ad \ tiene at PS ree CATCHWORDS | Otte Trade Practices Act 1974 (Cth.) s.52 misleading and deceptive conduct - false claims that advertisements had been commissioned - that children's colouring in booklets had official and professional sponsorship - respondent said to be responsible - circumstantial evidence - failure to call evidence ~ inferences therefrom. TRADE PRACTICES COMMISSION v. JOHN VICTOR SPARROW McGREGOR J. 11 DECEMBER 1981 AT SYDNEY No.G.26 of 1981 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. G 26 of 1981 GENERAL DIVISION TRADE PRACTICES COMMISSION Applicants JOHN VICTOR SPARROW Respondent REASONS FOR JUDGMENT ll December 1981 McGREGOR J. This is an application by TRADE PRACTICES COMMISSION (Cowmission) for certain relief pursuant to the Trade Practices Act 1974 (the Act) ss.52,80 and 80A against JOHN VICTOR SPARROW (Respondent). Section 52 states - "(1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. (2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of sub-section (1)." Section 80 states — "(1) The Court may, on the application of - (a) eeee (b) the Commission; or (c) «we. grant an injunction restraining a person from engaging in conduct that constitutes or would constitute - (d) a contravention of a provision of Part 1V or V; (e) attempting to contravene such a provision; (£) aiding, abetting, counselling or procuring a person to contravene such a provision; (gq) .a0. (h) being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision; or (3) eee (1A) A person other than the Minister or the Commission is not entitled to make an application under sub-section (1) for an injunction by* reason that a person has contravened or attempted to contravene or is proposing to contravene, or has been or is proposing to be involved in a contravention of, section 50. (2) see. (3) eae. (4) eee (5) wee (6) see. (7) ee ee" Section 80A of the Act reads ~ "(1) Where, on the application of the Minister or the Commission, the Court is satisfied that a person has engaged in conduct constituting a contravention of a provision of Part V, the Court may make either or both of the following orders: (a) an order requiring that person or a person involved in the contravention to disclose to the public, to a particular person or to persons included in a particular class of persons, in such manner as is specified in the order, such information, or information of such a kind, as is so specified, being information that is in the possession of the person to whom the order is directed or to which that last-mentioned person has access; u A summary of the conduct set out in the Statement of Claim and allegations made in it for which the Commission seeks relief is - 1. Since about May 1980 the respondent by himself, his servants or agents has, by means of telephone conversations or sending letters or invoices through the post, made the following statements and representations to other persons, firms and corporations or any of them (referred to hereafter in this paragraph as "the other persons") - (a) that the other persons had previously authorised the placing of an advertisement in a publication called "Katy's Colouring Book about Drugs & Health"; (b) that the other persons had previously agreed to pay a fee for the placing of an advertisement in a publication called "Katy's Colouring Book about Drugs & Health"; (c) that the other persons had previously authorised the placing of an advertisement in a publication called "Signals & Safety Children's Colouring Book". (a) that the other persons had previously agreed to pay a fee for the placing of an advertisement in a publication called "Signals & Safety Children's Colouring Book"; 5. 2. Since about May 1980 the respondent by himself, his servants or agents, has by means of postal services, sent and published to «persons, firms and corporations or any of them publications called "Katy's Colouring Book about Drugs & Health" and "Signals & Safety Children's Colouring Book". The Commission alleges that the said publications contained representations respectively - 3. (a) the said publications had the sponsorship, approval or support of one or more of the following - (i) persons, associations or corporations whose functions are or include the conduct of public drug education programmes or public road safety education programmes; (ii) government authorities or instrumentalities concerned with drug education and road safety education; (iii) education authorities or establishments; (iv) schools; (v) organisations of parents of school 'children; (b) the said publications were published by a firm, corporation, association or trust having charitable or public benevolent objects; (c) the said publications were published by a non-profit organisation or, alternatively, that any profits earned from the publications would be used for the purposes of public drug education or public road safety. The Commission further alleges - 4. The publication "Katy's Colouring Book about Drugs & Health" contained statements that it was "Edited by Gerald Milner MD" and was "From a US Bureau of Narcotics & Dangerous Drugs Publication". These statements, in the context in which they appeared, constitutedthe representations that - (a) (b) (c) (da) (£) Dr. Gerald Milner MD had authorised the Said use of his name; Dr. Gerald Milner MD had edited the publication; Dr. Gerald Milner MD approved of the publication; Dr. Gerald Milner MD approved of the publisher or was associated, affiliated or connected in some way with the publication; the United States Bureau of Narcotics and Dangerous Drugs had authorised the said use of its name; the said Bureau approved of the publication. wTuie Commission further alleges ~ 5. (a) As from about December 1976 the Hospital Benefits Association of Victoria Limited (hereinafter referred to as "HBA"), a body corporate incorporated in Victoria, had been distributing to the public through its branch offices and - chemists a publication called "Katy's Colouring Book about Drugs & Health". (b) (c) Prior to 2 May 1980 the printing and publishing of the publication referred to in paragraph 4 was done with the authority of the owner of the copyright in the work namely Perfect Publishing Company Pty. Limited, a company incorporated in Victoria but by an agreement dated 2 May 1980 Perfect Publishing Company Pty. Limited assigned to HBA all its right title and interest in the said work. The publication referred to as "Katy's Colouring Book about Drugs & Health", apart from the advertisements appearing in it and some other minor differences, has been copied from the HBA publication of the same title without the knowledge or consent of HBA. The Commission further alleges the sending and publishing of the publication called "Katy's Colouring Book about Drugs & Health" was likely to mislead or deceive by inducing an erroneous belief that - 6. (a) (b) (c) the publication referred to in paragraph 1(a) is published by HBA; the said publication is sponsored, approved or authorised by HBA; the publisher of the said publication is affiliated, associated or connected with HBA. - Accordingly, the conduct was misleading or deceptive or likely to mislead or deceive in contravention of section 52 of the Act. The Commission further alleges - 7. Since May 1980 the respondent by himself, his servants or agents has received payment from other persons, firms and corporations in connection with advertisements in the publications referred to in paragraphs 1 and 2. 8. Hereafter the publications being the handbooks "Katy's Colouring Book about Drugs & Health" and "Signals & Safety Children's Colouring Book" are referred to as "Drugs & Health" and"Signals & Safety". The Commission further alleges - 8. At the time when the said payments were received and accepted by the respondent the persons, firms and corporations making the payments believed that the respondent intended to distribute the publications generally to school children and to schools free of charge in the areas respectively where such other persons, firms and corporations carried on business. The acceptance of the payments was likely to induce and did induce such other persons, firms and corporations to continue in the same belief. 9. At the time of acceptance of the said payments the respondent did not intend to distribute the publications to school children or schools in the said areas, or alternatively intended only to distribute the publications to a relatively insignificant proportion of schools or school children in the same areas. 10. The rakine of the statements anc representations, the sending of letters, invoices and the publications, being the handbooks referred to above, through the post, set forth above, constituted conduct that was misleading and deceptive or was likely to mislead or deceive in contravention of section 52 of the Act. Alternatively, the Commission claims that a person or persons other than the respondent engaged in the conduct described in the foregoing paragraphs and the respondent - (a) aided, abetted, counselled or procured the other person or persons to enage in the conduct; (b) was directly or indirectly knowingly concerned in, or party to, the conduct; (c) conspired with the other person or persons to engage in the conduct. It will be convenient to consider the evidence relating to the two handbooks separately. 10. "DRUGS AND HEALTH" Gerald Milner, a consulting clinical and forensic psychiatrist, has given evidence by affidavit dated 29 July 1981, which has not been the subject of cross examination. He referred to his qualifications in medicine, surgery and psychiatry and to his appointment, until May 1979, as the Inspector and Director of the Alcoholic and Drug Dependent Persons Service of Victoria. In 1973,he saw in the United States a booklet entitled "Katy's Colouring Book about Drugs and Health". This handbook contained drawings which might be attractive to children and which would be suitable for colouring in. He thought it might be useful to £ill a gap in children's education in Victoria and therefore wrote to the United States Bureau of Narcotics and Dangerous Drugs (the U.S. Bureau) seeking its permission to arrange a similar publication in Australia. With his application he undertook that he personally would not receive any form of financial gain from any proposed modification of or the publication and distribution of the handbook in Australia and that the U.S. Bureau would be acknowledged on all copies of the proposed Australian version. In due course he was given this permission from the U.S. Bureau. Thereafter, he instructed a firm of publishers, Thomas Williams & Associates Pty. Ltd., (later to become Perfect Publishing Company Pty. Ltd. (the publishers)), in Victoria to produce a modified version of the handbook in which he had re-written the text to delete Americanisms and some of the wording accompanying the line drawings. ll. Gerald Milner's belief was that the Australian version of the handbook was first printed in 1975; and over the next four years large numbers of the handbook were distributed. The witness left Victoria in May 1979 to take up another appointment. In early 1980 he agreed with the publishers that the H.B.A. might buy the rights of it from the publishers and would be allowed to handle publication of the handbook thereafter. The only persons, companies or organisations to whom he has given authorisation to use his name in connection with the Australian version of "Drugs & Health", I find, are the publishers and the H.B.A. He identified one such handbook produced by the publishers. Allowing for minor differences in e.g. ink, it is identical with those received and to be referred to later by e.g. the witnesses, Sawers, Pillig and Smith Potter. 12. Kenneth John Stevenson in an affidavit stated he had worked in various businesses as a type-setter for the past 20 years.-He conductsa business known as "Kenmar Services"; that in 1977 and until late 1979 he was employed as a type~- setter by the "Glebe & Western Weekly Newspaper" (the Glebe Weekly); that in that business he knew a man as 'Jack Moore" he believed to be the proprietor of another enterprise known as "Dana Publications'. The said Jack Moore arranged for the "Glebe Weekly" to do type-setting work for him consisting of double-sided pages of advertisements which the deponent believed was intended for insertion in a children's booklet concerning drugs being published by Jack Moore's business. When swearing his affidavit he was shown a version of the booklet "Drugs and Health" (marked KJS1) and recognised the general appearance, lay-out and content of it as being substantially similar to one he had seen before and otherwise than having been shown it by the officers of the Commission. He believed that he saw the copy at the premises of the "Glebe Weekly". This booklet,' I find, is'a copy identical with those received by Sawers, Pillig and Smith Potter whose evidence I refer to later. In or about June or July 1980, the man he knew as Jack Moore visited his premises and handed him a double-sided printed sheet for advertisements to be type-set and for 70 copies of each page to be printed on a particular paper. On the copy supplied the handwritten words "Drug Book" appeared. The deponent believed the advertisements were to be inserted in abooklet for children about drugs similar in style to another booklet he referred to as "The Signals and Safety Booklet" and to which, in evidence, later reference is made. 13. Stevenson made arrangements for the printing of the advertisements by Snap Instant Printing Pty. Ltd. He gave evidence that he had the printing done to the handbook "Signals & Safety". He identified the respondent in Court as a man known to him as "Jack" who had come to his premises on many occasions. "Jack" is the same person who is referred to in his affidavit as "Jack Moore" though the addition of "Moore" may be because he had heard that surname used by officers of the Commission. He thought "Jack" was getting work done by Dana Publications. The telephone number given for this man was 664.1239. According to his viva voce evidence, Stevenson had this number listed in his teledex under "Dana". Stevenson visited the premises of Snap Instant Printing Pty. Ltd. to ascertain if that company would print on paper he produced to Mr. Sells, one of its executives, advertisements given to Stevenson by Jack Moore. Stevenson's evidence is corroborated by David Arthur Seils of Snap Instant Printing Pty. Ltd. who, apart from doing certain printing work for and at Stevenson's request, was, in about March.or April 1980, shown by him a copy of the booklet "Drugs & Health" Steven de Vroom in his affidavit dated 14 August 1981, referred to carrying on business as printing, Plate making and graphic dark room work. In about March 1980 he received a call from Stevenson seeking the making of some plates. The art work for some printing plates was thereupon delivered to de Vroom by Mr.Don Dalton. It consisted of sheets of business advertisements. De Vroom made 12 double sided printing plates. These were collected by Mr. Don Dalton. Between March and May 1980 this procedure was repeated on a number of occasions. 14. Mr. Dalton told de Vroom that Stevenson's client was a man called gack Sparrow. On one such occasion Dalton stated that the advertisements were to be inserted in children's handbooks about Road Safety and Drugs. Thereafter, or during the course of his dealings with Dalton, de Vroom always believed the advertisements were destined for insertion in children's Road Safety and/or Drug Handbooks. De Vroom also says that he, by telephoning a number given to him by Stevenson, arranged for collection at his, de Vroom's premises, of "Signals & Safety" he had trimmed and stapled. In due course they were collected by a person he believed to be Jack Sparrow who put them into envelopes as if for posting. Jack Sparrow he identified in Court as the respondent. In about June or July de Vroom deposed to having had a call from Stevenson in which the latter asked him to make some more plates of "those advertisement sheets for me and do some printing. It has to be on glossy paper." Stevenson said he would send a sample of the paper so de Vroom could procure it. About that time, he,de Vroom, received a sample of the paper and a copy of a handbook entitled "Katy's Colouring Book about Drugs and Health" into which, so Stevenson advised, advertising sheets were to be inserted. De Vroom was given the handbook in order to obtain measurements for the size of paper required for the work to be done. He identified an exhibit marked "SDV12" as a copy of the handbook so entitled and being substantially identical to the one shown to him by Stevenson. 15. Invoices he supplied to Stevenson referred to "3 sets drug book inserts". This handbook is a replica, apart from advertisements, of the one identified by Gerald Milner. From a consideration of the affidavits of Stevenson, de Vroom and Selis, I find that copies of "Drugs & Health" were produced in 1980, somewhere about April of that year or later, at the instance of other than the publishers and lacking any authority to use the name Dr. Milner, the U.S. Bureau, the publishers or the HBA. Copies of this publication were sent at least to Elizabeth Anne Sawers in late August 1980, Amne Marcelline Pillig in or about September 1980, and George Robert Smith Potter in October or November 1980. In 1980 before the said handbooks were received by them a telephone caller (not necessarily the same in each case) telephoned the said Pillig and Smith Potter. I am satisfied that the caller represented on the telephone falsely, and to each of them that there had been an arrangement made by each of them prior to the telephone call for the insertion of advertisements , and for which payment was agreed to be made by those persons, in "Drugs & Health". 16. An Order Form-invoice received by e.g. Sawers and Pillig dated 22nd August 1980 was, as to alleged prior arrangement, to the same effect. It was headed - "CHILD GUIDANCE PROGRAMME The Drug Danger Handbook" and it quoted a charge for the work of insertion of the advertisement. It read as follows - "Following our recent telephone conversation, we wish to thank you for sponsoring an advertisement in our Drug Danger Handbook. This Handbook will be distributed free of charge amongst school children in your area who appreciate your gesture in taking an advertisement. Once again, many thanks. When making payment would you please make cheque payable to... THE CHILD GUIDANCE PROGRAMME, and post to: Box 3149, G.P.O. Sydney 2000. Yours faithfully, ( Signature ) I find that the order form invoice in so far as it refers -to a prior.sponsoring of an advertisement hy the recipients of the communcation, and for which payment was agreed to be made by them, and that the said handbook would would be distributed or distributed free of charge amongst school children in the area of e.g. Sawers or Pillig, was false. 17. I have not referred to all the evidence. From a consideration of it, I find that a person or persons on his own behalf or on behalf of another had contrary to the fact - 1. Orally by telephone calls represented at least to Anne Marcelline Pillig, and George Robert Smith Potter that they and each of them or someone on their behalf had, on the occasion of a previous telephone conversation, agreed to place and pay for a business advertisement in "Drugs & Health". 2. Orally by telephone calls and by the use of an order form invoice sent to the said persons to whom the telephone call had been made represented contrary to the fact - (a) they and each of them had agreed to place and pay for a business advertisement in a handbook "Drugs & Health"; (b) the said. handbook would be widely distributed free of charge to school children 1n the area wherein the business of ~- the persons to whom the telephone call had been made or the order form invoice had been sent, operated. 3. by the use of an Order form invoice sent to Elizabeth Anne Sawers represented that she had agreed to place and pay for a business advertisement in a handbook "Drugs & Health". 18. 4. By the use of an Order form invoice sent to persons including Elizabeth Anne Sawers represented to the said persons that the said handbook would be widely distributed free of charge to school children in the area wherein the business of the said persons and Elizabeth Anne Sawers operated; 5. by words reproduced on the handbook "Drugs & Health" represented to persons including those mentioned in para. 1 that publication of it and its publisher were then affiliated with or had the support, sponsorship, approval and authority to publish of - (i) Gerald Milner (ii) The Alcoholicgand Drug Dependent Persons Services, Victoria. (iii) The U.S. Bureau of Narcotics and Dangerous Drugs; 6. by words reproduced on the said handbook "Drugs & Health" represented to persons including those referred to in para. 1 that Gerald Milner was, at the time of the production in 1980 of the handbook "Drugs & Health", then associated with the Alcoholics and Drug Dependent Persons Services, Victoria. I find that the conduct in the above paragraphs 1, 2, 3, 4, 5 and 6 was in trade or commerce misleading or deceptive or is likely to mislead or deceive within the meaning of and in contravention of s.52 of the Act. 19. "SIGNALS AND SAFETY" 1s a handbook in the form of a children's colouring-in book which is, as the evidence shows respondent admits, and anyway a comparison of exhibited examples of it confirms, is the same style of publication as "Drugs & Health"; suitable to children. It does not have on it any written reference to its editor or authority for its publication. It could be taken or thought to be some form of official publication or so to represent itself, i.e. to teach children the function of traffic signals. The evidence of Stevenson and de Vroom establishes, in or about the first half of 1980 that for "jack Moore", Stevenson undertook typesetting and arranged printing of 2000 copies of the handbook "Signals & Safety". The date on a copy of an Order Form exhibited indicates that this latter work was undertaken by Stevenson on 12 May 1980. His affidavit evidence establishes further that in the copies of the handbook "Signals & - Safety" advertisements were to be inserted. Stevenson's records account for 20 sets which would include 1200 prints of advertising sheets made by the Company, Snap Instant Printing pty. Ltd. This work was arranged at the request of"Jack Moore". Advertising sheets were inserted in 480 of the 2000 copies of the handbooks. Stevenson, for those handbooks at least, arranged that their stapling and trimming would be carried out by de Vroom. Already I have referred to the identification of "Jack Moore" as the respondent. The dates of the orders by Stevenson of de Vroom for stapling and trimming 480 copies of the handbook are 22 and 28 May, and 13 June 1980. 20. However, other evidence of Stevenson indicates that some advertising sheets may not have been typeset by him. David Arthur Sells, Manager of a branch of Snap Instant Printing Pty. Ltd., in an affidavit deposed to having, pursuant to arrangements made with Stevenson, printed 1000 copies of a publication headed "Signals & Safety Children's Colouring Book" and numerous designs of road traffic signs. Insert pages in it contained line drawings and short written commentaries addressed to children concerning road safety. In 1980, it was also possibly Stevenson's business that at the request of "Jack Moore", typset the three first lines of a form of order form invoice (to which reference will be made later) headed "Signals & Safety". Examples of this form having been used appear elsewhere in the evidence. Stevenson's evidence is corroborated by Sells who, in about dune 1980, was given a copy by him of "Signals & Safety" being one of the handbooks printed by Snap Instant Printing Pty. Ltd. In affidavits, and on dates appearing therein in brackets after their name, Robert William Bowerman (early May 1980), William Edward Lawless (early May 1980), Maiga Helen Roche (6 August 1980), James Robert Lindwall (20 August 1980), _ Gerald Moore Robinson (25 August 1980), Heide Dorothee Smith (September 1980) were telephoned by persons who represented contrary I find to the fact, that on behalf of the respective firms or companies the deponents had agreed to place and pay for 21. advertisements in the publication "Signals & Safety". The purpose of the call was to collect from the deponents a sum payable in respect of the advertisements. An Order form invoice for this publication was received by e.g. William Edward Lawless, as follows - "SIGNALS & SAFETY 13097 The Children's Guide to Road Safety POSTAL ADDRESS, Box 709, G.P.0O. Sydney, 2001 Dear Advertiser, Thank you once again for your support following our recent telephone call for your advertisement in our publication. This book is distributed free in the appropriate area to school children whose parents will appreciate you taking your advertisement. Many thanks for your kindness in helping with Road Safety. When making payments please make cheque payable: TO: Signals and Safety Post to Box 709, G.P.0. SYDNEY. 2001 issue Date Charge Yours faithfully, 1980 13.5.80 $90.50 B. Benson" An order form invoice similar to that set out above was also sent to persons including Robert William Bowerman or Alma Jean Bowerman, Maiga Helen Roche, James Robert Lindwall, Gerald Moore Robinson and Heide Dorothee Smith. I find that the order form invoice in so far as it refers to a prior sponsoring of an advertisement by the persons named and for which payment was agreed to be made by them, was false. 22. I have not referred to all the evidence. From a consideration of it, I find that a person or persons on his own behalf or on behalf of another had contrary to the fact - 7. orally by separate telephone calls, represented at least to Robert William Bowerman, William Edward Lawless, Maiga Helen Roche, James Robert Lindwall, Gerald Moore Robinson and Heide Dorothee Smith that they and each of them or some one on their behalf had, on the occasion of a previous telephone conversation, agreed to place and pay for an advertisement in "Signals & Safety"; 8- orally by telephone calls and by the use of an order form invoice sent to Alma Jean Bowerman or to Robert William Bowerman on her behalf, William Edward Lawless, Maiga Helen Roche, James Robert Lindwall, Gerald Moore Robinson and Heide Dorothee Smith represented that - (a) they and each of them had agreed to place and pay for a business advertisement in a handbook "Signals & Safety"; (b) the said handbook would be widely distributed free of charge to school children in the area wherein the business of the persons to whom the telephone call had been made, operated. 23. 9. by the use of an order form invoice sent to Roberta Shelagh Bolitho represented to her that she herself or on behalf of Jetset Tours (Aust.) Pty. Ltd. - (a) had agreed in a telephone cali to place and pay for a business advertisement in a handbook "Signals & Safety"; (b) the said handbook would be widely distributed free of charge to school children in the area where the business Jetset Tours (Aust.) Pty. Ltd. operated; 1O. by the use of an order form invoice sent to persons including Alma Jean Bowerman, William Edward Lawless, Maiga Helen Roche, James Robert Lindwall, Gerald Moore Robinson and Heidi Dorothee Smith represented to the said persons that the handbook "Signals & Safety" was part of a Road Safety programme and is widely distributed free of charge to school children in the appropriate area. I find that the conduct referred to 1n paragraphs 7, 8, 8 and 10 above was in trade or commerce misleading or deceptive or is likely to mislead or deceive within the meaning of and contrary to s.52 of the Act. Next I refer to submissions and evidence upon which the Commission relies to show liability of respondent for the conduct referred to in paras. 1 to 10 on pages 17 to 23 24. The case for the Commission is that respondent, then proprietor and owner of "Dana Publications", a publishing business, perhaps because of impending or actual sequestration of his estate, either posed as or allowed himself to be known as "James David Moore". He decided to continue the publishing business as or start a new business "Renown Publishing". The case includes that there was a registration of that firm name. This was associated with the opening of a Bank account established for it which referred to the publications "Drugs & Health" and "Signals & Safety". Advertisements already had been or thereafter were sought for insertion in the two handbooks of those names. On occasions this was done by telephone calls and the use of order form invoices to which earlier reference has been made. The Commission further contends that the evidence compels the inference that the person responsible for telephone calls, use of order form invoices and the production of the handbook and hence the misleading and deceptive conduct, already the subject of my finding, was the respondent. Respondent gave evidence that, in effect,"Moore" agreed to take over the "Dana Publications" business. I refer to this later. He also denied, in effect, any association with "Renown Publishing", investing any money in it or being employed by "woore". He conceded he was with "Moore"when the Bank account at the Commonwealth Trading Bank, Town Hall Branch, in the name "Renown Publishing" was opened; that he twice visited "Moore's" office at 14/201 Coogee Bay Road, which flat was then still "Moore's" office. He remained, he said, with "Moore" "three or four months. It might have been longer". "Moore"used to stay at his flat. He said - 25. "I used to do the banking for him and go and clear the box for him and go to the printer for him and pick up different things and post things for him, things like that." He said he used to do "errands" for Moore. He was aware there were various editions or versions of "Katy's Colouring Book". He denied owning a brief case found on a search of his flat by John Cranston Thompson on 26 March 1981 containing documents referring to "Renown Publishing" or that it was locked or that he knew what was in it. He said the case was "Jim's" (Moore). I make further reference to this brief case later. He referred to a lady "Barbara" (Morgan) identified in a photograph in evidence as a friend of Moore's and his for ten years who used to do some banking for him and help him work. He described Moore (whom he had known 7 or 8 years) as a "mysterious sort of bloke", "very secretive". Barbara Morgan used various names; in relation to e.g. "Renown Publishing" she used the name "Howe". He denied having been directly involved in selling advertising space; he had helped Mooney and Moore and received remuneration for that help. He agreed that when "Dana Publications'" Bank account was opened he had signed a document used to open the Bank account and a Statutory Declaration used to open an account as a "partner"; that word appeared on the document he had signed above his signature. His explanation for this was, referring to Peter Mooney - "He wanted me to be known as a partner but I was not a partner." Yet when Mooney (apparently) wrote to the Rural Bank, Kings Cross Branch, on 29 January 1980, stating his withdrawalfrom "Dana Publications", he referred to there being a partnership. 26. He also agreed that he signed an indemnity addressed to the Rural Bank of New South Wales in respect of dealings on that account; and that there was annexed to that indemnity a list of publications being an annexure which list included a publication known as "Child Guidance Programme". He claimed that when he had a conversation with Moore about selling its furniture he told him the numbers of the Post Office boxes operated by "Dana Publications", being two in the city and one at Coogee and that he gave him the keys to those boxes agreeing that he assumed thereafter Moore would meet any payments necessary to maintain those boxes. Later he agreed that the up-keep of those accounts, viz. the Post Office box accounts, would be an expense of Moore's business. But he agreed he signed "Dana Publications!" cheques on 8 and 9 April 1980 in favour of Australia Post which were in respect of the Post Office boxes. He said that the Bank account of "Dana Publications" was closed at the end of March or early April i.e. - "Just before I was made bankrupt I closed the account", Later, this evidence appears - "You were operating on Dana's bank account, were you not?----I was, yes. In April 1980?--~-And then it closed when I was a bankrupt. I had to close it. I told them to close it. It had to be closed. That was the instructions from the bankruptcy people. I went and closed it. I have not had a bank account since." 27. He said that he did not think he had ever seen an invoice or any other document with the words "Signals and Safety" printed on it. This answer appears to relate to before April 1980. He denied that a letter addressed "Dear Jack" found in the black brief case (which he said belonged to Moore) was addressed to him. Elsewhere in his evidence he said that he 1s "always known as Jack Sparrow, always have been", He was referred to his Statement of Affairs made an his bankruptcy and dated 27 April 1980 in which it was put to him, in effect, he had said - "T have not during the past 5 years carried on business on my own account or in partnership." He agreed that, in respect of carrying on a business of Dana Publications between the beginning of February and early April 1980, the statement referred to - "as is pointed out tome now...." was false. He denied that he signed the document knowing the contents to be false, and asserted that he was never a partner of Mooney. In respect of his work with Mr. Moore at the end of April 1980, he said ~ "I was doing some errands that is all. And were you receiving any remuneration or that?----No. Did you receive any remuneration from Mr. Moore?----No. Did he ever reimburse you for out-of- pocket expenses?----~No." Elsewhere he agreed he had had remuneration from Moore. " 28. He agreed that he signed a cheque dated 8 April 1980 to pay for a Post Box in the name of Dana Publications; that this was in respect of a Box which Moore was "going to use", In respect of signing that cheque and his comment in paragraph 5 of an affidavit signed by him ~ "I agree that I signed to therein at the request of Peter Mooney" He was not able to understand how it came about that he had so stated. At this stage Mooney, on respondent's evidence, was no longer associated with "Dana Publications". In respect of payment for a Post Office box in the name of "J. Moore" in the Australian Capital Territory, he said - "....Moore wanted the box retained,so that 1s how we paid for it, and so I gave him the cheque to pay for it. But Box 436 had been the Box that Dana Publications had used for the previous two or three years." The cheque in question was dated 26 March 1980 in favour of Australian Post for $16.00. He said that he gave the cheque to Jim Moore to pay for the Box. It was drawn on the account "Dana Publications", and signed by respondent. 29. In his affidavit of 11 June 1980 referring to a paragraph in an affidavit of John Cranston Thompson, relating to documentary evidence as to the sale of a Mercedes car to Moore, respondent had said - "J do not know and cannot admit the truth of the facts alleged in paragraphs 52 to 56 inclusive of the said affidavit." After cross examination on this, he said -~ "That was a mistake on my part, it was quite common sense that the car is registered to Moore there. How could one deny it. That 1s an oversight definitely. I am not very educated...." I have not referred to all evidence given by respondent. I consider that he was not a credible witness. Some instances of his unreliability I have quoted. I do not accept that his only help to Moore, if indeed Moore played any part in the affairs of "Renown Publishing" was doing "errands". I do not accept that Stevenson did business as respondent said in evidence, with "Jim Moore" (as distinct from respondent), a matter never put to Stevenson in cross examination. I do not accept his evidence that he did not own or know what was in the brief case found when the search warrant was being executed. His account of how he received the withdrawal slips for the Building Society and the books to which they related does not ring true; and his possession generally of share certificates in the name "James David Moore" is not satisfactorily explained. 30. On a consideration of all the evidence, I find as follows - On 21 September 1975 an application was made to the Corporate Affairs Commission (C.A.C.) by Thomas Walter Mills for the registration of a business name, "The Child Guidance Programme". On or about 19 April 1977 a "Statement of Change in Persons in Relation to whom Business Name is Registered" in respect of that name stated that on that date "Peter Mooney" commenced to carry on business under that name at 21/151 Bayswater Road, Rushcutters Bay. There was lodged, also dated 23 August 1978, a "Statement for Renewal of Registration of Business Name" with Peter Mooney as proprietor, the registration not to expire until 21 September 1981. An application for registration of a business name "Dana Publications" to commence on 21 December 1976 was lodged on 6 January 1977 with the C.A.C. The said Mooney was referred to therein as carrying on business under that name at the principal business address, viz., 171 Oberon Street, Coogee - telephone number referred to as 665.8056. The nature of the business was "publishers". 31. On 13 January 1977 an application for a Private Box service for "Dana Publications" was lodged with the Australian Post Office (A.P.0O.). Business principal was shown as Peter Mooney who gave a telephone number 665.8056 and 151 Bayswater Road, Rushcutters Bay, as its address. The business purpose stated was "publishing". Box No. 3149 was allotted in response to the application. This Box number appeared on the order form invoices received by e.g. Elizabeth Anne Sawers and Anne Marcelline Pillig headed "The Child Guidance Programme", sub~heading "The Drug Danger Handbook". The A.P.O. documents indicate that the service commenced on 13 January 1977. On both the application and service document was the signature "J. Sparrow". He signed for keys. Similar application dated 15 November 1977 for "Dana Publications" was made. The application was signed by John Sparrow as proprietor, business purposes being "publishing". Box number 709 was allotted. Keys were signed for by J. Sparrow. This Box number appears on the order form invoice for "Signals & Safety" annexed to the affidavit of e.g. Bolitho. See page 21 above. Respondent worked as or for "Dana Publications" from about 1977 until after the New Year in 1980. He described his activities with it thus - 32. "I used to sort of look after things in the office, take the copy to the printers and answer the phone occasionally, and do the banking and go and clear the box." He agreed he organised printing and advertising for two publications "Bondi Icebergs" and a sports carnival. From at least or about January or February 1980, whether following a conversation with Mooney or otherwise relating to the business "Dana Publications", respondent continued to run the business. Stevenson had "Dana" listed in his teledex; and when de Vroom, given a number, telephoned and arranged for "Signals & Safety" handbooks to be collected, the respondent came to Stevenson's premises (an incident to which I refer later). Respondent gave evidence that "Dana Publications" closed down early in April (1980); just before that, he told Jim Moore of his intention. Moore said "I understand all about that business, I will take it over." I note that the respondent's evidence is that Moore bought certain furniture and then commenced to operate a business "Renown Publishing". I do not accept that Moore spoke as quoted or bought furniture or commenced to operate that business. 10. ll. 12. 33. On 16 April 1980 respondent's estate was sequestrated. On 17 April 1980 there was lodged with the C.A.Cc. an application for registration as a business name "Signals & Safety Programme". The name of the person to be registered as carrying on the business was "James David Moore", 8 Bligh Place, Randwick. On 30 April 1980 an application for a Private Box service was made to the A.P.O. by "James Moore", 8 Bligh Place, Randwick. Box 436 was allotted. On an occasion which having regard to invoice dates referred to in his affidavit may have been May/June 1980, a batch of "Signals & Safety" handbooks had to be collected from de Vroom''s premises. He had been given a telephone number by Stevenson to contact a person there when the completed handbooks were ready. He telephoned that number. Following that a man came whom I find was the respondent. He put the handbooks singly into the envelopes, brought apparently for that purpose. They were then in a completed state ready for delivery or posting to a customer or client. 34. 13. Respondent, apparently referring to this incident, said in evidence that "Jim" (Moore) gave him the envelopes, that Moore said people were waiting for them so "....will you go out and do it for us". He did not know which book it was; it might have been the colouring book meaning "Drugs & Health" or "Signals & Safety" (sic) "they are both the same to me". Order form invoices headed "Signals & Safety", "The Children's Guide to Road Safety" referred to earlier were sent to witnesses including e.g. Lawless and Roche. I do not accept that Moore gave him the envelopes or made that request or he did not know which book it was. 14. On or about 2 May 1980 application for registration of a business name "Renown Publishing" was lodged with the C.A.C.; the name of the person carrying on the business was stated to be "James David Moore". The principal place of business was stated as 8 Bligh Place, Randwick. - 15. Respondent stated that he used to help Moore, as I have earlier quoted his evidence, thus —- "I used to do the banking for him . and go and clear the box for him and go to the printer for him and pick up different things and post things for him, things like that." I find respondent so acted but not for or to help Moore. 35. 16. In the first half of 1980 respondent delivered to Stevenson copy for double sided pages of advertisements. He understood these were to be inserted in the "Signals & Safety" booklet. In about June/July 1980 the witness was given similar copy he believed were to be inserted in a booklet about "Drugs & Health". 17. On 19 May 1980 "Renown Publishing" opened its Bank account with the Commonwealth Trading Bank, Town Hall Branch. The respondent was identified by Bank Officer McNeill as being present; the latter thought respondent opened the account and was J. Moore. The initial deposit was of some 69 cheques totalling approximately $6,300.00. I find respondent, who admitted he was present, at least actively participated in opening the account. 18. There was presented a Statutory Declaration taken as part of the procedure of account opening in which deponent was "James David Moore", the "sole proprietor" of the registered business "Renown Publishing", "Signals & Safety" and "Child Guidance". Thereafter the respondent from time to time presented deposit slips to the Bank signed "J. Moore" and cashed cheques on that account similarly signed. (He agreed he went there "quite often"). The address for the account was noted as 8 Bligh Place, Randwick. 19. 20. 36. On occasions thereafter the witness McNeill also cashed "Renown Publishing" cheques for a lady who was identified from photographs as "Barbara". Included in my findings in respect of her are those set out in this paragraph. She is also referred to as "Barbara Howe" e.g. (as respondent says) when engaged in the activities of "Renown Publishing". She is a "close" friend of respondent's; she used to help him, albeit as a friend. She used to do some banking for the latter, help him and work for him. She received cheques from "Dana Publications" for a total of $2,300.00. She used to work for "Renown Publishing" .... "banking and typing". In relation to "Renown Publishing" she used the name "Howe". She signed deposit forms for cheques paid to the Bank account of "Renown Publishing". Respondent spoke with her at least on the telephone on 23 September 1981 i.e. whilst still giving evidence. The search of her premises was at the address "8 Bligh Place, Randwick", similar to the address of "Renown Publishing" and "Signals & Safety". On 29 March 1981 John Cranston Thompson, of the Commission's staf£, deposed to having searched on 26 March 1981, pursuant to a warrant, premises 6 Dundas Street, Coogee. Respondent was present for at least some of the time. 37. Items found in a brief case there were listed. These included such as might be expected to be in the immediate possession of the proprietor or one in a position of responsibility with the firm "Renown Publishing" and "Dana Publications"- (i) Cheque book issued on Commonwealth Trading Bank Town Hall Branch for "Renown Publishing" (part used}; and other accounts referring to that firm; (211i) an account for Australia Post for "Dana Publications"; and also (iii) a personal letter addressed "Dear Jack"; (iv) Pass book for a Building Society account in the name of "J. Moore"; and (v) Cheque dated 16 March 1981 drawn by Hoyts Theatre Limited in favour of "Signals & Safety". - Other articles at that address though not in the brief case included Building Society withdrawal slip for the same company signed in blank "J. Moore", Building Society withdrawal slips signed "Ray Thompson" and "R. Thompson" respectively, a business card for "Stephen de Vroom", and records referring to "Dana Publications". 38. Respondent gave evidence that the name "Ray Thompson" was used by "Jim Moore". 21. I £ind that the respondent either owned or had been using as his own the brief case to which I have referred in which regard I have noticed the evidence of the witness Thompson, as to the respondent apparently knowing the combination and opening the case. This evidence I accept rather than the contrary contention or statement of the respondent. 22. A cheque book in the name of "G. Oliver" (said by respondent to be a name used by ™Moore") was also found at the search. According to the evidence of Mr. Tomich, which I accept, this was a name which the respondent claimed on a certain occasion he would like used in respect of himself. € 23. On 26 March 1981 on a search of premises at Unit 3F, 8 Bligh Place, Randwick, there was present Barbara Nancy Morgan whom I find to be identical with "Barbara Howe" elsewhere referred to. The search was conducted pursuant to the grant of a Search Warrant authorising Trevor McNaught to enter those premises. 39. Amongst other things there was found on those premises blank copies of the order form invoice headed "Signals & Safety", "The Child's Guide to Road Safety". Other forms were in the form of the drug danger order form invoice headed "Child Guidance Programme". There were also window faced envelopes, such as would be suitable for despatching commercial publications or communications, and "Renown Publishing" cheque butts. 24. Respondent was well aware of the layout of the handbooks "Drugs & Health" and "Signals «& Safety". He knew them "very well". 25. The respondent did not nor did anyone on his behalf, distribute widely or otherwise the handbooks to schools in any areas nor were they so distributed, nor was it intended they would be so distributed. The respondent's activities (p.32 above) (admitted) with or for "Dana Publications", of which he was proprietor are, I consider, strikingly similar to those he claimed to have carried out- for "Moore" (p.34) after, according to his evidence, Moore said (p.32) i.e. before "Renown Publishing" came into operation - "I understand ail about that business, I will take it over." (meaning "Dana Publications"). Though I do 40. not accept that "Moore" spoke as quoted, the inference is assisted, or an admission is made that "Dana Publications" became (respondent as proprietor) "Renown Publishing". respondent, facts found, As a further exercise in tracing relationship between "Renown Publishing" and "James David Moore" from I note - (iL) the order form invoice for "Signals & Safety" has, as part of an address, Box 709, G.P.O., Sydney; (i1) that Box was allotted following an application by respondent (see para. 5 above); (iii) the name "Signals & Safety" was one of those mentioned in the Statutory Declaration put forward when the "Renown Publishing" Bank account, referred to in para. 17 above, was opened ostensibly by "James David Moore". (iv) a cheque from Hoyts Theatre Limited drawn to "Signals & Safety" was found on the respondent's premises when the search warrant (referred to in para. 20 above) and a cheque drawn on 3 June 1980 by A.J. & R.W. Bowerman (Alma and Robert) was deposited in the Bank account a7 of "Renown Publishing" on 5 June 1980. 41. If assistance or confirmation were necessary to support the Commission's case, it is, I consider, to be found in the respondent's lack of credibility. It is not necessary to make a finding as to whether James David Moore existed or played some part in the affairs of "Renown Publishing". There may well have been such a person; at least the respondent's evidence so claims. Furthermore, someone who claimed to be concerned in the matter was interviewed at the Trade Practices Commission, though, interestingly, he disclaimed any real knowledge of the affairs of "Renown Publishing". Moreover, it is significant that respondent's "close friend", Barbara Howe, who, apart from receiving some $2,300.00 from "Dana Publications", had, as he said, worked for himself and for Moore, typing and banking and cashing cheques in and of the "Renown Publishing" Bank account, has not been called to give evidence, nor has her absence from the witness box been explained. She was present when a search was carried out at 8 Bligh Place, Randwick, being to that extent the same address as was registered for "Renown Publishing". I have referred to stationery found there, appropriate for that publishing business. Respondent, as he said in evidence, actually spoke to her on the telephone in the period of adjournment between two days on which he gave evidence. 42. If "Moore" had indeed acted as a principal or in a managerial capacity in "Renown Publishing" or in producing "Drugs & Health" and "Signals & Safety" she would have been in a position to give evidence bearing on his relevant activities; and as to the involvement of the respondent, from which it should have emerged that he was a much lesser figure. The failure to call her to give evidence or to account for her absence as a witness assists me in the inference that any evidence she might have given would not have assisted respondent's case; and also makes it possible more readily to draw inferences favourable to the Commission's case. See Jones v. Dunkel (1958) 101 C.L.R. 298 at e.g. p.308. Further, where his credibility was in issue, and his story of "Renown Publishing" was challenged, respondent called no evidence except his own which is unreliable-anyway. On the whole of the evidence, though I have not referred to it all, I am satisfied that respondent if initially concerned in publishing as a partner with Mooney was thereafter, at least in 1980, the sole proprietor of "Dana Publications"; that he played a major part in the affairs of "Renown Publishing" including the arrangements for the production of "Drugs & Health" and "Signals & Safety" though, because of bankruptcy, it would have been convenient for him to be known as "Moore" or "James David Moore". His description of his work for "Moore" (see p.25) is not, anyway, dissimilar to his description of his work for "Dana Publications", which business seems to have continued as "Renown Publishing". 43. There were various stages in what may be called the operation associated with the handbooks and the misleading and deceptive conduct which I have found, including the following - the soliciting of advertisements; the compilation of advertisement material;the setting out and arranging for or procuring the printing of advertisements; the assembling of various groupings of advertisements so solicited compiled, arranged and printed; the copying of or procuring of e.g. the handbooks to which Gerald Milner referred and its equivalent "Signals & Safety"; The commissioning of the art work for and the printing and production of the handbooks, their assembly with groupings of advertisements; The production and printing of order form invoices; and the making of telephone calls and the sending to persons and corporations through or by use of the Post Office delivery, handbooks, order form invoices, the procuring of cheques in response to the latter, the depositing of such cheques in e.g. the Renown Publishing Bank account and the use of the proceeds thereof . 44, In all stages of this operation including the making of telephone calls and the sending of order form invoices and handbooks through the post to persons and corporations, I find the respndent was directly and indirectly knowingly concerned but, more than that, was responsible for the operation. I find the respondent, John Victor Sparrow, did in trade or commerce engage in conduct to which I have referred that is misleading or deceptive or is likely to mislead or deceive within the meaning of and contrary to s.52 of the Act. | carrify that this and the ¢7 preceding pages are a true copy of t s Reasons for Judgment herein of his + onour - Mr. Justice McGregor. Associate . Dated: 10/12/e)