CATCHWORDS Trade Practices ~- consumer protection - alleged false representation - supply of goods - possible supply of goods - separate offences - use of machine EQr demonstration purposes - whether machine still new - meter on mathine - zero meter reading - whether representation that goods new Trade Practices Act 1974, ss. 53(b), 79. WINSTON FRANKLIN JOSEPH RODRIGUES v. A.B.E. COPIERS PTY. LTD. A.C.T. No. G6, G7, G8, G9, G18 of 1983 STEPHEN GARTH BEDE BROWN v. A.B.E. COPIERS PTY. LIMITED A.C.T. No. G23 of 1983 of 1983 of 1983 1983 . of 1983 of 1983 of 1983 Nos. A.C.T. AANAANA NE WOW O~AIO (e) th Morling J. 19 August 1983 Sydney. IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY GENERAL DIVISION .~ TRADE PRACTICES ACT 1974 SECTIONS 79 AND 53(b) WINSTON FRANKLIN JOSEPH RODRIGUES Prosecutor A.B.=. COPIERS PTY. LIMITED Defendant BETWEEN: A.C.T. No. G 6 of 1983 ) No. G7 of 1983 ) No. G8 of 1983 ) No. G9 of 1983 ) AND: No. G18 of 1983 ) BETWEEN: A.C.T. No. G23 of 1983 AND CRO JUDGE MAKING ORDER : Morling J. DATE OF ORDER 3 19 August WHERE MADE 2 Sydney 13) STEPHEN GARTH BEDE BROWN Prosecutor A.B.E. COPIERS PTY. LIMITED Defendant » THE COURT ORDERS AS FOLLOWS: i. The defendant is convicted of the charges referred to in proceedings G6, G7, G18 and G23 of 1983. 2. The defendant is acquitted of the charges referred to in proceedings G8 and G9 of 1983. 3. All matters are stood over to a date to be fixed to determine questions of penalty and costs. IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY GENERAL DIVISION TRADE PRACTICES ACT 1974 SECTIONS 79 AND 53(b) WINSTON FRANKLIN JOSEPH RODRIGUES Prosecutor A.B.E. COPIERS PTY. LIMITED Defendant BETWEEN: A.C.T. No. G 6 of 1983 ) No. G7 of 1983 ) No. G 8 of 1983 ) No. G9 of 1983 ) AND: No. G18 of 1983 ) . BETWEEN: A.C.T. No. G23 of 1983 AND: MORLING J. 19 August 1983 STEPHEN GARTH BEDE BROWN Prosecutor A.B.E. COPIERS PTY. LIMITED Defendant REASONS FOR JUDGMENT In these proceedings the prosecutors seek the imposition upon the respondent of penalties under s.79 of the Trade Practices Act 1974 ("the Act") for alleged contraventions of s.53(b). of the Act. Section 53(b) provides (inter alia) that a corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods falsely represent that they are new. With the consent of the parties proceedings brought by the two prosecutors in respect of six separate alleged offences were heard together. The defendant has a substantial business of selling photocopying machines. It sells machines manufactured by a large Japanese company. Four of the charges arise out of the supply of machines to the Commonwealth. The other charges arise out of the supply of machines to the Australian Mutual Provident Society Limited ("the A.M.P. Society") and Lester Firth & Murton Pty. Limited. The substance of all the charges is that the defendant represented that the machines supplied by it were new when in fact they were not new. 3. MACHINE SUPPLIED TO THE DEPARTMENT CF SOCIAL SECURITY - No. G.23 of 1983 The information in this matter alleges that on or about 4 June 1982 at Canberra the defendant in trade or commerce, in connexion with the supply of goods, namely, a photocopying machine bearing serial number 3841533, did falsely represent to the Commonwealth of Australia that the said machine was hew whereas it was not then new. The defendant admitted that it is a trading corporation formed within the limits of Australia and that at all material times it had a branch in the Australian Capital Territory operating from an address at Fyshwick. In June 1980 the Department of Administrative Services invited tenders for the supply of, inter alia, photocopying machines. The defendant made a tender in response to the invitation. It tendered for "a combination of both new and fully factory refurbished units". In tendering for the supply of a photocopier capable of producing up to 600 copies per hour and sustaining a monthly work-load of up to 3,000 copies produced by electrostatic process on bond or plain paper, the defendant advised that 1t had three machines which could meet these requirements, namely:- "U-BIX 600 WI Console Fully Factory Refurbished. U-BIX Mark T Brand New Desk Top. U-BIX 1500 Dual Tray Console Factory Reburbished." The tender price for the photocopying machine referred to as -"U-BIX Mark 'T'" was $2,100. The defendant was requested to advise the Australian content of, inter alia, a "U-BIX Model 'T' New" machine. By letter dated 1 August 1980 addressed to the Australian Purchasing Commission, the defendant enclosed a list of Australian content figures by mcdel. The Australian content of some nine models was given, each model being described as either refurbished or new. The information given in respect of the Mark "T" model was as follows: "Mark 'T' 53% new". On or about 19 January 1981 the Commonwealth accepted the defendant's tender for the supply of photocopying equipment for Commonwealth Departments throughout Australia. A document styled Period Contract Acceptance No. PV 4413 dated 19 January 1981 was issued by the Commonwealth to the defendant specifying the contract period as being from 1 December 1980 to 30 November 1981. On 11 January 1981 the defendant acknowledged receipt of 5. this document and confirmed its agreement to satisfy orders placed in accordance with it. Subsequently the Commonwealth extended the pericd of contract PV 4413 to 31 May 1982. On 26 February 1982 the defendant wrote to the Purchasing Officer of the Department of Administrative Services advising of an alteration to the then current photocopier tender. In this letter the following paragraph appeared: - "In our current tender acceptance, ABE offer the U-BIX Model 'T' new for a purchase price of $2,100 with a sliding copy costs scale of 1.7¢ per copy. ABE wish to amend this cfier to supplying a New Model 'V' machine at the same unit and copy cost." In a document dated lst March 1982 and described as a "Special Offer Conditions to Government Buyers Purchasing from Current Government Tender (PV 4413) for period 1.3.82 to 31.5.82" the defendant offered for the price of a U-BIX Model 'T' Desk Top Copier a U-BIX Mark 'V' machine. The defendant's Canberra branch provided a copying service for members of the public, utilizing for this purpose copying machines on 1ts showroom floor. It was also the practice of the defendant's emplcyees at this oranch to give demonstrations of vhotccorying machines to potential 6. custcmers. These demonstrations were given by using machines in the showroom. A photocopying machine U-BIX Model Mark 'T' serial number 3841533 was located in, the defendant's Fyshwick premises from about September 1981. About the first week of March 1982 an employee of the Commonwealth had a conversation with the Canberra branch manager of the defendant in relation to the hire of a copier for a period of four weeks. Subsequently an order for the rental of a U-BIX Model Mark 'T' photocopying machine was issued to the defendant. On or about 9th March 1982 a photocopying machine U-BIX Model Mark '''T' serial number 3841533 was delivered to the War Memorial Annexe in the Australian Capital Territory. An arrangement was subsequently made between the Commonwealth and the defendant to extend the period of hire of this machine to 29 May 1982. From about 9 March 1982 this machine was used by employees of the Commonwealth to photocopy documents. I am satisfied from the evidence given by Mr Manning and Miss Pauline Smith that extensive use was made of the machine for photocopying purposes during this period. Mr Manning said that he himself made hundreds of copies of documents on the machine and that three or four other employees cf the Commonwealth made more or less constant use of it. Mr Manning's evidence was not challenged and I accept it. Mass 7. Smith also gave detailed evidence of the use of the machine. It is plain from her evidence that the machine was in constant and active use whilst it was at the War Memorial Annexe. No challenge was made to her evidence. On or about 31 May 1982 employees of the defendant collected the machine from the War Memorial Annexe. Subsequently the defendant rendered invoices to the Commonwealth in respect of the rental of the machine and for copying charges. On or about 26 May 1982 the Commonwealth placed a purchase order with the defendant for two U-BIX Model Mark 'vV' photocopying machines. On 28 May 1982, Mr Luchetti, an employee of the Commonwealth, was telephoned by Mr Richard McKenzie who was at that time the Canberra branch manager of the defendant. Mr McKenzie rang Mr Luchetti in relation to the order placed for the two Mark 'V' machines. Mr McKenzie advised that the machines were not available in Canberra. In replacement, he offered a reconditioned Mark 'V' photocopying machine for $1950 and a Mark 'T' photscopying machine for $1690. There was also discussion about a third machine which was the subject of a separate purchase order. Mr McKenzie told Mr Luchett1i that the price for the Mark 'T' machine was reduced because of a special offer being made by the Gefencant. The defendant's brice list in respect of machines supplied to the Commonwealth 8. showed $1690 as the price of Mark 'T' machines effective as from 1 June 1982. During this conversation Mr McKenzie did " not use the word "new" in relation to the Mark 'T' machine which he was offering to the Commonwealth. However, he did refer to the Mark 'V' model as being reconditioned. About 4 June 1982 a photocopying machine U-BIX Model Mark ''T' serial number 3841533 was delivered to Juliana House, a Commonwealth Government Office at Phillip in the Australian Capital Territory. The delivery docket in respect of this machine described it as a "'T' Copier", and gave its serial number. The defendant subsequently rendered an invoice to the Department of Social Security in respect of the machine. The relevant part of the invoice was in the following terms: "Mark ''T' Copier $1690.00" Om or about 10 June 1982 the reconditioned U-BIX Model Mark 'V' machine was delivered to Juliana House. The defendant rendered an invoice to the Commonwealth in respect of this machine, and on the invoice the machine was described as "Mark 'V' Copier (Re-conditioned)". Having regard to the fact that the serial number on the U-BIX Model Mark 'T' sold te the Commonwealth was identical with the serial number on the machine rented by the defendant to the Commonwealth and used at the War Memorial Annexe, it seems inescapable, and I find, that the 'T' Model machine sold to the Commonwealth was the same machine as was rented to the Commonwealth and used at the War Memorial Annexe. The machine had a meter attached to it .showing the number of copies it had produced. Evidence was given by Mrs Tyrell that as at 11 June 1982 the meter reading on the machine was 59. Her evidence in this respect was not challenged, and I accept it. The delivery docket which accompanied the machine when it was delivered contained a space for notation of the meter reading, but no figure appeared in the space. Mr Sully Q.C., senior counsel for the prosecutors, relied upon the evidence to which I have referred as establishing that the defendant falsely represented that the U-BIX Model Mark 'T' machine was new. He argued that the machine could no longer be described as being new after 1t had been used for about three months at the War Memorial Annexe. Mr Gleeson Q.C., senior counsel for the defendant, admitted that the evidence established that the machine was not new. This admission was inevitable. Mr Sully further submitted that, taken in its entirety, the evidence estéblished that the defendant 10. 7 represented that the machine was new when it was sold to the Commonwealth. I agree with this submission. The fact that the delivery docket gave no meter reading for the' machine was, Of itself, equivocal. But the meter itself showed a reading of 59. This was of itself a clear representation that the machine was unused. Cf. Given v Holland (Holdings) Pty. Ltd. (1977) 29 F.L.R. 212 at 216. Moreover, the course of dealing between the defendant and the Commonwealth made 1t plain that machines supplied by the defendant were either new or refurbished. Mr McKenzie's conversation with Mr Luchetti can only be understood as conveying that, whereas ™~ the 'V' model he was offering was refurbished, the i model was not. The evidence also establishes that the special price of $1690 for a 'T' model was intended to refer to the defendant's offer to supply those models at that price before 1 June 1982. For all these reasons I think it has been established that the machine was represented as being new. I am satisfied beyond reasonable doubt that this charge has been established. MACHINE SUPPLIED TO A.M.P. SOCIETY - No. G 7 of 1983 The presecutor alleces that on ocr about Ill March 1982 the defendant falsely represented to the A.M.P. Society ll. that a Mark 'V'' 2 photocopier machine was new whereas 1t was not then new. It was alleged that the representation was made in connexion with the supply of a machine bearing serial number 8010473. This model machine was variously referred to in the evidence as Mark 'V' 2 and Mark ''V' II and I shall hereafter refer to it by the former description. A macHine bearing this serial number arrived in the . defendant's showroom at Fyshwick 1n December 1981. It was delivered to the Crookwell High School on or about 12 February 1982. The defendant sent it tc the school on a trial basis, and it remained there for about two weeks. It was used by the school principal and staff for photocopying purposes. In all it produced about 750 copies. It was collected from the school late in February or early in March 1982 and taken to the Canberra-Rex Hotel. It was there used by employees of fTonclay Services, a service company associated with a large firm of Sydney solicitors which was then undertaking work in Canberra on behalf of a client. In- fact two photocopying machines were hired from the defendant by Tonclay Services. But the two machines preved inadequate to meet all the company's requirements and accordingly some documents were taken for copying purposes to the defendant's Fyshwick premises. Photocopying machines in the defendant's showroom were used to ocvreduce the required additicnal copies. 12. Mrs Stanwell, an employee of Tonclay Services, said that whilst the two phctocopying machines were at the Canberra-Rex Hotel they were in constant use. She said they were used ten hours per day. A number of people operated the machines. It is plain from Mrs Stanwell's evidence, which I accept, that both machines must have produced a large number of copies of documents whilst they were on hire to Tonclay Services. On 13 October 1980 the defendant submitted a quotation to the A.M.P. Society. Part of the quotation veferred to the cost to the Society of replacing a U-BIX Model Mark 'T' photocopying machine. The relevant part of the quotation was in the following terms: _ "In areas where the copying volume within 12 months has increased to the extent that in A.M.P. Society's opinion the Model 'T' is too slow or unable to handle it efficiently, A.B.E. Copiers will give full nett refund (1.e. $2,600.00) upon purchase of a Mark 'V' (i.e. nett price $4,400.00." The U-BIX Model Mark 'V' 2 is an up-dated version of the U=BIX Model Mark 'T'. On or about 5 March 1982, Miss Jennifer Howard, an officer of the A.M.P. Society, telephoned Mr Clingan, a representative of the defendant at its Sydney office. She discussed with him the purchase of a Mark 'V' 2 mcdel 13. machine, as a replacement for a 'T' model machine then at the Society's Canberra branch office. On or about 8 March 1982 an order was placed with the defendant for a Mark 'V' 2 model machine. About 1l March a Mark 'V' 2 model machine serial number 8810473 was delivered to the Society's premises in Canberra. The delivery docket showed the meter reading on the machine as "or", In due course the defendant sent an invoice to the Society in respect of, inter alia, the Mark 'V' 2 photocopier. The price was shown on the invoice as being $4,400. The Society paid the defendant the invoiced cost of the machine. The defendant admitted that the machine supplied to the Society was the same machine as the one that had been used at Crookwell High School and at the Canberra-Rex Hotel. Mr Petrus Jansen gave evidence that in 1981 and 1982 he was joint proprietor with his wife of a small company known as Jentaz Pty Limited. This company worked as a commission agent for the defendant. In January 1982 Mr Jansen went to Canberra to work as a sales commission agent on behalf of the defendant. He said there were from four to six photocopying machines in the defendant's Fyshwick showroom at any one time. From time to time he used the machines for his own purposes if he required documents to be 14. copied. Other members of the defendant's staff did likewise. Now and again, perhaps twice a week, members of the public would come to the showroom and ask for documents to be copied. It was the custom of the defendant to compiy with such requests. Mr Jansen said that in March 1982 he and Mr Cronin, another of the defendant's agents, delivered two U-BIX 'v' 2 machines to Tonclay Services at the Canberra-Rex Hotel. They also delivered 10,000 sheets of copying paper. About a week later they collected the two machines from the hotel, but no paper was returned to them. Mr Jansen said that at the time the two copying machines were brought back from the hotel, one machine had a meter reading of between 10,000 and 15,000 and the other between 20,000 and 25,000. - According to Mr Jansen, on or about 8 March 1982 a memo was sent from the defendant's Sydney office to its canberra office requesting delivery of a U-BIX 'v' 2 photocopier to the A.M.P. Society in Canberra. Mr Jansen said he asked Mr Haylen, the manager of the defendant's Canberra office, for a machine to send to the A.M.P. Society. He said the only machines which were unpacked were the two machines that had been brought back from Tonclay Services. Mr Haylen told him to take one of these machines. Mr Jansen said that he told Mr Haylen that the machine "had far too many copies on it". According to Mr Jansen, Mr 15. Haylen replied: "You work here, and I look after the machines." He said he later walked out to the back of the premises and saw that the back and top covers had been removed from one of the two machines that had used by Tonclay Services. He also saw a technician standing next to the machine with a meter in his hand. Later the same day he delivered one of the machines to the A.M.P. Society. When the machine was delivered the meter on it showed a zero reading. Mr Jansen's evidence does not make it clear whether the machine delivered to the Society was the same machine as he had observed with its covers removed. Mr Jansen also said that on the morning of 28 March 1982 he overheard a conversation between Mr Cronin and Mr Haylen. He said that he heard Mr Cronin say that he had obtained a government order and that he had unpacked a machine and was going to deliver 1t. Mr Jansen said that Mr Haylen then said: "Why didn't you send the machine off the showroom floor?" Mr Cronin replied that that machine was broken. According to Mr Jansen Mr Haylen then said that the machine could have been fixed. According to Mr Jansen, Mr Cronin then said "they asked for a new machine", and Mr Haylen replied: "In the future all machines to be used are showroom machines." It appeared in cress examination of Mr Jansen that his recollection of some of the events tc which he deposed 16. was imperfect. In particular, it seems almost certain that his evidence as to the meter readings on the machines at the time they were returned by Tonclay Services was incorrect. On the other hand, his evidence as to Mr Cronin's conversation with Mr Haylen was corroborated by Mr Cronin, and Mr Haylen was not called by the defendant. I think Mr Jansen was an honest witness but I think it would be unsafe to make a finding adverse to the defendant on any matter upon which his evidence is not supported by other evidence. It seems certain that the meter on the machine supplied to the A.M.P. Society was tampered with prior to it being delivered to the Society. Its use at the Crookwell High School and at the Canberra-Rex Hotel must necessarily have caused the meter to show a reading of some thousands. According to other evidence in the case, it had a reading of over 4,000 when it was returned by Tonclay Services. Yet the meter reading was zero when it was delivered to the Society. These facts lead to an irresistible inference that somebody tampered with the meter after it was returned from Tonclay Services. The supply of the machine with the zero meter reading seems to me to be the clearest representation to the A.M.P. Society that the machine was a new machine. I have no doubt that the purpose of showing a zere meter reading was to convey the impression to a purchaser that 1t was 17. indeed a new machine. Moreover the supply of the machine to the Society in pursuance of the tender docwument and in the context of the trade-in of the used 'T' model machine was in itself a representation that the machine was new. Mr Gleeson submitted that the use to which the machine had been put prior to its delivery to the A.M.P. Society did not mean that it was not still a new machine. He pointed out that the machine was sold with a five year guarantee and that. it was designed to be able to produce nearly 2 million copies over the guarantee period. It may well be that some use of a machine, e.g. for demonstration purposes only, will not necessarily lead to the result that it is no longer new. But in this case I do not think the machine could fairly be described as new after its use at Crookwell High School and the Canberra-Rex Hotel. Its efficiency may well not have been diminished by the use to which it had been put. But that is a matter relevant to the question of the gravity of the offence, not to the question whether the machine was new. In my opinion the prosecutor has made out this charge. 18. MACHINE SUPPLIED TO LESTER FIRTH & MURTON PTY. LIMITED - No. G 9 of 1983 Since a question of importance turns upon the form of this charge, it 1s desirable to set it out, omitting formal parts. The charge alleges that the defendant: "being a corporation, did commit an offence against Section 79(1) of the Trade Practices Act 1974, by contravening Section 53(b) of the said Act, in that the said corporation, in trade or commerce, in connexion with the supply of goods, namely a photocopying machine bearing serial number 4920043, did falsely represent to Lester Firth & Murton Pty. Limited that the said machine was new whereas it was not then a new machine." It is to be observed that s. 53(b) of the Act refers to "the supply or possible supply of goods". Mr Gleeson submitted that if the facts to which I shall presently refer make out any case against the defendant, it is a case of false representation in connexion with the possible supply of gocds. He submitted this is a different offence from making a false representation in connexion with the supply of goods, that no amendment was sought by the prosecutor, and that in any event an amendment could not have been made because no consent had been given by the Minister under s.163(4)(b) cf the Act. It was further submitted that, even if the information had been amended so as to allege an offence in relation to the possible supply c# gcods, the prosecution would necessarily have failed because cf the 19. provisions of s.21 of the Crimes Act 1914. That section requires that an information be laid within twelve months of the date on which an offence is committed. The evidence establishes that in January 1982 Debra Jensen an employee of Lester Firth & Murton Pty. Limited spoke to Mrs Fleming an employee of the defendant and said that she wanted to determine the capabilities of a new model the defendant was then selling. Miss Jensen asked Mrs Fleming for a written quotation on the machine. This was furnished by the defendant on 21 January 1982. The quotation referred not only to the specifications of the machine, but also to its price, calculated with reference to the trade-in value of another copying machine. Miss Jensen discussed the potential of the machine with Miss Fleming and after that discussion she said that "we decided to:get the machine in on trial and A.B.E. agreed to provide a machine". On 17 February 1982 Mrs Fleming brought the machine to Lester Firth & Murton's premises and demonstrated its qualities. After the demonstration Miss Jensen had a discussion with Mr Peter Jansen, the defendant's sales representative, The discussion with Mr Jansen was in relation to leasing costs, because it had always been Lester Firth & Murton's intention to lease the machine if 1t proved satisfactory. Mr Jansen informed Miss Jensen that the machine could be leased through a finance company. Miss 20. Jensen told Mr Jansen that the machine was only on trial. Mr Jansen assured Miss Jensen that the machine would provide the quality of work required of it. On the same day as the machine was delivered on trial Mr Jansen produce a document called an order form. In the body of the form the following words appear: "On acceptance of this order by an authorised officer of A.B.E. Copiers Pty. Limited there shali hereby be constituted a binding contract between A.B.E. Copiers Pty. Limited (hereinafter called 'A.B.E.') and the purchaser on the terms and conditions herein contained." Miss Jensen signed this form on behalf of her employer and the form was signed "Jentaz Pty. Limited" on behalf of the defendant. When the machine was first delivered to Lester Firth & Murton's premises, Mrs Fleming drew Miss Jensen's attention to a blue plastic film on the side of the machine. According to Miss Jensen, Mrs Fleming "told us to please not remove the film because it was a new machine on trial and- until we agreed to purchase the machine 1t had to remain there." In fact Lester Firth & Murton did not agree to lease the machine as it did not prove satisfactory. The arrangement between the parties seems to have been that, had the machine proved satisfactory, 1% would have been sold to @ company which would have leased it to Lester Firth & 21. Murton. But in the events that happened no lease was executed and the defendant took the machine back to its premises. The evidence leaves me in no doubt that the machine was represented as being new. But the real question is whether the representation was made, as is alleged in the information, in connexion with the supply of the machine. Mr Gleeson submitted that the representation was made only in connexion with the possible supply of the machine, and that this is not the offence alleged to have been committed by the defendant. He submitted that the definition of "supply" in s.4(1) of the Act when read with paragraph (b) of s.53 shows that mere delivery of goods on approval~1s not a supply for the purposes of the paragraph. Section 4 provides that, unless the contrary intention appears: supply', when used as a verb, includes - (a) in relation to goods - supply (ancluding re-supply) by way of sale, exchange, lease, hire or hire-purchase; and (b) in relaion to services - provide, grant or confer, and, when used as a noun, has a corresponding meaning, and 'supplied' and 'supplier' have corresponding meanings;" 22. He contended that the words "possible supply" in paragraph (b) would be otiose if "supply" is construed so as to include the delivery of gcods on approval. He argued that the .facts of this case showed that there was the possibility of a lease of the machine to Lester Firth & Murton, but no more. He said that, by virtue of the definition clause, the lease of a machine is the supply of a machine for the purposes of s.53(b). Hence, so it was argued, the possible lease of a machine is the possible supply of it for the purposes of the section. He submitted that, in the present case, notwithstanding the typed words which appeared on the order form, the clear arrangement between the defendant and Lester Firth & Murton was that the latter company did not commit itself to take a lease of the machine and that at no stage was there more than a possibility that a lease would be entered into. In any event, so it was contended, the lease would have been entered into with the finance company, not Lester Firth & Murton. Mr Sully relied upon s.4C(b) of the Act, which is in the following terms: ' "ac. In this Act," unless the contrary intention appears - (b) a reference tc the supply or acquisition of gocds or services includes a reference to agreeing to supply or acquire gocds or services;" 23. He argued that if goods are delivered by a supplier to a particular custemer, then the supplier has agreed to supply them. The goods are appropriated to the customer of the supplier, who has agreed to supply them. He argued that the words "possible supply" in s.53(b) refer to situations where gocds are not actually delivered to a customer. The point is a fine one. But I have reached the conclusion that the defendant's construction 1s to be preferred. I think that when s.4C(b) refers to "agreeing to supply or acquire goods" it refers to situations where some contractual arrangement has been made which binds the parties to observe their agreement - cf. an agreement to enter into a lease. On the facts of the present case, until Lester Firth & Murton communicated their approval of the machine to the defendant , neither it nor the defendant was contractually bound. The true position was that there was no more than the possibility of a lease of the machine. But the charge does not allege an offence in connexion with the possible supply or lease of the machine. For this reason, the defendant is entitled to succeed on this charge. In any event, the evidence does not satisfy me beyond reasonable doubt that the machine was not new when it was delivered to Lester Firth & Murton on 17 Februéry 1982. The only evidence as to 1ts pricr use was that 1t was on the 24. showroom floor at Fyshwick for about two months prior to 17 February. It is more probable than not that, during that time, it was used to a limited extent. It may well have been used for demonstration purpose. It may well also have been used for commercial copying. But both types of use may have been minimal. The proven use does not satisfy me beyond reasonable doubt that the machine was not properly described as new. For this additional reason the defendant is also entitled to be acquitted on this charge. MACHINE SUPPLIED TO DEPARTMENT OF HOUSING AND CONSTRUCTION - No. G8 of 1983 The prosecutor alleges that a U-BIX Model Mark ''Ww' photocopying machine bearing serial number 5430416 was falsely represented by the defendant to the Commonwealth as being a new machine whereas it was not. It 1s alleged that the representation was made in connexion with the supply of the machine to the Department of Housing and Construction. The Mark 'W' model is referred to in the tender documents already referred to. In tendering for the supply of a photocopier capable of producing in excess of 900 coples per hour and sustaining a monthly work load in excess of 20,000 per month, and a photocopier capable of preducing in excess of 1,200-:copies per hour and sustaining a monthly 25. work load in excess of 40,000 on plain or ordinary bond paper, the defendant advised that it proposed to tender on only one model, namely, "The all new U-BIX Mark 'W'". The tender price for this machine was $7,000. It is unnecessary to refer to all the evidence relating to the supply of this machine. It is sufficient to say that in a letter dated 25 January 1982 to the Regional Purchasing Officer of the Cepartment of Administrative Services, the managing director of the defendant said, inter alia: "In our current tender acceptance A.B.E. offer the U-BIX Mark 'W' (new) for a purchase price of $7,000." In January 1982 an employee of the Commonwealth telephoned the defendant's Canberra branch office regarding the possible supply of a Mark 'W' model machine. Mr Cronin advised him that the defendant was making a special offer with respect to the Mark ''W' model, namely, free supply of some associated equipment used with the machine. This oral offer was confirmed in a letter dated 29 January 1982 signed by Mr Cronin. This letter read, in part, as follows: "This letter is to confirm our conversation relating to a special offer A.B.E. is making to government users on its U-BIX 'W' photocopiers whilst stocks last. 26. U-BIX photocopier is the current contract machine for volumes of 20,000 - 60,000 A4 copies per month at the contract price of: U=-BIX Mark 'W': (excludes drum and toner pack) $7,000.00 eee Whilst stocks last A.B.E. is offering the Mark W at $7,000.00 with the automatic document feed and sorter provided free of charge." On or about 11 February 1982 the Commonwealth placed a purchase order for a Mark ''W' medel machine. On or about 25 February 1982 in pursuance of the purchase order the defendant delivered a Mark 'W' model machine serial No. 5430416 to the Department of Housing and Construction. The delivery docket in respect of this machine contained a column headed "Meter Reading" and in the space beneath this heading there was no entry. The defendant was paid $7,000 for the machine. The course of dealing between the parties, the initital reference to the Mark 'W' mcedels as being ""new", the statement that the special offer was only open whilst stocks last, and the absence of any notification of a meter reading indicating that the machine had been used all point irresistibly to the conclusion that the machine was represented as being new. I therefore find that the defendant represented the machine as being a new machine. Indeed, I did not understand Mr Gleeson to submit that this was not the case. 27. However, the evidence is much less clear on the question whether the machine was, in fact, new. It was admitted that the machine was located on the defendant's showroom floor at Fyshwick from about October 1981 until about 24 February 1982. But the evidence that it was used for any specific purpose whilst on the showroom floor is not at all cogent. Evidence was given by Mr Jansen that the machines on the showroom floor were used for copying purposes by members of the defendant's staff. He also said that the machines were used for copying documents for members of the public, and for demonstration purposes. But there was no evidence as to the use made of this particular machine. It arrived in the showroom in October 1981 and was delivered to the Commonwealth on 24 February 1982. Unlike the machine which is the subject of the charge in No. G6 of 1983 (see infra), there 1s no evidence that it was used for commercial copying purposes. I am satisfied that, more probably than not, it was used to a limited degree for such purposes. But I cannot say that I am satisfied of such use beyond reasonable doubt. Moreover, there is no evidence that the meter on this machine was tampered with. There is also evidence that the machine was twice inspected in the showroom by Mr Healy, an officer of the Commonwealth. Mr Healy was not called. This machine was capable of producing no less than 9 million copies over 5 years use. , Its use for demonstration or other 28. purposes to produce a relatively few copies would not necessarily have been inconsistent with it remaining a new machine - cf. Hollis v. A.B.E. Copiers Pty. Ltd. (1979) 41 F.L.R. 141 at 147. For these reasons I do not think the prosecution has proved beyond reasonable doubt that this machine was not new when it was sold to the Commonwealth. The charge 1s therefore not established. MACHINE SUPPLIED TO DEPARTMENT OF VETERANS' AFFAIRS - No. G18 of 1983 The prosecutor alleges that, in connexion with the supply to the Department of Veterans' Affairs of a photocopying machine bearing serial number 7960030, the defendant represented to the Commonwealth that the machine was new whereas it was not new. The machine was a Mark ''V' 2 model. The tender documents to which I have already referred make reference to the Mark 'V' model as being "prand new" and in a Stores Circular issued by the Department of Administrative Services for the information of other Departments the U-BIX Mark 'V' Model 1s described as "new", There 1s evidence, which I accept, that the defendant was aware of the terms of this circular. 29. On or about 9 February 1982, a Mark ''V' 2 photocopier, serial number 7960030 was delivered by the defendant on a trial basis to Leith Bartlett & Partners Pty. Limited at Braddon. The machine was used for about one week by that company to photocopy documents. About 800 copies were produced whilst it was on the company's premises. The machine was returned to the defendant's premises on or about 16 February 1982. About 4 March 1982 the machine was delivered to the Canberra-Rex Hotel. It was used by Tonclay Services until about 10 March 1982 when it was again returned to the defendant's premises. It was used extensively for Photocopying purposes by Tonclay Services. I have already referred to the evidence of Mrs Stanwell in this respect. On or about 24 May 1982 Ms. M'Cosker, an employee of the Cemmonwealth had a discussion with Mr Richard McKenzie who was at that time the Canberra branch manager of the defendant. At the time the Commonwealth wished to acquire a new Model 'V' machine. Mr McKenzie told Ms M'Cosker that the defendant did not have any Mark 'V' models in stock. Eventually a purchase order for a Model 'V' 2 was placed with the defendant. The machine was delivered to the Defence Services Homes Corporation cn or about 1 June 1982. At the time of delivery 1t had a meter reading of zero. The delivery docket contained a space for the meter reading, and in the space there was no entry. Tt was admitted that the 30. machine was the same machine as had been used by Tonclay Services at the Rex-Hotel and by Leith Bartlett & Partners. It was also admitted that the machine was located in the defendant's showroom premises from about June 1981. The evidence leaves me in no doubt that this machine was not new when it was delivered. It is almost certain that it was used to a limited degree whilst it was on the showroom floor. It is beyond question that it was, in fact, used by Tonclay Services and Leith Bartlett & Partners prior to it being delivered to the Department of Veterans' Affairs. In 'the face of this evidence the defendant admitted that the machine was not new when it was delivered to the Department. indeed, in March 1983 Mr McKenzie approached Mr Chapman of the Department and apologised for the defendant's action in supplying the machine as new. He offered to replace the machine with a new machine. The offer was accepted and in due course the defendant supplied the Commonwealth with a new machine as a replacement for the machine delivered to the Department of Veterans' Affairs in 1982. The question remains whether the defendant represented that the machine was new. I am satisfied beyond any doubt that it dad. The course of dealing between the 31. defendant and the Commonwealth as shown in the tender and other documents, the zero reading on the meter and the admissions made by McKenzie tc Mr Chapman all point irresistibly to this conclusion. Indeed, on 28 March 1983 Mr McKenzie wrote to the Department of Veterans' Affairs confirming his discussion with Mr Chapman and offering to replace: the machine with a new unit. In my opinion this charge has been established. MACHINE' SUPPLIED TO DEPARTMENT OF SCIENCE AND TECHNOLOGY - No. G 6 of 1983 The prosecutor alleges that, in connexion with the supply to the Department of Science and Technology of a photocopying machine bearing serial number 3921170, the defendant represented to the Commonwealth that the machine was new whereas 1t was not new. In tendering for the supply of a photocopier capable of producing approximately 20,000 copies per month on bond or plain paper and equipped with document reduction copying facilities to allow reducticn of A3 originals to A4 copies, the defendant advised that it had two machines which could meet these requirements, namely: - 32. "U-BIX 600 WII Console fully factory refurbished. U-BIX Mark V3R Desk Top. New Unit." The tender price, excluding drum, for the photocopying machine referred to as "U-BIX Mark V3R" was $8,000. On or about 16 April 1982 Miss Connors, an employee of the Commonwealth, telephoned Mr Haylen in relation to the purchase of a U-BIX Model Mark V3R machine. At the time Miss Connors discussed the purchase of the machine with Mr Haylen she had in front of her a Stores Circular issued by the Department of Administrative Services. I am satisfied that at all relevant times the defendant was aware of the terms of this circular . On p.3 of the circular there appeared the following entry: "R.B.E. Copiers U-BIX Mark 'V' 3 R_ (new)." Miss Connors asked Mr Haylen if the U-BIX Mark 'V' 3 R machine was still under government contract. He said that it was. She asked him whether there was any change in the price of the machine as mentioned in the Stores Circular, and he replied in the negative. Miss Connors asked whether there was any delay in delivery and Mr Haylen said there was not, as the machine was ex-stock. 33. On or about 29 April 1982 an employee of the Commonwealth placed a purchase order with the defendant for a U-BIX Model 3R machine and associated equipment. Mr Haylen was advised that the machine was to be delivered to the offices of the Department of Science and Technology at Belconnen. On 3 May 1982 a Mark 'V' 3R machine, serial number 3921170, was delivered to the Department's Belconnen offices. The space on the delivery docket for notation of the meter reading was left blank. The price paid for the machine (excluding the associated equipment) was $8000.00. It was admitted that on or about 12 February 1982 this machine was delivered by the defendant to Honeywell Pty. Limited's premises in Canberra in pursuance of a rental agreement. The machine developed a fault on the same day or shortly thereafter. It does not appear to have been used whilst at Honeywell's premises.- Having regard to the course of dealing between the Commonwealth and the defendant, to the conversation between Mr Haylen and Miss Connors, and to the absence of any meter reading on the delivery docket, I am satisfied beyond reasonable doubt that the defendant represented that the machine was new at the time 1+ was delivered tc the Department of Science and Technology. 34. The machine was returned by Honeywell and thereafter it was put back on the showroom floor at Fyshwick. Early in March 1983 the machine was used to produce a large number of copies of documents for Tonclay Services. I have referred already to the evidence of Mrs Stanwell (vide matter No. G7 supra), who said that the machines that the defendant provided for Tonclay Services at the Canberra-Rex Hotel were unable to produce all the required copies and that some documents were taken to the defendant's Fyshwick premises to be copied. Mrs Stanwell's evidence was corroborated in this respect by Mr Cronin. About 5,000 copies were made on machine No. 3921170 for Tonclay Services. The defendant was paid at commercial rates for these copies. It is also quite possible that the machine was used to carry out other commercial copying work but the evidence does not establish this beyond reasonable doubt. I think it is likely that the machine was also used from time to time as a demonstration model. In my opinion the evidence establishes that the machine was not new at the time it was sold to the Commonwealth. Mr Gleeson argued that some use of the machine was consistent with it remaining new. He submitted that this machine was still new, bearing in mind that it was the subject of a five-year guarantee and that the number of copies which it was proved to have produced was miniscule when compared with the number of copies which the machine 35. was capable of producing. Whilst these matters may well be relevant on the question of penalty, I do not think that they lead to the result that the machine was still new. It is one thing to use a machine for demonstration purposes. It is afrother to use it for ordinary commercial purposes. It could not fairly be described as new after it had been used by the defendant for its own profit, although that use was in the defendant's own premises. For these reasons I am of the opinion that this charge has also been made out. CONCLUSION In the resuit, the defendant 1s convicted of the charges referred to in proceedings G 6, G 7, G18 and G 23 of 1983 and acquitted of the charges referred to in G 8 and G 9 of 1983. It was agreed by counsel that consideration of guestions of penalty and costs should be deferred until the parties had been given the opportunity to consider these reasons. Accordingly, the matters will stand over to a date | . to be fixed for that purpose. fan" purp - Model (33