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IN THE FEDERAL COURT OF AUSTRALIA
DISTRICT REGISTRY
NOTICE OF FILING
This document was filed electronically in the Federal Court of Australia on 28 February, 2006
CASE DETAILS
Case Number: NSD 878 OF 2005
Case Description: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION V STORES ONLINE INTEF
District Registry: New South Wales
Document Type: Amended Document
ka,jsl cr?rxk.' (./,t'NMe X / zYhq; W (J&= 4: me+ ,.s w'u ,. upLu. ,r .;j;jj. r.y;l ; 1C '' :! < .. w..; ':,9x' .) sox '''f: $ s t j l z. .kx:e:, u. x tilt. ': w ''..'.9 Nx3 xl%*
17.0.Dated: 28 February, 2006 Registrar
Note
This Notice forms part of the document and contains information that might otherwise appear elsewherein the application. The Notice must be included in the document served on each party to the proceeding.
1
IN THE FEDERAL COURT OF AUSTRALIANEW SOUTH WALES DISTRICT REGISTRY
No N59878/2005
ID&CD
900:LpnlqeatoXOr
cxo no 1eO LLcN XQN(II rtrow*c<* Yc:3 .=O
Australian Competition and ConsumerCommission
Applicant
Storesonline International, Inc.ABN 65 361 279 260
First respondent
Storesonline, Inc.
Second respondent
Brett Perkins
Third respondent
FORM 7
AMENDED STATEMENT OF CLAIM
(Order 4, rule 6 and Order 11)
R'he applicant (ACCC) is:
(a) a body corporate established by section 6A of the Trade Practices Act 1974 (Cth)
(Act)', and
(b) capable of suing in its corporate name.
The respondents
2 The first respondent (SOL) is:
a body corporate incorporated in Delaware in the United States of America', and
Filed on behalf of: Australian Competition and Consumer Commission
Corrs Chambers WestgarthLawyersWaterfront Place1 Eagle StreetBRISBANE QLD 4000
3875865/5
TeI: (07) 3228 9333Fax: (07) 3228 9444Ref: RMD/RCM/9OI 7837
2
(b)
The second respondent (SOL Inc) is:
a foreign corporation within the meaning of the Act.
3
(a)
(b)
The third respondent (Perkins) is and was at aII material times:
(a) engaged by SOL and/or SOL Inc in a position with the style or title ''director of
Business Development Internationals of SOL and/or SOL Inc', and/or
a body corporate incorporated in Delaware in the United States Of America; and
a foreign corporation within the meaning of the Act.
(b) engaged by SOL and/or SOL Inc in a position with the style 0r title ''Regional
PresidentAsia Pacific'' of SOL and/or SOL loc; and/or
SOL and/or SOL loc's Australian representative.
5
(c)
From no later than October 2003, SOL and/or SOL Inc has carried on the business of
conducting seminars (Storesonline Seminars) and workshops (Storesonline
Workshops) in Australia at which it promotes and offers for sale to the public a package for
setting up and operating online stores (Storesonline package) through SOL and/or SOL
loc's software accessed by the felsite located at i'hdp://wastoresonline.com/'
(Website).
(a)
(b)
At aII material times, the Storesonline package comprised goods and services including:
Particulars
The domain name registrant of storesonline.com is iMergent, loc., a body
corporate incorporated in Delaware in the United States of America.
SOL and SOL Inc are whollyowned subsidiaries of iMergent, Inc.
6
(a)
(b)
(c)
(d)
a folder marked ''Complete Store Building Packet'' together with its contents',
2 DVDS marked t'Storesonline Boot Camp'';
a licence to use software accessible on the Website in order to set up and operate
websites from which to conduct an online retail business; and
optionally, and for a further charge, a function called i'ECI'' through which credit
card payments could be accepted for purchases made on the websites
established using the Storesonline package (ECI).
3875865/5
3
Storesonline Seminars
8
From no later than about October 2003, SOL and/or SOL lnc sent by mail or email
unsolicited invitations to members of the public to attend a ''free'' Storesonline Seminar with
a guest (Seminar Invitation).
The Seminar Invitation:
(a) stated that ''ordinary people, some with very little marketing experience at all, are
creating part time and full time incomes working from home on tile internet'';
stated that the Storesonline Seminar would allow the invitee to experience what
others are using to create padtime or fulltime income from the Internet by
working at home', and
contained testimonials of persons who) claimed to have established successful
online retailing businesses quickly and/or with limited effort.
(b)
(c)
Following acceptance of the Seminar Invitation by an invitee, SOL and/or SOL Inc sent to
the invitee a document entitled ''VIP Confirmation'' (VIP Confirmation) which:
(a) contained testimonials of persons wo claimed to have established successful
online retailing businesses quickly and/or with limited effort and stated that ''these
people attended our FREE 90 minute Preview and look what happenedf''; and
stated that Rin just 90 minutes (the conference host) will detail exactly hOw others
like you are building lucrative websites making part time or full time income. Our
turnkey Internet marketing training and services systems can work for anyone who
needs a little extra income. Attend even if yoU have limited computer Or business
experience''.
(b)
From no later than October 2003 up to and including June 2005, SOL and/or SOL Inc has
conducted the Stofesonline Seminars in various locations in Australia including Sydney,
Melbourne, Brisbane, Gold Coast, Perth, Adelaide and Canberra.
Particulars
The Storesonline Seminars lasted for approximately 90 minutes and were held, in various
locations in Australia, in at least, the following periods:
(a) October to December 2003.,
(b) October to December 2004*, and
(c) May to June 2005.
3875865/5
4
Participants in tine Storesonline Seminars were provided with a document entitled 'The
internet Marketing Conference'' and a document entitled ''What People are Saying about
Us'' (Seminar Documents).
At the Storesonline Seminars, SOL and/or SOL tnc made statements to the effect that:
(a) it was possible to make money through the Internet by establishing and operating
online retail businesses from home;
(b) ordinary people with little or no knowledge Or experience in computing Or
(c)
marketing had successfully and quickly established online retail businesses with
SOL and/or SOL Inc;
participants could learn how it was possible to make money through the Internet
by operating an online retail business by paying a fee in order to attend a further
allday workshop, the Storesonline Workshop.
Particulars
The statements were made orally by conference leaders for or on behalf of SOL and/or
SOL Inc.
Participants in the Storesonline Seminar who wished to attend the Storesonline Workshop
were required to complete and submit a document entitled d'Wcrkshop Guarantee
Agreemenf' and pay a fee between $20 and $50.
Storesonline Workshops
14 From about October 2003 up to and including June 2005, S0L and/or SOL Inc conducted
the Storesonline Workshops in various locations in Australia including Sydney, Melbourne,
Brisbane, Gold Coast, Perth, Adelaide and Canberra.
Particulars
The Storesonline Workshops lasted for approximately 1 day from 8.30 a.m. to 6.30 p.m.
and were held, in various locations in Australia, in at least, the following periods:
(a) October to December 2003,.
(b) October to December 2004; and
May to June 2005.
3875865/5
5
15 Participants at the Storesonline Workshops were handed a folder containing documents
and entitled ''Internet Cash Flow Workshop'' (Workshop Folder).
During the Storesonline Workshop, participants were invited to purchase and many did
purchase the Storesonline package involving rights to establish and operate 3 websites (or
a multiple of 3 websites) using the Storesonline package.
16
Representations
By the Seminar Invitation, the VlP Confirmation, and at the Storesonline Seminars and the
Storesonline Workshops (lr, alternatively, one or more of them. SOL and/or SOL 1nc
represented that by using the Storesonline package, profitable online retail businesses
could be quickly developed by persons with limited computing or business experience
working from home (the profitable business representation).
(a)
Particulars
The profitable business representation was partly written and partly oral. To the
extent that it was written it is contained in the Seminar Invitation, the VlP
Confirmation, the Seminar Documents and the document contained in the
Workshop Folder entitled ''lf y0u run a small business or if you are about to launch
one we'd like to be your Internet padnef'. TO the extent that it was oral, the
profitable business representation was made by presenters at the Storesonline
Seminars and Storesonline Workshops.
The profitable business representation also arises by implication, as a result of the
testimonials of ordinary persons who) stated that they had quickly and successfully
established online retail businesses using the Storesonline package, which were
presented at the Storesonline Seminars and Storesonline Workshops and in the
Seminar Document entitled 'What People are Saying about Us''.
(b)
18 At the Storesonline Seminars and/or Storesonline Workshops, SOL and/or SOL Inc
represented that the Storesonline package was easy to use (the easy to use
representation).
(a)
Particulars
The easy to use representation was partly written and partly oral. To the extent it
was written it is contained in the documents contained in the Workshop Folder
entitled ''If you run a small business or if y0u are about to launch one .. we'd like
3875865/5
6
(b)
to be your Internet partnerl'' and ''Features of Your Stores Online Storefront''. To
the extent that it was oral, the easy to use representation was made by presenters
at the Stofesonline Seminars and Storesonline Workshops.
The easy to use representation also arises by implication as a result Of the
matters in paragraph (b) to the particulars of paragraph 17 above.
19 By the VIP' Confirmation and at the Storesonline Seminars and Storesonline Workshops,
or, alternatively, one or more of them, SOL and/or SOL Inc represented that persons with:
(a) no computing or Internet knowledge or experience', or, alternatively.
(b) only basic or limited computing or Internet knowledge or experience
could readily use the Storesonline package to set up and operate websites from which to
conduct an online retail business (the no experience representation).
(i)
Particulars
The no experience representation was partly written and partly oral. To the extent
that it was written it is contained in the Seminar Invitation, the VIP Confirmation,
the Seminar Documents and the documents contained in the Workshop Folder
entitled tdlf you run a small business or if you are about to launch cine we'd like
to be you Internet partner'' and ''DO l Need a Computer?'' in the Workshop Folder.
To the extent that it was oral, the no experience representation was made by
presenters at the Storesonline Seminars and Storesonline Workshops.
The ACCC also relies in the matters in paragraph (b) to the particulars of
paragraph 17 above.
20 By the VIP Confirmation and/or at the Storesonline Workshops, SOL and/or SOL Inc
represented that accessible and prompt technical support would be available at no further
cost for persons who purchased the Storesonline package in order to set up and operate
websites from which to conduct an online retail business (the support representation).
Particulars
The support representation was partly written and partly oral. T0 the extent that it was
written it arises from the document contained in the Workshop Folder entitled ''Customer
Support Seaices'' and the VlP Confirmation. To the extent that it was oral, the support
representation was made by presenters at the Storesonline Workshops.
3876865/5
By the VIP Confirmation and/or at the Storesonline Workshops, SOL and/or SOL Inc
represented that the Storesonline package contained aII that purchasers could reasonably
require to set up and operate a profitable Online retail businesses (the complete package
representation).
(a)
Particulars
The complete package representation was partly written and partly oral. To the
extent that it was written it arises from the VIP Confirmation and the documents
contained in the Workshop Folder entitled ''lf you run a small business or if you
are about to launch one we'd like to be your Internet padnerl'' and ''Features of
Your Storesonline Storefront''. To the extent that it was oral, the complete
package representation was made by presenters at the Storesonline Workshops.
The ACCC also relies in the matters in paragraph (b) to the particulars of
paragraph 1 7 above.
The complete package representation also arises from the failure Of SOL and/or
SOL Inc to identify any other product or service not in the Storesonline packages
(b)
(c)
which was reasonably necessary in order to profitably set up and Operate
websites from which to conduct an online retail business, and, in particular, not
including any reference to the additional cost of any coaching or centering that
was subsequently offered to purchasers of the Storesonline package.
At the Storesonline Workshops, SOL and/or SOL lnc represented that SOL and/or SOL Inc
would set up and design the websites which were purchased with the Storesonline
package at no further charge (the construction of websites representation).
Particulars
Tile construction of websites representation was partly written and partly oral. To the
extent that it was written it arises from the document contained in the Workshop Folder
entitled ''Features of Your Stores Online storefront'. To the extent that it was oral, the
construction of websites representation was made by presenters at the Storesonline
Workshops.
At the Storesonline Workshops, SOL and/or SOL Inc represented that the Storesonline
package (including the optional ECl function) was adapted for the purpose of operating
websites from which to conduct an online retail business in Australia (the appropriate to
Australia representation).
23
3875865/5
8
Particulars
The appropriate t0 Australia representation arose by implication from each of the following:
(a)
(b)
(c)
the introduction of Perkins to the Storesonline Workshops as the Australian
representative of SOL and/or SOL Inc or as 'iRegional PresidentAsia Pacific'' of
SOL and/or SOL Inc or as ''director of Business Development international'' of
SOL and/or SOL Inc;
the introduction of Mr Simon Biar and Mr Richard Zikmundovskv at several of the
Storesonline Workshops as aAustralian successfully operating through
Storesonline websites conducting an online retail business in Australia', and
the failure of SOL and/or SOL Inc to advise persons attending the Storesonrine
Workshops that the Storesonline package was directed towards the setting up Of
and operating of websites from which to conduct an online retail business in the
United States and not in Australia.
24 At the Storesonline Workshops, SOL and/or SOL Inc represented that websites could be
established by using Storesonline packages using a variety of common web browsers (the
common functionality representation).
Particulars
The common functionality representation was written and contained in the document in the
Workshop Folder entitled ''Do l Need a Computer?''
25A At the Storesonline Workshops. SOL and/or SOL Inc represented that prices at which the
Storesonline packages were bedroll offered for sale were lower than the nricosat which the
Storesonline packages. of components thereof, had been offered f0r sale or sold in
Australia (discounted prices representation),
3875865/5
9
Particulars
The discounted prices representation was Dartlv written and Dartle oral. To the extent that it
was written it arises from the document entitled ''Stores Online Storefront Certificate'' which
was presented at the Workshop and distributed in hardcopy at Workshops. To the exten t
that it was oral, it was made be presenters at the StoresonlineWlrksbllfls.
25B At tine Storesonline Workshops, SoLand/or SOL lnc represented that for the na Ament of a
oneoff additional fee of $999, purchasers of the Storesonline packages would be nrovided
with the function called ECl on an ongoing basis at no further cost (ECI representation).
Particulars
The ECI representation was partly written and partly oral. T0 tine extent that it was written it
arises from:
(a ) the document entitled ''Stores Online Storefront Certificate'' which was presented
at the Workshop and distributed in hardcopy at Workshops) an. d
(b) the three documents entitled 'tAcceDtino Credit Carats''. the document entitled
WVIJjCaUM e rchant Account Unfront Costs'' and the document entitled d'Tvnical On
Goinn Costs'' which were presented at the Workshop.
TI) ttm extent that it was oral, it was made bv presenters at (tm Storesonline Workshops,
25C At the Storesonline Workshops. SOL and/or SOL lrlc represented that Australian
purchasers of Storesonline packages which included the ECI function would be able touse
tha! functionw itho. ut having to provide anv form of security dermsit in connection with their
use of the ECI function fno deposit representation)
Particulars
The no deposit representation was written. and was contained in the document entitled
''Tvnical Merchant Account Unfront Costs'' which was presented at the Storesonline
Workshop.
25D In the alternative to Daraqraoh 25B above, at the Storesonline Worksho/s. SOL and/or
SOL lnc represented that the ongoing costs for the ECl function would be:
(a) a ''Discount Rate (lnternetl'' fee of 2.39%
(b) a ''Transaction'' fe0 of AUD$0.25'.
(c) a ''Monthlv Statement'' fee of AUDSIO:
3875865/5
10
(dJ a ''Gatewav Access'' fee of AUD$20v
with no monthly minimum required (onqoinq psts representation).
25E. At the Storesonline Wprkshon, SOL and/or SOL Inc represented that Richard
Zikmundovskv purchased the Storest7nlinepackaqed because he wanted to expand
leis existing business into N&w Zealand finter a?ia) (the ZikmundovskvNe.w. Zealand
expansion representation).
Particulars
The Zikmundovskv New Zealand expansion representation was partly written and
Dartle oral. To the extent that it was written. it was contained in the slides pfesented at
the Storesonline Workshop. To the extent that it was oral, it was madebv presentefs
as the Storesonline Workshops,
25F At the Storesoniine Workshop. Soland/or SOL Inc imDliedlv renresented that MT
Zikmundovskv was using online stores created and operated via a Storesonline
package to sell products in New Zealand on an ongoing basis (the ZikmundpvsW
N@> zealand ongoing business represedtation).
Particulars
The implication arose from the Zikmundovskv New Zealand expansion representation
and the context in which it was made.
25G .A t .the Storesonline Workshop. SOL and/or SOL Inc represented that, at the time of the
making of the representation. Mr Zikmundovskv was averaging AUD$20,000 tier month.
in sales made directlv through his websites created and operated via a Storesonline
package (Zikmundovskv sales representation).
Particulars
The Zikmundovskv sales representation waspartiv written and partly oral. To the
extent that it was written. it was contained in the slides presented at the Storesonline
Workshop. To the extent that it was oral, it was made bv presenters at the
Storesonline workshops.
3875865/5
25H Bv means of the Website. SOL and/or SOL Inc represented that Mf Zikmundovskv's
opinion was thatthe Storesonline package was easy to use (Zikmundovsk: ease of
use representation).
Particulars
The Zikmundovskv ease of use representation was contain. ed on the webnane
which is in the section of the
Website headed''testimonials'', where thefollowinn quote is attributed to Mr
Zikmundovskv: 'once I understood what esc/a particular par! of the software Idi4l and
Ihowl the Droaram worked, it kvas Ber/ eas/ to Jel around. '' saws Richard. ''Just like anv
program, 4% justa matter of Ja/7wy/r/la//t?rl wktha particula r. software patl/fac/. Once
vou know how to use it, it e4s/ to aet around. ., I found l/)e tutorials very. verv IlelDful. ''
Misleading and deceptive conduct
26 Contrary to the profitable business representation, it was unlikely that persons with limited
computing or business experience could quickly develop a profitable Internet retail
business working from home using the Storesonline package.
27 Contrary to the easy to use representation, the Storesonline package was not easy to use.
Particulars
(alThe Storesonline package was technically complex to use to set up and
operate websites on which to conduct an online retail business.
(blThe instructions provided with the Storesonline package were difficult to follow,
were incomplete and inadequate for the purpose of setting up and operating
websites from which to conduct an online retail business.
(clthe Storesonline package could not be used to set up and operate websites
from which to conduct an online retail business without considerable time and
effort even by persons with computing and technological experience.
28 Contrary to the no experience representation, persons withe
(alno computing or Interne! knowledge or experience', or alternatively,
(bibasic or limited computing or Internet knowledge or experience,
could not readily use the Storesonline package to set up and operate websites from which
to conduct an online retail business.
3875865/5
12
Particulars
The ACCC relies on macers particularized in paragraph 27 above and says further that
following the purchase of a Storesonline package SOL and/or SOL lnc Or their agent
contacted purchasers to offer additional personal ''coaching'' to assist with the technical
and/or commercial set up arid operation of websites from which to conduct an online retail
business at a cost ranging between about $5,000 and $15,000.
Contrary to the support representation, accessible arid prompt technical support was n0t
available for persons who purchased the Storesonline package in order to set up and
operate websites from which to conduct an Online retail business.
29
(a)
Particulars
SOL and/or SOL Inc's online chat service available at
''hqp://suppod.myquickresponse.comc was frequently either unavailable,
unattended or unresponsive to queries from customers.
Emails by purchasers of Storesonline packages to SOL and/or SOL Inc's email
address for customer support, [email protected], were often unanswered Or
not answered within a reasonable time frame.
Telephone calls by purchasers of Storesonline packages to SOL and/or SOL Inc's
telephone number for customer support, +1 (801) 4348582. during Utah business
hours were often unanswered or not returned within a reasonable time fame.
(b)
(c)
(d) Substantive responses to customer requests for assistance of a technical nature,
when responded to by SOL and/or SOL loc, were often delayed fof extended
periods while answers to the requests for assistance were sought.
The substantive responses provided by SOL and/or SOL Inc to requests for
technical assistance often did not adequately address the problems raised.
Following the purchase Of the Storesonline package, SOL and/or SOL Inc
contacted purchasers to offer additional personal ''coaching'' to assist with the
technical set up and operation of websites on which to conduct an online retail
business at a cost ranging between about $5,000 and $15,000.
(e)
(t)
30 Contrary to the complete package representation, the Storesonline package did not
contain aII that purchasers could reasonably require to set up and operate profitable online
retail businesses.
3875865/5
13
Particulars
(a)
(b)
Following the purchase of a Storesonline package, SOL and/or SOL lnc or their
agent contacted purchasers to offer additional personal ''coaching'' to assist with
the technical and commercial set up and operation of websites on which to
conduct an online retail business at a cost ranging between about $5,000 and
$15,000.
In order to use ECI to accept credit card payments for purchases made on a
felsite established with a Storesonline package it was necessary to pay
substantial further fees and charges.
Contrary to the construction of websites representation, SOL and/or SOL Inc did not set up
and design the websites which were purchased with the Storesonline package at no further
charge.
Particulars
SOL and/or SOL Inc would only set up and design 1 felsite for each purchaser of the
Storesonline package at no further charge and would, thereafter, charge an hourly rate for
the set up and design of websites.
Contrary to the appropriate to Australia representation, tile Storesonline package was not
adapted for the purpose of setting up and operating websites on which to conduct an online
retail business in Australia.
32
Particulars
(a) The Storesonline package made no provision for establishing websites
accommodating freight options within Australia or the addition of the Goods and
Services Tax lo purchases.
(b) Tlqe ECI function could onlv accept payments in USDS and was n0t able to accent
payments in AUDS.
Contrary to the common functionality representation, websites could not be established
using Storesonline packages by persons using some common web browsers.
33
3875865/5
14
Particulars
The Apple Macintosh web browser ''Safari'' was not compatible with the Storesonline
package and is a common web browser.
34A contrary to the discounted prices representation. SOL and/or SOL 1nc has nev. er offered or
sold in Australia the Storesonline packages or components thereof. at the hai her prices
sneci.fiqd the document entitled ''Stores Online Storefront Certificate''.
34B Contrary to the ECl representation. oufchasefs Of the Storesonline packages who paid the
$999 fee for the ECI function were required to nav further. onnoinn costs to use the ECI
function.
344 Contrary to the no deposit reDresentation, Australian purchasers of the ECI function were
required to Dav a deDosit of between USDS 200 and GBP E5.000.
34D Gllntral'vlo the ongoing costs representation. Australian purchasers of ttl.o ECI function
were required to Dav fees additional to or higher than those specified in the ongoing costa
representation.
34E. Contrary to the Zikmundovskv New Zealand expansion representation, Mr Zikmundovskv
did not Dnrchase the Storesonline package to expand into New Zealand,
34F Contrary to the Zikmundovskv New Zealand ongoing business renresentation.Mr
Zikmundovskv did riot use the websites created and operated via Storesonline package to
sell products in New Zealand on an ongoing basis.
34G Contrary to the Zikmundovskv sales representation. Mr Zikmundovskv was not averaging
AUD$20,O00 ner month in sales made directly through his websites created and operated
via a Storesonline package. because the average of AUD$2O.000 wes comprised of some
sales directly through Mr Zikmundovskv's websites and some sales indirectly by persons
who had viewed the felsite and then contacted Mr Zikmundovskv (lirqctly.
34H The Zikmundovskv ease of use representation was not, or notadequatelv qualified, in that
SOL and/or SOL lnc should have qualified the Zikmundovskv representation bv:
(a) including the introductory words listen. the Storesonline tool initially in the #rSl
week or loo aas a little bit hard lo qet mv head artl&ntrwhich weresaid bv Mr
3875865/5
15
Zikmundovskv immediately prior to the quote attributed tohim and set 0ut in the
narticulars to paragraph 25H above; and
(b) indicating that Mr Zikmundovskv had a computer decree and had extensive
knowledge with computers and various programs and hOw the: work.
Representations as to future matters
35 Further, and in the alternative to paragraphs 26, 29, 30, 31 33, 348, a4*34C2 and 349
above. the:
(a) profitable business representation',
(b) support representation;
(c)
(d)
(e)
1
(g) ECI representation: and
(h) no deposit representation', ants
complete package representation',
construction of websites representation;
common functionality representationi.Ad
ti/til ongoing costs representation.
were representations made by a corporation with respect to a future matter.
The ACCC relies on section 51A of the Act in relation to the representations identified in
paragraph 35 above.
36
Opinions and predictions
36A Fudher. or in the alternative, the:
(a) profitable business representation',
(b) easy to use representation;
(c) no experience representation;
(d) complete package representation; and
(e) appropriate to Australia representation;
were opinions proffered. anfr/orpredictions made. bv SOL and/or SOL Inc,
3875865/5
16
36B Bv proffering .the opinions and/or makinclhe predictions referred to in naranranh 36A
above, SOL and/or SOL Inc impliedly represented that SOL and/or SOL Inc had reasonable
Grounds for such (minions or predictions (reasonable grounds represenlexqn).
36C Contrary to the reasonable Grounds representation. SOL and/or SOL Inc did not have
reasonable Grounds for holdino the (minions or predictions referred to in Jlaracraph 36A
above.
Contradictions of the Act
The:
(a) distribution of the Seminar Invitations;
(b)
(c)
distribution of the VIP Confirmations',
conduct of the Storesonrine Seminars, including the distribution of the Seminar
Documents', and
conduct of the Storesonline Workshops, including the distribution of the
Workshop Folder,
(d)
was conduct of SOL and/or SOL Inc in trade of commerce within the meaning of the Act.
By reason of the matters pleaded in paragraphs 17 to 36 above, SOL and/or SOL Inc has
engaged in misleading or deceptive conduct or conduct likely to mislead or deceive in
contravention of section 52 of the Act.
Further, and in the alterative, by reason of the matters in paragraphs 19, 24,26 25A, 28,
33 and 34 above, SOL and/or SOL Inc, in connection with the supply or possible supply of
Storesonline packages or in connection with the promotion of Storesonline packages:
(a) falsely or misleadingly represented that Storesonline packages were of a
particular standard, quality, value or grade in contravention of section 53(aa) ofthe Act;
represented that Stcresonline packages had performance characteristics, uses Or
benefits they did not have, in contravention of section 53(c) of the Act.
(b)
38
39
40 Further, and in the alternative, by reason of the matters in paragraphs 5, 18, 19, 27 and 28
above, SOL and/or SOL Inc, in trade of commerce, engaged in conduct which was liable to
mislead the public as to the nature. the characteristics arid the suitability for its intended
purpose of the Storesonline package, in contravention of section 55A of the Act.
3875865/5
17
Further, and in the alternative, by reason of the matters in paragraph: 17, ZX5C. an626, and
34,G above, SOL and/or SOL Inc made a representation which was false or misleading
about the profitability of risk of a business activity (namely, the establishment and operation
of a retail Internet business using the Storesonline package) that SOL and/or SOL Inc
represented as one which can be, or to a considerable extent can be, carried on from a
person's residence in contravention of section 59 of the Act.
41 A Further. and in the alternative, bv reason Of the mattars in paragraphs 258, 258. 25C, 250
34A. 348, NC and 34D above. SOL and/or SOL Inc. in connection with thesuonlv or
possible sunned of Storesonline packages or in connection with the nromtl.tjop of
Storesonline packages. has made a false Or misleading representation withrespect to the
Drice of moods or services. in contravention of section 53(e1 of the Act.
Accessorial liability of the third respondent
42 Perkins amended Storesonline Seminars and/or Storesonline Workshops, in one or more
of the capacities referred to in paragraph 4 above.
Particulars
Perkins attended various Storesonline Seminars and Storesonline Workshops in
December 2004 and from May to June 2005, at which Perkins was introduced, variously,
as the ddRegional PresidentAsia Pacific'' of SOL and/or SOL loc, or SOL and/or SOL loc's
''Australian representative'' or ''director of Business Development international'' of SOL
and/or SOL loc.
By reason of the matters in paragraph 42 above, Perkins was aware of, authorized and/of
permitted the making of the representations pleaded in paragraphs 17 to 25 above.
43
3875865/5
18
45 Perkins'.
(a) was aware that the representations pleaded in paragraphs 1 7 to &42.5 above were
false or misleading;
alternatively, was aware of the facts that gave rise to the falsity and/or the
misleading nature of the representations referred to in subparagraph (a);
alternatively, was aware that SOL and/or SOL Inc did not have reasonable
grounds to make the representations.
Particulars
(b)
Tine ACCC relies upon the matters in paragraphs 4, 42, and 4 above.
By reason of the matters in paragraph 45 above, Perkins was directly Or indirectly
knowingly concerned in or party to the contradictions pleaded in paragraphs 38 to 41
above.
In the premises, Perkins was involved in the contradictions pleaded in paragraphs 38 to 41
above by reason of section 75B of the Act.
46
47
The applicant claims the relief specified in the amended application.
Date: 28 February 2006
W> e
Rodney ichael DannSolicitor for the applicant
This statement of claim was prepared by Mr S T White SC, Mr R S Hollo. Mr R M Foreman of
counsel, Mr Bob Alexander, general counsel, ACCC, and Mr Rodney Michael Dann and
Ms Rebecca Catherine Mitchell, solicitors.
3875865/5
19
IN THE FEDERAL COURT OF AUSTRALIANEW SOUTH WALES DISTRICT REGISTRY
No N5D878/2005
Australian Competition and ConsumerCommission
Applicant
Storesonline International, loc.ABN 65 361 279 260
First respondent
Storesonline, Inc.
Second respondent
Brett Perkins
Third respondent
FORM 15B
CERTIFICATE OF LEGAL PRACTITIONER
(Order 1 1 rule 1 B)
1, RODNEY MICHAEL DANN, certify to the Court that in relation to the pleading dated 28 February
2006 filed on behalf of the applicant. the factual and legal material available to me at present
provides a proper basis for:
(a)
(b)
(c)
Date: 28 February 2006
each allegation in the pleading;
each denial in the pleading', and
each nonadmission in the pleading.
rx< ee
Legal practitioner resenting the applicant
Filed on behalf of: Australian Competition and Consumer Commission
Corrs Chambers WestgadhLawyersWaterfront Place1 Eagle StreetBRISBANE QLD 4000
3876865/5
TeI: (07) 3228 9333Fax: (07) 3228 9444Ref: RMD/RCM/9017837