Noone v Mericka & Ors (No 2) [2012] VSC 2 (24 April 2012)

AustLII Search

Supreme Court of Victoria

Search AustLII

▼ Search Options

All databases
This database only
Full text
Titles only
Advanced Search…

Search term: ×

Specific Year
Any 2015

Noone v Mericka & Ors (No 2) [2012] VSC 2 (24 April 2012)

Last Updated: 26 April 2012

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL COURT

LIST B

No. SCI 2010 4660

DR CLAIRE NOONE, DIRECTOR OF CONSUMER AFFAIRS VICTORIA	Plaintiff

V

PETER MERICKA & ORS	Defendants

---

JUDGE:	SIFRIS J
WHERE HELD:	Melbourne
DATE OF HEARING:	16 April 2012
DATE OF JUDGMENT:	24 April 2012
CASE MAY BE CITED AS:	Noone v Mericka & Ors (No 2)
MEDIUM NEUTRAL CITATION:	[2012] VSC 2

---

INJUNCTION – injunction under the Fair Trading Act 1999 (Vic) – whether injunction necessary in addition to declaratory relief – scope of injunction - whether undertaking sufficient – factors taken into account.

COSTS – plaintiff’s claim successful – alleged public interest litigation - resolution of legal question of interest to the public – whether orders as to costs should depart from usual orders – matter defended for private interest – no reasons sufficient to justify departure from usual order.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P.D. Crutchfield SC with Mr R.C. Knowles	Consumer Affairs Victoria

For the Defendants	Mr W.F. Rimmer	Stynes Dixon Lawyers

HIS HONOUR:

1 On 27 March 2012 I published my reasons for holding that the Director had made out her claim against each of the defendants.[1] I deferred making final orders and gave the parties an opportunity to file written submissions and make oral submissions.

2 The parties agree that in light of my reasons, declaratory relief in the form proposed by the plaintiff is appropriate. I agree and the suggested declarations will be made.

3 The main remaining issues between the parties relate to whether injunctive relief is appropriate and what costs orders should be made.

Injunctive Relief

4 The defendants submit that the proposed declarations are sufficient. Now that the law has been clarified, they submit that they are required to comply with the law and that accordingly no further orders are necessary. Alternatively they submit that instead of injunctive relief the court should accept undertakings from them in a suitable form.

5 The Director submits that the conduct of the defendants, and in particular the first defendant, at all stages of the proceedings, but in particular after publication of my reasons for judgment, compels further relief beyond the agreed declarations. It follows that the injunctive relief relates to future conduct. The Director is not confident that the defendants will indeed comply with the law. To this end the Director has filed an affidavit sworn 11 April 2012 by Blair Russell Ussher, solicitor to the Director, deposing to various matters including the first defendant’s public responses to the decision of the court. The defendants have filed an affidavit in response contradicting a number of matters.

6 As acknowledged by both parties, the court has power to grant injunctive relief and it is not necessary for the court to find any loss or damage to any person as a result of the contravening conduct prior to making such orders. Indeed I accept that the evidence does not establish any loss or damage to any person. The parties also agree that it is not necessary to establish the threat of ongoing conduct. However this is a matter relevant to the exercise of the court’s discretion in relation to the granting of injunctive relief.

7 Division 2 of Part 11 of the Fair Trading Act 1999 (Vic) (“the Act”) deals with remedies and legal proceedings in relation to the Act.

8 Section 149 of the Act provides for injunctions to restrain conduct in contravention or attempted contravention of any provision of the Act. Section 149 is in the following terms:

“149 Injunctions to restrain conduct

(1) The Minister, Director or any other person may apply to the Supreme Court, County Court or Magistrates' Court for the grant of an injunction restraining a person from engaging in conduct that constitutes—

(a) a contravention of any provision of this Act; or
(b) attempting or conspiring to contravene such a provision; or
(c) aiding, abetting, counselling or procuring a person to contravene such a provision; or
(d) inducing or attempting to induce a person, whether by threats, promises or otherwise, to contravene such a provision; or
(e) being in any way directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision.

(2) The Court may grant an injunction restraining a person from engaging in conduct of the kind referred to in paragraphs (a) to (e) of subsection (1)—

(a) if the Court is satisfied that the person is engaging in or has been engaging in conduct of that kind, whether or not it appears to the Court that the person intends to engage again or continue to engage in the conduct; or
(b) if it appears to the Court that, in the event that the injunction is not granted, it is likely that the person will engage in conduct of that kind, whether or not that person has previously engaged in conduct of that kind and whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person engages in conduct of that kind; or
(c) if the Court determines it to be appropriate, by consent of all the parties to the proceedings, whether or not the person has engaged in, or is likely to engage in conduct of that kind.

(3) An application for an injunction under this section may be made ex parte.”

9 Section 149A of the Act provides for injunctions requiring a party to do an act or thing. The section is in the following terms:

“149A Injunctions to do an act or thing

(1) The Supreme Court or the County Court, on the application of the Minister, the Director or any other person, may grant an injunction requiring a person to do any act or thing if the Court is satisfied that the person is engaging in or has been engaging in conduct that constitutes—

(a) a contravention of any provision of this Act; or
(b) attempting or conspiring to contravene such a provision; or
(c) aiding, abetting, counselling or procuring a person to contravene such a provision; or
(d) inducing or attempting to induce a person, whether by threats, promises or otherwise, to contravene such a provision; or
(e) being in any way directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision.

(2) The power of the Court under this section to grant an injunction requiring a person to do an act or thing may be exercised—

(a) whether or not it appears to the Court that the person intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing; and
(b) whether or not the person has previously refused or failed to do that act or thing; and
(c) whether or not there is an imminent danger of substantial damage to any person if the first person refuses or fails to do that act or thing.

(3) Without limiting subsection (1), an injunction under this section may require a person—

(a) to institute a training program for the person's employees in relation to compliance with this Act;
(b) to refund money to purchasers;
(c) to transfer property to purchasers;
(d) to disclose information about the person's business activities or business associates;
(e) to honour any promise made in the course of misleading or deceptive conduct or in a false representation;
(f) to destroy or dispose of goods used for the purpose of a contravention of this Act.

(4) Despite subsections (1) and (3), only the Supreme Court may grant an injunction under this section requiring a person to transfer an interest in land.
(5) An application for an injunction under this section may be made ex parte.”

10 Section 93A of the Estate Agents Act 1980 (Vic) is in the following terms:

“93A Application of Fair Trading Act 1999

(1) Sections 143 and 144 and Division 2 of Part 11 (except sections 152A and 155) of the Fair Trading Act 1999 extend and apply (with any necessary modifications) to this Act as if any reference in those provisions to the Fair Trading Act 1999 were a reference to this Act.
(1A) For the purposes of subsection (1), section 153 of the Fair Trading Act 1999 applies as if a reference in that section to Part 2A or 6 of the Fair Trading Act 1999 were a reference to this Act.
(2) For the purposes of subsection (1), section 154 of the Fair Trading Act 1999 applies as if a reference to prescribed proceedings were a reference to—

(a) proceedings for an offence against a provision of this Act (except Division 2 of Part VI and section 93); or
(b) proceedings on an application for an injunction under section 149, 149A, 150, 151A or 151B of the Fair Trading Act 1999 (as applied by subsection (1)) against a person alleged to have contravened a provision of this Act (except Division 2 of Part VI and section 93); or
(c) proceedings on an application for an order under section 158, or for damages under section 159, of the Fair Trading Act 1999 (as applied by subsection (1)).”

11 It is clear that the sections confer a broad power on the court. It is also clear that under ss 149 and 149A of the Act injunctions can be granted in respect of contraventions of the Estate Agents Act. This is specifically provided for by s 93A of the Estate Agents Act, set out above.

12 In determining whether to grant injunctions in relation to future conduct, the critical factor is whether after an assessment of all relevant matters it is necessary and desirable for the party subject to the proposed injunction to be subject to “the more onerous burdens, such as contempt of court, in relation to their future conduct”.[2]

13 In Australian Competition & Consumer Commission v Francis [3] Gray J dealt with the effect of granting an injunction in relation to s 80 of the Trade Practices Act 1958 (Cth). At paragraph 122 his Honour said:

“The effect of granting an injunction, if there is a repetition of the conduct enjoined, is to render the person enjoined liable to punishment for contempt of court. By this means, what would otherwise be a contravention of the Trade Practices Act can be converted to conduct rendering the person liable to a financial penalty, or, in extreme cases, to imprisonment. The Court must therefore be satisfied that the possibility of such consequences ought to be visited upon a person, if there should be a repetition of the conduct complained of, before granting such an injunction. The terms of the injunction must be specific, so that the person subject to it can understand clearly what conduct will amount to a breach of the injunction, and what conduct he or she can engage in legitimately.”

14 In BMW Australian Ltd v Australian Competition & Consumer Commission [4] the Full Court of the Federal Court of Australia comprising Gray, Goldberg and Weinberg JJ said:

“A relevant factor to consider in determining whether to grant an injunction pursuant to s 80 of the Trade Practices Act is whether the existing sanctions for the conduct to be the subject of the injunction, found in the Trade Practices Act itself, require to be supplemented by the availability of the range of sanctions applicable to contempt of court. The purpose of granting an injunction to restrain conduct already prohibited by legislation can only be to add to whatever consequences the legislation attaches to that conduct the additional consequences of a possible finding of contempt of court by failure to comply with an injunction. In each case, it is a question whether the conduct concerned warrants the application of those more stringent consequences.”^[5]

15 Accordingly it is necessary to consider, amongst other relevant matters, whether the conduct of the defendants warrant the application of these more stringent consequences.

16 Factors in favour of not ordering injunctions against the defendants are their preparedness to give an undertaking and the fact that the evidence does not establish any loss or damage. It should also be noted that the defendants are prepared to undertake the corrective advertising as proposed by the Director.

17 Factors in favour of ordering injunctions include the conduct of the defendants, and in particular the first defendant, over a long period of time but particularly after publication of the decision and reasons of the court on 27 March 2012. I will deal with this aspect in more detail later in these reasons. It is also necessary to consider the related and important matter of the public interest.

18 After carefully considering all relevant matters I am of the opinion that injunctive relief as proposed by the Director is appropriate and desirable. I am not prepared to allow the law to take its course or accept undertakings from the defendants. Rather, I am of the opinion that the defendants should be subject to the full range of options available to the court in the event of a breach of any of the injunctions.

19 It is clear on the evidence that the defendants, and in particular the first defendant, have not properly understood the reasons of the court which I endeavoured to set out in clear and unequivocal terms. Although the defendants submit the reasons for decision clarifies the law, like the Director, I am not confident that the defendants fully comprehend the extent to which their conduct contravened the relevant statutory provisions. The defendants, and in particular the first defendant, have, as was their right, pursued the correctness and righteousness of their case with vigour and determination. However, despite my judgment in this case, the evidence suggests that the first defendant now still seeks vindication and approval notwithstanding the matters raised in his affidavit sworn on 16 April 2012. I should note that I have not had any regard to the article regarding this matter that appeared in the Australian Financial Review. From the other available evidence it appears to me that there is an unacceptable risk that one or more of the defendants may engage in conduct in contravention of the law.

20 I accept that the defendants are entitled to comment on the decision and to criticise the reasons provided they do not expressly or implicitly by such commentary or criticism indicate that they will not abide by the decision. Although they have not done so expressly, the real concern relates to their expressed and clear misunderstanding of the reasons. It is not clear to me that they understand the law which they say they will comply with without the need for injunctive relief.

21 Although the evidence establishes no loss – a matter clearly in favour of the defendants – the public is entitled to the confidence that the regulatory regimes in place in relation to both estate agents and Australian lawyers are being properly adhered to. The regimes are designed as much to prevent any loss as to remedy any loss. I should say at this stage that I am surprised that all defendants have not obtained the necessary estate agents licence.

22 Of course it is precisely because of the consequences of any breach of an injunction that the injunction must be specific and clear and relate to the conduct the subject of the declarations.

23 In relation to paragraph 6(a) of the proposed orders I am not prepared to include the word “conspiring”, as proposed by the Director. It is unnecessary and conspiracy was not raised in this proceeding.

24 In relation to paragraph 6(c), I agree with the submission made by counsel for the defendants that the version proposed by the Director goes beyond that which is necessary to protect the public interest.

25 The injunctions should be set out with sufficient specificity in order to make it absolutely clear what conduct the defendants are not permitted to engage in. To this end and as discussed in argument, I regard it necessary to set out not by reference to the defined terms contained in the Estate Agents Act, but by reference to the actual conduct that is proscribed.

Corrective advertising

26 The defendants agree that there should be corrective advertising in the form proposed by the Director but submit that undertakings in this regard should be accepted by the court rather than injunctions. For the reasons given, I am of the opinion that the injunctions should extend to corrective advertising.

Costs

27 The Director submits that costs should follow the event and that the defendants should pay the Director’s costs on a party and party basis. The defendants submit that the litigation was in the nature of public interest litigation and that accordingly it is appropriate that there be no order as to costs.

28 The fact that litigation may be of some interest or relevance to the general community and to the government or any statutory body does not make it public interest litigation of the kind referred to in the cases as constituting special circumstances justifying a departure from the usual orders as to costs. Something more is required.

29 In Hollier v Australian Maritime Safety Authority (No 2),[6] Heerey, Whitlam and North JJ stated that:

“We do not read Oshlack as establishing any general principle that the usual order as to costs should not apply if the subject matter of the litigation is a matter of “public interest”. The latter concept is a particularly elusive one. As McHugh J pointed out (152 ALR at 104):

“Without an organising principle to apply or a set of criteria to guide, there is a real danger that, by invoking the ‘public interest litigation’ factor in cases that affect the public interest or involve a public authority, an award of costs will depend on nothing more than the social preferences of the judge, a dependence that will be masked by reliance on the protean concept of public interest litigation.”

...
In a common law jurisdiction decisions of the courts, in private as well as public law, often clarify the law or lay down new law for the benefit of citizens, taxpayers, traders, patentees, insurers ... etc etc. To that extent, much litigation has a public interest going beyond the interests of the parties. But this feature is inherent in common law litigation and provides no ground for departure from the usual rule as to costs. And, as has been pointed out in another context, what interests the public is not necessarily in the public interest... .”

30 In Geeveekay v Director of Consumers Affairs Victoria (No 2),[7] the successful director was not deprived of costs in circumstances where the appeal included a very important question of law, the resolution of which was in the public interest, involving as it did the critical question of whether a term contract for sale provides credit and constitutes a credit contract for the purposes of the Consumer Credit Code.

31 Although the appeal had implications between the parties involved, Bell J held that it was an appeal of a “private nature between Geeveekay and the Director” arising as it did “in the (legitimate) pursuit of [Geeveekay’s] own commercial interests”.[8] Thus Geeveekay was distinguished from those cases between a public agency and a private litigant where the usual costs are not made. This proceeding can also rightly be distinguished.

32 As Bell J noted, cases where the usual costs orders are not made typically involve factors such as the losing party having had no financial interest in the litigation,[9] or the losing party having “no personal or private interest in the litigation” but being “uniquely placed ... to bring the proceeding in the public interest”.[10]

33 On the contrary, where proceedings are brought for a private benefit and not necessarily to benefit the public or to enforce a public duty, the mere fact that they also resolved an important legal question is insufficient to justify a departure from the usual orders as to costs.[11] Indeed, in Geeveekay Bell J found that in cases “brought or defended for private reasons” the circumstances in which the usual order as to costs would be departed from, for reasons involving public interest litigation, “would have to be special or exceptional”.[12]

34 The litigation in this case was not commenced or run as a proceeding in the public interest and was defended for private reasons. The defendants clearly wished to vindicate their own position in a long running dispute with the Director. The defendants had, and have, a very real personal and private interest in the matters the subject of the litigation. The fact that the court’s decision on the relevant legislation has implications beyond the immediate parties is, as noted in Hollier, a consequence of the role of the court in interpreting legislation.[13] As such it does not mean the litigation was public interest litigation as referred to in the cases and does not justify depriving the Director of her costs.[14]

35 There is no evidence in this case of any such special or exceptional circumstances that would justify a departure from the usual orders as to costs. No evidence has been tendered of other solicitors in the position of the defendants. Further there is no evidence that there are a number of parties who have expressed such uncertainty with the relevant legislation so as to render any ruling of significance and relevance beyond the immediate parties to the litigation. I do not consider that the correspondence between the parties takes the matter any further.

36 In Geeveekay, Bell J also found it helpful to examine the issue in counterpoint, noting that in the event that Geeveekay’s appeal had succeeded, the director would have had to pay Geeveekay’s costs as “the public interest issues involved in the appeal would have been no reason for doing otherwise.”[15] This would apply similarly to this matter.

37 Accordingly, in my opinion, the usual order as to costs should be made, that is, that the defendants should pay the plaintiff’s costs of the proceeding including reserved costs, such costs to be taxed as between party and party in the absence of agreement.

^[1] Noone v Mericka & Ors [2012] VSC 101.

^[2] Australian Competition & Consumer Commission v Dermalogica Pty Ltd [2005] FCA 152 (per Goldberg J).

^[3] [2004] FCA 487.

^[4] [2004] FCAFC 167; [2004] 207 ALR 452.

^[5] At [39] (emphasis added).

^[6] [1998] FCA 975, p. 4-5 (“Hollier”).

^[7] [2006] VSC 152 (“Geeveekay”).

^[8] Ibid [6].

^[9] Ruddock v Vadarlis (2001) 115 FCR 229.

^[10] Geeveekay v Director of Consumers Affairs Victoria (No 2) [2006] VSC 152, [6], referring to Smith v Airservices Australia [2005] FCA 997; (2005) 146 FCR 37.

^[11] See, e.g., De Silva v Ruddock [1998] FCA 311, p. 3.

^[12] Geeveekay v Director of Consumers Affairs Victoria (No 2) [2006] VSC 152, [7].

^[13] Hollier v Australian Maritime Safety Authority (No 2) [1998] FCA 975, p. 5.

^[14] Cynthia Weinstein v Medical Practitioners Board of Victoria (No 2) [2008] VSCA 224, [8].

^[15] Ibid [11] citing Quinn v Law Institute of Victoria Limited (No 2) [2007] VSCA 132.

Supreme Court of Victoria

Search AustLII

All Databases

Cases & Legislation

Journals & Scholarship

Law Reform

Treaties

Libraries

Communities

LawCite

Australia

CTH

ACT

NSW

NT

QLD

SA

TAS

VIC

WA

New Zealand

Specific Year

Any

Any

Noone v Mericka & Ors (No 2) [2012] VSC 2 (24 April 2012)

Authorities Cited12

Referred to (12)