Lin Neh! wee wom eee wet ~_ wae -- - wwe See wo IN THE FRDERAL COUR. Cr AUSTRaALS4 GLURRAL DIVISTON B. Ro. 305 of 1975 Between BRIAN ALEXAND'X GIVEN Informant and C,V.HOLES iD CROLDIPGUPTY LTTE Defendant LEASONS FOR JUDGLENT FRANKI J. DELIVERED: 23 June 1977. The defendant C.V. Holland (Holdings) Fty. Limited, is charged with an offence under s.79 of the Trade Fractices Act 1974-1976 ("the Act") particularised in tne summons follows "...in that you did, in contravention of section 53( of the said éct, in trade or conmrerce in connectzon with the supply of goods, falsely represent thet the said goous vere as a ie) ) £ a particular quality in that you ou that day falsely represented to Trevor Gregory Thomas that a Holden Kingswood Seca q ta] registcred number ECM-689 supplied by you nee travelled 23,7 miles when in fact the said sedan had travelled subsiviantiall in excess of that mileage." On 1 December i975 tne chsa Attorney-General consented to tne institution of these proce The defendant, a company selling used cars at Rockdale pleaded not guilty. A Mr. Thomas gave evidence, which J zccept. tA ra o oO G +o {2t vsro) +e] fe ¢. a m fe fay rv) , Ke saiea that he went to the cefeuant! yard at Rockdale on Sunday 15 December 1974, te jaw Por en autumatic Holden car, He saw a turple avlomatic AG Folden thoi3 and he exarined it. He said that te observed tnat tx a05 70 roy showed a mileexe of 23,700, vhien he cutor:bed as "e reacone. 1" low mileage." The odometer is that nem of © es eederever whien shoves the tota: number of miles trevertod, se eee ete ctw ee ema ee ee ee 2. ir. Thomas said thet he had not previously purchased a car from the defendant but he had purchased the one he then owned from a man who had become an employee of the defendant. He said that he spoke to tnat employee on the telephone and arranged to meet him at the car yard. Mr. Thomas said that he went to the car yard on 18 December 1974. After a conversation about tne possibility of an N.R.M.A. anspection, the employee said: "I don't think it is necessary. For $25.00 they don't ago much anyway and the car seems okay." Mr. Thomas said that he took the Holden for a test drive, and then arranged with the defendant to trade in tne car he then owned, and a hire purchase transaction was arranged for the difference in price. Tne defendant was described in the hire purchase agreement as a "Dealer". On 27 January 1975, whilst it was being driven, the rear wheel and axle came off and tne car had to be towed to Mr. Thomas' home. On 31 January 1975 treuble ceveloped in the differential, and again the car had to be toved to Mr. Thomas' home. Mr. Thomas said that he noticed that the front seats were covered with plastic seat covers and when he removed these ne observed that the seats were frayed. iir. Thomas arranged to drive the car to the defendant's premises where it was inspccted by a mechanic employed by the defendent. Mr. Thomas said *hav he made some enquiries from an employee of the previous owner of the car about the number of miles the cer had traveiied, and thereafter Mr. Thomas had a4 conversation witi Mr, Guigsey, the Maneging Director of the defendant company, abouv the number of miles tie car had traveiled. Mr. Thomas said that he showed Mr. Quigley some docunents that he had obtained from the previous owner of the car and Mr. Quigtey said he would look into the matter. Mr. Thomas said that he and Mr. Quigley sutsequently had a conversation in which Mr. Quigley said: "The speedometer had been taken out and another one put back in its place." Senior Counsel for the Informant alleged in opening that the defendant had turned the odometer back some 45,000 miles. In his final address Senior Counsel for the defendant invited me to accent the comment Mr. Thomas said that Mr. Quigley had made to him as an explanation of wnat took place. Mr. Thomas also said that after his second conversation with Mr. Quigley, the vehicle again stopped on the road and had to be towed to Mr. Thomas' home. Mr. Thomas thereafter complained to the Consumer Affairs and the 'trade Practices authorities. Mrs. Thomas, the wife of Mr. Thomas, said in evidence, that, when she inspected the car before Christmas 297$ an the defendant's used car yard, the odoneter showed about 25,000 miles. The Holden which Mr. Thomas acquired fron the cefendant had been owned previasly by a company. Mr. Birch, who had been senior sales representative for that company, gave evidence that it had acquired the car new in July 1972, and that he had heen the regular driver of it until October 1974, when it was traded in. Mr. Birch said that the odometer had not exnibitec any mechanical defect whilst he had been driving the car, and showed 69,012 miles when the car was tradcd in. Mr. Biren Aliso said that he had inepected the car at the defendant's premises, after it had been traded in, and the ogometer then recorded about 23,000 or 24,000 miles, T am satisfiec thet wher, traded in tne odometer recorded 69,012 miles amd thut the veiecie had travelled approximately thet distances. se te ae ee ee te eee - =e An attempt was made by the iniormant to introduce evidence in re.ation to odometer readings on two other vehicles. It was argued for the informant that this evidence was relevant upon the principles that apply to the admission of similar facts. Proceedings under s.79 are criminal proceedings and, I consider, that before a defendant can be convicted, the informant must prove each ingredient of the offence charged beyond reasonable doubt, according to rules which apply in any other criminal charge. I admitted certain evidence directed to establisning Similar facts but I rejected other evidence and on the evidence admitted, I consider that no similar facts were established against the defendant. I am satisfied that the mileage a particular cer has travelled can fairly be described as a particular quality of that car. Senior Counsel for tne defendant referred me to a number of cases, particularly those dealing with the expressior: "merchentable quality", but I do not consider that any of these are of significant help in determining the meaning of the word "quality" in s.53(a), because they are concerned with the meaning of the word "quality" in the phrase "merchantable quaiity". I have also given consideration to a number of the cases dealing with the words "...a word not having direct reference to the character or quality of the goods..." appearing in s.24(i)(¢é) of the Trace Marks Act 1955-1973, and to the corresponuing words in s.16(1)(d) of the 1905-1948 Trade Marks Act, and to the vords in the corresponding section of the corresponding Unselish acc. These cases do not afford any significant assistance, because of the combination of the word "quality" with the words "character or", ' The words "of a particular quality" in s.53(a) have us be read in their context. 1 do mot consider it is nossitle to ae, m, SM nD teett oy oe te that Time ted eantert tte 5. meaning must be ascertained in relation to the goods whose quality is being considered, and this is particularly clear when one looks at the definition of goods in s.4 of the Act where goods are defined, unless the contrary intention appears, as including: - "(a) Ships, aircraft and other vehicles; (b) animals, including fish; (c) minerals, trees and crops, whether on, under or attached to land or not; and (a) gas and electricity;" This case is concerned with a particular quality of a motor vehicle. The shorter Oxford Dictionary gives the following meanings amongst others, for quality in relation to things:- "An attribute, property, special feature. The nature, kand cr character (of something)." In my opinion the number of miles a particular venicie has traveiled describes a particular attribute, or a special feature of that vehicle, and therefore describes a paiticular quality of that vehicle. I pass now to consider whether the reading on the edoneter of a used motor vehicle is a representation of the miles that vehicle has travelled wnen that venicle is displayed by a dealer in its used car yard. It was made clear py Senior Counsel for the informant that no verbal representation, or represcutation of any kind other than the mere appearance of the fisures on tne odometer was alleged. There was no suggesticn that any officer of the company hadi drawn the attention of any customer vo the odometer reading. However, the dcetendant had taken the step of placing the car on display ror saic an its vsed car vard and tne =] odemeter reading wac there for prospective purcha-ers to observe, 6. I do not consider that any statement or assertion by a servant or agent of the company, with an intention to convey information to a prospective purchaser 1s necessary in this case. I consider that the step of placing the car on display for sale with a mileage shown on the odometer in a used car dealer's yard, where the vehicle is placed witn the intention that it will be inspected by prospective purchasers is, in the absence of any special circumstances, a representation by the used car dealor that the car has travelled the number of miles shown on the odometer. In R. v Hammertons Cars Ltd. 1976 1 W.L.R. 1243, the Court of Appeal considered s.1(1)(b) of the United Kingdom Trade Descriptions Act 1968. That section draws a distinction between a person who in the course of trade or business (a) applies a false trade description to any goods and (3;) supplies or offers to supply any goods to which a false trade description is applied. I consider s.53(a) of the Act does not draw any such distinction. In the last mentioned case the Court was considering whether a false odometer or mileometer reading was a false trade description and at 1245 said "....1n most cases of the kind now before the Court the mileoneter reading 21s on the motor car for the prospective purchaser to see and to take into consideration when deciding to buy." As to s.1(1)(a) and (») Q of the Trade Descriptions Act see generally 1972 1 W.L.R. 1408 at 1414-1418. ottee v D. Seaten Lot. The defendant also argued tnat if the Holden vehicle had travelled 169,600 miles, the odometer would have shown that it had travelled only 69,COO0 miles since after 99,999 miies the odometer automatically returns to 0. However the correct reading on the odometer when the vehicie was purchased was about 69,012 and so the reading of 23,709 wes not correct, whether the vehicle had travellcd 69,012 miles or 169,012 miles. 7. The next matter to consider is whether the words "falsely represent" in s.53(a) of the Act are satisfied if the representation is not correct, or whether it must be known to be false by the person making the representation. It was also argued for the defendant, that, since it was a corporation, the representation must be one false to the knowledg of a person of sufficient seniority in the company to be able to bind the company. I am satisfied that, if a representation is in fact not correct, it comes within the words of the section, even if it is not false to the knowledge of the person making the representation, and even if the person naking the representation is a servant of the company of insufficient significance in the company for his knowledge, according to the ordinary principles of the Common Law, to be deemed to be the knowledge of the company. There is nothing novel in equating "false" with "contrary to fact", For example, s.244(da) of the Customs Act srovides that no person shall make any entry which is false in any particular. The section provided a penalty of two hundred doliers. The High Court considered the section in Sternbers v. The Queen 88 C.L.R. 646 and in Davidson v. Watson 23 A.L.J. 63, and held tnat "false" there meant "contrary to fact." In the latter case the Court said at 64: "For clearly, if the entry is objectively false in a particular the offence is cornitted and guilty knowledge or belief forms no ingredient in tne offence." I am satisfied that the odometer reading was in fact not correct, and that the display of that reading in the Circumstances in which it was displayed, constituted a faise representation that the venicle was ci a particular quality. 8. I pass now to consider s.85 of the Act. This section provides certain defcnces, s.&5(1) and (2) read as follows:- "(1) Subgect to sub-section (2), in a prosecution under this Part in relation to a contravention of a provision of Part V, it is a defence if the defendant establishes- (a) that the contravention 1n respect of which the proceeding was instituted was due to a mistake, to re.iance on information supplied by another person, to tne act or default of another person, to an accident or to some other cause beyond his control; and (b) that he took reasonable precautions and exercised due diligence to avoid the contravention. (2) If a defence provided by sub-section (1) involves an allegation that a contravention was due to reliance on information supplied by another person or to the act or default of another person, the cefendant 1s not, without leave of the Court, entitled to rely on that defence unless he has, not later than seven days before the day on which the hearing cf the proceeding commences, served on the person by whom the proceeding was instituted a notice in writing giving such information thet would identify or assist in tne identification of the other person as was then in his possessisn." The defendant argued that mens rea was a necessary ingredient which the informant had to establish and tnis argument was put cn a number of grounds. In my opinion, it is very significant that 1t is not a defence to establish that a contravention of s.53({a) was due to a mistake, or to reliance on information supplied by anott.er persun, or to the act or default of another person, or :9 an accident or to some other cause beyond the control of the defendant. It is also necessary for the defendant to establish that he teok rcasonable precautions and exercised dus ciligence ta aveld the conti is 9. vention. Section 84(2) provides: "Any conduct cngaged in on behalf of a body corporate by a director, agent or servant of the body corporate or by any other person at the direction or with the consent or agreement (whether express or implied) of a director, agent or servant of the body corporate shall be deemed, for the purposes of this Act, to have been engaged in also by the body corporate." Section 4 cefines "engage in conduct", unless the contrary intention appears, as including: "do, refuse to do, or refrain from doing, any act, including the making cf a contract or arrangement or the entering into an understanding,and 'engaging lr. conduct! has a corresponding meaning." Sectior 34(2) was considered in Ballard v Sverry-Rand 6 A.L.R. 696. In a joint judgment Spicer C.J., Dunphy and St. John JJ., said at 705 that the criminal responsibility of a corporation under the Trade Practices Act, is, by virtue of s.84(2), extended to inciaée responsibility for the acts of a servant. it is to be noted that the word servant in s.84(2) is not limited to any particular grade of servant, and, in particular, it is not limited to those servants whose status and authority at common law would make their acts, in the matter under consideration, the acts of the company whose servants they were. My attention was drawn to a number of cases dealing with mens rea and the defendant relied upon these as establishing that there is a presumption that mens rea, or knowledze of the wrongfulness of the act, is an essential ingredient of every offence. Amongst other cases, it relied on Lit Chin Aik v. The Queen, 1963 A.C. 160. However, in that case the Privy Council proceeded von tne basic that the application of the rule that mons rea is an essential ingredient in every oftence is liable to be displaced citner Ly the words of the partscuiar statute creating the offence, or by the subjecy scatter with 10. the judgment of the House of Lords in Pesco Supermarkets Lid, v. Nattrass 1972 A.C. 153 18 particularly helpful. In tnis case the House of Lords wes considering a prosecution based on the provisions of s.11(2) and a defence based on the provisions of s.24(1) of the United Kingdom Trade Descriptions Act 1963. A very important issue was whether the offence created by s.11(2) was one of strict liability or whether 'mens rea' was a necessary ingredient. 8.11(2) provided: "If any person offering to supply any goods gives, by whatever means, any indzcation likely to be taken as an indication that the goods are being offercd at a price iess than that at which they are in fact being offered he shali, subject to the provisions of this Act, be guilty of en offence." S.24(1) provided:"In any proceedings for en cffence under this Act it shall, subject to subsection (2) of this section, be a defence for the person charged to prove-(a) that the coma1zsion of the offence was due to a mistaxe or to reliance on information supplied to hin or to the act or default of another person, an accident or some other cause beyond his cont O23 and (b) that he cook ail reasonable precautions and exercised ali due diligence ta avoid vhe commission of such an offence by h2mselt or any person under his control." The speeches of Lord neid at 169-170, Viscount Dilhorne at 183, Lord Perrson at 189, i.crd Diplock at 194, 195 and 203 are particulariy helpful on tie question of mens rea. The judgments of euch of their Lordships proceedec upon the bahbis li. that, subgect to the aefences provided in the Act, s.11(2) created an offence of strict liability. in considering the question of mens rea in proceedings under the Australian legislation the existence of ss.84 and 85 is very important. Notwithstanding the extraordinarily neavy burden which ss.53(a) and 84(2) appear to place upon corporations and the Magnitude of the penalty provided by s.79 of tne Act, I am satisfied that the legislature intended to displace the presumption that mens rea was a necessary ingredient in relation to an offence arising from a contravention of the provisions of 8.53(a). At the ciose of the infornant's case Senior Counsel for the defendant sought to argue that there was no case to answer. Senior Counsel for the informant raised no objection snd said that, as a matter of practice, the Cormonwealth took the view that a defendant mignt argue that there was no case to answer without being obliged to elect whether or not to cali evidence. I allowed this course to be followed and after hearing submissions, I held that there was evidence upon wnich the defendant cou:d lawfully be convicted; and that there was a case te answer. The Gefendent then elected to call no evidence and after further submissions I reserved my judgment on the question of whether the defendant was guilty. (See generally Mey v. O'Sulliiven 92 C.L.R. 654). The defendant chose not to go into evidence, but this is a right any defendant has in a criminel case, and does not alter the onus which the informent carries. Wone of the matters mentioned in s.85{lXe)or(b) have been established. On the view 1 take of s.53(a) it is not necessary to make any finding on how the change in the odometer reading came abour 12. znd, indeed, on the evidence before me I would not be prepared to make a finding that the odometer was wound back by the defendant. I am satisfied that the informant has proved all the ingredients of the offence beyond reasonable doubt and therefore X convict the defendant. Both Senior Counsel joined in asking me to defer the consideration of penaity, costs and any consequential orders until after I nad desivered judgncent on whether or not T would convict the defendant and I agreed to do so. I certify that this andthe /H preced'ng pages are a true copy of the Reasons fer Judgment rerein cf his Honour Mr. Justice Fian€&,- Associate