ae] bh + G, ~ XN ' CATCHWORDS Trade Practices - Prosecution - false and misleading statement concerning location of land - meaning of "location" and "facilities"—- Minister's consent and amendments to informations and summons - relevance of evidence given by members of the public -— requirement of statement being made "in trade or commerce" and "in connexion with the promotion of the sale". TRADE PRACTICES ACT 1974 ss.53A(1)(b), 85, 79(1), 163. JUDICIARY ACT 1903 s.79 JUSTICES ACT OF S.A. 1921 ss.69, 125 COMMONWEALTH CRIMES ACT 1914 ss.21, 21A PLANNING AND DEVELOPMENT ACT OF S.A. 1967-1972 FEDERAL COURT RULES Order 49 rule 5 JOHN GRAHAM VIDEON Vv BARRY _ BURROUGHS PTY. LTD. AND JOHN GRAHAM VIDEON Vv BENEFICIAL LEASING PTy. LTD. AND JOHN GRAHAM VIDEON Vv poueetciae FINANCE CORPORATION No. 5 = 6 of 1980 No. 7 - 8 of 1980 No. 9 -10 of 1980 FISHER J. ADELAIDE 30 October 1981 &. + SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION IN THE FEDERAL COURT OF SOUTH AUSTRALIA) No. 5 - 6 of 1980 } No. 7 - 8 of 1980 } No. 9 -10 of 1980 BETWEEN: JOHN GRAHAM VIDEON Prosecutor - and - BARRY BURROUGHS PTY. LTD. Defendant AND ~ JOHN GRAHAM VIDEON Prosecutor - and - BENEFICIAL LEASING PTY. LTD. Defendant AND JOHN GRAHAM VIDEON Prosecutor - and - BENEFICIAL FINANCE CORPORATION LTD. Defendant REASONS FOR JUDGMENT FISHER J.: 3C October 1981 These prosecutions are brought by the prosecutor against each of the defendants alleging contraventions of s.53 A(1){(b) of the Trade Practices Act 1974 ("The Act"). By consent of all parties the proceedings were heard concurrently on the basis that 2. h all evidence taken, subject to proper objections on the ground of inadmissability against a particular defendant, was evidence against each of the defendants. The relevant portions of s.53A of the Act are in the following terms: "$.53A (1) A corporation shall not, in trade or commerce, in connexion with the sale or grant, or the possible sale or grant, of an interest in land or in connexion with the promotion by any means of the sale or grant of an interest in land - (a) represent that the corporation has a sponsorship, approval or affiliation it does not have; (b) make a false or misleading statement concerning the nature of the interest in the land, the price payable for the land, the location of the land, ~ the characteristics of the land, the use to which the land is capable of being put or may lawfully be put or the existence or availability of facilities associated with the land; or (c) ... (2)... (2A) Nothing in this section shall be taken as implying that other provisions of this Division do not apply in relation to the supply or acquisition, or the possible supply or acquisition, of interests in land. (3) In this section "interest", in relation to land, means - (a) a legal or equitable estate or interest in the land; (b) a right of occupancy of the land, or of a building or part of a building erected on the land, arising by virtue of the holding of shares, or by virtue of a contract to purchase shares, in an incorporated company that owns the land or building; or (c) a right, power or privilege over, or in connexion with, the land." Two charges based in each instance on information were laid against each of the defendants, which charges were, after a number of amendments, in a form which was common to each defendant, with exception of course of the name and address of the particular defendant. One summons as amended was in the following terms: On the 20th day of February 1979 at Adelaide in the State of South Australia Barry Burroughs Pty. Ltd. a corporation being a company incorporated under the Companies Act 1962 as amended of the State of South Australia and having its registered office at 81 Fullarton Road, Kent Town in the State of South Australia in contravention of Section 53A(1)(b) of the Trade Practices Act 1974 did in trade or commerce in connection with the promotion of the sale of an interest in land make a misleading statement concerning the location of the land, contrary to Section 79(1) of the Trade Practices Act 1974. The particulars of the charge are: The said statement was made in a brochure entitled "Hillbank. A truly prestige Subdivision". The said brochure indicated that the northern side of the land mentioned in paragraph 4 hereof was located immediately adjacent to the "Hills Face Zone" whereas in fact it was not. The said land was comprised of lots 90 to 94 inclusive and 96 and 97 of the "Hillbank Subdivision". The second charge against the defendant Barry Burroughs Pty. Ltd. ("Barry Burroughs"), again in a form to all intents and purposes the same in respect of each of the other defendants, was in the following terms: "lL. 3. On the 20th day of February 1979 at Adelaide in the State of South Australia Barry Burroughs Pty. Ltd. a corporation being a company incorporated under the Companies Act 1962 as amended, of the State of South Australia and having its registered office at 81 Fullarton Road, Kent Town in the State of South Australia in contravention of Section 53A(1){(b) of the Trade Practices Act 1974 did in trade or commerce in connectior. with the promotion of the sale of an interest in land, make a misleading statement concerning the existence or availability of facilities associated with land, contrary to Section 79(1) of the Trade Practices Act 197¢ The particulars of the charge are: The said statement was made in a brochure entitled "Hillbank. A truly prestige Subdivision". The said brochure indicated that there was a "Hills Face Zone" immediately adjacent to Lots 69 and 83 to 89 inclusive of the Hillbank Subdivision: whereas in fact there was not. 4. The said land was comprised of Lots 90 to 94 inclusive and 96 and 97 of the "Hillbank Subdivision"." The prosecutor in each instance is an officer of the Trade Practices Commission and the Minister for Business and Consumer Affairs on 18 February 1980 gave his consent pursuant to s.163(4) (a) of the Act to the prosecution of each defendant on charges, the particulars of which were as in the abovementioned summons but in their original unamended form. A matter much debated before me was the contention of Beneficial Finance Corporation Ltd, ("Beneficial Finance") that it had established defences under s.85(1) of the Act, the relevant portions of which section are as follows? "S.85 (1) Subject 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)... (b) that the contravention in respect of which the proceeding was instituted was due to reasonable reliance on information supplied by another person; or (c) that - (i) the contravention in respect of which the proceeding was instituted was due to the act or default of another person, to an accident or to some other cause beyond the defendant's control: and (ii) the defendant 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 defendant is not, without leave of the Court, entitled to rely on that defence unless he has, not later than 7 days before the day on which the hearing of the proceeding commences, served on the person by whom the proceeding was instituted a notice in writing giving such information that would identify or assist in the identification of the other person as was then in his possession." The Prosecutor conceded that Beneficial Finance had complied with the requirement of s.85(2), having ultimately on 13 June 1980 served what was accepted as a sufficient notice. The significant facts, on the basis of which I can determine whether there has or has not been a "prima facie" contravention of s.53A(1)(b) fall, in my view, into a relatively small compass. I use and will use the expression "prima facie" contravention as indicating what would constitute a contravention but for the existence of a s.85({1) defence. However, both the Prosecutor and Beneficial Finance put before me most detailed and comprehensive evidence of facts, matters and circumstances, extending back over a period of some six years prior to the date of the alleged contravention. In all 36 witnesses were called to testify and 90 exhibits tendered. This evidence indicates very clearly the context in which the offence is alleged to have occurred and some part of it is very relevant to the s.85(1) defences and on the question of any penalty. I shall therefore set out chronologically the most relevant of the background facts which I find proved. However, I shall concentrate almost exclusively on the activities of Beneficial Finance because, subsequent to my finding of a case to answer, the defendant Barry Burroughs Pty. Ltd. indicated it proposed to plead guilty to summons G5 of 1980 and it was agreed that summons G6 of that year would eventually be dismissed. During the presentation of the submission of no case, the prosecutor sought leave consequent upon certain admissions by Beneficial Finance to withdraw the two summonses against the defendant Beneficial Leasing Pty. Ltd. After certain submissions had been made as to my powers and with consent of Beneficial Leasing, I granted leave to withdraw the proceedings on 5 March 1981 in reliance upon the provisions of s.7 of the Judiciary Act 1903 and Sections 69 and 125 of the Justices Act 1921 of this State. The proceedings thereafter and subsequent to my finding of a case to answer continued only between the prosecutor and Beneficial- Finance. In 1972 the bulk of the land which eventually comprised the "Hillbank Subdivision", being the whole of that land less a small parcel purchased from the South Australian Housing Trust, was in broadacre form and owned by a limited company Henderson Investments Pty. Ltd. Being in broadacre form, a number of plann- ing approvals had to be obtained pursuant to the provisions of the Planning and Development Act 1967-1972 and the Regulations thereunder before it could be subdivided into residential allot- ments, each with its separate Certificate of Title. The greater part of the land was zoned Residential One which enabled that part to be subdivided into relatively small allotments appropriate for suburban dwellings. However, a matter which was to become of vital significance was that all the land was situated in the foothills of the Mount Lofty Ranges and a portion of it was in or abutted another zone, namely the Hills Face Zone. This zone had been identified in the Metropolitan Development Plan for the City of Adelaide published in 1962 as a Prescribed Zone, which Zone was, because of the acknowledged necessity to preserve the " semi-rural face of the hills visible frem the City of Adelaide, to be the subject of special planning consideration. That Plan provided that as far as possible land in that Zone was to be subdivided only into large allotments. On 16 December 1971 planning regulations governing the subdivision and use of the land in the Hills Face Zone were enacted. The Planning and Development Act at this time provided (s.42) that the land in the Hills Face Zone could not be subdivided unless the Director of Planning and the State Planning Authority, the statutory body set up to administer the provisions of the latter Act, were satisfied that the plan of proposed subdivision confirmed to the "purposes, aims and objectives of the Metropolitan Development Plan and the planning regulations". On 1 December 1972 s.45 of the Planning and Development Act was amended to provide that a plan of subdivision of the Hills Face Zone land should not create allotments less than 10 acres in size. There was at the time much public interest in the preservation of the Hills Face Zone and in the efforts of the legislature to minimise its subdivision. It was accepted that for planning purposes the Zone had exceptional and peculiar features. Such generally was the state of the law when Henderson Investments Pty. Ltd., the owner of the bulk of the land, granted an option to purchase that land to a company controlled by two real estate agents and developers, Messrs Stone and Thompson, and these parties set in train the necessary planning procedures to obtain approval to subdivide that land into residential building allotments. What is called by the regulations a proposal plan was prepared by a firm of planning consultants, Fyfe Hulse Mitchell & Associates, which proposal plan was on 30 March 1973 lodged with the Director of Planning and accompanied by an application for tentative approval to subdivide which approval when obtained is called a "Form A" approval. An approach was then mede by the two agents to Beneficial Finance which was at the time a large company engaged both in Adelaide where it had its Head Office and elsewhere in Australia in the general business activities of a finance company. At this stage one Devereux had entered employment with Beneficial Finance with a view to taking over as Regional Manager in South Australia, that is, as chief executive of the South Australian Branch having charge of activities in that state. A letter dated 9 May 1973 signed by Thompson invited Beneficial Finance to join with him and Stone in the subdivision and marketing of the land on the basis of a joint venture. This proposal was recommended by Devereux and two other officers in the South Australian Branch to Head Office of Beneficial Finance which approved the transactior Pursuant to the proposal, steps were then taken for Beneficial to acquire the land from Henderson Investments Pty. Ltd. and to proceed to obtain the necessary subdivisional approvals. The evidence establishes quite conclusively that thereafter Beneficial Finance took charge of the subdivision development and sale of the land, notwithstanding that Beneficial Leasing was the registered proprietor of the land. However until 1 July 1975 Beneficial Finance's interest in the land was subject to the joint venture arrangements and subsequently to the provisions of a joint venture agreement. On 18 October 1973 the first planning approval was obtained, namely the "Form A" approval of the proposal plan which approval was subject to conditions all of which were in relatively common form and generally acceptable. From that date until approximately October 1974 Beneficial Finance took steps to implement the terms of its approval and to develop the land by construction of roads and installation of services. Its surveyors performed the work necessary to complete the more accurate survey of the land, and in particular its outer boundaries, as required by the Planning Regulations. Such plans indicated that the subdivided land was in the proximity of the Hills Face Zone, the boundary of which the relevant parties generally understood to run along the outside of the most eastern allotments. The land actually in the Hills Face Zone was set aside to constitute portion of the reserves which the owners were required to provide. As it was believed at the time that no allotment was actually wholly or in part in the Hills Face Zone, no more than passing attention, if any, was given by the officers engaged in subdivisional and development activities to the exact position of the western boundary of that zone in relation to the subdivision. In October 1974 Beneficial Finance placed an embargo on expenditure on land development and no further steps were taken to obtain final approval of the subdivision and the issue of individual titles until mid 1975. Prior to that time the Planning and Development Act had been amended so as to place further restrictions on subdivision of the Hills Face Zone. The amending Act No. 2 of 1975 prohibited the submission for approval of a plan of subdivision if it purported to create an allotment in the Hills Face Zone. The frequent amending of the Planning and 10. Development Act (there were in fact four amending acts proclaimed that year) and the increasing restrictions placed since 1971 on subdivision of the Hills Face Zone together with certain litigation to which much publicity was given, ensured that members of the public were aware of the concept and the general Situation of that zone, even if they understandably could not specify its location or the exact nature of restrictions on development at any particular point of time. In general they were aware of the policy to preserve the semi-rural nature of the zone and the efforts to minimise residential development therein. In mid 1975 Beneficial Finance recommended development of the land, in particular the provision of those services which were a condition precedent to obtaining final planning approval. Certain delays occurred in consequence of the acquisition by the Highways Department of land on the western side of the subdivision for a future transportation corridor. A valuation of that portion was provided by a Mr. Schutz of Ambron Research for the purpose of assessing proper compensation. In that report Mr. Schutz referred to the proximity of the land to the Hills Face Zone as being one of its advantages but did not indicate where that zone was or was not situated in relation to the land. On 1 July 1975 an agreement was executed by Beneficial Finance, Stone and Thompson which evidenced the abandonment of the joint venture arrangements between them and thereafter Beneficial Finance was sole owner of the project and the land, On 20 April 1976 the District Council of Munno Para, one of the bodies required to give planning approval to the subdivision and which had been a party to earlier approvals, gave its consent ll. . to the final plan. However subsequently this plan had to be amendd because of the acquisition of portion of the land by the Highways Department, and an amended plan was lodged on 23 September 1976. Prior to this date the Hills Face Zone Planning Regulations were amended on 6 May 1976, which amendments imposed further restrictions on subdivision, land use and erection of dwellinghouse in that Zone. Such amendments probably had little if any impact upon Beneficial Finance's subdivision of the land, but they emphasized the continuing interest of the authorities in the Zone and had an effect on the freedom of action of purchasers whose allotments were wholly or in part in that Zone. On 8 ~ November 1976 Beneficial Finance took a further step towards the marketing of the allotments when it applied to the Land Price Control Unit for approval of the selling prices of the allotments. On the same day the South Australian Branch of Beneficial Finance put together what it called its marketing proposals, being the procedures which it contemplated for the sale of the allotments. Such proposal was prepared and signed by three officers, Devereux, McLean and McGaffin, and was approved by Head Office of Beneficial Finance on the following day. The aspects of the proposal relevant to these proceedings were that Barry Burroughs Pty. Ltd., and Stone & Associates were recommend- ed as joint selling agents for a period of three months after which their performance was to be "reviewed". The proposal recommended that the sale of the allotments should be promoted by the agents as follows: "(1) An inexpensive brochure approved by us and showing a subdivisional plan and prices to be distributed to prospective purchasers, (2) A sign approved by us and of maximum size allowed by the local council ... 12. (3) An advertisement approved by us to appear in the Saturday Advertiser and Sunday Mail." These recommendations were generally accepted by Head Office, the only relevant amendment being that the agents were to be required to pay all costs listed under "Promotion". On 9 November 1976 the ultimate planning approval was given when the Director of Planning signed the final plan thereby indicating his approval thereof. On 17 November 1976 the Adelaide Branch Office implemented one of the crucial steps in its marketing proposals by formally appointing the agents. It was agreed before me that there had been prior discussion between the Branch Officers, Stone and Barry Burroughs, and that the letter of appointment of the agents was only a necessary formality. However much emphasis was properly placed on the letter as indicating the procedures which Beneficial Finance considered prudent, the degree of control which it retained over the activities of the agents and the care it took to minimise the risk of contravention of the Act. It is desirable to set out in full the letter which Beneficial Finance sent to Barry Burroughs, a facsimile of which was sent to Stone: "17th November, 1976. The Manager Barry Burroughs Pty. Ltd., 81 Fullarton Road, KENT TOWN. S.A. 5067 Dear Sir, APPOINTMENT OF SELLING AGENTS - HILLBANK SUBDIVISION We are pleased to confirm your appointment as a selling agent in conjunction with Stone & Associates Pty Ltd for our 111 allotment subdivision known as Hillbank. 13. > Conditions: 1) 2) 3) 5) 9) Although the appointment is effective immediately, it will be gauged to extend for a period of 3 months from the date LPCU approval if granted. We will then assess performance at not greater than monthly intervals. We require a plan of the subdivision showing numbered allotments to be approved by us prior to production. This need only be in comparatively inexpensive brochure form similar to the attachment. When prices approval has been granted we request that a roneod list be prepared for distribution to prospective purchasers. Advertising in weekend newspapers will be required. The extent and format of this will be discussed shortly after active marketing of the subdivision has commenced. All advertisements must be prior approved by us. A sign of maximum dimensions allowed by the local council is to be erected at the entrance to the subdivision show- ing a plan of the subdivision with allotments numbered and that our finance facilities are available plus our Company's logo in standard colour on white background. All costs associated with 2, 3 & 4 be borne by the Selling Agents. Settlement from builder purchasers is to be shown on contract notes at 2 months after date of signing or 14 days after issue of individual certificates of title by the Registrar General of Deeds, whichever is the later. Settlement from purchasers from the private sector will be required 14 days after signing of the contract or 7 days after issue of title, whichever is the later. Full commissions will be paid on the gross amount of each contract except where multiple sales are involved which will be aggregated for the purpose of calculating commission. We are attaching a list of builders with whom we have dealt in the past and it is recommended that you should canvass these in the course of your marketing programme, Please sign both copies of the attached indemnity required under the Trade Practices Act and return one copy to the undersigned. We look forward to a mutually rewarding association in the sale of this project. Yours sincerely, J.D. McGAFFIN REAL ESTATE DIVISION MANAGER 14, * PLEASE NOTE: The actual wording to appear on contracts will probably differ. We are awaiting written confirmation from the Munno Para Council that they will accept, approve and permit building to commence before individual titles have issued - providing Beneficial's name and signature appears on the application conjointly with the purchasers - in which case settlement could be called for 2 months after LPCU approval has been granted. The final plan has been numbered. We will confirm the actual wording to be used immediately we receive word from the Council." Accompanying the letter was the sample brochure and also a pro forma document described as "letter to agent" which set out, in a form obviously settled by Beneficial Finance's solicitors, the salient features of ss.52 & 53 of the Trade Practices Act in their then form. It also required an acknowledgment from the agents of their receipt of the letter of instructions and the letter to agents. Barry Burroughs signed the acknowledgment on 24 November 1976 and a copy was retained in the possession of Beneficial Finance. In this matter the crucial feature of the agencies was the obligation of the agents in relation to the brochure, namely that the plan thereon showing the allotments should be approved by Beneficial Finance prior to production. For the purpose of assisting the agents in preparation of a brochure Beneficial Finance instructed one Richardson to prepare a plan of the allotments in the subdivision, which plan was subsequently reproduced in the brochure and was admitted into evidence. It was dated 26 November 1976 and it did not have the words "Hills Face Zone" on the top thereof. It is apparent therefore that these words were subsequently inserted by or at the an 15. . direction of the agents or one of them,though in what circumstance was not revealed to me as neither Burroughs nor any of his employees (other than a Mrs. Pryor who was called by the prosecution) gave evidence. The cost of preparation of this plan ("the Richardson plan") was met, at least in the first instance, by Beneficial Finance. On 2 December 1976 separate Certificates of Title for the 111 allotments in the subdivision, the culmination of the sub- divisional procedures, issued. On 9 December the agents had 300 copies of the brochure printed, some of which found their way to the office of Beneficial Finance. The brochure as -printed was in the following form: HILLS - FACE ZONE Or a wa] 3 2 3) 'a wee nae rae BROOKER DRIVE +, Une Ute rantaner ne wap we Oe Ty woe ne wa > a) Ej pier 3 e?,, 60 = . 109 =} 100 > 107 5} 106 os 5} 102 sie ay ; 5 ou Gara 7 mx) bufne pw tt lial} ' $i =] 80s] tes} bbs) 0 Wy wae] ee y WON] eee] eee fe oe J nee | ts fives | pee | noe | oe as Lo venne / fat wkerants) Ye. . t " s "t . ' soc irene . RESERVE (ts eterents) ILLBANK | 4 to, ~ 16. On the right hand side of the plan appeared the following statements: " The prestigeous ""HILLBANK" subdivision your investment in the future ALL ALLOTMENTS HAVE: * MAIN SEWER * SEALED ROADS AND KERBS * UNDERGROUND POWER * SEMIRURAL LIVING " On the back of the brochure appeared the following words: "HILLBANK' A truly prestige Subdivision of gently elevated allotments with panoramic views and under ground services. The allotment of your choice is available for:— 10% Deposit 10 Years To Pay* Proudly presented by the Joint Selling Agents BARRY BURROUGHS PTY. LTD. .LICENSEDLAND AGENTS 'AUCTIONEERS M.R.Et. ° 81 FULLARTON ROAD, KENT TOWN. 332 4422 A.H. 263 3195 : 298 2884 STONE & ASSOCIATES Pty Ltd 125 Glen Osmond Road, Eastwood. 272 3466 A.H. 79 7196 * Finance from Beneficial Finance Corporation Ltd 17. On 15 December 1976 the Land Price Control Unit indicated for each of the allotments the selling price which it was prepared to approve. The land was then released for sale through the two agents and advertising commenced in the local newspapers with brochures being distributed on the site and to enquirers including builders. Notwithstanding the obligation stated clearly in the letter of appointment that the brochure containing the plan was to be approved by Beneficial Finance, there was no clear evidence before me that it was presented in draft form to Beneficial Finance, let alone approved by that company. Barry Burroughs in answering questions put by the Trade Practices Commission said that it had received approval from Beneficial Finance. However this evidence is not admissible against Beneficial Finance, None of the witnesses called by Beneficial Finance were, on cross-examination, able to deny that the brochure had been produced for approval by Barry Burroughs and the officer most closely involved, namely McGaffin, the Real Estate Manager, was of opinion that it probably would have been submitted to his company. In the ultimate it is my opinion that, irrespective of whether or not Beneficial Finance received the brochure for approval, there was a breakdown in the procedures it deemed desirable and thus it is at fault. It is not necessary therefore for me to make a firm finding whether or not Beneficial Finance saw the brochure prior to it being printed. The next happening in the chronological sequence was that a building company, Elf Constructions Pty. Ltd, ("Elf Constructiong) 18. approached Beneficial Finance on 20 December 1976 for the purpose of acquiring allotments. On 27 January 1977 it signed a contract for the purchase of allotments 80 to 94 and 102 to 110, which were transferred by Beneficial Leasing by transfer dated 22 March 1977, encumbered by a mortgage to Beneficial Finance securing $214,000. On 5 May 1977 a further 300 copies of the brochure were printed and the following month Devereux, who had been the Branch Manager in Adelaide since at least June 1973 was transferred to Head Office, his position being filled by one Brenton Wood. Two months later Elf Constructions received a letter from the District Council of Munno Para informing it that allotment 58 in the subdivision, upon which it was seeking to build, was in the Hills Face Zone. Through its Managing Director it reported the information to Beneficial Finance. The opinion of the latter company that the Munno Para Council was in error was confirmed by the State Planning Authority. However more important, it was said, was the contention that at this stage, in consequence of Elf Constructions enquiries, Beneficial Finance became aware that a portion of allotments 67 and 68 was within the Hills Face Zone. Early the following year Beneficial Finance also ascertained that the boundaries of approximately 20 allotments were incorrectly pegged in consequence of errors in the survey. It instructed another firm of surveyors to re-survey and do all work necessary, which included some re-subdivisions, to correct the errors and to the extent necessary re-peg the boundaries of these 20 allotments. Some of the allotments purchased by E1f Constructions were affected by this work. At about this time Barry Burroughs became the only agent employed by Beneficial Finance to sell 19. allotments, the other agent Stone & Associates Pty. Ltd., having relinquished its agency by letter dated 10 July 1978, On 23 August 1978 E1f Constructions advised it could not meet payment of instalments of interest due under the mortgage to Beneficial Finance, which company, on 25 August 1978, made demand and gave notice of intention to sell as mortgagee. At least one conference was held between the parties, and Elf Constructions was authorised to make efforts to sell, until 25 September, the allotments subject to the mortgage. On that date Beneficial Finance took steps to sell the allotments and in particular, allotments 90-94 as mortgagee through its agent Barry Burroughs. The position at the end of that year was that Beneficial Finance had certain allotments, including allotments 96 and 97 still registered in the name of Beneficial Leasing, fa&sale in addition to allotments 90-94 which it was selling as mortgagee exercising a power of sale. At about this time the Trade Practices Commissioner's Office in Adelaide received a complaint from a purchaser by the name of Phillips, who had purchased an allotment in April 1978, in relation to the information on the brochure concerning the position of the Hills Face Zone. Phillips was the purchaser of allotment 84, : which allotment abutted the area marked Hills Face Zone on the brochure. On 30 January 1979 the prosecutor John Graham Videon visited the offices of Beneficial Finance and collected a number of brochures, including the brochure the subject matter of the charges. On 20 February 1979 he went to the offices of Barry Burroughs where he spoke to a young woman (subsequently identified as Mrs, Pryor) near the reception desk. He asked her if she had 20. any brochures or price lists for the Hillbank subdivision in the Munno Para region. She replied that there was no agent in the office but she went into another office returning with two brochures. She said that they only had the brochure and that he would have to speak to an agent for the price list. Videon asked her the name of the agent and she took a business card from the nearby reception desk. She wrote on it the name "Don Cardone" and his after hours telephone number. Videon left taking with him the brochures and the business card which were admitted into evidence, On 20 March 1979 the Trade Practices Commission wrote to Barry Burroughs advising of the complaint by Phillips and requesting information. Barry Burroughs supplied the information sought by letter dated 9 May 1979, A contract for the purchase of allotment 90 was entered into on 14 May 1979 between one Austin as purchaser and Barry Burroughs as agent for Beneficial Finance as mortgagee, which purchase was completed by transfer registered on 27 June 1979. On 20 June 1979 the Trade Practices Commission wrote to Beneficial Finance seeking information which that company supplied by letter dated 6 August 1979. In answer to questions concerning approval by the company of the brochure, it replied as follows: "4(a) We have no record of the brochure having been submitted to the company for approval prior to printing. No member of the Real Estate Division staff can recall having approved the draft and a copy of the draft is not held on the Hillbank Subdivision file maintained by the company. (b) ... 21. (c) As mentioned in (a) above, no member of the Real Estate Division staff can recall having approved the draft and therefore we conclude that no amendments or corrections to the draft brochure were made or instructed to be made by the company." Beneficial Finance also stated that it had given instructions for all brochures which could be located to be destroyed and that it had supplied Barry Burroughs, which was then its sole agent for the subdivision, with a new brochure. On 18 February 1980 the appropriate Minister gave his consent to the initiation of proceedings against each of the defendants on two charges, The consent in respect of one charge against the defendant Beneficial Finance was in the following terms: " Commonwealth of Australia Trade Practices Act 1974 I, RANSLEY VICTOR GARLAND Minister for Business and Consumer Affairs HEREBY CONSENT to the institution of proceedings against BENEFICIAL FINANCE CORPORATION LIMITED for the following offence against the Trade Practices Act 1974 thats: On about the 20th day of February 1979 at Adelaide in the State of South Australia BENEFICIAL FINANCE CORPORATION LIMITED: a Corporation being a company incorporated under the Companies Act 1962 as amended of the State of South Australia and having its registered office at 33 Franklin Street, Adelaide in the State of South Australia, in . contravention of Section 53A(1)(b) of the Trade Practices Act 1974, in trade or commerce, in connection with the promotion of the sale of an interest in land, namely Lots 68, 69 and 83 to 98 inclusive of 'Hillbank subdivision' did make in a brochure entitled 'Hillbank, a truly prestige subdivision' a misleading statement concerning the location of the Land, namely that the northern side of the said land was located immediately adjacent to land zoned 'Hills Face Zone'. Dated the eighteenth day of February (signed) RANSLEY VICTOR GARLAND Minister for Business and Consumer Affairs." 22. The consent to the other charge against Beneficial Finance was in exactly similar terms except that the alleged misleading statement concerned "the existence or availability of facilities associated with the land, namely that facilities of land zoned 'Hills Face Zone' were available immediately adjacent to the said lots." In so far as it was alleged that there was a departure in the information and summons initiating the proceeding from the proceedings as consented to by the Minister, such departure appears in the particulars of the charge as amended by leave. In the Minister's consent the land the sale of which was being promoted was identified as lots 68, 69 and 83 to 98 inclusive. In the particulars as a result of the amendment the allotments were identified as allotments 90 to 94 inclusive and 96 and 97. The consequence was that at trial the contravention alleged and the evidence was restricted to 7 of the 18 allotments referred to in the Minister's consent. The information in respect of each charge was laid on 20 February 1980 and by letter dated 13 June 1980 Beneficial Finance through its solicitors gave notice of a defence pursuant to s.85(2) indicating that Stone & Associates Limited and Barry Burroughs Limited were the persons upon whom it had relied for the purpose of establishing that defence. Some 36 witnesses 'in all were as already mentioned called, including on the part of Beneficial Finance all of its executive officers who at the various times had involvement with particular stages of development and sale of the subdivision, and who might have been involved in approving a draft brochure. There was 23. virtually no conflict of evidence and all witnesses were conscientious and reliable. Apart from the lapse which occurred in respect of the approving of the form of the brochure, there is in my view no ground for criticism of their performance of their duties. Nor do I find any lack of care on the part of Beneficial Finance in that it failed. to discover the alleged misleading statement prior to the time the Trade Practices Commission drew it to its notice. If its officers had earlier been alerted to the possibility that the Hills Face Zone was misplaced in the brochure, there were of course a number of plans in its possession or shown to its officers which could have been of assistance in checking the position of such zone. It can not be said however that at a particular time (other than prior to printing) they were under an obligation to check such position and that they failed to take reasonable care and avail themselves of all information in their company's possession. These being the circumstances in which the contraventions are alleged to have occurred, I turn to the grounds upon which the defendant Beneficial Finance relied in contending that I should not as a matter of law find that it had contravened the provisions of the legislation. A particular argument was presented in various forms on a number of occasions, namely when application was made for leave to amend, during the submissions of no case to answer and in final addresses. That argument was based on a lack of exact coincidence between the terminology of the information and summons on the one hand and the terms of the Minister's consent. Such consent is a prerequisite to the institution of proceedings "for an offence" (my emphasis), being required by s.163 of the Act, which provides as follows: "(1) Prosecutions for offences against this Act shall be brought only in the Court. (2) Jurisdiction is conferred on the Court to hear and determine prosecution under this Act. (3) ee (4) Proceedings before the Court in accordance with this section - (a) may be instituted by summons upon information; and (b) shall not be instituted except with the consent in writing of the Minister or of a person authorized by the Minister, by writing under his hand, to give such consents. (5) A prosecution for an offence against section 118 may be commenced at any time after the commission of the offence." It is the institution of the prosecution which requires Ministerial approval. The contention of Beneficial Finance, placing it at its highest, was that by permitting an amendment of the number of allotments identified 1n the consent, I permitted the prosecutor to charge a defendant with a new offence or alternatively to commence new proceedings in circumstances where there was no Ministerial consent and no compliance with the time limit of one year. Section 21 of the Commonwealth Crimes Act 1914 provides the time for commencement of proceedings, the relevant portion of which is as follows: "(1) A prosecution in respect of an offence against any law of the Commonwealth may be commenced as follows? (a) ... (b) ... (c) where the punishment provided in respect of the offence is a pecuniary penalty and no term of imprisonment 1s mentioned - at any time within one year after the commission of the offence." 25. The power to make amendments to the information or summons is contained in s.21A of that Act in the following terms: "(1) If at the hearing of any indictment, information or summons any objection is taken for an alleged defect therein in substance or in form, or if objection is taken to any variance between the indictment, information or summons and the evidence adduced at the hearing in support thereof, the Court may make such amendment in the indictment, information or summons as appears to it to be desirable or to be necessary to enable the real question in dispute to be determined, (2) ... (3) The power of the Court under sub-section (1) shall not be exercised in cases where the Court considers that the required amendments cannot be made without injustice to the defendant." It was submitted at the time of the application for leave to amend the particulars in the information and summons that an injustice would result because the prosecution would be charging a new offence, which offence could not be the subject of fresh proceedings and which had not received Ministerial consent. I ruled against this on the application for leave to amend as in my opinion there was no injustice caused to the defendant because the prosecution would notwithstanding the amendments continue to charge the same offence. Likewise it relied on the same conduct but in relation to fewer, although the same, allot- ments of land. The Minister has in quite specific terms given his consent to the prosecution of a particular offence which offence remained the same after the amendments had been made, This submission in somewhat different form but in substance the same was made at later stages. At the time of final addresses Brennan J. had delivered his decision in Gilmour v Midways Springwood Pty. Limited (1980) 33 A.L.R. 605. In that case the 26. alleged contravention as identified (in terms of the legislation) in the information and in the summons differed from that to which the Minister had given his consent to prosecute. It is interesting but in the view I hold unimportant that there was also a departure from the consent in the particulars of conduct charged, but such departure was neither relied upon nor referred to by Brennan J. In my view this is understandable, because there has always been a clear dichotomy between an offence as stated in an information and summons and the particulars of the relevant conduct. Such dichotomy is in my view determinative of this issue. Reasonable information is required of the acts or omissions constituting that conduct, because in the words of Gibbs J. "the defendant to a proceeding" is entitled to be "fairly appraised of the case he has to meet..." (Total Australia Ltd v Trade Practices Commission (1975) 1 A.T.P.R. 17,289). It is however the offence with which he is prosecuted which has to be clearly and unequivocally identified, both in the consent and the summons. There is no obligation under the Act for the Minister to identify the conduct charged, and there is no requirement under the Act for particulars of conduct to be suppliec Such requirement was initially imposed by the Regulations under the Conciliation and Arbitration Act and currently is set out in the Rules of this Court (0.49 r.2). Both the Regulations and the Rules clearly differentiate between the offence and the particulars of conduct. The distinction between the offence charged and the conduct which may or may not amount to such an offence is the key to this problem. The charge must be sufficiently and unequivocably identified in the information, whereas particulars and further 27. and better particulars may be given from time to time to better identify and distinguish the conduct from other transactions and occurrences (See per Dixon J. in Johnson v Miller {1937] 59 C.L.R. 467 at p.490), On the crucial question whether the information and summons come within the terms of the Minister's consent, the defendant does not gain much support from the reasoning in Gilmour v Midways Springwood supra. Section 53, the section there under consideration,in its introductory words prohibits a corporation from making a false representation in alternative circumstances, namely "in connexion with the possible supply of goods or services" or "in connexion with the promotion by any means of the supply or use of goods or services...". The consent specified the representation as having been made in one circumstance, whereas the information alleged the other alternative circumstance. Brennan J. clearly distinguished between the facts which identify the conduct and the identification of the offence, and it is the latter which the Minister is required to specify and approve. At page 607 he had this to say; "The offences created by s.53 have a number of elements. Each combination of elements together constitutes an offence different from the others created by the same section. That is not to say that the facts which would support a conviction for one offence under s.53 might not at the same time support a conviction for another of the offences created by the same section. However the question now relevant is not related to the evidence necessary to support a charge, but to the identifying of the particular offences charges." The next succeeding sentence of Brennan J.'s reasons indicates that the particulars do not assist in identifying the offence charged. 28. "For present purposes, it is necessary to determine whether conduct of a kind specified in one of the lettered paragraphs of s.53, when combined with the several alternatives in the introductory part of that section, constitutes differing offences.... A sufficiency of evidence to support a conviction for either offence does not establish the identity of the two offences. It follows that the Minister consented to one offence but another is to be found in the information." , However in my opinion the present case is quite different in that it can not be said that in consequence of the amendment to the particulars a different offence is charged from that consented to and laid within the specified time. I have given consideration to Berwin v Donohoe (1915) 21 C.L.R. 1 at p.25 and the conclusion drawn by Brennan J. and relied upon by Beneficial Finance to the effect that "where the Minister limits his consent, the limitation is one which the informant is bound to observe in the laying of the information". It has no application in my opinion where the amendment is permitted to the particulars and merely specifies more exactly the circumstances in which the offence is alleged to have occurred. Beneficial Finance conceded that it was a "corporation" for the purposes of the Act, but contended that the prosecutor had not established that the statement was made "in trade or commerce". It was accepted that this element of the offence, as indeed all elements, must be established by the prosecutor beyond reasonable doubt. The normal day to day activities of Beneficial Finance were conceded by that company as being performed in trade or commerce, but the contention was that when its agent's employee handed the brochure to m officer of the Trade Practices Commission, who was not apotential customer but was in his capacity as such an 29. officer, the particular occurrence was not a transaction in trade or commerce. It was not disputed that if the prosecutor had collected the brochure as a potential purchaser or as a person interested in what allotments were for sale and where, the transaction would have occurred in trade or commerce. However it was contended that both parties to the transaction or occurrence must be operating in trade or commerce and that it did not suffice for Beneficial Finance to be carrying out its normal functions if the other party had no interest in any commercial transaction or 1n the sale or promotion of sale of the land. In my opinion this submission is misconceived and certainly is inapplicable in circumstances where as here the person making the statement is unaware of the interest or capacity of the other party and the purpose for which the brochure is sought. The decision of Nimmo J. in Larmer v Power Machinery Pty. Ltd. ((1977) 14 A.L.R. 243) on the third charge there considered was cited as illustrating the proposition that the person to whom the statement was made (in circumstances where the offending document was not displayed in a place open to the public) must be someone other than an investigator of a possible contravention. However at page 245 the judge referred to the same contention as was before me, namely the submission of counsel for the defendant that the officers of the Trade Practices Commission "were there in their capacity as investigating officers of the Trade Practices Commission at the time the representation was made and consequently that the statement was not made in the course of trade or commerce or in trade or commerce", 30. He went on to dismiss this contention in the following words: "I rejected the arguments of Counsel for the Company for the following reasons. I do not think that the expression 'in trade or commerce' should be given the narrow interpretation contended for by Counsel for the Company. On the contrary I think the provisions of the Trade Practices Act, including the definition given to the expression in sec.4, demand that a very wide meaning be given to it. In my view, the expression is intended to cover the whole field in which the nation's trade or commerce is carried on. I reject the view that it is confined to any particular event which may occur in the conduct of a business which operates within that field". The prosecution in Larmer supra alleged contraventionsof s.53(c) of the Act, and the first two charges certainly did arise in circumstances where the offending brochure was on public view. However the circumstances of the third charge were similar to those before me in that a brochure was handed to the investigating officer. The trial judge held that this occurred in trade or commerce. I refer also to the discussion of the words "trade" and "commerce", in In re Ku-ring-gai Co-operative Building Societ (No,12) Ltd & Anor. (1978) 22 A.L.R. 621 at p.624 and also in Taperell, Vermeesch & Harland on "Trade Practices and Consumer Protection" 2nd Edit. para. 1329. I can concede, as is obliquely noted in the latter reference, that on exceptional occasions isolated acts by a Corporation may be outside of the ordinary run of business, and thus not performed in trade or commerce. However such an exception can have no application where the Corporation acts on the assumption that the person with whom it is dealing is a potential purchaser. It is my opinion that the words "trade or commerce" relate to the activities of the corporation (which activities of course may be affected or 31. influenced by the actions of the other party) as does the next succeeding requirement discussed in the succeeding paragraph that the making of the statement is required to be in connexion with the sale or promotion of sale of an interest in land. Certainly the word "trade" can apply to a unilateral act (see per King C.J. in R v Mandica & Ors (1981) 24 S.A.S.R. 394 at pages 398-9). I reject the argument that the statement in question was not made "in trade or commerce". It is also necessary for me to be satisfied on the evidence that the allegedly misleading statement was made on 20 February 1979 in connection with the promotion"of the sale of an interest in land. I am well satisfied that prior to that date allotments 90-94 inclusive were placed in the hands of Barry Burroughs for sale by Beneficial Finance as mortgagee exercising its power of sale. Likewise Beneficial Leasing still owned allotments 96 & 97 and they were also for sale. Subsequent to 20 February 1979 one at least of these allotments was sold, and there was no direct evidence and no evidence from which an inference can be drawn that at the relevant date ail or any of the other allotments had been withdrawn from sale. All the evidence points the other way. Certainly for a statement to be made "in connexion with the promotion of the sale" there is no necessity to establish that a sale resuited from or was the likely result of the making of a statement (Thompson v Riley McKay Pty. Ltd. (1980) 29 A.L.R. 267) and matters which can occur in the course of promoting a sale are of infinite variety. The scope of the word "promotion" was also considered in Henderson v Pioneer Homes Pty. Ltd. (1980) 29 A.L.R. 597 by the Full Court of the Federal Court where the 32. prosecution was based on the contents of an advertisement. The reasoning of that Pull Court supports my view that the statement in question here was made "in connexion with the promotion of the sale of an interest in land", the land being the allotments earlier mentioned. It was also made notwithstanding the fact that the brochure was "handed to an officer investigating a possible contravention of the Act. In fact on this score the reas-— oning of the members of the Full Court in Thompson v Riley McKay supra would tend to suggest that the fact that the brochure containing the statement was available to the public is sufficient, and there is no need to establish that it was read by any person, and, a fortiori, read by a potential purchaser. The brochure was handed to the prosecutor by Mrs. Pryor, an employee of the defendant Barry Burroughs Pty. Ltd., which company was admittedly the agent of Beneficial Finance for the purpose of disposing of the allotments. It was submitted that because Mrs. Pryor's normal duties did not encompass dealing with the enquiries and requirements of members of the public attending at her employer's place of business and because she was not a licensed saleswoman under the provisions of the Land & Business Agents Act 1973 her action in handing out a brochure on this occasion was not the act of Beneficial Finance. I reject this submission. Even though such work was not the normal work of Mrs. Pryor, she was accustomed to dealing with members of the public in the absence of the employee whose normal duties encompassed such work, "Thus she was acting in accordance with the authority she had to deal from time to time with members of the public and the fact that she did not have a licence is nothing to the point. Beneficial Finance must accept responsibility for the 33. fact that the brochure was handed out on the relevant date to the prosecutor by Mrs. Pryor All of the defendants objected to evidence being given on behalf of the prosecutor by members of the public who had made purchases or had given consideration to purchasing allotments and who had been handed copies of the brochure. It was also said that even if such evidence was admissible, it had no relevance on the question whether the statement in the brochure concerning the Hills Face Zone was misleading. I can agree with the latter submission to the extent that the fact that members of the public were, or were not, mislead is not determinative of the question whether the statement is misleading. I draw attention to the discussion of this matter by Smithers J. in McWilliams Wines Pty. Ltd v McDonalds" Systems of Australia Pty. Ltd. {1980} 33 A.L.R. 394 at p.399 and also my comments at p.413 see also Keely J. in Sterling v Trade Practices Commission [1981] A.T.P.R. 42,913 at p.42,921. In my opinion the evidence from third parties is admissable but of peripheral value. It did however support my own firm view that the statement is misleading. I do not accept any of the arguments to the contrary based on any element of uncertainty as to the exact situation of the Hills Face Zone as alleged by the statement and on the great but understandable uncertainty as to what the words correctly in law meant or conveyed to members of the public during the relevant time. It follows that I am satisfied to the requisite degree of certainty that Beneficial Finance did in the course of trade or commerce in connexion with the promotion of sale of an interest 34, in land make a misleading statement. However the making of such a statement only contravenes the relevant section of the Act if it concerns "the location of the land" or alternatively "the existence or availability of facilities associated with the land". In my opinion the brochure falsely states that the Hills Face Zone is situated immediately to the North of the subdivision or alternatively that it immediately abuts certain numbered allotments in the subdivision. The question for decision is whether such representation falsely stated the "location of land". There is no essential reason in the view I take to differentiate between the subdivision as a whole or the individual allotments, except that the falsity of the statement is doubtless more apparent or of greater significance to potential purchasers of allotments closest to the alleged Hills Face Zone. In circumstances where the land for sale comprises vacant allotments in a new subdivision, the streets of which, although made and named, are new and unknown and when community and facilities are not yet established, it will frequently facilitate the identification of the subdivision and its allotments to refer to physical features of which purchasers are likely to be aware. Doubtless in established residential suburbs the identification of the location of a particular piece of land will be best specified by reference to its address. However it is not of much assistance to members of the public to refer to allotment numbers in a newly made and newly named street in a recently established subdivision. The name of the subdivision frequently is not indicative of its whereabouts or its proximity to an adjoining suburb. It will be of greater assistance to purchasers if reference is made to physical features, such as the beach, the hills, rivers or rail- ways. Panny a ae 35. Allotments in my opinion can be located at a specified address in a particular street. They may also be located by reference to the distance from or proximity to physical features. Thus in this subdivision an allotment and its locality may be identified as 98 Brooker Drive in the Subdivision known as Hillbank Alternatively its location may be identified by reference to its proximity to the future transportation corridor and the Hills Face Zone. That Zone had at the relevant time acquired a @nsiderable notoriety and also was generally believed to be an area unlikely to be subjected to heavy residential development. Thus it was likely to be retaining its relatively open profile and such bush or other characteristics as it then exhibited. Altogether the alleged proximity of such an area and the fact that it was shown to abut immediately the allotments on the northern side of Brooker Drive was properly seen as an advantage by purchasers whether for recreational purposes or as a relief from or contrast to normal suburban living. This was the way it was in fact seen by witnesses, whose expectations of course were in many instances without justification because they were unaware of intricacies of the Planning and Development Act and the liability, in law, of the land to be subdivided and developed at any particular point of time. However notwithstanding this element of uncertainty the fact that subdivided land or an allotment was indicated as being close to the Hills Face Zone was a favourable selling point. To my mind to indicate the situation of an allotment or a subdivision by reference to the Hills Face Zone is as much a reference to its locality as is the statement that it 1s at the 36. * beach, overlooks a river or abuts a railway. Alternatively its location is identified, albeit somewhat inadequately, by saying that it is in the hills or on the plains. All of these references to physical features in my opinion identify the locality of the land just as much as does its address or its proximity to man~_ made features such as churches, schoolS and other community services. It follcws that the brochure made a misleading state- ment concerning the location of the land. Beneficial Finance is also charged with making a misleading statement concerning the facilities associated with the land. Exactly the same conduct is relied upon to support this alleged contravention of s.53A(1)(b). In these circumstances there are doubtless grounds upon which for technical reasons I should dismiss the charge. However, notwithstanding the acknowledged overlap between the various misleading statements specified in s.53 A(1)(b), I do not see the proximity of the Hills Face Zone as a facility. A facility in this context is a feature or circumstance which facilitates or renders easier or more enjoyable a person's occupation,whether as owner of a dwellinghouse or otherwise,of a piece of land. The availability of electricity, gas or sewerage are more obvious examples of facilities. The presence of such conveniences renders easier or alternatively lessens the labour or expenditure necessarily involved in making use of the ownership or occupation of an allotment of land. In the context of this matter I do not see the presence of the Hills Face Zone, whether immediately abutting an allotment or some distance therefrom, as constituting a "facility". 37. It follows that I find the prosecutor has made out a prima facie case of contravention by Beneficial Finance of s.59(2). I say prima facie only because Beneficial Finance pleads and relies upon the availability of defences under s.85(1) of the Act which defences now must be considered. Beneficial Finance contends that if it be found to have committed what I have called a prima facie contravention of s.53(A)(1)(b) of the Act, it should not be convicted because it has established a defence under either s.85(1)(b) or s.85(1)(c) or both subsections, One matter is common to both of these defences, namely that the contravention by the defendant is the result of the inter- vention and fault of "another person", I set out in full at the commencement of these reasons the provisions of the subsection which provide the defences. Under s.85(1)(b) the defendant must establish, on the balance of probabilities that the contravention was due to "reasonable reliance upon information supplied by another person". To establish a defence under s.85(1)(c) the defendant must likewise prove that the contravention was due to "che act or default of another person, to an accident or some other cause beyond the defendant's control" (In each instance my emphasis). The defendant Barry Burroughs was identified by notice given by Beneficial Finance under s.85(2) as the "other person", because it was the defendant Beneficial Finance's case that the offending words "Hills Face Zone" were placed on the brochure by Barry Burroughs. 38. This submission raises squarely the difficult question whether Barry Burroughs, as the agent of Beneficial Finance is "another person" for the purpose of these defences. Section 84(2) provides in effect that conduct of Barry Burroughs engaged in on behalf of Beneficial Finance is deemed to have been engaged in by Beneficial Finance. Thus if the reasoning of the Full Court of the Industrial Court in Ballard v Sperry Rand Australia Ltd (1975) 6 A.L.R. at p.696 is applicable to the facts of this matter, Barry Burroughs is in consequence of s.84(2) not "another person" for the purpose of s.85 defences. Counsel for Beneficial Finance strongly contended that Ballard v Sperry Rand Australia Ltd, supra shovld not bind me in the circumstances of this matter, submitting that at the most it was authority only in a similar fact situation. He correctly asserted that no detailed consider- ation was given in that decision to the difficulties consequent upon such a construction and that, on an occasion when there was ample opportunity to review and, if thought proper, rely upon and affirm the authority of that decision, the Full Court of this Court in Guthrie v Universal Telecasters Queensland Limited (1978) 18 A.L.R. 531 expressly refrained from mentioning it. This indeed was the case even though Ballard v Sperry Rand Australia Ltd, had been expressly relied upon by the judge at first instance. As I read the Universal Telecasters case, I agree that the Full Court expressly refrained from affirming Ballard v Sperry Rand Australia Ltd, supra preferring to decide the appeal on other grounds. As I am not wholly satisfied with the reasoning in the latter decision, and because it related to a servant and not an agent, I prefer not to decide this matter on the ground that Barry Burroughs is not "another person". This approach is open to me because in the end result I am against Beneficial Finance on 39. another ground which it must establish to make out a defence. I proceed therefore on the assumption, but without deciding, that Barry Burroughs is "another person" for the purpose of the Statutory defences. On the basis of this assumption Beneficial Finance must establish, to make out a defence under s.85(1)(b), that its contravention was due to "reasonable reliance on information supplied by" Barry Burroughs. The defendant here encounters two obstacles, did it in fact rely upon information supplied by Barry Burroughs in making the statement in the brochure and if so, was such reliance reasonable. Beneficial Finance has encountered difficulty in establishing that it ever saw the brochure prior to it being printed, and thus it is difficult to see how it relied upon Barry Burroughs, except by default. However I am not satisfied that if it did rely, such reliance was reasonable. Admittedly Barry Burroughs was a competent and experienced agent, to the knowledge of Beneficial Finance. However the fact that it did not consider it reasonable to rely upon even such an agent in the preparation of promotion material is made very clear in the marketing proposal put forward and approved by Head Office. Such proposal was very specific, in that the promotion material and the brochure in particular were to be approved by Beneficial Finance prior to printing. Such was obviously a responsible and prudent requirement. Where Beneficial Finance fell down was in not failing to ensure, by some appropriate policing procedure, that there was compliance with this requirement If it relied upon Barry Burroughs in circumstances where there was no compliance with its own selected procedures, it seems to me that it is impossible to find that reliance in that case was reasonable. In my opinion Beneficial Finance has failed to 40. establish a defence under s.85(1)(b) because it can not on the evidence prove, on the balance of probabilities, that the contravention was due to "reasonable" reliance on information supplied by Barry Burroughs. Beneficial Finance is in much the same predicament in respect of its defence claimed under s.85(1)(c). Assuming that it can establish that the contravention was due to the act or default of Barry Burroughs or some other cause beyond its control, Beneficial Finance must prove that it took reasonable precautions and exercised due diligence. It is my opinion that reasonable precautions and due diligence were not taken by the officers of the State Branch in that they failed to carry out the instructions of Head Office to approve the brochure prior to printing. Such officers included the Branch Manager and the Real Estate Manager and it was not disputed that they were "core personnel" and, no limitation on their authority having been proved, they are "the company" for the purposes of such default. As in the Universal Telecasters Case, supra Beneficial Finance laid down an effective procedure in an attempt to ensure that no misleading material appeared in its brochure. However it failed to supervise and "police" this procedure, in that it failed to take steps to ensure that the procedure was followed. By failing to ensure that a draft brochure was presented for approval and, when presented, approved and any misleading statements excised, Beneficial Finance has denied itself the benefit of the defence. It did not take reasonable precautions and it did not exercise due diligence to avoid the contravention. 41. Beneficial Finance, having failed to prove either of the defences which it relied upon,has contravened s.53(A)(1)(b) and a conviction will have to be entered on the charge which relates to the locality of the land. I expressly refrain from entering the conviction at this stage but adjourn the matter to enable that - defendant and also Barry Burroughs to present evidence in mitigation, I draw attention to the provisions of Order 49 rule 5 of the Rules of this Court in this regard. | certity that thus and tne 40 preceding pages are a true copy of the Reasons Judgment of Mr Justice Fisher. Aplus, Associate Dated' 2» s/10 o/s / |