Australia: Misleading or deceptive conduct: Director of Consumer Affairs Victoria v Gibson [2017] FCA 24

On 15 March 2017 Justice Mortimer of the Federal Court handed down the following decision:

BACKGROUND

The Director of Consumer Affairs Victoria ('the director') brought an application1 against Ms Anabelle Natalie Gibson & Inkerman Road Nominees Pty Ltd (in Liq) for contraventions of the Australian Consumer Law and Fair Trading Act 2012 (Vic) ('ACL (Vic)') and the Australian Consumer Law (Cth) ('ACL').2

This case concerned the alleged conduct of Ms Annabelle Natalie Gibson (also known as 'Belle Gibson') in relation to her claims of being diagnosed with brain cancer, the treatment of her brain cancer and the alternatives to traditional medicines Ms Gibson preferred.3 Ms Gibson claimed she had been diagnosed with terminal malignant brain cancer; however an MRI was performed at the Alfred Hospital in Melbourne in 2011 that confirmed that Ms Gibson did not have a brain tumor.4 Despite receiving a clean bill of health, Ms Gibson continued to state she had brain cancer. In November 2014, Ms Gibson was tested by a general practitioner, Dr Phillip Soffer, and was informed that results of tests came back normal showing nothing of note.5

The Director alleged that in the course of developing and promoting a smart phone application and a book, Ms Gibson falsely claimed to have been diagnosed with brain cancer and claimed to have rejected conventional cancer treatments in favour of embarking on a quest to heal herself naturally.6 Ms Gibson promoted herself and these representations under her own name and under a registered business name, "The Whole Pantry", which she was the sole director and shareholder.7 Ms Gibson claimed that part of the proceeds of sales of the smart phone application and the book would be donated to various charities, many or most of those donations were not made.8 it was found that by these representations Ms Gibson and her company had contravened the ACL and ACL (Vic).

Ms Gibson developed and controlled the following social media platforms which purported certain representations later found to contravene the ACL and ACL (Vic):

  • Website – www.thewholepantryapp.com;
  • Facebook account with the identifier "@TheWholePantry" (held in the name of the company); and
  • Instagram account with the identifier "healing_belle" (held in the name of the company). 9

UNREPRSENTED AT HEARING

Ms Gibson and Inkerman Road Nominees Pty Ltd (in Liq) (formally named "Belle Gibson Pty Ltd prior to liquidators being appointed) were not represented at hearing. On 24 June 2016, Ms Gibson sent a letter to Justice Mortimer's chambers expressly stating that she would not be defending the proceeding.10

Any evidence that was provided to the court by her legal representatives was not sworn or affirmed, nor even in her own words.11

LAW CONTRAVENED

  • Section 4, 18, 2112 and 19 of the ACL & ACL (Vic).
  • "false and misleading representation", "misleading and deceptive" and "unconscionability".13
  • Silence and non disclosure: Ms Gibson not disclosing she did not have cancer fell within the ambit of misleading or deceptive.14

REPRESENTATIONS MADE

Ms Gibson made a number of representations regarding:

  1. Claiming to have cancer: The Court found there was no reasonable (or rational) basis for Ms Gibson to believe she had brain cancer.15
  2. Treatment Ms Gibson had received: Ms Gibson had stated she had been treated for cancer. Stating she had received conventional treatment but had turned away from conventional treatments for cancer in favour of "healing" herself through nutrition and other alternative remedies.16

The Court found the above representations made by Ms Gibson and her company constituted misleading or deceptive conduct, in trade and commerce, contrary to section 18 of the ACL & ACL (Vic).17

  1. Representations regarding financial donations: Ms Gibson claimed that part of the proceeds of sales of the application and the book would be donated to charities, many or most of these donations were not made.18

The Court was satisfied both Ms Gibson and her company engaged in conduct that was misleading or deceptive in making the charitable giving representations above.19

Section 4(1)(b) of the ACL & ACL (Vic) the Court held had been satisfied, and the representations made by Ms Gibson and her company were taken to be misleading.20

The Court was satisfied that the misleading and deceptive representations made by Ms Gibson and the company about the charitable donations which she and her company would make, constituted unconscionable conduct for the purposes of section 21 of the ACL & ACL (Vic).21

These representations made over multiple social media accounts, to her publisher, though The Whole Pantry Apps and Book and any sales materials used to promote the app or book, and to journalists for newspapers, magazines and television.22

REMEDIES SOUGHT

The Director sought injunctions, declarations, pecuniary penalties, publication orders and costs in respect of alleged contraventions by the respondents.

DECISION

The Court found that the Director had proven the alleged contraventions of section 18 (misleading and deceptive conduct) of the ACL and ACL (Vic) against both Ms Gibson and her company; some of the alleged contraventions of section 21 (unconscionable conduct in connection with goods and services) against Ms Gibson and her company, but not the alleged contraventions of section 29 (false or misleading representations about goods or services).23

Sentencing has been stood over until final orders are pronounced, at which time the Court will give directions concerning the hearing and determination of relief and penalties in light of the Court's determinations on liability.24

CONSUMER AFFAIRS VS HEALTH COMPLAINTS COMMISSION (VIC)

Proceedings could not be brought against Ms Gibson and her company under the National law or under the Health Services (Conciliation and Review) Act 1987 (Vic) (now repealed) as Ms Gibson or her company were not classed a 'health service' or a 'provider'. The only other avenue for compensation and restitutionary measures exists under consumer legislation for contraventions of the sections mentioned above.

RECENT DEVELOPMENTS

As of 7 April 2017, Ms Gibson has been ordered to pay $30,000 contribution towards the legal costs of Consumer Affairs Victoria;25 and pursuant to section 232 of the ACL (Vic) is banned from making deceptive claims about her health in connect with wellbeing advice.26 Ms Gibson has 60 days to pay Consumer Affairs Victoria, if she refuses to obey this order she will be liable for imprisonment, sequestration of property, or other punishment.27

The Director seeks that the Court should order Ms Gibson to publish what he describes as "a non-punitive/adverse publicity notice" in the Herald Sun and The Australian newspapers – however, such an order should be deferred until the Court has determined the appropriate pecuniary penalty to be imposed, if any.28

Sentencing for the misleading, deceptive and unconscionable conduct contraventions are expected to be handed down in mid-June.29

Footnotes

1Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [1].
2 As set out in Schedule 2 to the Competition and Consumer Act 2010 (Cth).
3 Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [2], [130]-[155]
4 Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [147].
5 Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [147].
6 Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [2].
7 Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [2].
8 Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [2].
9 Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [17].
10 Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [4].
11 Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [138].
12 Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [238]-[242].
13 Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [120]-[129].
14Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [127].
15 Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [170].
16Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [152].
17Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [172].
18 Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [2].
19Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [243].
20 Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [200].
21Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [238].
22 Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [139], [241].
23 Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [6].
24 Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [247].
25 Director of Consumer Affairs Victoria v Gibson (No 2) [2017] FCA 366, at [9] and [7].
26 Director of Consumer Affairs Victoria v Gibson (No 2) [2017] FCA 366, at [7] and [8].
27 http://www.abc.net.au/news/2017-04-07/belle-gibson-costs-order-fake-cancer-case/8426030
28Director of Consumer Affairs Victoria v Gibson (No 2) [2017] FCA 366, at [8].
29 http://www.news.com.au/lifestyle/real-life/news-life/belle-gibson-fined-30k-in-vic-court/news-story/8ef57444e4611f253292165b2bd81218

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