ACCC Attacks Bogus Allergy Clinic Claims

Stephen Barrett, M.D.


The Federal Court of Australia has ordered Allergy Pathway Pty Ltd.—formerly called Allergy Elimination Pty Ltd, (AAE)—to stop misleading consumers about the efficacy of treatment at its clinics. In a case brought by the Australian Competition & Consumer Commission, the court declared that the company had falsely represented that:

Before the court decision, the AAE Web site stated that the clinic used a muscle response test (MRT) to determine alleged negative body reactions. The test was performed by pushing down on the patients outstretched arm while the patients holds a vial containing a homeopathic solution of the substance being tested. If the arm muscle tests "weak," the patient would continue to hold the vial while the practitioner ran a device down the spine and pressed on "acupressure points" to "relax the body" and to "strengthen the organ systems" said to "correspond" with the body's major organ systems. These methods closely resemble those of Nambutripad's allergy elimination technique (NAET).

The case was settled with a consent agreement under which the Keir and his company pledged not to engage in similar conduct for a period of three years. The court also ordered the company and its director, Paul Frederick Keir, to publish corrective advertising notices in newspapers, in its clinics, and on its website and to send letters to current and former customers detailing the contravening conduct and the outcome of the ACCC's action.


FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission
v Allergy Pathway Pty Ltd [2009] FCA 960

PRACTICE AND PROCEDURE – declaration – evidence – declaration not to be made on admissions or consent

TRADE PRACTICES misleading or deceptive conduct in relation to medical services

Trade Practices Act 1974 (Cth) ss 52, 53(aa), 53(c), 55A

Animatrix Ltd v O’Kelly [2008] EWCA Civ 1415
Australian Securities and Investments Commission v Cash King Pty Ltd
[2005] FCA 1429
Australian Securities and Investments Commission v Edwards
(2004) 51 ACSR 320
Australian Securities and Investments Commission v Elm
Financial Services Pty Ltd (2005) 55 ACSR 411
Australian Securities and Investments Commission v Rich
[2004] NSWSC 836; (2004) 50 ACSR 500
BMI Ltd v Federated Clerks Union of Australia
(1983) 51 ALR 401
Dean-Wilcox Pty Ltd v Commissioner of Taxation (No 2)
(2004) 49 ACSR 325
Gramophone Company Ld v Magazine Holder Company (1911) 28 RPC 221
Hayim v Couch
[2009] EWHC 1040 (Ch)
Interstate Parcel Express Co Pty Ltd v Time-Life International (Netherlands) BV [1977] HCA 52; (1997) 138 CLR 534
Lever Fabergé Ltd v Colgate-Palmolive Co [2005] EWHC 2655 (Pat)
Metzger
v Department of Health and Social Security [1977] 3 All ER 444
One.Tel Ltd (in liq); Australian Securities and Investments Commission v Rich, Re
(2003) 44 ACSR 682
Patten v Burke Publishing Co Ltd [1991] 1 WLR 541
Thompson Australian Holdings Pty Ltd v The Trade Practices Commission
(1981) 148 CLR 150
Wallersteiner v Moir
[1974] 1 WLR 991
Williams v Powell
[1894] WN 141

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v ALLERGY PATHWAY PTY LTD (FORMERLY ADVANCED ALLERGY ELIMINATION PTY LTD) and PAUL FREDERICK KEIR

VID 361 of 2009

FINKELSTEIN J27 AUGUST 2009MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 361 of 2009
BETWEEN:
AUSTRALIAN COMPETITION AND CONSUMER COMMISSIONApplicant
AND:
ALLERGY PATHWAY PTY LTD (FORMERLY ADVANCED ALLERGY ELIMINATION PTY LTD) First Respondent
PAUL FREDERICK KEIR Second Respondent
JUDGE:
FINKELSTEIN J
DATE OF ORDER:
27 AUGUST 2009
WHERE MADE:
MELBOURNE

UPON THE COURT ACCEPTING the undertakings given by each of the First and Second Respondents, by their Counsel, in Annexure 1 to this order:

For the purposes of each of the declarations, the following definitions apply:

1. “allergy”or “allergies” means a physical hypersensitivity in an individual to certain substances which are normally harmless such as pollen, foods and fruits and which produces an allergic reaction in that individual and which may be initiated by:

(a) contact with the skin;

(b) inhalation;

(c) ingestion; or

(d) injection;

2. “allergen” means a substance which elicits an allergic reaction in an individual; and

3. “allergic reaction” means an immunological process of specific allergen recognition and pathological response.

THE COURT DECLARES THAT:

1. The First Respondent (AAE) from 8 July 2008 until the date of this order has, in trade or commerce:

(a) engaged in conduct that was misleading or deceptive or was likely to mislead or deceive, in contravention of section 52 of the Trade Practices Act 1974 (Cth) (the Act);

(b) in connexion with the supply or possible supply of services of testing, identifying and treating allergies (Services), or with the promotion of the supply of such services, falsely represented that its Services were of a particular quality, in contravention of section 53(aa) of the Act;

(c) in connexion with the supply or possible supply of Services, or with the promotion of the supply of such services, represented that its Services had performance characteristics, uses or benefits they did not have, in contravention of section 53(c) of the Act; and

(d) engaged in conduct that was liable to mislead the public as to the nature or characteristics of its Services or the suitability for their purpose of such services, in contravention of section 55A of the Act,

by publishing, or causing to be published:

(e) the statements on its Internet website accessible via the uniform resource locator address (URL) www.aaeclinics.com.au (AAE Website) and in its brochure entitled "Frequently Asked Questions" referred to in Part 1 of the Schedule to this order (the Schedule) thereby representing that AAE could test for and identify an allergen for that person and/or a substance to which that person is allergic when AAE could not test for and accurately identify an allergen for a person nor a substance to which that person is allergic;

(f) the statements:

(i) on the AAE Website referred to in Part 2A of the Schedule thereby representing that AAE could cure or eliminate virtually all allergies or allergic reactions when AAE could not cure or eliminate any allergies or any allergic reactions; and

(ii) on the AAE Website, in the Herald Sun newspaper advertisement published on 17 December 2008, in each of the brochures entitled "Advanced Allergy Elimination", "Allergies and Positive Conditioning" and "Frequently Asked Questions" and in the radio advertisements broadcast on radio stations in Melbourne (3AW), Sydney (2UE and 2GB), Brisbane (4BC and 4BH) and Perth (6PR) referred to in Part 2B of the Schedule thereby representing that AAE could successfully treat a person’s allergies or allergic reactions when AAE could not successfully treat a person’s allergies or any allergic reactions; and

(g) the statements:

(i) on the AAE Website, in the Herald Sun newspaper advertisement published on 17 December 2008 and in each of the brochures entitled "Advanced Allergy Elimination" and "Allergies and Positive Conditioning" referred to in Part 3A of the Schedule thereby representing that AAE’s treatment was safe and/or low risk; and

(ii) on the AAE Website, in the Age newspaper advertisement published on 31 July 2008 and in each of the brochures entitled "Advanced Allergy Elimination" and "Allergies and Positive Conditioning" referred to in Part 3B of the Schedule thereby representing that after AAE's treatment it was safe to have contact with the substance or allergen to which the person had an adverse reaction, when there were risks associated with AAE’s treatment for persons with certain allergies including food allergies.

2. The Second Respondent (Mr Keir) from 9 October 2008 until the date of this order, was directly or indirectly knowingly concerned in or a party to the contraventions by AAE of sections 52, 53(aa), 53(c) and 55A of the Act in making the representations referred to in paragraphs 1(e) to (g) of this order by reason of him causing, permitting or authorising the statements referred to in the Schedule to be published, maintained, broadcast, provided or made available (as the case may be) during the period from 9 October 2008 until the date of this order in circumstances where he knew:

(a) AAE could not test for and accurately identify an allergen for a person nor a substance to which a person is allergic;

(b) AAE could not cure or eliminate any allergies or any allergic reactions;

(c) AAE could not successfully treat a person’s allergies or any allergic reactions; and

(d) there were risks associated with AAE’s treatment for persons with certain allergies including food allergies.

THE COURT ORDERS THAT:

Corrective Advertising

3. AAE, within 30 days of the date of this order, at its own expense publish a corrective advertisement in the form of Annexure 2 to this order in a single Saturday edition of:

(a) “The Age”;
(b) “The Australian”;
(c) “The West Australian”;
(d) “The Sun”;
(e) “The Daily Telegraph”;
(f) “The Sydney Morning Herald”;
(g) “The Courier-Mail”; and
(h) “The Parramatta Sun”,

(the Newspapers) and further AAE shall use its best endeavours to ensure that such advertisements shall be:

(i) of a size not less than two columns in width, and at least 18 centimetres high by 13 centimetres wide

(ii) in text which is in a type not less than 10 point; and

(iii) placed within the first 10 pages of each of the Newspapers.

4. AAE, within 14 days of the date of this order, at its own expense, cause to be published a notice in the terms and form of Annexure 3 to this order which notice is to be affixed on the front counter or displayed at the point of sale at each of the clinics operated by AAE at the date of the order of the Court for a continuous period of 45 days and in a manner such that the notice is not obscured.

5. AAE, within 21 days of the date of this order, at its own expense, cause a notice in the terms and form of Annexure 4 to this order (Website Notice) to be published on the Internet at the home page of all websites which are owned, operated, controlled or maintained by or on behalf of AAE, including the AAE Website or if any such URL is replaced or changed, the Internet home page of the corresponding website (Corresponding Website) for a continuous period of 45 days and use its best endeavours to ensure that:

(a) the Website Notice shall be viewable by clicking a ‘click-through’ icon located on the AAE Website;

(b) the ‘click-through’ icon referred to in the previous sub-paragraph is located at the top of the homepage of the Website and/or Corresponding Website;

(c) the ‘click-through’ icon shall contain the words “ AAE's Corrective Notice Ordered by the Federal Court of Australia” prominently in red text on a black background and the words “click here”; and

(d) the Website Notice shall occupy the entire webpage that is accessed via the “click-through” icon referred to above.

6. AAE, within 30 days of the date of this order, at its own expense, publish and distribute a letter in the terms and form of Annexure 5 to this order (Letter) to all persons who are AAE’s customers at the date of this order or who were customers of AAE during the period from 8 July 2008 until the date of this order.

Compliance Program

7. AAE:

(a) establish the Trade Practices Compliance and Education/Training Program set out in Annexure 6 to this order:

(i) for the employees or other persons involved in its business, being a program designed to ensure their awareness of the responsibilities and obligations in relation to the conduct declared by the Court in this proceeding to be in contravention of Division 1 of Part V of the Act and any similar or related conduct; and

(ii) revising the internal operations of its business which led to it engaging in the conduct declared by the Court in this proceeding to be in contravention of Division 1 of Part V of the Act;

(b) maintain and administer, at its own expense, the Trade Practices Compliance and Education/Training Program set out in Annexure 6 to this order for a period of 3 years; and

(c) provide, at its own expense, a copy of any documents to be provided to the Applicant pursuant to Annexure 6 to this order.

8. Mr Keir:

(a) no less than once annually for a period of 3 years from the date of this order, attend practical training regarding Division 1 of Part V of the Act, such training to be conducted by a suitably qualified compliance professional or legal practitioner with expertise in the Act; and

(b) provide to the Applicant within 14 days of the completion of each annual training written confirmation:

(i) that such training has occurred; and

(ii) stating precisely the date the training occurred, the topics that were covered and the name of the person who provided the training.

Other Orders

9. AAE file and serve on the Applicant within 60 days of the date of this order an affidavit of its proper officer verifying that it has carried out its obligations under paragraphs 3, 4, 5 and 6 of this order, detailing what it has done, and:

(a) in respect of paragraph 3 of this order, providing a copy of the corrective advertisement as published in each of the Newspapers;

(b) in respect of paragraphs 4 and 5 of this order, detailing how the 45 day period ordered has been complied with; and

(c) in respect of paragraph 6 of this order, providing:

(i) a copy of one Letter as distributed to a customer or former customer of AAE; and

(ii) a list of the customers and former customers of AAE to whom the Letter was sent and the address to which the Letter was sent.

10. That AAE and Keir pay the Applicant's costs of the proceeding fixed in the agreed sum of $7,500.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court’s website.

ANNEXURE 1

1.The First Respondent, by its Counsel, undertakes to the Court that it will not, whether by itself, its directors, servants, agents or otherwise howsoever, in trade or commerce, for a period of 3 years from the date of the orders herein, make or publish or cause to be made or be published, in any internet website, radio, television or newspaper advertisements or brochures or other written promotional material published or caused to be published by it, statements that represent:

(a) it can accurately test for and identify an allergen for a person and/or a substance which causes a person’s allergic reaction;

(b) it can cure or eliminate, or successfully treat, any allergies or any allergic reactions; \

(c) its treatment for a person’s allergies or allergic reactions is safe and/or low risk; or

(d) after its treatment of a person’s allergies or allergic reactions it is safe for that person to have contact with the allergen to which the person had an allergic reaction.

2. The Second Respondent, by his Counsel, undertakes to the Court that he will not, for a period of 3 years from the date of the orders herein, be in any way directly or indirectly, knowingly concerned in, or a party to, the conduct of the First Respondent or any other corporation whereby the First Respondent or the other corporation whether by itself, its directors, servants, agents or otherwise howsoever, in trade or commerce, makes or publishes or causes to be made or published statements that represent any of the matters in (a) to (d) of paragraph 1 above.

For the purposes of each of these undertakings, the following definitions apply:

3. “allergy”or “allergies” means a physical hypersensitivity in an individual to certain substances which are normally harmless such as pollen, foods and fruits and which produces an allergic reaction in that individual and which may be initiated by:

(a) contact with the skin;
(b) inhalation;
(c) ingestion; or
(d) injection;

4. “allergen” means a substance which elicits an allergic reaction in an individual; and

5. “allergic reaction” means an immunological process of specific allergen recognition and pathological response.

ANNEXURE 2 AND 3

Information Notice
An important message from Advanced Allergy Elimination, which has now changed its
name to Allergy Pathway

False, misleading and deceptive conduct by Advanced Allergy Elimination and its Director

Following action by the Australian Competition and Consumer Commission (ACCC), the Federal Court of Australia has declared that Advanced Allergy Elimination Pty Ltd (AAE) contravened the Trade Practices Act 1974 (the TPA) by making false, misleading and deceptive representations.

AAE made the representations in relation to its ability to test for, identify and treat allergies. The representations were made at certain times between 8 July 2008 and 10 July 2009 in statements published and adopted on its website at www.aaeclinics.com.au, in brochures it published and provided to consumers and in advertisements it caused to be published in newspapers and on the radio.

The Court has declared that AAE’s conduct contravened the TPA because the following representations it made were either not true or were misleading or deceptive:

    1. AAE can test for and identify an allergen for a person ; (AAE cannot do this; immunologically mediated allergies such as coeliac disease or food allergies can only be diagnosed by skin prick testing or a special blood test and AAE does not perform these tests)

    2. AAE can cure or eliminate virtually all allergies or allergic reactions, or successfully treat a person’s allergies or allergic reactions; (AAE cannot do this; many allergies, including food allergies, cannot be cured or successfully treated) .

    3. AAE’s treatment is safe and/or low risk, and following treatment it is safe for a person to have contact with an allergen; (as AAE cannot cure, eliminate or successfully treat allergies, it may be unsafe or even potentially life threatening to recommence contact with the allergen).

The Court has also declared that AAE’s director, Mr Paul Keir, was, since October 2008, directly or indirectly knowingly concerned in or party to AAE’s conduct referred to above.

AAE and Mr Keir have given undertakings to the Court that they will refrain from engaging in similar conduct for a period of 3 years.

AAE agreed to court orders that it publish corrective notices including this notice and implement a trade practices compliance program. As part of its orders, the Court also required AAE and Mr Keir to pay costs to the ACCC.

ANNEXURE 4
An important message from Advanced Allergy Elimination,

which has now changed its name to

Allergy Pathway

False, misleading and deceptive conduct by
Advanced Allergy Elimination and its Director

Following action by the Australian Competition and Consumer Commission (ACCC), the Federal Court of Australia has declared that Advanced Allergy Elimination Pty Ltd (AAE) contravened the Trade Practices Act 1974 (the TPA) by making false, misleading and deceptive representations*.

AAE made the representations in relation to its ability to test for, identify and treat allergies. The representations were made at certain times between 8 July 2008 and 10 July 2009 in statements published and adopted on its website at www.aaeclinics.com.au, in brochures it published and provided to consumers and in advertisements it caused to be published in newspapers and on the radio.

The Court has declared that AAE’s conduct contravened the TPA because the following representations it made were either not true or were misleading or deceptive:

    1. AAE can test for and identify an allergen for a person; (AAE cannot do this; immunologically mediated allergies such as coeliac disease or food allergies can only be diagnosed by skin prick testing or a special blood test and AAE does not perform these tests)

    2. AAE can cure or eliminate virtually all allergies or allergic reactions, or successfully treat a person’s allergies or allergic reactions; (AAE cannot do this; many allergies, including food allergies, cannot be cured or successfully treated)

    3. AAE ’s treatment is safe and/or low risk, and following treatment it is safe for a person to have contact with an allergen; (as AAE cannot cure, eliminate or successfully treat allergies, it may be unsafe or even potentially life threatening to recommence contact with the allergen).

The Court has also declared that AAE’s director, Mr Paul Keir, was since October 2008, directly or indirectly knowingly concerned in or party to AAE’s conduct referred to above.AAE and Mr Keir have given undertakings to the Court that they will refrain from engaging in similar conduct for a period of 3 years.

AAE agreed to court orders that it publish corrective notices including this notice and implement a trade practices compliance program. As part of its orders, the Court also required AAE and Mr Keir to pay costs to the ACCC.

*Specifically, the Court declared that the AAE contravened sections 52, 53(aa), 53(c) and 55A of the TPA. Section 52 of the TPA prohibits conduct that is misleading or deceptive or is likely to mislead or deceive while section 53 prohibits the making of certain false representations about goods or services. Section 55A prohibits conduct liable to mislead the public as to the nature, the characteristics and the suitability for their purpose of services.

ANNEXURE 5

(Advanced Allergy Elimination Pty Ltd logo and letterhead)

(Date)(To AAE client)

Dear Sir / Madam,

False, misleading and deceptive conduct by Advanced Allergy Elimination Pty Ltd,
which has now changed its name to Allergy Pathway

Following action by the Australian Competition and Consumer Commission (ACCC), the Federal Court of Australia has declared that Advanced Allergy Elimination Pty Ltd (AAE) contravened the Trade Practices Act 1974 (the TPA) by making false, misleading and deceptive representations.

AAE made the representations between 8 July 2008 and 10 July 2009 on its website www.aaeclinics.com.au, in brochures it published and distributed to consumers and in advertisements it caused to be published in newspapers and on the radio.

The Court declared that AAE’s conduct contravened the TPA because it represented that:

    1. AAE can test for and identify an allergen for that person; (when in fact immunologically mediated allergies such as coeliac disease or food allergies can only be diagnosed by skin prick testing or a special blood test and AAE does not perform these tests).

    2. AAE can cure or eliminate virtually all allergies or allergic reactions, or successfully treat a person’s allergies or allergic reactions; (when in fact AAE cannot do this as many allergies, including food allergies, cannot be cured or successfully treated).

    3. AAE’s treatment is safe and/or low risk, and following treatment it is safe for a person to have contact with the allergen (when in fact, as AAE cannot cure, eliminate or successfully treat allergies, it may be unsafe or even potentially life threatening to recommence contact with the allergen).

The Court has also declared that AAE’s director, Mr Paul Keir, was, since October 2008, directly or indirectly knowingly concerned in or party to AAE’s conduct referred to above.

AAE and Mr Keir have given undertakings to the Court that they will refrain from engaging in similar conduct for a period of 3 years.

AAE agreed to court orders that it publish corrective notices, send this corrective letter and implement a trade practices compliance program. As part of its orders, the Court also required AAE and Mr Keir to pay costs to the ACCC.

AAE sincerely regrets and is sorry for the conduct referred to above in this letter.

Yours faithfully,

(Signature of AAE’s Proper Officer)

ANNEXURE 6
TRADE PRACTICES COMPLIANCE AND EDUCATION / TRAINING PROGRAM

Interpretation

1. In this Annexure:

(a) “ACCC” means the Australian Competition and Consumer Commission;
(b) “Act” means the Trade Practices Act 1974 (Cth);
(c) “Compliance Advisor” means the person defined in paragraph 6 below;
(d) “Compliance Officer” means the person appointed under paragraph 2 or 3 below;
(e) “Compliance Policy” means the policy defined in paragraph 8 below;
(f) “Compliance Program” means the Trade Practices Compliance and Education / Training Program in this Annexure;
(g) “Compliance Program Review Report” is the report defined in paragraph 19 below;
(h) “Compliance Trainer” is defined in paragraph 14 below;
(i) “Contravening Conduct” means the conduct declared by the Federal Court of Australia in these proceedings to be in contravention of Division 1 of Part V of the Act;
(j) “External Reviews” means the reviews required by paragraph 18 below;
(k) “Order of the Court” means the relevant order(s) of the Federal Court of Australia made in these proceedings;
(l) “Relevant Provisions” means sections 52, 53(aa), 53(c) and 55A of the Act which were contravened by the Contravening Conduct, and Division 1 of Part V of the Act which deals with similar or related conduct;
(m) “Respondent’s Program” means the steps taken by Advanced Allergy Elimination Pty Ltd (AAE) to comply with the Order of the Court in relation to the Compliance Program;
(n) “Reviewer” is defined in paragraph 18(b) below;
(o) “Risk Assessment” means the assessment required by paragraph 6 below;
(p) “Risk Assessment Report” means the report required by paragraph 7 below;
(q) “Training” means the training required by paragraph 13 below.

Compliance Officer

2. AAE must, within 30 days of the date of the Order of the Court, appoint a Director or a senior employee with suitable qualifications or experience in corporate compliance as Compliance Officer with responsibility for ensuring that the Compliance Program is effectively established, maintained and administered in accordance with the Order of the Court. After the appointment of the Compliance Officer in accordance with paragraph 2,

3. AAE must take all reasonable steps to ensure that, for the duration of the Order of the Court, there is a Director or a senior employee with suitable qualifications or experience in corporate compliance appointed as Compliance Officer with responsibility for ensuring that the Compliance Program is effectively established, maintained and administered in accordance with the Order of the Court.

4. AAE must take all reasonable steps to ensure that for the duration of the Order of the Court the Compliance Officer discharges his or her responsibility of ensuring that the Compliance Program is effectively established, maintained and administered in accordance with the Order of the Court.

5. AAE must take all reasonable steps to ensure that the Compliance Officer reports in writing to AAE ’s board of directors every six months with respect to the on-going maintenance and administration of the Compliance Program including, in particular, whether the Respondent’s Program is effectively:

(a) ensuring an awareness by the employees and other persons involved in AAE ‘s business of their responsibilities and obligations in relation to the Relevant Provisions; and (b) revising the internal operations of AAE’s business which led to AAE engaging in the Contravening Conduct.

Risk Assessment

6. AAE must, within 30 days of the date of the Order of the Court, appoint a qualified, internal or external, compliance professional with expertise in trade practices issues (Compliance Advisor) to conduct a risk assessment to:

(a) identify the areas of AAE’s business where it is at risk of contravening the Relevant Provisions;
(b) assess the likelihood of any such contravention occurring;
(c) identify where there are deficiencies in AAE’s procedures for managing any such risk;
(d) make findings concerning sub-paragraphs (a) to (c) above; and
(e) make recommendations for action having regard to sub-paragraphs (a) to (d) above (Risk Assessment).

7. AAE must instruct the Compliance Advisor to set out, and must take all reasonable steps to ensure that the Compliance Advisor sets out, the findings and recommendations of the Risk Assessment in a written report (Risk Assessment Report), to be provided to AAE’s board of directors within two months of his or her appointment.

Compliance Policy

8. AAE must, within 30 days of the date of the Order of the Court, establish a policy (Compliance Policy) which is communicated in writing to all employees and other persons involved in AAE’s business regarding compliance with the Act, which must include:

(a) a statement of commitment by AAE to comply with the Relevant Provisions;
(b) a direction to all employees or other persons involved in AAE’s business to report any compliance related issues and Act compliance concerns to the Compliance Officer;
(c) a statement guaranteeing that employees or other persons involved in AAE’s business making a complaint or report in relation to AAE’s compliance with the Relevant Provisions will not be prosecuted or disadvantaged in any way by reason of their complaint or report and that their complaint or report will be kept confidential and secure; and
(d) a statement that AAE will take disciplinary action against any persons who are knowingly or recklessly concerned in a contravention of the Relevant Provisions and will not indemnify them.

9. AAE must take all reasonable steps to ensure that the Compliance Program is maintained and administered in a manner that is consistent with the Compliance Policy for the duration of the Order of the Court.
10. AAE will provide a copy of the Compliance Policy to all new staff at the commencement of their employment with AAE.

Complaints Handling System

11. AAE must establish, maintain and administer a trade practices complaints handling system.

12. AAE must take all reasonable steps to ensure that the trade practices complaints handling system is in accordance with AS/ISO 10002:2006 Customer satisfaction - Guidelines for complaints handling in organizations, though tailored to its own circumstances (Complaints Handling System).

Training

13. AAE must take all reasonable steps to ensure that all directors, officers, employees, representatives and agents of AAE, whose duties could result in them being concerned with conduct that may contravene the Relevant Provisions, receive practical training regarding the Act (Training) no less than once annually.

14. The Training must be conducted by either a suitably qualified compliance professional or legal practitioner with expertise in the Act (the Compliance Trainer).

15. AAE must instruct the Compliance Trainer to design the Training, and must take all reasonable steps to ensure that the Training is designed, to ensure that the persons at the Training are made aware of:

(a) the responsibilities and obligations in relation to the Relevant Provisions;
(b) the potential consequences of contravening the Relevant Provisions;
(c) the areas of AAE’s business where it is at risk of contravening the Relevant Provisions, as identified in the Risk Assessment Report; and
(d) the content of the Compliance Program.

16. AAE must provide to the Compliance Trainer, for the purposes of conducting the Training, a copy of:

(a) the Order of the Court; (b) the Compliance Policy; (c) the Complaints Handling System; and (d) the Risk Assessment Report.

17. AAE must take all reasonable steps to ensure that an awareness of the Compliance Program forms part of the induction of all new directors, officers, employees, representatives and agents, whose duties could result in them being concerned with conduct that may contravene the Relevant Provisions.

External Review

18. AAE must take all reasonable steps to ensure that annual reviews of AAE’s compliance with the Order of the Court are carried out in accordance sub-paragraphs (a) to (d) below (External Reviews):

(a) Scope of the External Reviews – The External Reviews are to ascertain whether the Respondent’s Program:

(i) has made the employees and other persons involved in AAE’s business aware of their responsibilities and obligations in relation to the Relevant Provisions;
(ii) has revised the internal operations of AAE’s business in relation to the Relevant Provisions and the circumstances that led to the Contravening Conduct; and
(iii) is effectively maintaining and administering the Compliance Program.

(b) Independence of Reviewer – AAE must take all reasonable steps to ensure that all External Reviews are carried out by a suitably qualified, independent compliance professional with expertise in the Act (Reviewer). The Reviewer will qualify as independent on the basis that he or she: (i) is not a present or past director, employee or officer of AAE;

(ii) has no significant shareholding or other interests in AAE;
(iii) has not acted for or consulted to, and does not act for or consult to, AAE in any matters involving alleged contraventions of the Act;
(iv) has not acted for or consulted, and does not act for or consult to, AAE or provide other services in relation to this Compliance Program, other than as the Reviewer in a previous year; and
(v) has no conflict of interest in carrying out the Reviews.

(c) Evidence – AAE must take all reasonable steps to ensure that in the conduct of the External Reviews the Reviewer has access to all relevant sources of information in AAE’s possession or control, including access to:

(i) any officers, employees, representatives or agents of AAE;
(ii) any relevant records of AAE, including its complaints register/reports and any documents relevant to the Training or its induction program; and
(iii) any documents created by AAE’s consultants or legal advisers for use in relation to the Respondent’s Program.

(d) Timing – AAE must take all reasonable steps to ensure that the first External Review is completed within one year of the date of the Order of the Court and that each subsequent External Review is completed within one year thereafter, save that all steps to be taken by AAE in relation to the final External Review are to be completed one month prior to the expiration of the Order of the Court

    19. AAE must instruct the Reviewer to set out, and must take all reasonable steps to ensure that the Reviewer sets out, the findings of each of the External Reviews in a written report (Compliance Program Review Report) which addresses each of the following:

    (a) details of the evidence gathered and examined during the External Review;
    (b) the name and relevant qualifications/experience of the person appointed as the Compliance Officer;
    (c) if, and to what extent, the Respondent’s Program includes all the elements and requirements of the Compliance Program; (d) if, and to what extent, the Respondent’s Program covers the areas identified in the Risk Assessment; and
    (e) recommendations that the Reviewer considers are reasonably necessary to ensure that the Respondent’s Program effectively maintains and administers the Compliance Program.

20. AAE must instruct the Reviewer to complete and provide the Compliance Program Review Report to it, and must take all reasonable steps to ensure that the Compliance Program Review Report is completed and provided to it, within one month of each Review.

21. AAE must retain each Compliance Program Review Report.

22. Within 30 days of the receipt of each Compliance Program Review Report, AAE’s board of directors must hold a meeting to consider the matters described in paragraph 23 below.

23. At the meeting referred to in paragraph 22 above, AAE’s board of directors must consider:

(a) the Compliance Program Review Report;
(b) whether to make any changes to the Respondent’s Program to more effectively implement the Compliance Program for the purposes of:

    (i) ensuring an awareness for the employees or other persons involved in AAE’s business of their responsibilities and obligations in relation to the Relevant Provisions; and
    (ii) revising the internal operations of AAE’s business in relation to the circumstances that led to the Contravening Conduct; and
    (iii) any recommendations of the ACCC for the purposes of sub-paragraph (b) above.

24. Within 14 days of holding the meeting referred to in paragraph 22 above, AAE must advise the ACCC in writing of:

(a) details of when the meeting was held and who was present; and
(b) the outcome of the meeting, including:

    (i) what, if any, changes AAE decided to make to the Respondent’s Program to more effectively implement the Compliance Program and details of the proposed implementation of any changes; and
    (ii) the decisions made by AAE about each of the recommendations that had been made by the ACCC (if any).

25. Within 14 days of holding a meeting referred to in paragraph 23 above at which AAE decides to make changes to the Respondent’s Program it must take all reasonable steps to communicate those changes to all employees or other persons involved in AAE’s business.

Supply of Documents to the ACCC

26. AAE must within 14 months of the date of the Order of the Court, cause to be produced and provided to the ACCC copies of each of the following documents:

(a) documents evidencing the appointment of the Compliance Officer and Compliance Adviser;
(b) the Risk Assessment Report;
(c) the Compliance Policy and the documents evidencing its implementation; and (d) documents evidencing the provision of Training, including all materials used in the Training.

27. AAE must provide a copy of each Compliance Program Review Report to the ACCC within 14 days of its receipt from the Reviewer.

28. If requested in writing by the ACCC, AAE must, at its own expense, provide copies of documents and information constituting or evidencing compliance or non-compliance with the Order of the Court.

SCHEDULE TO ORDER

PART 1: ACCURATE ALLERGY TEST REPRESENTATION

AAE WEBSITE

Page No
Statement No
Statement of Concern
Website as at:
9/7/08
20/11/08
10/2/09
21/04/09
43, 68, 105
1.
“It is not just a treatment. At Advanced Allergy Elimination we can also test for what you are reacting to. Our practitioners employ a muscle strength indicator technique in testing. To do this the practitioner isolates the triceps muscle in the arm whilst exposing you to an allergen. The integrity of the muscle indicates whether or not a substance is an allergen. Muscle testing is a testing technique widely used by natural health practitioners such as naturopaths, chiropractors and kinesiologists.”
7
“It is not just a treatment. At Advanced Allergy Elimination we can also test for what you are reacting to. Our practitioners are qualified naturopaths and/or acupuncturists who employ a muscle strength indicator technique in testing. To do this the practitioner isolates the triceps muscle in the arm whilst exposing you to an allergen. The integrity of the muscle indicates whether or not a substance is an allergen. Muscle testing is a testing technique widely used by natural health practitioners such as naturopaths, chiropractors and kinesiologists.”
44, 69, 106
2. 
“In the initial consultation the practitioner makes a clinical assessment using your patient history, a muscle response test and any previous allergy test results. The muscle response test involves the practitioner isolating and testing the integrity of the triceps muscle in the arm whilst you are exposed to a safe level of allergen, giving a response as to whether or not a substance is an allergen.”
52, 74, 111
4. 
“Our practitioners are trained to take a detailed patient history and have protocols to determine unknown sources of allergic reactions.”

PRINT PUBLICATIONS

A1: The Age, 31/7/08
A2: Herald Sun, 17/12/08
B1: AAE Brochure, “Advanced Allergy Elimination”

B2: AAE Brochure, “Allergies and Positive Conditioning”

B3: AAE Brochure, “Frequently Asked Questions”

Page No
Statement No
Statement of Concern
Publications
A1
A2
B1
B2
B3
139
6.
“The initial appointment is $115 which includes identifying your allergies and the treatment of one allergen family. We can treat one allergen family per treatment.”

PART 2A: ALLERGY ELIMINATION REPRESENTATION

AAE WEBSITE

Page No
Statement No
Statement of Concern
Website as at:
9/7/08
20/11/08
10/2/09
23/2/09
21/4/09
37, 60
14.
“AAE is a treatment for allergies. We don’t just treat the symptom; we retrain your body so it no longer reacts.”
95
“At Advanced Allergy Elimination (AAE) we treat allergies... Through the use of a positive conditioning effect we recondition your body to no longer react adversely”
17, 52, 74, 111
19.
“Successful elimination of allergies/sensitivities may require clearing preliminary allergens first. If components of allergens are not cleared the items containing those components will remain allergenic.”
17, 52, 74, 111
21 
“Once the allergy is cleared and the symptoms alleviated, the benefits from the treatment are generally long term.”
6
23. 
“Advanced Allergy Elimination is able to eliminate allergies and/or sensitivities, allowing patients to be exposed to substances without experiencing the allergic reactions they previously suffered”
1
24. 
“Advanced Allergy Elimination (AAE) significantly improves, if not eliminates, most forms of allergies & sensitivities with one treatment per allergen family.”

PART 2B: SUCCESSFUL ALLERGY TREATMENT REPRESENTATION

AAE WEBSITE

Page No
Statement No
Statement of Concern
Website as at:
9/7/08
20/11/08
10/2/09
23/2/09
21/4/09
39, 63
0
13. 
“Advanced Allergy Elimination has been operating in Australia for the past 5 years working to successfully treat allergies.”“Advanced Allergy Elimination has been operating in Australia for the past 4 years working to successfully treat allergies.”
37, 60
14. 
“AAE is a treatment for allergies. We don’t just treat the symptom; we retrain your body so it no longer reacts.”
95
“At Advanced Allergy Elimination (AAE) we treat allergies... Through the use of a positive conditioning effect we recondition your body to no longer react adversely”
67
17. 
“The treatment involves gentle pressure to stimulate points on the back while you are exposed to a safe level of the Allergen.
This stimulation relaxes your body and temporarily strengthens your organ systems. Your body makes the positive association between the strengthening effect and the exposure to the allergen so it no longer perceives the allergen as harmful.”
68
“The treatment strengthens the major organ systems while the body is exposed to an allergen. The body associates the positive stimulus with the exposure to the allergen and no longer perceives it as harmful.”
106
“Advanced Allergy Elimination uses gentle pressure to stimulate points on the back which correspond with the major organ systems, while you are exposed to a safe level of the Allergen. This stimulation temporarily strengthens your system. The body associates the positive stimulus with the exposure to the allergen and no longer perceives it as harmful.”
17, 52, 74, 111
19. 
“Successful elimination of allergies/sensitivities may require clearing preliminary allergens first. If components of allergens are not cleared the items containing those components will remain allergenic.”
74, 111
20. 
“In the initial consultation the practitioner isolates the triceps muscle in your arm and tests that muscle while you are exposed to a safe level of the allergen. Once we know what you are reacting to we can treat one allergen group per treatment.”
17, 52, 74, 111
21. 
“Once the allergy is cleared and the symptoms alleviated, the benefits from the treatment are generally long term.”
17, 52, 74, 111
22.
“The initial appointment is $115 which includes identifying your allergies and the treatment of one allergen family. We can treat one allergen family per treatment.”
6
23. 
“Advanced Allergy Elimination is able to eliminate allergies and/or sensitivities, allowing patients to be exposed to substances without experiencing the allergic reactions they previously suffered”
1
24. 
“Advanced Allergy Elimination (AAE) significantly improves, if not eliminates, most forms of allergies & sensitivities with one treatment per allergen family.”

PRINT PUBLICATIONS

A1: The Age, 31/7/08
A2: Herald Sun, 17/12/08

B1: AAE Brochure, “Advanced Allergy Elimination”
B2: AAE Brochure, “Allergies and Positive Conditioning”
B3: AAE Brochure, “Frequently Asked Questions”

Page No
Statement No
Statement of Concern
Publications
A1
A2
B1
B2
B3
132
26.
“Most patients only need one treatment per allergen”
132
27.
“Your body associates the positive experience with the allergen and no longer sees it as something to react to”
133
28. 
“Advanced Allergy Elimination (AAE) is an advanced technology that significantly improves, if not eliminates most forms of allergies and sensitivities with one treatment per allergen family.”
138
29.
“All the major organs can be stimulated through acupressure points along the back which temporarily strengthens each system. The patient holds a glass tube containing an allergen during the stimulation creating a positive conditioning effect. The conditioning is immediate with associated symptoms diminishing usually within a 24 hour period. There may also be other ways to create a positive stimulus and reverse an allergic error; the key is to convince the immune system that the substance is harmless or beneficial.”
138
30.
“While allergic reactions may now be successfully eliminated or significantly diminished, former food allergy sufferers are advised to minimise their intake of processed foods”
138
31.
“By safely exposing a patient to an allergen ... while simultaneously creating a positive stimulus, thousands of allergy sufferers have been able to be successfully treated.”
139
32. 
“We find that approximately 80% of cases require only one treatment per allergen family, while 20% of cases require more than one treatment.”
139
33.
“The initial appointment is $115 which includes identifying your allergies and the treatment of one allergen family. We can treat one allergen family per treatment.”
139
34.
“Once the allergy is cleared and the symptoms alleviated, the benefits from the treatment are generally long term.”

Radio Advertisement

Page No
Statement No
Statement of Concern
130
35. 
“Advanced Allergy Elimination is an effective treatment that improves or resolves allergies in most cases.So the body no longer reacts to substances like pollen, dust, grass, pets and food.”

PART 3A: LOW RISK REPRESENTATION

AAE WEBSITE

Page No
Statement No
Statement of Concern
Website as at:
9/7/08
20/11/08
10/2/09
21/04/09
8
37. 
“Advanced Allergy Elimination is a safe, painless treatment available to all age groups, including infants and the elderly.”
44, 69, 106
38. 
“Advanced Allergy Elimination uses gentle pressure to stimulate points on the back which correspond with the major organ systems, while you are exposed to a safe level of the Allergen. This stimulation temporarily strengthens your system. The body associates the positive stimulus with the exposure to the allergen and no longer perceives it as harmful.”
8
“Advanced Allergy Elimination uses gentle pressure to stimulate points on the back, which correspond with the major organ systems. ... this stimulation relaxes the body and temporarily strengthens each of the major organ systems. The stimulation is done while the patient is exposed to a safe level of allergen”

PRINT PUBLICATIONS

A1: The Age, 31/7/08
A2: Herald Sun, 17/12/08
B1: AAE Brochure, “Advanced Allergy Elimination”
B2: AAE Brochure, “Allergies and Positive Conditioning”

B3: AAE Brochure, “Frequently Asked Questions”

Page No
Statement No
Statement of Concern
Publications
A1
A2
B1
B2
B3
132
42
“The treatment uses gentle stimulation down your back while you are exposed to a safe level of the allergen”
134
43 
“The treatment is safe, painless and available to all ages including infants.”
138
44
“By safely exposing a patient to an allergen ... while simultaneously creating a positive stimulus, thousands of allergy sufferers have been able to be successfully treated.”

PART 3B: SAFE REPRESENTATION

AAE WEBSITE

Page No
Statement No
Statement of Concern
Website as at:
9/7/08
20/11/08
10/2/09
21/04/09
1
39. 
“Once treated patients can recommence contact with the substance that had previously caused the reaction.”
44, 69, 106
40.
“Advanced Allergy Elimination uses gentle pressure to stimulate points on the back which correspond with the major organ systems, while you are exposed to a safe level of the Allergen. This stimulation temporarily strengthens your system. The body associates the positive stimulus with the exposure to the allergen and no longer perceives it as harmful.”
6
41. 
“Advanced Allergy Elimination is able to eliminate allergies and/or sensitivities, allowing patients to be exposed to substances without experiencing the allergic reactions they previously suffered”

PRINT PUBLICATIONS

A1: The Age, 31/7/08
A2: Herald Sun, 17/12/08
B1: AAE Brochure, “Advanced Allergy Elimination”

B2: AAE Brochure, “Allergies and Positive Conditioning”

B3: AAE Brochure, “Frequently Asked Questions”

Page No
Statement No
Statement of Concern
Publications
A1
A2
B1
B2
B3
131
45.
“Once treated, patients can recommence contact with the substances that had previously caused the adverse reaction.”
133
“Once treated, patients can start or recommence contact with the substances that had previously caused the adverse reaction.”
138
46.
“By safely exposing a patient to an allergen ... while simultaneously creating a positive stimulus, thousands of allergy sufferers have been able to be successfully treated.”
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 361 of 2009
BETWEEN:
AUSTRALIAN COMPETITION AND CONSUMER COMMISSIONApplicant
AND:
ALLERGY PATHWAY PTY LTD (FORMERLY ADVANCED ALLERGY ELIMINATION PTY LTD) First Respondent
PAUL FREDERICK KEIRSecond Respondent
JUDGE:
FINKELSTEIN J
DATE:
27 AUGUST 2009
PLACE:
MELBOURNE

REASONS FOR JUDGMENT

1. The first respondent, formerly known as Advanced Allergy Elimination Pty Ltd (AAE), operates clinics for the diagnosis and treatment of allergies. The methods by which AAE diagnoses and treats allergies include testing for and identifying a person’s specific allergies using a muscle strength indicator technique and treating allergies by using a technique based on positive and negative conditioning. In the ordinary course of its operations AEE publishes information about those services on an internet website. It also advertises its services on the radio, in newspapers and in brochures given to clients, prospective clients and other interested persons. The Australian Competition and Consumer Commission (ACCC) alleges that certain statements published on the website and contained in the advertisements are in breach of the Trade Practices Act 1974 (Cth).

2. The impugned statements can be grouped into several categories. The first are statements by which AAE represents that it can test for and identify a substance to which a person is reacting and which is therefore an allergen for that person or a substance to which that person is allergic. The second are statements by which AAE represents that it can cure or eliminate virtually all allergies or allergic reactions. The third comprise statements by which AAE represents that it can successfully treat a person’s allergies or allergic reactions. The fourth are statements by which AAE represents that its treatment is safe or involves low risk. The fifth group are statements by which AAE represents that following its treatment it is safe to have contact with the substance or allergen to which the person was having an adverse reaction. There are quite a number of statements said to be infringing and for convenience they are set out in an annexure to these reasons, grouped according to the category into which they fall.

3. The ACCC’s specific allegation is that these statements are in breach ss 52, 53(aa), 53(c) and 55A of the Trade Practices Act. In summary, those sections provide that a corporation shall not in trade or commence: engage in misleading or deceptive conduct (s 52); falsely represent that services are of a particular standard or quality (s 53(aa)); represent that services have benefits they do not have (s 53(c)); and engage in conduct that is liable to mislead the public (s 55A).

4. To establish that each statement is in breach of the Trade Practices Act the ACCC tendered a report by Professor Douglass, the Head of the Allergy, Asthma and Clinical Immunology Service at the Alfred Hospital. Professor Douglass is a specialist in allergy and respiratory medicine. Her report is lengthy and technical. It is sufficient for present purposes to set out the following selected passages:

International consensus guidelines define an allergy as a type of hypersensitivity. These guidelines have been produced by the Nomenclature Review Committee World Allergy Organization. The Authors of this report are representatives of national Allergy and Clinical Immunology organizations and include internationally recognized experts ... In these guidelines a hypersensitivity is defined as: ‘objectively reproducible symptoms or signs initiated by exposure to a defined stimulus at a dose tolerated by normal persons’. Furthermore allergy is defined as a ‘hypersensitivity reaction initiated by specific immunological mechanisms.’ ...

Allergic diseases are recognized to include asthma, rhinitis, conjunctivitis, eczema (allergic dermatitis), urticaria, food allergy, stinging insect allergy, drug allergy and anaphylaxis. These allergic conditions are usually mediated by the antibody IgE: thereby being designated ‘IgE mediated allergy’, and these conditions are those most commonly attributed to allergy in the community. Generally, IgE-mediated allergy is the most commonly recognized form of allergy and the one responsible for the increasing prevalence of inhalant and food allergies in the community.

Allergic diseases can be limited in extent, such as the local reaction occurring in the upper respiratory tract due to grass pollen inhalation in an individual who produces IgE to grass pollens, usually known as ‘hay fever’ or more correctly as allergic rhinitis ... Allergic reactions can also be generalized such as occurs in severe food or drug allergy. In these instances, exposure to a small amount of allergen leads to a cascade of release of cellular mediators, in particular histamine, causing the manifestations of anaphylaxis, or a severe generalized allergic reaction.

...

According to the International Consensus Guidelines allergic reactions can occur which are mediated by antibodies other than IgE, or by other immune mechanisms.

...

Whilst there are proven methods of successful desensitization of individuals with allergic disease by incremental exposure to allergens, known as desensitization or ‘immunotherapy’, these methods do entail the risk of inducing a generalized allergic reaction and have not been shown to be successful in general medical practice with respect to food allergies. In the conventional medical literature, fatalities have been reported due to immunotherapy for both inhalant and food allergies. The statement that patients with true allergies can initiate contact with the substance that had previously caused the allergic reaction will, in my opinion if followed, expose some individuals to the risk of severe allergic reaction or even death.

...

The diagnosis of an allergic disease is determined by two factors. The first is a clinical history of symptoms and/or signs on exposure to the putative allergen which are characteristic of an allergic disease. The diagnosis of an allergic disease is then confirmed by the demonstration of an immunological basis of the allergy. In the most well-recognised allergic conditions, that is IgE-medicated allergy, this is determined by detection of allergen specific IgE. This can be performed by either skin prick testing or blood-specific IgE testing.

...

In practice allergy testing is usually performed by a medical practitioner with specific expertise and training in allergy as a test at the point of care. The medical practitioner should order the tests to be performed in order to ensure the correct allergens are tested for. Because of the small but nevertheless evident risk of adverse reactions it is required that appropriate medical expertise and equipment to deal with a severe generalized allergic reaction is in attendance at the site of testing. The ASCIA guideline states that a medical practitioner should be on site at the time of testing.

....

The treatment of allergic disease is usually performed by a medical practitioner. The specialty of Allergy and Clinical Immunology is a specialist training program for medical practitioners under the auspices of the Royal Australasian College of Physicians and the Royal College of Pathologists, involving a minimum of 7 years post-graduate training and examinations for medical graduates. Other medical practitioners may also gain experience in the field of clinical allergy practice, including general practitioners and other specialist physicians with specific training and experience in this area.

...

The treatment of IgE-mediated allergic diseases falls into two broad categories.

Firstly, non-allergen specific therapies are utilized respective of the causative allergen. These are frequently drug treatments and include such drugs as antihistamines for allergic rhinitis and allergic conjunctivitis, inhaled bronchodilators for allergic asthma and topical nasal corticosteroid preparations for persistent allergic rhinitis. Such treatments are often prescribed by a medical practitioner, although some, such as oral antihistamines are available from a pharmacist without a prescription.

Secondly, therapies may be utilized which require accurate diagnosis of the causative allergen: ‘allergen specific therapy’. In the first instance, this can involve allergen avoidance.

...

Allergen immunotherapy is the only form of treatment which can alter the natural history and immunological parameters of allergic disease. By this I mean that the natural progression of allergic diseases appear to be altered by the administration of allergen immunotherapy. For example there is good evidence that the risk of severe allergic reactions to insect stings can be reduced by immunotherapy.

...

The scientific concept of allergens, their properties and identification is not consistent with the AAE statement ‘Successful elimination of allergies/sensitivities may require clearing of preliminary allergens first. If components of allergens are not cleared the items containing those compounds will remain allergenic.’

...

Medically valid treatments for allergy include drug treatments and allergent specific therapies such as allergen immunotherapy. The use of these treatments is described in evidence-based guidelines such as the ARIA consensus document (Allergic Rhinitis and its Impact on Asthma), the Global Initiative in Asthma (GINA) consensus document and guidelines on immunotherapy. During the course of my practice, I have not been made aware of a medically validated therapeutic process of ‘positive conditioning’ or ‘negative conditioning’ with regard to allergies. I am therefore unaware of ‘positive conditioning’ and ‘negative conditioning’ as an effective form of allergy treatment. I am aware that ‘positive conditioning’ and ‘negative treatment’ does not form part of the body of authoritative treatment guidelines for allergic diseases. In my opinion I do not believe the scientific literature has information to support ‘positive conditioning’ or ‘negative conditioning’ treatments to cure or eliminate allergies.

...

I am not aware of the muscle strength testing as a medically validated test for allergy, nor is it recommended in international consensus treatment and diagnosis guidelines.

...

As a clinical practitioner in the field of allergy for over 18 years I am not aware of acupressure or muscle testing being used in Australia or internationally to effectively treat allergies by medical practitioners.

...

The categories of allergens claimed to be treated by AAE include contactant, inhalant, ingestant and injectant. I am not aware of effective strategies of allergen immunotherapy for contactant allergies. I have stated previously the difficulties in treating ingestant allergies.

I am unable to verify the statements claiming cure or improvement of allergies through the Allergy Elimination Technique. I do not believe there is published scientific evidence to support these claims.

...

[I]ndividuals with true allergic disease could be harmed by this treatment. Many of the symptoms claimed to be relieved in the AAE publicity brochures, such as irritable bowel syndrome, diarrhoea and attention deficit disorder are unlikely due to an allergic process and therefore unlikely to have an immunological basis. However the brochures do state that ‘ingestant’ allergies can be eliminated. I take this to mean food allergies. At the current time to my knowledge, there is no safe, scientifically-based treatment for food allergies. ... I am concerned by claims that AAE can treat wheezing and asthma. In my own and international experience, there is currently no known cure for asthma, which still carries a very substantial burden of illness which includes mortality.

5. In light of Professor Douglass’ evidence it is no longer disputed that AAE has contravened the Trade Practices Act. The parties have therefore been able to reach agreement as to the orders they ask be made. In summary, the orders seek: (a) a declaration that AAE’s publication of the impugned statements contravenes a number of provisions in the Trade Practices Act 1974 (Cth) and that the second respondent, Mr Kier, a director of AAE, was knowingly concerned in or a party to the contraventions; (b) an order requiring AAE to publish corrective advertising; (c) the establishment by AAE of a compliance program to avoid further contraventions; and (d) that Mr Kier attend practical training regarding Div 1 of Pt V of the Trade Practices Act. Rather than an injunction (which was originally sought) the respondents will undertake to not cause the impugned statements to be published.

6. I consider it appropriate for the orders to be made and the undertaking received. It is, I think, particularly important that the respondents publish corrective information. The impugned statements have the potential to cause real harm. Persons with allergies are best treated by medical practitioners. Further, clients suffering from allergies and taking the treatment provided by AAE may wrongly believe the treatment is effective when it is not. Some treatments may even be dangerous to a client. This state of affairs must be remedied and the provision of corrective advertising is an appropriate means to achieve that result.

7. This leaves one matter of procedure to be dealt with. The issue comes about in this way. At that time the orders were provided to the court, the ACCC had filed Professor Douglass’ report but, because it had only recently been served, the respondents objected to it being read. The ACCC was prepared to go along with this. In the result there was no evidence to support the declaratory relief sought in the orders, the parties asking that the court proceed on their agreement that the declarations were justified.

8. On this aspect I was referred to Thompson Australian Holdings Pty Ltd v The Trade Practices Commission (1981) 148 CLR 150. In that case the Trade Practices Commission (the predecessor of the ACCC) brought an action against a group of liquor retailers alleging they had entered into a price fixing agreement in breach of what was then s 45 of the Trade Practices Act. Pecuniary penalties and injunctions were sought. Several defendants entered into a settlement agreement with the Commission consenting to orders imposing injunctions and agreeing to give undertakings that they would not in the future engage in like conduct. The question raised by the appellant, who had been given leave to intervene, was whether the Federal Court had power to grant the agreed injunctions. The Federal Court found it had power, but the High Court held that there was no power to grant the injunctions. In the course of its reasons the plurality said (at 163-164): “In the ordinary case ... the Court will be justified in making consent orders, if it has jurisdiction and power so to do and the orders are such as to be capable of enforcement ... In deciding whether consent orders sought are in conformity with legal principle the Court is entitled to treat the defendants’ consent as involving an admission of all facts necessary or appropriate to the granting of the relief sought”.

9. Based on this reasoning the parties submitted I should make the declarations. I declined to do so. In due course the respondents withdrew their objection to the tender of Professor Douglass’ report, save for certain portions which were said to be irrelevant. Thus there is evidence that justifies the declaratory relief.

10. In the absence of that evidence I would not have made the declarations. It has for a long time been the position in England that a court will not grant a declaration “on admissions of the parties or on consent, but only if the Court was satisfied by evidence”: Williams v Powell [1894] WN 141, 141 per Kekewich J. This rule was confirmed in an early design infringement case, Gramophone Company Ld v Magazine Holder Company (1911) 28 RPC 221. The defendant was sued for infringement. It admitted that the design was new and original but denied infringement. The House of Lords refused to act on the concession. Lord Loreburn LC, with whom the other Law Lords agreed, said (at 225):

“It is the duty of a Court to decide cases according to the truth and fact, not according to any assumed or artificial state of facts which the parties may find it convenient to present. No doubt Courts of Law allow and indeed encourage parties to simplify litigation by making admissions and to a certain extent by waiving their rights, because, when there is a real controversy depending upon real facts, everyone ought to facilitate its authoritative settlement. But that is a very different thing from allowing people to obtain an adjudication upon the footing that something exists or has happened which in truth does not exist, or has never happened ... A Court of Justice can never be bound to accept as true any fact, merely because it is admitted between the parties.”

This passage was cited with approval in Interstate Parcel Express Co Pty Ltd v Time-Life International (Netherlands) BV [1977] HCA 52; (1997) 138 CLR 534, 561.

11. When the issue of making a declaration by consent comes up the case usually referred to is Wallersteiner v Moir [1974] 1 WLR 991. The defendant by way of counter-claim sought a declaration that the plaintiff had been guilty of fraud. No defence to the counter-claim having been delivered, the defendant moved for judgment in default. The trial judge entered judgment but the Court of Appeal set the judgment aside. Buckley LJ said (at 1029).

It has always been my experience and I believe it to be a practice of very long standing, that the court does not make declarations of right either on admissions or in default of pleading. A statement on this subject of respectable antiquity is to be found in Williams v. Powell [1894] W.N. 141, where Kekewich J., whose views on the practice of the Chancery Division have always been regarded with much respect, said that a declaration by the court was a judicial act, and ought not to be made on admissions of the parties or on consent, but only if the court was satisfied by evidence. If declarations ought not to be made on admissions or by consent, a fortiori they should not be made in default of defence, and a fortissimo, if I may be allowed the expression, not where the declaration is that the defendant in default of defence has acted fraudulently. Where relief is to be granted without trial, whether on admissions or by agreement or in default of pleading, and it is necessary to make clear upon what footing the relief is to be granted, the right course, in my opinion, is not to make a declaration but to state that the relief shall be upon such and such a footing without any declaration to the effect that that footing in fact reflects the legal situation.

Scarman LJ put the matter somewhat differently. He said (at 1030):

But, when what is sought is a declaration, there is the risk of irremediable injustice: the court has spoken and words cannot be recalled, even though later they be negatived; ‘nescit vox missa reverti,’ Horace, Ars Poetica, line 390. The power of the court to give declaratory relief upon a default of pleading, of course, exists, but, for the reasons crystallised by Horace in those four words of his, should be exercised only in cases in which to deny it would be to impose injustice upon the claimant.

This approach leads me to the conclusion that the declaratory relief contained in the minute of judgment annexed to the order of [the trial judge] should be disallowed at this stage

12. Perhaps the most succinct statement of the rule is to be found in Metzger v Department of Health and Social Security [1977] 3 All ER 444. There, Megarry VC said (at 451):

The court does not make declarations just because the parties to litigation have chosen to admit something. The court declares what it has found to be the law after proper argument, not merely after admissions by the parties. There are no declarations without arguments: that is quite plain.

13. In Patten v Burke Publishing Co Ltd [1991] 1 WLR 541 Millett J said (at 544) that the rule is a rule of practice only, not a rule of law. He explained that the rule was justified by the fact that a declaration of right may affect third parties who are not bound by the declaration. Notwithstanding that the rule is only one of practice, it has been said the court will only depart from the practice in a “rare case” and then only when it is necessary “to do justice between the parties”: Animatrix Ltd v O’Kelly [2008] EWCA Civ 1415 at [54].

14. In recent times it has been suggested that the court may move away from the strictness of the rule. With the introduction in 1999 of the Civil Procedure Rules in the United Kingdom a statement of case and a response must be verified by a statement of truth (r 22.1) - ie a statement by the party putting forward the document that he believes the facts stated in the document are true. This led to a suggestion that “the reluctance of the court to grant declarations without full investigation of the facts is less strong now that the allegations have to be verified by a statement of truth than was formally the case”: Lever Fabergé Ltd v Colgate-Palmolive Co [2005] EWHC 2655 (Pat) at [4] per Lewison J. See also Hayim v Couch [2009] EWHC 1040 (Ch).

15. Cases in Australia follow the orthodox English approach. The leading Federal Court decision is BMI Ltd v Federated Clerks Union of Australia (1983) 51 ALR 401. The case involved an application for a declaration that an industrial award was invalid. In their joint judgment Keeley and Beaumont JJ said (at 413-414):

[W]e think that it is generally undesirable that the court should grant relief by way of declaratory orders ... in the absence of any contest on the question. If the matter were merely one of private right between particular parties, for example, a question as to the respective rights of parties under a contract, it may well be appropriate for a court to make a declaration as to those rights by consent. In such a case, the public and other parties cannot be affected, let alone bound, by such a declaration.

But different considerations apply in a case such as the present. If a declaration were made, even in the terms sought, its practical operation may well extend beyond the activities of the first applicant. (Citations omitted)

16. Although this represents the orthodox view, the New South Wales Supreme Court has taken a different approach. Cases in that court acknowledge that a declaration on a matter relating to a public or an analogous right should not be made by consent. However, while the cases have said that a declaration can only be made when the court is satisfied by evidence that it ought be made, the “evidence” to which regard may be had include “facts” admitted to be true but about which there is no evidence (eg facts contained in a statement of agreed facts). By way of example, see Australian Securities and Investments Commission v Rich [2004] NSWSC 836; (2004) 50 ACSR 500. See also Re One.Tel Ltd (in liq); Australian Securities and Investments Commission v Rich (2003) 44 ACSR 682; Australian Securities and Investments Commission v Elm Financial Services Pty Ltd (2005) 55 ACSR 411; Australian Securities and Investments Commission v Edwards (2004) 51 ACSR 320. This approach has also been applied by one Federal Court judge: see Australian Securities and Investments Commission v Cash King Pty Ltd [2005] FCA 1429.

17. None of the New South Wales cases have explained why there should be a departure from the established rule. In Rich (50 ACSR 500) White J said (at [15]) that the new approach was consistent with the decision in Dean-Willcocks Pty Ltd v Commissioner of Taxation (No 2) (2004) 49 ACSR 325. There Austin J was dealing with a statutory requirement that the court must be “satisfied” of the existence of a certain state of affairs before it could make a particular order. Usually, the word “satisfied” is taken to mean “established by proof”. Austin J said, however, that in the context of the particular provision under consideration, it was permissible for the court to rely on the parties’ admissions. He justified this approach (at [28]) on the basis that it would promote the “just, quick and cheap resolution of ... dispute[s]”.

18. The declaration cases, however, require proof by way of evidence. An assurance by parties (whether by admission or agreed statement) that asserted facts are true will not suffice. Moreover, the House of Lords did not think a departure from this rule was justified because of administrative expediency.

19. For the time being, at least until a Full Court holds otherwise, it is, in my view, incumbent upon a single judge of the Federal Court to follow BMI and therefore not grant a declaration involving a public right in the absence of evidence that supports the declaration.

20. I will make orders in the form submitted by the parties.

I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.

Associate:

Dated: 27 August 2009

Counsel for the Applicant:
P Neskovcin
Solicitor for the Applicant:
Corrs Chambers Westgarth
Counsel for the Respondents:
D Star
Solicitor for the Respondents:
Piper Alderman
Date of Hearing:
10 July 2009
Date of Judgment:
27 August 2009

ANNEXURE

First Category

“It is not just a treatment. At Advanced Allergy Elimination we can also test for what you are reacting to. Our practitioners employ a muscle strength indicator technique in testing. To do this the practitioner isolates the triceps muscle in the arm whilst exposing you to an allergen. The integrity of the muscle indicates whether or not a substance is an allergen. Muscle testing is a testing technique widely used by natural health practitioners such as naturopaths, chiropractors and kinesiologists.”
“It is not just a treatment. At Advanced Allergy Elimination we can also test for what you are reacting to. Our practitioners are qualified naturopaths and/or acupuncturists who employ a muscle strength indicator technique in testing. To do this the practitioner isolates the triceps muscle in the arm whilst exposing you to an allergen. The integrity of the muscle indicates whether or not a substance is an allergen. Muscle testing is a testing technique widely used by natural health practitioners such as naturopaths, chiropractors and kinesiologists.”
“In the initial consultation the practitioner makes a clinical assessment using your patient history, a muscle response test and any previous allergy test results. The muscle response test involves the practitioner isolating and testing the integrity of the triceps muscle in the arm whilst you are exposed to a safe level of allergen, giving a response as to whether or not a substance is an allergen.”
“At AAE we use a muscle strength indicator technique to test what you react to. We test against a wide range of food and airborne allergens”
“Our practitioners are trained to take a detailed patient history and have protocols to determine unknown sources of allergic reactions.”
“A muscle response test will be used to determine what you are reacting to”
“The initial appointment is $115 which includes identifying your allergies and the treatment of one allergen family. We can treat one allergen family per treatment.”

Second and Third Categories

“Advanced Allergy Elimination (AAE) is an advanced technology that eliminates most allergies/sensitivities with one treatment per allergen family.”
“Treat allergies at their source for results that really work.”
“AAE offers a real alternative for people with allergies, treating allergies at the source using a non-invasive, drug-free treatment based on positive conditioning.”
“At AAE we offer a treatment option for allergy sufferers. We do not diagnose whether you have an allergy, sensitivity or intolerance as we think of each as a negative reaction. AAE test and treat all negative reactions* in the same way.”
“Allergens TreatedAllergens are categorized in the following groups:
– contactant
– inhalant
– ingestant
– injectantAdvanced Allergy Elimination can treat any substance or stimulus that causes a negative reaction”
“Advanced Allergy Elimination works to correct the error by retraining the body through positive conditioning.”
“Advances in knowledge about allergies and allergens are incorporated into our testing and treatments to ensure Advanced Allergy Elimination treatment is as specific, simple and successful as possible.”
“Advanced Allergy Elimination has been operating in Australia for the past 5 years working to successfully treat allergies.”“Advanced Allergy Elimination has been operating in Australia for the past 4 years working to successfully treat allergies.”
“AAE is a treatment for allergies. We don’t just treat the symptom; we retrain your body so it no longer reacts.”
“At Advanced Allergy Elimination (AAE) we treat allergies... Through the use of a positive conditioning effect we recondition your body to no longer react adversely”
“Once treated patients can usually recommence contact with the substance that had previously caused the reaction.”“Once treated patients can recommence contact with the substance that had previously caused the reaction.”
“Advanced Allergy Elimination addresses the specific organ systems affected by the allergen or offending substance.”
“How it worksAdvanced Allergy Elimination uses gentle pressure to stimulate points along the back, which correspond with the major organ systems. This stimulation relaxes the body and temporarily strengthens each of the major organ systems.”
“The treatment involves gentle pressure to stimulate points on the back while you are exposed to a safe level of the Allergen.
This stimulation relaxes your body and temporarily strengthens your organ systems. Your body makes the positive association between the strengthening effect and the exposure to the allergen so it no longer perceives the allergen as harmful.”
“The treatment strengthens the major organ systems while the body is exposed to an allergen. The body associates the positive stimulus with the exposure to the allergen and no longer perceives it as harmful.”
“Advanced Allergy Elimination uses gentle pressure to stimulate points on the back which correspond with the major organ systems, while you are exposed to a safe level of the Allergen. This stimulation temporarily strengthens your system. The body associates the positive stimulus with the exposure to the allergen and no longer perceives it as harmful.”
“AAE treatment stimulates point along the back, with gentle pressure. The stimulation is relaxing and strengthening to the organ systems.”
“Through Advanced Allergy Elimination treatment the body alters its perception, correcting its own erroneous response.”
“Successful elimination of allergies/sensitivities may require clearing preliminary allergens first. If components of allergens are not cleared the items containing those components will remain allergenic.”
“In the initial consultation the practitioner isolates the triceps muscle in your arm and tests that muscle while you are exposed to a safe level of the allergen. Once we know what you are reacting to we can treat one allergen group per treatment.”
“Once the allergy is cleared and the symptoms alleviated, the benefits from the treatment are generally long term.”
“The initial appointment is $115 which includes identifying your allergies and the treatment of one allergen family. We can treat one allergen family per treatment.”
“Advanced Allergy Elimination is able to eliminate allergies and/or sensitivities, allowing patients to be exposed to substances without experiencing the allergic reactions they previously suffered”
“Advanced Allergy Elimination (AAE) significantly improves, if not eliminates, most forms of allergies & sensitivities with one treatment per allergen family.”
“Once treated, patients can recommence contact with the substances that had previously caused the adverse reaction.”
“Once treated, patients can start or recommence contact with the substances that had previously caused the adverse reaction.”
“Treatment means you can usually recommence contact with the substance you were reacting to”
“Most patients only need one treatment per allergen”
“Your body associates the positive experience with the allergen and no longer sees it as something to react to”
“Advanced Allergy Elimination (AAE) is an advanced technology that significantly improves, if not eliminates most forms of allergies and sensitivities with one treatment per allergen family.”
“All the major organs can be stimulated through acupressure points along the back which temporarily strengthens each system. The patient holds a glass tube containing an allergen during the stimulation creating a positive conditioning effect. The conditioning is immediate with associated symptoms diminishing usually within a 24 hour period. There may also be other ways to create a positive stimulus and reverse an allergic error; the key is to convince the immune system that the substance is harmless or beneficial.”
“While allergic reactions may now be successfully eliminated or significantly diminished, former food allergy sufferers are advised to minimise their intake of processed foods”
“By safely exposing a patient to an allergen ... while simultaneously creating a positive stimulus, thousands of allergy sufferers have been able to be successfully treated.”
“We find that approximately 80% of cases require only one treatment per allergen family, while 20% of cases require more than one treatment.”
“The initial appointment is $115 which includes identifying your allergies and the treatment of one allergen family. We can treat one allergen family per treatment.”
“Once the allergy is cleared and the symptoms alleviated, the benefits from the treatment are generally long term.”
“Advanced Allergy Elimination is an effective treatment that improves or resolves allergies in most cases.So the body no longer reacts to substances like pollen, dust, grass, pets and food.”
“The allergy is eliminated.”

Fourth and Fifth Categories

“Advanced Allergy Elimination is a safe, painless treatment available to all age groups, including infants and the elderly.”
“AAE is a treatment available to all age groups, including infants and the elderly.”
“Advanced Allergy Elimination uses gentle pressure to stimulate points on the back which correspond with the major organ systems, while you are exposed to a safe level of the Allergen. This stimulation temporarily strengthens your system. The body associates the positive stimulus with the exposure to the allergen and no longer perceives it as harmful.”
“Advanced Allergy Elimination uses gentle pressure to stimulate points on the back, which correspond with the major organ systems. ... this stimulation relaxes the body and temporarily strengthens each of the major organ systems. The stimulation is done while the patient is exposed to a safe level of allergen”
“Once treated patients can usually recommence contact with the substance that had previously caused the reaction.”
“Once treated patients can recommence contact with the substance that had previously caused the reaction.”
“Advanced Allergy Elimination uses gentle pressure to stimulate points on the back which correspond with the major organ systems, while you are exposed to a safe level of the Allergen. This stimulation temporarily strengthens your system. The body associates the positive stimulus with the exposure to the allergen and no longer perceives it as harmful.”
“Advanced Allergy Elimination is able to eliminate allergies and/or sensitivities, allowing patients to be exposed to substances without experiencing the allergic reactions they previously suffered”
“The treatment uses gentle stimulation down your back while you are exposed to a safe level of the allergen”
“The treatment is safe, painless and available to all ages including infants.”
“By safely exposing a patient to an allergen ... while simultaneously creating a positive stimulus, thousands of allergy sufferers have been able to be successfully treated.”
“Once treated, patients can recommence contact with the substances that had previously caused the adverse reaction.”
“Treatment means you can usually recommence contact with the substance you were reacting to”
“Once treated, patients can start or recommence contact with the substances that had previously caused the adverse reaction.”
“By safely exposing a patient to an allergen ... while simultaneously creating a positive stimulus, thousands of allergy sufferers have been able to be successfully treated.”

This article was posted on August 31, 2009.

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