ever saw or heard of from that Green Triangle Community Group.

133    I asked counsel whether there was evidence which identified the office bearers of the incorporated body Green Triangle. I was directed to the affidavit of Mr Love, which established only that there was such an incorporated body and that its ABN was active from 23 February 2012. I asked whether there was any evidence about the records of the registrar of business associations and was told that there was not. After exchanges of no present relevance, the following was said:

HIS HONOUR: I mean, I’m assuming it’s Mr Hann who established the Green Triangle Organisation. I don’t know.

MR HEEREY: Well, certainly we have the evidence of Mr Blackall and many other people. That whoever established it is Mr Hann, who is - - -

HIS HONOUR: He was using it.

MR HEEREY: - - - using it, yes.

HIS HONOUR: There is no doubt about that on the evidence.

MR HEEREY: Yes. Yes, your Honour. Suffice to say that the invoices provided to Mr Blackall certainly identified by reference to the ABN number an actual incorporated association. So there is the corporation that’s relevant for the charges. It was that corporation which was supplying the household cleaning products to Mr Blackall, which he then on supplied to those customers identified in paragraph 35 of Mr Blackall’s affidavit.

(Emphasis added.)

134    The sentences I have emphasised in this passage can be understood to be advancing two propositions. The first is that it was Green Triangle the incorporated association, as distinct from Mr Hann himself, that supplied products. The second is that the supplies which were channelled through Mr Blackall (noting that not all were) were provided to Mr Blackall and then were “on supplied” by him to the ultimate consumers.

135    This exchange caused me some concern because it appeared to expose some uncertainty about the relationship between Mr Hann and Green Triangle. In an effort to clarify the position, the ACCC, shortly before the penalty hearing, filed an affidavit from Ms Patricia Fancke. She deposed that Mr Hann had approached her in Portland in late December 2011 and asked her “to register the business as an incorporated association and also organise an ABN”. Ms Fancke agreed and lodged an application with the Office of Consumer and Business Affairs in South Australia for the registration, under the Associations Incorporation Act 1985 (SA), of the “Green Triangle Community Contributors Association Inc”. It was Ms Fancke who chose the name. The organisation was subsequently registered. During 2012, Ms Fancke assisted Mr Hann in the day to day running of the business “by assisting … with deliveries of chemicals to customers, speaking to a few customers each day by telephone to see whether they needed any products, and invoicing customers”. In about August 2012, Ms Fancke became aware of the litigation, in this Court, which led to the making of the orders which Mr Hann subsequently breached. While she continued carrying on administrative duties until the end of 2012, she “resigned from the business” and had no further involvement in running it from that time.

136    Mr Hann’s pleas reflect an acknowledgement that, either he was the guiding mind of Green Triangle, or that the organisation was acting as his agent in the various transactions. From early in 2013 until Mr Blackall was recruited and subsequently commenced deliveries in early 2015, Mr Hann solicited sales orders from businesses including Ferguson’s Diesel, LV Dohnt, Noel Barr Toyota, Porthaul and Dean & McCabe. When orders were lodged, Mr Hann issued invoices which bore Green Triangle’s trading name and ABN.

137    Mr Hann secured the active involvement of Mr Blackall in the business, commencing in January 2015. Mr Hann gave Mr Blackall advice as to the registration of a separate business name — Gambier Budget Products — and other preliminary matters. He told him what the conduct of that business would involve. Mr Hann instructed Mr Blackall to deliver particular products to particular entities, in response to orders that Mr Hann had himself received. Mr Hann provided to Mr Blackall lists setting out the prices that Mr Blackall was to charge to consumers. He effectively dictated what Mr Blackall’s range of products would be and how much Mr Blackall would keep in stock of each such product at any time. He arranged for labels to be prepared, bearing Mr Blackall’s trading name, for the purpose of fixing them to products. When Mr Blackall decided to part ways with Mr Hann, Mr Hann resumed contact with people whom Mr Blackall had been supplying directly (including, for example, Mr Pasfield). The lists that were to be circulated by Mr Blackall — Gambier Budget Products’s “Commercial Wholesale Price List” and “Reseller Cost Pricelist” — bore Green Triangle’s “1800” phone number and the same “gbplocal” email address.

138    Indeed, it is worth observing that, well before Mr Blackall’s involvement, Green Triangle’s invoices bore the email address “gbplocal@gmail.com”. That email address remained on Green Triangle’s invoices and price lists after Mr Blackall’s involvement commenced, and appeared also on the Gambier Budget Products price lists that Mr Hann provided to Mr Blackall to distribute. It is at least something of a coincidence that “gbplocal” (emphasis added) happened to be quite a suitable email address for Mr Blackall’s business name. Perhaps it is more than coincidence when one takes into account that it was Mr Hann who suggested to Mr Blackall that he name his business “GBP” or “Gambier Budget Products”.

139    Although Mr Hann had very substantial input into, and indeed substantial control over, Mr Blackall’s business, namely Gambier Budget Products, it was Mr Blackall’s business. Mr Blackall was able to, and did, make some sales without instructions from Mr Hann. To that extent, Mr Blackall was not acting as Mr Hann’s agent.

PENALTIES

140    There are, potentially, a wide range of matters which will guide the Court’s exercise of its sentencing discretion in contempt cases. They were summarised by Merkel J in Louis Vuitton Malletier SA v Design Elegance Pty Ltd (2006) 149 FCR 494 at 501; [2006] FCA 83 at [25] as follows:

1.5    In deciding the appropriate penalty, a court should consider the following factors:

(1)    contemnor’s personal circumstances;

(2)    nature and circumstances of the contempt: R v West Australian Newspapers Ltd; Ex Parte DPP (WA) (1996) 16 WAR 518;

(3)    effect of the contempt on the administration of justice: Durack v Gallagher (1982) 44 ALR 272 at 286–7 [65 FLR 459];

(4)    contemnor’s culpability: Durack v Gallagher (1982) 44 ALR 272 at 286–7 [65 FLR 459];

(5)    need to deter the contemnor and others from repeating contempt: DPP v John Fairfax & Sons Ltd (1987) 8 NSWLR 732, Kirby P at 741; and

(6)    absence or presence of a prior conviction for contempt: Attorney-General (NSW) v Macquarie Publications Pty Ltd (1988) 40 A Crim R 405 at 410. However, other criminal history is irrelevant: R v Giscombe (1984) 79 Cr App R 79 at 84.

1.6    In deciding the amount of any fine the Court should take into account the contemnor’s financial means: Smith v R (1991) 25 NSWLR 1. The court may also suspend the fine on terms.

Contrition and apology

1.7    Genuine contrition and a full and ample apology may also reduce the penalty: R v Gray [1900] 2 QB 36 at 41–2; Superstar Australia Pty Ltd v Coonan & Denlay Pty Ltd (No 2) (1982) 65 FLR 432 at 436.

Imprisonment

1.8    It is widely accepted that the court should only impose a term of imprisonment in the most serious criminal contempt cases: Keeley v Justice Brooking (1979) 143 CLR 162 at 179; Gallagher v Durack (1983) 152 CLR 238.

1.9    In Deputy Commissioner of Taxation v Hickey [1999] FCA 259 [(1999) 42 ATR 229], Carr J held that imprisonment is a “last resort”: see also R v Vasin (1985) 39 SASR 45; [R v] James (1985) 14 A Crim R 364; [R v] Skipper (1992) 64 A Crim R 260.

141    The factors that may be taken into account were also considered by Spender J in Australian Competition and Consumer Commission v World Netsafe Pty Ltd (2003) 133 FCR 279 at 283; [2003] FCA 1501 at [16]:

Considerations which are relevant in deciding what is the appropriate penalty include:

(a)     The relative seriousness of the contempt, which is determined by the extent to which the contemnor appreciated that a contempt was being committed: Australian Competition and Consumer Commission v Info4PCCom Pty Ltd (2002) 121 FCR 24 at [144].

(b)     Whether the contemnor subjectively intended to disobey the order: Attorney-General v Times Newspapers Ltd [1992] 1 AC 191 at 218; Australian Competition and Consumer Commission v Hughes [2001] ATPR 41-807 at [20]; and Info4PCCom.

(c)     The importance of bringing home to the contemnor the seriousness of the contempt: Hughes at [24]; Info4PCCom at [139].

(d)     Whether the contemnor has offered any explanation or apology for his conduct: Gallagher v Durack (1983) 152 CLR 238, per Gibbs CJ, Mason, Wilson and Brennan JJ at 245.

(e)     An acknowledgment by the contemnor that a contempt was committed may be a mitigating factor: [ASIC v] Matthews [(1999) 32 ACSR 404; [1999] FCA 803] at [25] and [29].

142    Similarly, Palmer J summarised relevant factors in Australian Securities and Investments Commission v Michalik (2004) 52 ACSR 115 at 123; [2004] NSWSC 1259 at [29]:

For present purposes the relevant factors to be considered may be summarised thus:

(i)     the seriousness of the contempt proved;

(ii)     whether the contemnor was aware of the consequences to himself of what he proposed to do;

(iii)     the actual or potential consequences of the contempt on the proceedings in which the contempt was committed;

(iv)     whether the contempt was committed in the context of a proceeding alleging crime or conduct seriously prejudicial to the public interest: see, for example, Von Doussa v Owens (No 3) (1982) 31 SASR 166;

(v)     the reason or motive for the contempt;

(vi)     whether the contemnor has received, or sought to receive, a benefit or gain from the contempt;

(vii)     whether there has been any expression of genuine contrition by the contemnor;

(viii)     the character and antecedents of the contemnor;

(ix)     what punishment is required to deter the contemnor and others of like mind from similar disobedience to the orders of the court;

(x)     what punishment is required to express the court’s denunciation of the contempt.

143    The factors identified by Spender J in World Netsafe Pty Ltd and by Palmer J in Michalik were recently cited with approval by Flick J in Sydney Medical Service Co-operative Limited v Lakemba Medical Services Pty Ltd (No 2) [2016] FCA 1188 at [15] and by Moshinsky J in Australian Competition and Consumer Commission v ACN 117 372 915 Pty Ltd (in liq) (formerly Advanced Medical Institute Pty Limited) [2016] FCA 1437 at [40]–[42], though their Honours noted that neither list should be considered exhaustive. See also Thunder Studios Inc (California) v Kazal (No 2) [2017] FCA 202 at [8]–[11] (Rares J).

144    To the extent that they are relevant, I have had regard to these considerations in dealing with the present application.

145    There was some measure of agreement between the parties as to sentencing considerations. In particular, it was common ground that each of the contempts constituted a serious contravention of the Court’s orders and that, either individually or collectively, they warrant custodial sentences. Mr Hann contended, however, that his age and infirmity require that any sentence of imprisonment be wholly suspended. at the forefront of Mr Hann’s plea in mitigation was his contention that he suffered from chronic ill health, both physical and psychological.

146    Mr Hann supported these submissions by reference to medical reports obtained from his general practitioners, Dr David Chen and Dr Julia Jaensch, a consultant cardiologist physician, Dr Michael Mok and from clinical psychologists, Ms Arisja Oberholzer and Mr Patrick Newton (the latter who was also a forensic psychologist). There were additional reports which recorded the results of various tests undertaken by Mr Hann over recent years, as well as documentation pertaining to various cardiology appointments.

147    Dr Chen’s letter from 2016 reported that, since 1998, Mr Hann had, at various times, suffered from hypertension, hypercholesterolaemia, generalised anxiety, major depression and osteoarthritis. In 2000 he had undergone a coronary artery bypass graft and, in 2015, he had suffered from an acute subdural haematoma. Dr Chen reported that Mr Hann’s ischaemic heart disease was presently stable.

148    Dr Jaensch’s letter of March 2017 reported that Mr Hann had been diagnosed with a hernia and valvular aortic stenosis in late 2016 and with a haematoma and pulmonary hypertension in February 2017. She said that Mr Hann had recently undergone a stent insertion for his cardiac disease, as well as an aortic valve replacement procedure in February 2017. She also recorded that Mr Hann is presently being treated for congestive cardiac failure and generalised anxiety disorder. She further indicated that Mr Hann had expressed the view that his wife is “under considerable stress” due to his health conditions.

149    In his report of March 2017, Dr Mok confirmed that Mr Hann continues to suffer cardiac disease but that recent surgery had stabilised his condition. No further surgical intervention was contemplated in the near future.

150    Mr Newton examined Mr Hann in October 2016. In his report of December 2016, Mr Newton found that Mr Hann suffered from a major depressive disorder with agitated distress which he assessed at a moderate level of clinical severity. He advised that:

As matters stand, Mr Hann remains a physically and emotionally vulnerable man who would have considerable difficulty adjusting to the prison environment.

151    In a further report, which was filed on the eve of the penalty hearing in March 2017, Mr Newton confirmed that Mr Hann continued to suffer from these conditions. Mr Newton observed that:

It should be noted that Mr Hann’s anxiety is only related to his fear of incarceration in a secondary fashion. That is, he expresses little concern on his own behalf with regards to managing the rigours of imprisonment. Rather, it is his concern that his wife would experience significant difficulties coping without him that exercises his mind most strongly.

152    Counsel for Mr Hann contended that this medical evidence pertaining to psychological conditions established that any period of imprisonment would bear more heavily on Mr Hann than it would on other prisoners who did not suffer from these conditions. He relied in particular on three authorities. They were: Vaysman v Deckers Outdoor Corporation Inc (2011) 276 ALR 596; [2011] FCAFC 17; R v Verdins (2007) 16 VR 269; [2007] VSCA 102; and R v Miceli [1998] 4 VR 588.

153    The first two of these cases explain the approach which should be taken by the Court in dealing with a contemnor (or other offender) who is suffering from ill health. The third deals with the more general issue of the place of “mercy” or “clemency” in the sentencing process.

154    In Vaysman, the Court was dealing with a 74 year old offender who had a number of significant health problems. He appealed against the severity of the custodial sentences imposed on him for contempt of Court. Besanko J (with whom Bromberg J agreed on this issue) referred to a number of authorities commencing with R v Smith (1987) 44 SASR 587, a decision of the Full Court of the Supreme Court of South Australia. His Honour (at 631 [123]) set out part of the reasons of King CJ (Cox and O’Loughlin JJ agreeing) from Smith at 589:

The state of health of an offender is always relevant to the consideration of the appropriate sentence for the offender. The Courts, however, must be cautious as to the influence which they allow this factor to have upon the sentencing process. Ill health cannot be allowed to become a licence to commit crime, nor can offenders generally expect to escape punishment because of the condition of their health. It is the responsibility of the Correctional Services authorities to provide appropriate care and treatment for sick prisoners. Generally speaking ill health will be a factor tending to mitigate punishment only when it appears that imprisonment will be a greater burden on the offender by reason of his state of health or when there is a serious risk of imprisonment having a gravely adverse effect on the offender’s health.

155    Justice Besanko then directed attention (at 632 [126]–[127]) to the implications of what King CJ had said about the burden of imprisonment on someone suffering from ill health. His Honour said that:

First, I do not think that the burden must be “particularly onerous” … before ill health becomes relevant. It may be of less significance if it is not particularly onerous, but it is still relevant if it would impose a greater burden on the appellant.

Second, the appellant’s age and state of health were relevant to the sentence of imprisonment and not just the determination of the period he should spend in prison. That may not be so in some cases but it seems to me that this is a case where it was relevant on both issues

156    In Verdins, the Victorian Court of Appeal also referred (at 275 [27]) to the observations of King CJ in Smith and (at 276 [28]) to the proposition, drawn from among the five identified in R v Tsiaras [1996] 1 VR 398 at 400, that “psychiatric illness may mean that a given sentence will weigh more heavily on the prisoner than it would on a person in normal health”.

157    “This proposition”, the Court said in Verdins, “requires neither explanation nor qualification”. The Court regarded it as self-evident that “a prisoner suffering from (for example) severe depression will find each day in prison more of a burden than would a person in normal health” (at 276 [28]). Their Honours also considered that there should be a new sixth proposition, namely that, “where there is a serious risk of imprisonment having a significant adverse effect on the offender’s mental health, this will be a factor tending to mitigate punishment” (at 276 [30]).

158    In Miceli, Tadgell JA (with whom Winneke P and Charles JA agreed) criticised a trial judge who had said, three times during sentencing submissions, that “I am not here to dispense mercy, I am here to dispense justice”. His Honour said that it “cannot be doubted that an element of mercy has always been regarded, and properly regarded, as running hand in hand with the sentencing discretion …”: at 592; see also at 594 (Charles JA).

159    Mr Hann’s health, therefore, falls to be considered, first, in determining whether a period of imprisonment (with time to be served) should be imposed and, secondly, if the first question is answered affirmatively, in determining the length of any appropriate sentence. Mr Hann’s health will be relevant in considering the burden which imprisonment would impose on him and, potentially, the impact of imprisonment on the conditions from which he suffers.

160    I had not, initially, been inclined to think that the medical evidence raised the possibility that incarceration would cause deterioration in Mr Hann’s existing mental health. On reflection, I have come to the view that Mr Hann’s concern for his wife’s health in his absence may, possibly, exacerbate his condition. The degree to which he may be affected is uncertain, on the evidence, and will, almost, certainly, depend upon the length of time (if any) he may be separated from his wife. I am not satisfied that Mr Hann has established that there exists a “serious risk” that imprisonment will have “a gravely adverse” impact on his health. I, therefore, put this issue to one side and concentrate on the “burden” issue, bearing in mind that the burden need not be “particularly onerous” in order for it to be taken into account.

161    The weight to be accorded this consideration will depend upon an assessment, based on the available evidence, of the anticipated severity of the burden in any given case.

162    The chronic conditions from which Mr Hann suffers did not disable him from deciding to engage in the contravening conduct and then to implement his plans over a period of some years. He travelled long distances. He solicited business. He procured orders and arranged for the orders to be filled. He engaged others in his activities. Throughout the relevant period he had access to his medical advisers and was receiving treatment (including medication) for his various conditions. In short, he was, despite his chronic conditions, able to function as a business manager.

163    This does not suggest that his health is sufficiently precarious as to preclude a period of imprisonment if other relevant considerations supported such an outcome. His anxiety and depression are treatable and the prison health authorities would bear responsibility for ensuring that he had access to medication. His cardiac condition is stable and, again, is being managed conservatively.

164    On the other hand, it may be taken as a given that a person suffering from a major depressive disorder (such as Mr Hann) would be afflicted more severely by imprisonment than a person enjoying normal health: cf Verdins at 276 [28]. The fact that Mr Hann’s depression has not prevented him from undertaking business activities in the community does not mean that this condition would not render any period of imprisonment more burdensome for him than for others not so afflicted. On the contrary, Mr Newton’s evidence suggests that Mr Hann would have “considerable difficulty” in adjusting to prison life.

165    In addition, counsel for Mr Hann relied on the following mitigating factors:

    Mr Hann’s guilty pleas;

    the absence of any direct evidence that Mr Hann’s contraventions of the Court’s orders caused any harm to others in the community; and

    the absence of any evidence of personal gain.

166    Subject to one matter, I accept these submissions. Some credit must be accorded Mr Hann for his guilty pleas. They have obviated the necessity for a potentially long trial and the associated costs and expense. The pleas were, however, made belatedly and not before the ACCC had presented its uncontested case. During much of this period, Mr Hann was not legally represented and the pleas were forthcoming after he obtained such representation.

167    Counsel acknowledged that Mr Hann had not exhibited any contrition or apologised to the Court for his contemptuous conduct. He also advised the Court that Mr Hann’s financial circumstances were such that there was “little prospect” that he would be able to pay any fine which the Court might be minded to impose.

168    The ACCC initially contended that Mr Hann had been convicted of contempt by the Magistrates’ Court of Victoria in March 2011. At the penalty hearing, it accepted that the Magistrates’ Court had acted under s 135 of the Magistrates’ Courts Act 1989 (Vic), which concerns that Court’s power to enforce orders, rather than s 134 of that Act, which deals with contempt of court. What had happened was that, in April 2010, Mr Hann had been ordered by that Court, in another consumer protection case, to place an advertisement in two newspapers circulating in the Ballarat and Swan Hill areas. He had failed to do so. In March 2011, the Court ordered that he be imprisoned for a period of 14 days but suspended the operation of the order upon condition that Mr Hann place the advertisements within a stipulated period. No conviction was recorded. Although Mr Hann’s offence was not dealt with as a contempt of court, his failure to comply with the earlier publication orders may well have constituted such a contempt.

169    The ACCC informed the Court that Mr Hann had accumulated a large number of criminal convictions in the Northern Territory, Western Australia, South Australia and Victoria between 1961 and 1990. These convictions are dated and can have little influence on the sentencing process in which I am now engaged.

170    As already noted, the seriousness of Mr Hann’s conduct is not in dispute. That seriousness is compounded by the fact that his offending continued after he was served with the present application in December 2015. His dealings with Mr Millard in February 2016 and with Mr Chatfield in March 2016, for example, constituted breaches of the Court’s earlier orders, namely paragraph 9(b).

171    Although the penalty of imprisonment for contempt is to be used as a last resort, there will be and are circumstances in which the imposition of such a penalty is warranted. An example is provided by Australian Securities and Investments Commission v Reid (No 2) [2006] FCA 700, where Lander J determined that an order of imprisonment should be made where the contempt had been “committed in full knowledge of the existence of the order and undertaking which were contravened, and in circumstances where the respondent ha[d] shown not the slightest indication of remorse of contrition or, indeed, even acknowledgement of the commission of the contempt” (at [27]–[29]). The present case has many similar features although, as has been said, Mr Hann, belatedly, acknowledged his contempts.

172    Having weighed the competing considerations, I consider that the appropriate orders are that Mr Hann be sentenced to three months imprisonment in respect to each of the contraventions giving rise to Charges 1, 3, 4, 5, 7 and 8 and that he be imprisoned for five months in respect of the contraventions covered by Charges 2 and 6. The reason I regard the contraventions of Charges 2 and 6 to be more egregious than the other contraventions is that they involved solicitation of business by telling those being approached that profits (or some of them) would be donated to charity. The making of such claims had been proscribed by the earlier Court orders made on 28 May 2012 because Mr Hann had falsely represented to potential purchasers of product distribution businesses that he was conducting a charity and that all profits would be distributed to community organisations: see Halkalia (No 2) at [29]. Such reprehensible attempts to appeal to the benevolent instincts of interlocutors is to be deprecated.

173    The conduct giving rise to each of the contempts is, to varying extents, common with one or more of the other contraventions. It is therefore necessary to ensure that the principle of totality is respected: cf Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (2015) 229 FCR 331 at 350; [2015] FCAFC 59 at [40] (Dowsett, Greenwood and Wigney JJ). Accordingly, it is appropriate to order that each sentence be served concurrently with each other sentence. This will mean that Mr Hann will serve a maximum of five months imprisonment.

174    Although I consider that a period of imprisonment is warranted and not precluded by Mr Hann’s age and state of ill health, I accept that any period of incarceration is likely to bear on him more onerously than would be expected of a healthier person. In these circumstances, I consider that Mr Hann should serve two weeks of his sentence and that the remainder of his sentence should be suspended on condition that he refrains from any further contravention of the Court’s orders for a period of two years from the date on which the suspension takes effect.

COSTS

175    Mr Hann accepted that the ACCC should have the costs of its application on an indemnity basis. This concession was properly made: see, eg, Infa-Secure Pty Limited v Crocker (No 2) (2016) 338 ALR 586 at 600; [2016] FCA 202 at [44] (Reeves J); cf Kazal v Thunder Studios Inc (California) [2017] FCA 238 at [90]–[92] (Katzmann J). Mr Hann’s misconduct was only brought to the Court’s attention because the ACCC devoted considerable resources to a long and detailed investigation and then prosecuted this application.

Associate:

Dated:    17 May 2017