Case: Foster v Australian Competition and Consumer Commission [2006] FCAFC 21
Outcome: discussed
Most recently, in Foster v Australian Competition and Consumer Commission [2006] FCAFC 21 , a Full Court (comprising Ryan, Finn and Allsop JJ) noted the apparent tension between the view expressed by Lockhart and Gummow JJ in ICI . Their Honours said at [30]-[31]: "His Honour's reference to terms having 'an operation outside the boundaries of s 80 ' is no more than a paraphrase of the actual words of the subsection 'such terms as the Court determines to be appropriate.' That paraphrase, we consider with respect, does not illuminate the amplitude which should be given, as a matter of construction, to the grant of power. In our view, a more helpful guide to resolving the question of construction is afforded by this observation, also from ICI v Trade Practices Commission , of Lockhart J (with whom French J agreed) at 256; 'In my opinion subss (4) and (5) are designed to ensure that once the condition precedent to the exercise of injunctive relief has been satisfied (ie contraventions or proposed contraventions of Pt IV or V of the Act ), the court should be given the widest possible injunctive powers, devoid of traditional constraints, though the power must be exercised judicially and sensibly.' This approach of Lochkhart J accords with the view often expressed by the High Court that discretions or powers entrusted to Courts should be read liberally for the relevant statutory purpose, without making implications or imposing limitations not found in the express words: Australian Memory Pty Ltd v Brien [2000] HCA 30 ; (2000) 200 CLR 270 at [77] and see generally for the cases Hewlett Packard v GE Capital [2003] FCAFC 256 ; (2003) 203 ALR 51 at [187] ." Thus, the Full Court preferred the wider view described by Lockhart and French JJ in ICI to the narrower view which the appellant in Foster sought to found upon the judgment of Gummow J. 71 The issue in Foster was whether an injunction that restrained the fourth respondent from being directly or indirectly knowingly concerned in the promotion or conduct of a business of a specified kind for a period of five years went beyond the power conferred by s 80 of the TPA. As the Full Court explained, this turned on the existence of a sufficient nexus between a contravention that enlivened the Court's power under s 80 and the conduct that was restrained by the injunction: "In our view, the need, suggested by the authorities, for a nexus between the contravention of the Act which the Court has found and the terms of the restraint which it then decides to impose is a specific reflection of Lockhart J's insistence that the power be exercised 'judicially and sensibly'. It goes to the appropriateness of the relief contemplated by the concluding words of s 80(1) , not to the extent of the power to grant it. If the Court considers that a complete prohibition, whether permanently or for a specified period, on a respondent's engaging in a particular field of commercial activity or industry is required to protect the public from conduct of the kind which constituted the contravention, s 80 is wide enough to support such a prohibition as a matter of power. This analysis of s 80 conforms, we consider, with that recently undertaken by Goldberg J in Australian Competition and Consumer Commission v Dermalogica Pty Ltd (2005) 215 ALR 482 at 504 [110]." The Full Court held that there was an appropriate nexus, as the evidence and the trial judge's findings at first instance gave rise to a real fear that the fourth respondent would, unless restrained, commit further conduct of the same general kind. In these circumstances, it was appropriate to cast the injunction more widely in order to catch conduct which was similar to the established contravention: at [34] and [38]. 72 In the present case, I consider that the wider form of injunctive relief is appropriate, especially given the evidence that McDougall attempted to resuscitate the Scheme in another form. The evidence demonstrates, in my view, that the defendants are susceptible to repeating their contraventions of the managed investment provisions of the Act . There is, in my opinion, a sufficient nexus between the wider form of injunctive order sought by ASIC in par 5 of the draft orders, and the contraventions of the Act which were established by the evidence in this case. The wider form of injunction is consented to by the defendants. In all the circumstances, I consider that the wider form of injunction is warranted, and that it will serve the public interest. 73 ASIC seeks orders that the Scheme be wound up pursuant to s 601EE(1) of the Act . A number of ancillary orders are sought, including an order appointing the existing Court appointed receivers as joint and several liquidators of the Scheme. The defendants consent to these orders being made. I have made two minor alterations to the form of the draft orders for the winding up of the Scheme. The first alteration, in par 7, identifies Adrian Lawrence Brown and James Henry Stewart as the receivers appointed by order of Merkel J on 25 October 2005. The second alteration clarifies that the receivers referred to in par 9 are the individuals identified in the above par 7 of the orders.