In a long judgment concerning breach of the ‘do not call register’, where 1,102,318 calls were made to numbers on the register
“which would have caused annoyance and inconvenience to members of the public who had taken up the ability to list their number on the Register”,
Justice John Logan has drawn upon history (Cromwell, as to reinstating a deregistered company), literature (Candide, “pour encourager les autres”, as to penalties) and the ordinary experience of life (as to junk mail) in deciding on the appropriate penalty to be imposed.
The do not call register
“Ordinary experience of life instructs that the experience of unsolicited, hard copy marketing and other material, colloquially referred to as “junk mail”, crowding out a letterbox or littering the entry path to a front door is not uncommon” … leading to the Do Not Call Register Act 2006 (Cth) (DNCR Act) which provides for the establishment of such a register by the Australian Communications and Media Authority (ACMA).
Exhumation of a company
The company involved – V Marketing – had been deregistered. Justice Logan saw its restoration to the register for the purpose of penal proceedings as bearing
“some resemblance to the exhumation in Post-Restoration England in the 17th century of the by then deceased Lord Protector Cromwell and other principal regicides, so they might be tried for treason”. (In a similar vein, see Top 7 reasons for reinstatement — exhuming the corporate body — (2007) 7(9) INSLB 114, Chris Symes).
The Judge reminded regulators such as ACMA to do an ASIC search prior to taking proceedings to see if a company is deregistered, which did not occur here.
“Penalisation”
The question of how a Judge should exercise the penalisation discretion is one of “instinctive synthesis”.
Here, a civil penalty should be sufficiently high to make engaging in misconduct more than just a cost of conducting a telemarketing business. The penalty
“must be sufficiently high as to make it a rational conclusion that it is a form of economic suicide to contravene the DNCR Act”.
“[it] must be at a level which will reduce the chance of unscrupulous telemarketing companies from under-cutting the scrupulous who incur the cost of implementing high quality compliance systems which avoid the making of calls to numbers on the Register”.
Penalisation of the innocent, to deter others
In an earlier judgment, a company – Balaska – that had acted upon instructions from V Marketing, had been found not to have had actual knowledge of the contraventions of the DNCR Act and no civil pecuniary penalty was imposed. Imposing a penalty simply to discourage others was not valid.
Justice Logan cited Voltaire – “Dans ce pays-ci, il est bon de tuer de temps en temps un amiral pour encourager les autres” – in Candide (1759, Candide, ou l’Optimism, ch 23) about the claimed justification for the execution of Admiral John Byng in 1757, as an example for others, following the verdict of a court martial for his alleged neglect of duty in having fought only half-heartedly in an engagement with a French fleet under Roland-Michel Barrin de La Galissonière.
“The penalisation of those whose conduct is essentially innocent, in order to deter others, is more likely to bring the law into disrepute than to preserve the integrity of the statutory scheme and to bring about widespread compliance with it”: Carr v Higgins Coatings Pty Ltd [2005] FCA 1809 at [17].
Penalising a company in liquidation
Imposing a penalty on a company in liquidation, which is not a provable debt, might seem an empty exercise – see Kicking a company when it’s down – a regulatory approach to penalising a company in liquidation — (2007) 8(5) INSLB 90, M Murray – but it serves the purpose of general deterrence.
Penalties
A penalty of $1,500,000 was imposed on V Marketing (in liq).
V Marketing’s director was fined $60,000.
2 Responses
There is no deterrence for a company in liquidation and indeed it may be a blueprint for others to do the same.Deterrence would be prosecution of the officers of these companies under accessorial liability provisions. Otherwise it’s a waste of taxpayer money
Agree, and it probably depends on available evidence?
See my report here – https://murrayslegal.com.au/blog/2021/12/06/unconscionable-and-immoral-corporate-conduct-nothing-personal/ – where Justice Bromwich expressed regret not only that the company was in liquidation but also “that no individual associated with AIPE’s conduct is being made accountable. This latter regret in particular extends to AIPE’s former Chief Executive Officer, Mr Amjad Khanche, who is not a party to the proceeding and is therefore not able to be made the subject of any liability or other adverse findings against him in person, or any related penalty. That is so despite his conduct forming an important part of basis for AIPE’s liability …”: Australian Competition and Consumer Commission v Australian Institute of Professional Education Pty Ltd (in liq) (No 3) [2019] FCA 1982 (26 November 2019) (austlii.edu.au)
See also https://murrayslegal.com.au/blog/2023/08/01/record-penalties-imposed-against-insolvent-companies/