IN THE FEDERSL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. G 222 of 1982 GENERAL DIVISION Trade Practaces Act 1974 EDWINA ALICE BARTON Prosecutor WESTPAC BANKING CORFORATICON Defendant CORAM: SHEPPARD J. Qi a at i9g3 . ( REASONS FOR JUDGMENT This is a prosecution instituted by the prosecutor for alleged breach by the defendant of s.58 of the Trade Practices act 1974 ("the Act"). Section 58 1s as follows: "A corporation snall not, in trade or commerce, accept payment or other consideration for goods or services where at the time of the acceptance it antends - {a) not to supply the goods or services; or (b) to supply goods or services materially different from the goods or services in respect of which the payment or other consideration is accepted." The defendant is a banking corporation. As an adgunct to its banking pusiness it conducts a large oe travel business. Part of this business involves 1t in wholesaling tours, mostly overseas tours, to travel agents who retail the tours to their customers. In 1981-82 one series of tours which was available was known as the "Discovery" series, These were tours to various places in Asia, China and other places in what 1s known as the Orient. One such tour was known as "Discovery Holiday 526", It was included in a brocnure containing a number of "Discovery" tours. The itinerary was to Hong Kong, Penang, Kuala Lumpur, Kuéentan and Singapore. It was sald to be a tour which would extend for 16 days and 14 nights. It involved departure on a Saturday, that being the first day of tne tour, and return on a Sunday morning, the Sunday being the sixteenth day. A person taking this tour woula be away on 15 nights but the fifteenth would be spent in overnight travel from Singapore to Australia, On this basis 1t was apparently not included as one of the 14 nights. In circumstances more fully to be described a Mrs. Speirs in August 1981, through a travel agent, Century Plaza Travel, orderec the tour to depart on Saturday, 6 Feoruary, 1982, and to return on Sunday, 20 February, 1982. She paid for the tour on or about 3 December, 1981. In the events which transpired she was booked to travel home from Singapore, not on the Saturday evening but on the Friday evening 19 February, 1982. She was thus away, not for 16 days and 14 nights but for 15 days and 13 nights. Her stay in Singapore was reduced from three days to two. The way the case is put against the defendant is that within the meaning of s.58 it, a corporation, in trade or commerce accepted payment for services, namely the 526 tour ordered by Mrs. Speirs, at a time when it intended to supply a service materially different from the service in respect of which her payment was accepted. The material difference is said to be in the reduction of the time of the tour to which I have referred. There is no issue that the defendant is a cor- poration nor that the transaction was entered into in trade or commerce. Nor is there any question that the defendant did accept payment for the tour or that Mrs. Speirs travelled home on 19 February, 1982, rather than 20 February, 1982. But in the defendant's submission: (a) The informant has not established that the defendant, at tne time of tne acceptance of Mrs. Speirs' money, intended to supply a service, i.e. a tour, materially different from that in respect of which the payment was accepted; (b) If that submission be rejected, the defendant has established one or more of the defences provided for in s.85 of the Act. It should be noticed that there are two aspects of (a). The first is the question of whether a tour cut short by one day was materially different from the tour advertised in the brochure and for which Mrs. Speirs paid her money. The secona question 1s whether, if that be so, the evidence establishes that at the time of the acceptance of the payment the defendant intended to provide the shortened tour. The resolution of these submissions necessitates a detailed review of the evidence. As mentioned, the brochure advertised the tour as one which would return to Australia on Sunday morn- ing, the tourists having left Singapore the previous evening. The airline which was to fly the last leg of the tour was uantas Limited. The earlier legs were flown either by Cathay Pacific or Malaysian Airline Systems. At all material times Wantas nad a flight, QF2 (sometimes referred to in the evidence as wFO0802) which travelled dai_y from Singapore to Sydney and Melbourne. The flight originated in London and set down and picked up passengers at Singapore on its way to Australia. Qantas also operated another flight, QF96 (otherwise WFO896) which was described as a terminator flight. It travelled as QF95 from Sydney and Melbourne to Singapore and then returned to Sydney and Melbourne as uF96. It operated on Saturday evenings from Singapore and was the flight intended by those who constructed the tour to carry the passengers back to Sydney or Melbourne. For reasons which the evidence does not make clear Gantas Limited decided in June 1981 to cnange the day upon which it would operate QF95 and GF96 from Saturday to Friday. That left OF2 as the only wantas flight returning from Singapore to Sydney and Melbourne. Since it was a flight which had originated in London there was not certainty that passengers on the sub- ject tours and on other tours could be found seats on the aircraft. ; In June 1981 UYantas Limited informed Cathay Pacific and the defendant of the change. It said that passengers from tour 526 would have to leave on the Friday rather than the Saturday. Strong representations to Gantas Limited were made both by Cathay Pacific and the defendant to the end that Gantas would either allow the passengers to travel on flight GF2 on the Saturday or would restore its terminator service to Saturday. One of the defendant's tour departments was its Tour Wholesale Department. This department was broken up into three sections, namely, marketing, operations and sales. A Mr. Baily was, at the relevant time, manager of the marketing section and a Mr, Woodcock the manager of the operations section. The principal representations to Qantas Limited made on behalf of the defendant were made by Mr. Baily. He made them to a Mr. Plaister who, at the relevant time, was national account manager attached to santas' Sydney office. Both Mr. Paily and Mr. Plaister gave evidence of their discussions. Understandably their recollections of the conversations have dimmed. Neither now holds the position he had in 1981. Mr. Baily is no longer with the defendant. He now lives in California and is the marketing manager for an American tours company. Mr.Plaister 1s stationed 1n Bahrain and 1s Qantas' sales manager for the Middle East, Both witnesses were brought to Australia especially for the case. This is an indication of the importance that the parties attach to it. Mr. Plaister said that his recollection was that after representations were made, not only by the defendant but by other tour operators as well, Qantas agreed to accept passengers on GF2 on the relevant Saturday evenings, firstly until 31 December, 1981, and then until 31 January, 1982. Mr. Plaister remembered representations being made to him by Mr. Baily and also a letter which Mr. Baily had written. He thought that the principal problem was not the change from Saturday to Friday but the fact that QF96 would no longer operate to Melbourne; it was to operate to Sydney only. fir. Plaister's recollection was that the negotiations went on in June and possibly in the early part of July 1981. The programme for tour 526 extended from the first departure on 18 April, 1981, to the last departure on 27 March, 1982. The first return was on 2 May, 1981 and the last on 10 April, 1982. There were only five returns after 31 December, 1981, and only three after 51 January, 1982. According to Mr. Plaister the problem was entirely overcome except as to the last three tours which were due to return on 20 February, 20 March and 10 April, 1982. Mr. Plaister said that the defendant did request that passengers be allowed to travel on GF2 on the Saturday up to the end of the programme on 10 April, 1982. But he said that it was not possible to allow this beyond 31 January, 1982. He thought there might have been some discussion about wait listing the passengers on the returns to take place after 31 January, 1982, but his recollection was vague. He stressed that the problem did not only concern the defendant's Discovery tours but the tours of other operators as well, The maximum number of bookings on any of the defendant's 526 tours was 25. Other operators required many more seats than this, with the result that the problem was one of finding perhaps 100 seats on an aircraft not originating 1n Singapore but picking up passengers on its way through from London to Australia. The maximum number of seats on an aircraft was 401. Mr. Plaister's recollection was that his dis- cussions with Mr. Baily came to an end certainly by August. He left his then position in November 1981 and has no recollection of any discussions beyond those which I have described. Of wait listing he said that he found it hard to remember "any specifics". He added, "It may have been discussed as a generality. There was a possibility of wait listing, but I cer- tainly woujd have discouraged that sort of approach. Certainly, as far as I am aware, there was no attempt to wait list." He said he had no authority to re- locate passengers from flight 96 to flight 2 beyond 31 January, 1982. He said that he held out no hope that that could be aone. According to Mr. Baily, ne made representations to Mr, Plaister about the problem on many occasions over a veriod of months. It was his habit to speak 'oO to Mr. Plaister almost on a daily basis. The impression I have from nis evidence is that on most days the problem was mentioned. He did not, of course, only speak to Mr. Plaister about this problem. They had many matters to discuss, but Mr. Baily's recollection is that this oroblem was raised many times. Cf this he said, "It was an ongoing proposition (sic). It was something which would not be resolved concretely on any given day. It was a rolling proposition which had to be introduced over a period of time". He also said, "He (Mr.Plaister) advised me that every endeavour would be made to accommodate our tour passengers on the QF2 flight for the curation of the programme and it would be, of course, subject to space being avail- able", Mr. Baily said that no reference was made to 31 January but he recalled that there was a date given of 31 December, "but I did not abide by it because I said the programme had been brochured and was in fact due to operate through to the end of March". Mr. Bailey also said that he understood the problem was resolved "and that as an ongoing thing it was in fact being resolved", Senior counsel for the defendant put the substance of Mr. Bally's evidence to Mr. Plaister in cross-examination. Mr. Plaister remained firm in his recollection that the transfer to GF2 from QF96 was firm eventually to the end of January 1982. Nothing was done in respect of the later returns. He said that once the directive was issued that the passengers could not be accommodated on flight 96 after the end of January it ceased to be a problem. In the words he used, "that was the end of the matter". The common ground between the two witnesses is that discussions between them went on no later than September 1981; the probabilities are that they ceased earlier than that month. There was no problem about returns up to the end of December 1981. In the minds of the two witnesses there was no problem either about returns in January 1982. The essential differ- ence between them is that Mr. Plaister's recollection is that there was no possibility of doing anything about the three returns to take place after the end of January 1982. In Mr. Bally's recollection there was an ongoing attempt, altnough so far as he was personally concerned it came to an end by September 1981, to accommodate passengers on GF2 on Saturday in respect of the returns after 31 January, 1982. Light is shed on what re-arrangements were in fact made by the evidence of two other witnesses and documents kept by them. The two witnesses are Mrs, Cree and Mrs. Croucher, formerly Miss Shipway. Mrs. Cree 1S an employee of Cathay Pacific. She nad a schedule which was a computer print out which listed the detail of each of the tours in the programme. The print out showed the day of departure and the day of return. The purpose of it was to enable Mrs. Cree to make reservations on the airlines, two reservations on Cathay Pacific itself, one on Malaysian Airlines Systems and the fourth for the return flight by wantas. hrs, Croucher, who was employed by the defendant, had a counterpart of this document. Both Mrs. Cree and Mrs. Croucher made notations on their copies as events trans- pired. Mrs. Croucher's notations were in respect of the Qantas return flights, the only ones that concerned her. Her document is much clearer than Mrs. Cree's. That is no criticism of Mrs. Cree. Only a photostat 12. cepy of her notations could te found and they have suffered in the process. As best I can read them they are an conformity with Mrs. Croucher's notations which I propose to use as a guide as to what happened. In order that her notations may be explained I should mention that Mrs. Cree's christian name is Inez and her initials I.¢c. Both her christian name and her initials avpear in the documentation un the case. From Mrs. Croucher's document one can see the problem first arising in respect of a return scheduled to leave Singapore on Saturday, 25 July, 1981. The return was actually made on Friday, 24 July. But in respect of returns thereafter up to and including Saturday, 14 November, 1981, the notations show that all passengers were transferred to QF2 and were presumably carried on this flight on the scheduled Saturday. Furthermore, the notat- ions show that these changes were made and confirmed on either 23 June, 1981, or 24 June, 1981; no 13. question of wait listing was involved, After 14 November, 1981, there was only one further return before 31 December, 1981, namely that due to return by a flight leaving Singapore on 26 December, 1981. Mrs. Croucher's note shows that the passengers were due to leave on QF96, presum- ably on the Friday, but were wait listed on QF2 for the Saturday. That they in fact travelled on the QF2 on the Saturday is confirmed, so far as I can make out from Mrs. Cree's document, by her notation thereon, Just when the passengers were wait listed on Q@F2 and when tne booking became firm I am unable to say. The first return leaving Singapore after 31 December, 1981, was that departing on 9 January, 1982. As in the case of the 26 December departure Mrs. Croucher's entry shows that the passengers were booked on flight QF96 but were wait listed on GF2, presumably for the Saturday. Again they appear to have travelled on QF2 on the Saturday. In respect of the next January departure from Singapore on Saturday, 23 January, 1982, Mrs. Croucher's note 14, shows 25 January crossed out and 22 January, that is the Friday, substituted. It also shows that the passengers were to travel on QF96. There 1s no note made by her to suggest that these passengers were ever wait listed on QF2. That they in fact travelled on Friday, 22 January, and not Saturday, 23 January, 1s con- firmed by other evidence to which I shall later refer. Mrs. Cree's notation on her document coincides with that of Mrs. Croucher's, The critical departure was that scheduled for Saturday, 20 February, 1982. Both Mrs. Cree's document and Mrs. Croucher's document show that this return flight was changed from 20 February to 19 February and that the flight was to be QF96, Furthermore, Mrs. Croucher's notation, although written in very small print, plainly indicates that the change was made on 24 June, 1981, when a number of the other changes were made. The return due to leave Singapore on 20 March has above it in red the abbreviation "w/L." This is not in Mrs. Croucher's handwriting but indicates wait list. Underneath the entry is written "19" the 20 being struck out, and QFS6. I am unable to say whether the passengers travelled home on 20 March or 19 March, but the fact that the symbols "W/L" are crossed out would suggest that they must have come back on 19 March. The final return was that leaving Singapore on 10 April, 1982. It has above 1t the abbreviation "OK", The abbreviation 1s not crossed out, Underneath it are the letters and figures "QF2 KK- Inez 24/6". The symbol KK stands for confirmed. Thus on 24 June, 1981, Mrs. Cree confirmed with Mrs. Croucher that passengers leaving Singapore on 10 April, 1982, would leave on that day but on QF2 rather than on GF96. The documentation to which I have referred is, to a degree, at odds with both the recollection of Mr. Plaister and Mr. Baily. It is at odds with the recollection of Mr. Plaister because it does not suggest that all flights before 31 December, 1981, were confirmed in June 1981 for the Saturday return. The return leaving Singapore on 26 December, 1981, must have been under a cloud because of the need 16, to wait list the passengers. More importantly the documentation establishes that the second January return due to leave Singapore on 23 January did not leave on that day but left a day early on 22 January. According to the notation of both Mrs. Cree and Mrs. Croucher there was never any question of the passengers travelling otherwise than on the Friday. It was wrong, therefore, to say that the passengers were all confirmed on QF2 on the Saturday up to the end of January 1982, The documentation also establishes that on 24 June, 1981, Mrs. Cree, through Mrs. Croucher, was able to book the returning tourists for 10 April, 1982, firmly on GF2 departing Singapore on that day. Thus Mr. Plaister's recollection that nothing could be done for the final three returns, that 1s those occurring after 31 January, 1982, 1s wrong. The matter did not develop out of later events. The return was firmly booked some ten months previously on 24 June, 1981. The documentation is at odds with Mr. Baily's recollection because it does not suggest any ongoing 17. attempts to have the passengers transferred to QF2 on the Saturday. This does not establish conclusively that attempts were not being made, but 1t tends to suggest that, if they were, they were not meeting with any success. The documentation discloses that most of the problem was solved by 24 June, 1951. The only returns which were then left in a doubtful situ- ation were those leaving Singapore on 26 December, 1981, 9 January, 1982, 235 January, 1982, 20 February, 1982 and 20 March, 1982. But the returns due to leave Singapore on 23 January, 1982, and 20 February, 1982, were booked firmly, the latter certainly on 24 June, 1981, to come back on the Friday on QF96. There 1S some doubt about the return due to leave Singapore on 20 Marcn, 1982, because the notation concerning QF96 1s in pencil and the letters W/L which have been crossed out indicate that there was an attempt to wait list passengers on QF2 for this return. Although the evidence does not enable me to say so it 1s possible that the 18. attempt to wazt list these passengers arose because oi the complaints which were made in respect of the two previous tours, that 1s those due to return on 23 January and 20 February, 1982. I should say of both Mrs. Cree and Mrs. Croucher that they impressed me as witnesses. They are both young and in comparatively junior positions in their respective organisations. But they both displayed a degree of efficiency and knowledge about the system which impressed me. Mrs. Cree was particularly con- cerned about the change and she herself, although no doubt at a comparatively junior level, endeévoured to have representations made which would overcome the problem. It is against this background that Mrs. Speirs and Century Plaza Travel come into the picture. I should mention that it was common ground between counsel that Century Plaza Travel acted as an agent for the defendant so that the transaction was between the defendant and Mrs. Speirs. I have not turned my mind to that question. In the light of the common 19. ground which there 1s between counsel about the matter I do not find it necessary to do so. Mrs. Speirs had a copy of the brochure. On 17 August, 1981, she paid a deposit of $50 for the tour. On 18 August, 1981, her booking was confirmed, the letter to her from Century Plaza Travel of that date saying, amongst other things, that a reservation had been maae for her in respect of a tour, "Saturday, 6 February, W. Tours 'Discovery Holiday 526' - 16 days/14 nights to Hong Kong/Peneng/ Kuala Lumpur/Kuantan/Singapore." The booking was confirmed by the defendant on 20 August, 1981. At the same time a change to the itinerary was advised. This resulted in there being one more night 1n Hong Kong and one less night in Penang. Nothing turns on this. On 28 November, 1981, the defendant invoiced Century Plaza Travel for the tour. The total price was to be $1,648. On 3 December, 1981, Mrs. Speirs paid what was due. Either on that day or a day or so later Century Plaza Travel accounted to the N lo) ° defendant for the payment. On 9 December, 1981, Cathay Pacific issued tickets for all legs of the tour including the return. The return was booked on Friday, 19 February on Gantas flight 96. The tickets were not then sent to Century Plaza Travel to be given to Mrs. Speirs, apparently because the defendant had to be satisfied that at least ten persons would travel on the tour in order to obtain the benefit of the lower air fares that are payable for a group of ten or more. The tickets, other documentation and an itinerary were sent to Century Plaze Travel on or about 15 January, 1982. Accompanying them was an invoice which said, amongst other things, "Reduced land cost due to flight rescheduling". The invoice indicated that a refund was payable. Miss Gollan, an employee of Century Plaza Travel, was handling tne matter. She did not understand the invoice and rang the defendant to find out what it meant. She was advised that tne Singapore stop over had been reduced by one night from three nights to two nights and that the passengers were due to return on Friday evening, 21. 19 February rather than Saturday evening, 20 February. Neither Century Plaza Travel nor Mrs. Speirs had heard anything of the reduced Singapore stay or the earlier return until this time. Mrs. Speirs was advised of the position on or about 22 January, 1982. She was told that Mr. Bandy who 1s the proprietor of Century Plaza Travel had taken steps to try to have the extra night restored. She was told that if 1t were not she would receive a refund. The day before, 21 January, 1982, Mr. Bandy had telexed the defendant in strong terms protesting at what had happened. Mrs. Speirs was content to accept the cnange. She may have thought she had no other choice, The evidence does not disclose what the position was. During her absence the defendant wrote to Century Plaza Travel apologising for the inconvenience caused by the reduction of the tour. The letter acknowledged that the advice of the change should have reached Century Plaza Travel earlier. Any embarrassment caused was regretted. On 2 June, 1982, tne defendant wrote both 22. to Century Plaza Travel and to Mrs. Speirs again apologising for what had happened. It was said that the change in itinerary "was a result of Airline rescheduling". An ex gratia payment of $100 was made. It should be observed in passing that although, in a sense, it was correct to say that the problem was caused by aircraft rescheduling, this had occurred in June 1981 long before Mrs. Speirs had booked. The letter 1s open to the inference that the rescheduling had occurred at a recent time. If it nad occurred at a recent time, tne position may have been covered by condition 6 on the back of the brochure which 1s headed "Tour Changes". But counsel for the defendant expressly declined to put any submission based on that provision. That was no doubt because the rescheduling had occurred long before the booking. In my opinion counsel was right in the stand which he took. No problem would have arisen if the defendant had made 1t clear to travel agents, including Century Plaza Travel, that there was a problem about returns at least after 31 December, 1981. in the light of a l¢Z7s 23. the history which I have recounted this could have been done, if necessary on a provisional basis, long before 17 August, 1981, when Mrs. Speirs booked the tour, Particularly is that so in the light of the fact that Mrs. Croucher's documentation Shows that the return on Friday, 19 February, 1982, was firmly booked on 24 June, 1981. Further evidence to which I should refer arose out of a complaint made by the Consumer Affairs Bureau (N.S.W.) on or about 4 January, 1982. It had received complaints from two passengers booked on the tour scheduled to depart earlier tnan Mrs. Speirs' tour. It was scheduled to leave on 9 January, 1982, and to return on 235 January, 1982. The passengers had complained of the need to return a day early and of a snortened stay in Singapore. It will be recalled that I earlier said that I was satisfied that the passengers on this tour did return a day earlier. The complaint was made to a Mr. Byrne. He brought it to the attention of Mr. Woodcock, the 24, manager of the operations section. Mr. Woodcock was unaware of tne problem. The inguiries he made led him to say tnat the problem was due to the rescheduling of an aircraft, a statement which the Consumer Affairs Bureau appears to have accepted, at least at that tame. Mr. Woodcock gave instruc- tions, so he said, that all passengers on later tours were to be notified of the problem. Either his recollection is at fault or his instructions were not carried out because there was no particular notification to Mrs. Speirs of the change. The terms of the invoice referring to "reduced land cost" would suggest that 1t was sent on the basis that she knew. In fact, as I nave said, neither Century Plaza Travel nor she knew anything of the change until the inquiry was made as a result of the sending of that invoice. Other evidence which I should mention is that of a Mr. Mitchell of Qantas and a Mr. Holloway who was in the employ of the defendant. I have taken their evidence generally into account but do not find it necessary to refer to the detail of it. Finally, in relation to the evidence, I should mention that Irs. Speirs does not seem to have been 25. at all upset by the change. The tenor of her evidence was that she was quite satisfied with the tour and appears to have engoyed it. If matters had been left to her she would not have taken any action or done anything about it. However, Mr. Bandy took a most serious view of the position, His telex to the defendant is in the strongest terms. Mr. Baily was obviously concerned about the change at an earlier stage but this may have been more because the terminator flight no longer went to Melbourne rather than because of any shortening of the tour itself or the stay in Singapore. Mrs. Cree was concerned about it and herself endeav- oured to do something to restore the position. Two passengers on the earlier tour were also concerned at the shortening. It 1s now appropriate to state my findings of fact. They are: i. Notice of the change from the Saturday to the Friday Singapore departure was given the defendant by Qantas in June 1981. 2. By 24 June 1981, all departures between August and November 1981 inclusive had been booked firmly on GF2 to depart on the relevant Saturday. Passengers for the one remaining return in 1981 were wait lasted for the Q@F2 Saturday flight. I am unable to say when the booking became available, but I would infer that this occurred well before the end of the year. In like case is the departure scheduled to leave Singapore on Saturday, 9 January, 1982. The passengers were booked on QGF96 but wait listed on QF2, 3. On 24 June 1981 also, the final departure on 10 April, 1982, was booked firmly to return on that gay (the Saturday) on GF2. 4 Again on 24 June 1981, the departures scheduled to leave Singapore on Saturday, 23 January and 20 February, 1982, were rescheduled to leave on Friday, 22 January and 19 February respectively. The passengers were never wait listed on QF2 to depart on the Saturday. 5. I am unable to make any firm finding concerning the departure scheduled to leave Singapore on Saturday, 26 March, 1982. t is unnecessery to do so. 27. 6. Although Mr. Plaister gave his evidence honestly, I do not accept his evidence that there were,by early July 1981 or at all, firm statements on behalf of Qantas that all departures up to 31 January, 1982, would be carried on the Saturday on QF2, and that thereafter all departures would have to leave on the Friday on GF96. The documentation 1s against his recollection being accurate 1n these respects, 7. I do accept Mr. Baily's evidence that until about September 1981 he mentioned the matter from time to time to Mr. Plaister in an endeavour to main- tain the original Saturday departures 1n respect of all tours. But I am not able to say with certainty how the matter was left. I think the probabilities are that in the minds of the two men, the problem was solved, although not in the way Mr. Plaister recalled, to a degree in the early stages and the matter was then overlooked. Mr. Baily ceased to exert the pressure he applied when the problem first arose so that nothing was done about the later cepartures which, on 24 June, 1981, had been booked to return on the Friday. As earlier mentioned, the schedules kept by Mrs. Cree and Mrs. Croucher tend to show, because of the absence of any reference to wait listing on GF2, that Mr. Baily's efforts were not leading very far. 8. So far as the records of dgantas and tne defendant disclose, the tour originally intended to leave Singapore on Saturday, 20 February, 1982, was rescheduled to depart on Friday, 19 February, 1982. That change was made on 24 June, 1981. There the matter stood. The fact that the change had been made was known to Mrs. Croucher and to other employees of the defendant. In the light of Mr. Baaly's evidence, I do not accept that 1t was in fact known to him, but as a matter of proper business practice 1t ought to have been, 9. The defendant did not notify any of its agents of the change. In particular 1t did not notify Century Plaza Travel. 10. The alteration had already been made when Mrs. Speirs made her booking on 17 August, 1981. The 2g. position was unchanged when sne paid for the tour on 3 December, 1981, and when Century Plaza Travel on that day, or a day or so later, accounted to the defendant for that payment. At the time she paid her money Mrs. Speirs expected to leave Singapore on Saturday, 20 February, 1982. 11. On 9 December, 1981, the defendant caused tickets to be issued for Mrs. Speirs' flights. These included a ticket entitling Mrs. Speirs to travel to Sydney on GF96 departing Singapore on Friday, 19 February, 1982. 12, The tickets ana an itinerary reached Mrs. Speirs in the middle of January 1982. It was then that she learned for the first time of the shortened tour. The first question is whether there is, for the purposes of s.58, a material difference between the tour for which Mrs. Speirs paid and thet which she in fact had. I leave aside, for the purpose of dealing with this submission, any question of intention. Both counsel were agreed that the test 1s an objective one. I share their common view. But I think 1% material, in order to come to a conclusion, to take 30, into account tne various views which there are in the evidence as to the materiality of the difference which there is. On the one hand Mrs. Speirs did not apparently consider there to be any problem about what happened. On the other hand a travel agent, presumably experienced in the industry if one has regard to the number of transactions through the two receipt books which are in evidence, considered the matter was serious. The concern in the defendant's office itself shows this to be the case as does the con- cern of the Consumer Affairs Bureau on behalr of two other passengers. In the end one has to make an assessment of the situation as best one can. Obviously a question of degree 1s involved and an evaluation 1s necessary. I need to be satisfied to the requisite standard that the difference was material, that is, the matter is an element in the offence which is charged and must be proved beyond reasonable doubt. Having reflected on the matter I have reached the clear conclusion that the difference was 31. material. If one looks at the brochure which contains the various Discovery Tours which were then available one can see highlighted at the top of each page the length of the tour stated in days and nignts. Those who formulatea the brochure thought tne le-.gth of the tour important. The overall period is, 1n round terms, fourteen 24 hour periods or a little more, The reduction was to thirteen 24 hour periods or a little more. Furthermore, a stay of tnree days and three nights in Singapore was curtailed by one 24 hour period, Many people will have different reasons for thinking that a reduction of one day was or was not material. To some 1t may have suited tnem to return e day earlier. But one must bear in mind that the reservation was for a tour of the advertised length. Some would have been attracted by the fact that they would be away from Australia for a full 14 days. Others would have regarded it as important that they have three full days, rather than two, in Singapore. They may have felt that they did not have enough time to see 1t properly or to shop adequately in wnat 1S recognised as one of the attractive shopping places in the East. Yet others, on hearing of the reduction, may have wished they had been anformed before they booked or paid their money so that they could nave reconsidered their decision to take Tour 526 rather than a different one. The reasons will be many and varied and the impact of the problem on people will provoke diff- erent reactions. But 1n all the circumstances I have a clear conviction that the difference was material, The first submission made on behalf of the defendant 1s accordingly rejected. In the course of the argument that occurred in relation to the second submission mention was made of whether, 1n addition to having to establish the intent for which the section provides, tre informant had to establish also mens rea, 1.e. a guilty mind on the part of the defendant. I was referred to the 33. general principles wnich are stated in a number of cases, the most recent of which 1s Cameron v. Holt (1980) 142 C.L.R. 342, Of more direct relevance are decisions of this Court dealing with the problem in relation to certain of the provisions of Division 1 of Part V of the Act. The only one of these to which I need refer 1s Darwin Bakery Pty. Limited v. Sully (1981) 36 A.L.R. 371, a decision of a Full Court of this Court. There the Court was concerned with @ submission that the liability imposed by s.53 of the Act was strict and that 1t was not necessary for a prosecution to prove a guilty mind. The submission was upheld. The Court said (p.376): "While it 1s relevant to see Pt V of the act as a piece of consumer protection legislation, we do not regard that as sufficient of itself to displace the ordinary requirement of mens rea. Section 55 does uSe language comparable in certain respects to that considered by the High Court in Cameron v. Holt, supra, and there can be no doubt that s.79 prescribed a penalty, andeed a very heavy one. Nor can there be any doubt that a contravention of a provision of Pt V, other than s.52, results in a 'conviction'. But we are of the opinion that the existence of s.85 in regard to contraventions of Pt V of the Act points to a policy on the part of the legislature tnat in the absence of one of the defences there mentioned the liability imposed "by S.535 18 strict. More particularly, in the case of s.53(e), it is umnecessary to establish knowledge of the falsity of the statement or reckless indifference as to its truth or falsehood. The range of defences in s.85 1s wide - reasonable mistake; reason- able reliance on information supplied by another; contravention due to the act or default of another or to an accident or some cause beyond the defendant's control where the defendant has taken reasonable precautions and exercised due diligence. There are particular defences in the case of publication of an advertisement and in the case of goods not complying with a standard. In addition, s.85(6) confers upon the court a general exculpatory power where a person other than a body corporate has acted honestly and reasonably and ought fairly, in all the e1rcum- stances of the case, to be excused. The breadth of these defences nardly accords with a situation in which liability depends in any event upon establishing mens rea. Rather, it assumes a liability arising from conduct objectively measured, but which may be avoided by the proof of matters peculiarly within the knowledge of the defendant." A question arises as to whether I should apply this approach in relation to an offence which plainly involves a mental element in that it will not be committed unless the defendant had tne requisite intent. In my opinion the principles stated by the Full Court have equal application to an offence under s.58. What the prosecution must establish beyond reasonable doubt is the existence of the intent for wnich the section 35. provides. If that intent is established no further mental element is involved. Nevertheless 1t is the submission of senior counsel for the defendant that the prosecution has not established the requisite intent. In his submission it 1s necessary, if the prosecution is to succeed, for it to be established beyond reason- able doubt thet the defendant by one or more of its servants or agents, actually adverted, at the time it accepted Mrs. Speirs' money early in December, 1981, to the circumstance that Mrs. Speirs was paying her money for a 14 day tour, but would, and was intended to, receive instead a 13 day tour. In the submission of senior counsel for the prosecution it was unnecessary for the prosecutor to establish more than that, at the time the money was accepted, the defendant, by its servants and agents, untended to provide a 13 day tour. It was not necessary that those servants and agents should be shown, as well, to have intended, at tne time of the acceptance of the money, to provide a tour which would be materially different from that for which they knew the money was paid. il Alternatively 1t was submitted that I should infer, because no notification of the shortening of the tour had been given Mrs. Speirs at the time she paid ner money, thet there were those in the defendant who knew that she was paying for the 14 day tour and who accepted her money on that footing. The fact that those servants and agents may not have been the same as those who effected her bookings, tnus providing her with a 13 day tour, was said not to be to the point. Looked at objectively the defendent by a variety of servents and agents was, so it was submitted, shown to have .nad the requisite intent. A further alternetive submission was that I should fine. the resuisite intent because tne evidence established that the defendant's servants and agents had acted with sucn reckless indifference that it was apparent that the defendant did not care whether the money was acceptea for something whicn was the same or materially different from that for which it was paid. I think these various ways of putting the prosecution's case throw up tne difficulties which there are in accepting any view of the proper construction of tne section other than that contended for by senior counsel for the defendant. He described the section as one to prohibit cheat- ing 1n a commercial context. In my view that is an apt description of it. What must be establisned 1s tnat the defendant corporation adverted to the gravamen of the matter which the section makes an offence, Since it can only form an intention through the mind or minds of its agent or agents, the offence will not be Committed unless it 1s proved beyond reasonable doubt that one or more agents turned his or their attention, at the time of tne acceptance of a customer's mcney, not only to what 1t was that would be supplied but also to whether that was materially different from that for which the money was being accepted. Only if they knew that what was or would ove supplied was or would be materially different from that for wrich the money was accepted, will the requisite intention be established. Support for that view 1s, in my opinion, to be found in the judgment of Smithers J. in Reardon v. Morley Ford Pty. Limited (1980) 33 A.L.R. 417 particularly at p.424, That was a case under s.56 dealing with bait advertising. The provision in question was sub-sec.55(1) which, like s.58, has as one of its elements the intent of a corporation. It follows that 1t is not sufficient, in my opinion, to establish, as the evidence here clearly does estaplisn, no more than that at the time the money was accepted the defendant by its agents intended to provide a 13 day tcur. Vhat must be established adaitionally is that the defendent by the same agents, or by other agents privy to the knowledge that the tour to be supplied was intended to be a 13 day tour, accepted the customer's money knowing 1t was paid for a 14 day tour. Otherwise the corvoration is not shown to have intended to supply something whicn was materially different from that for wnich the money was paid. In order that a corporation may be shown to have had the requisite intention, those acting for 1t must be shown to have been in a position to apply their minds to the question of whether what was to be supplied would be something materially different from that for which the customer's money was accepted. How can one intend to supply something different from that for which one accepts a customer's money, 17 one does not appreciate wnat 1t is for which the customer's money 1S being valid? The question 1s whether I should be satisfied that persons acting for the defendant did have the requisite intention. Undoubtedly Mrs. Speirs paid Miss Gollan of Century Plaza Travel for a 14 day tour. The booking advice dated 3 December, 1981, sent by Miss Gollan to the defendant on that day or a day or so later designeted the tour which was paid for as "Discovery Holiday 526 16 days". The advice certainly went to the defendant but to which of its servants or agents I am unable to say. Undoubtedly it led to the making by the defendant of the various reservations on 9 December, 1981, including the reservation of a seat for Mrs. Speirs on GF96 departing Singapore on 19 February, not 20 February, 1982. But tne critical question 1s whether I snould be satis- fied beyond reasonavcle doupnt thet servants or agents of the defendant, or any one of them, adverted to what was happening 1n tne sense of forming an intention positively to supply a tour materirally different from that for whicn the pay- ment was accepted. If tnis were a civil case and the standard of proor were on a balance of protabilities, one might conclude that an inference should be drawn that the reguisite intention was establisned. But the case 1S a criminal one. The standard of proor 1s proof beyond reasonable doubt. Having reflected on tne matter, I am unversuaded that the vrosecution has established this essential natter. 41. I should add that I have taken into con- sideration, in this respect, the agreement of counsel that Century Plaza Travel acted tnroughout as an agent and not as a principal. Thus it may be that Miss Gollan or Century Plaza Travel was acting as the defendant's agent when Miss Gollan accepted Mrs. Speirs' money on 3 December, 1981. Assuming that to have oeen so, the prosecution's case is no further advanced. Miss Gollan accepted the money for a 14 day tour end intended Mrs. Speirs to have such a tour. That 1s the purvort of her booking aavice,. She knew nothing of the problems which then existed in relation to the date of departure from Singapore. The totality of the evidence tends to suggest that this unfortunate problem was not brought about by any deliberate or antended conduct on the part of the defendant. It was caused by its failure to notify Century Plaza Travel of the problem before Mrs. Speirs' booking was made and her money accepted. what happened was that Mr. Baily tnought that he could overcome tne problem. To a sucstantial degree 4a, he did. But through oversight ne neglected to maintain the pressure he originally exerted on Qantas. And, 1n case his efforts failed, he neglected to have the defendant's agents advised that there was or might be a problem in relation to tours returning after the end of 1981. I am sure he would be the first to concede that he should have seen to it that agents were notified so that people such as Mrs. Speirs relying on the brochure would not be misled. Thus the case is in the realm of oversight, neglect and carelessness. It is not in the category of positive intent to foist on a customer somethang materially different from that for whicn his money has been accepted. The third alternative submission reliea upon by the prosection is based on alleged recklessness and indirference of the defenaent in acceoting the money so as to indicate that it did not care whether the tour was to be for 14 days or 135 days. I think there is a question as to whether the requisite intention could be established in this way. I express no view. I do say, however, tnat if reck- lessness and indifference could establish the 43. "t requisite intention, they would need to be of a high order. I am not satisfied that what happened here was due to more tnan neglect or carelessness falling far short of recklessness or indifference. I do not wish to minimise at all the defendant's failure to notify its agents of the problem when it became aware of 1t. But I am certainly not satisfied that its default in this respect amounts to the gross misconduct alleged by the prosecution. It was said by senior counsel for the prosec- ution that to construe the section as I believe it snould be construed would be to defeat its obgect. But that submission is of no help; 1t is 2 auestion of considering its terms and arriving at its true meaning. That 1s what I have endeavoured to do. In the same vein senior counsel said that my con- struction of it imported an additional mental element into the offence which is not there. But again the question is one of the construction of the words which the draftsman has used. The gist of the offence is to intend to supply something materially differeat bk, from that for wnich a payment 1s acceptea. It is that intention which, in my opinion, is absent from the prosecution's proof in this case. My conclusions make it unnecessary to consider the defences based upen the provisions of s.85 of the Act. I express no vi'.« on the considerations which they raise. I she ald also mention that reference was made in the argument from time to time to s.84 of the Act dealing witn the fixing of a corporation with the intentions of its servants or agents. I have taken the section generally into account in dealing with the various submissions which have arisen for consideration. For the reasons I nave given 1t is my opinion that the information should be a1lsmissed. However, senior counsel for the prosecution has asked me, if that should be my view, not now to enter judgment to Bive effect to my conclusion, but to state a case or reserve a question or questions for consideration by a Full Court pursuant to sub-sec.25(6) of the Federal Court of Australia Act 1976. The case or the questions would raise for consideration by a Full 45, Court the proper construction of s.58 of the Act in the context of this case. The course proposed by the prosecution 1s strongly opposed by the defendant. The reason for tne recuest 185 that if I give effect to my conclusion by dismissing the information, the prosecution will have no right of appeal, my gudg- ment amounting to an acquittal of the defendant on a criminal charge; Thompson v. Mastertouch TV Services Pty. Limited (1978) 19 A.L.R. 547 and Australian Building Construction Employees etc. Feaeration v. David Syme & Co. (1982) 40 A.L.R.519 at pp.520-521. I did not say what view of the request I would take in the event that my decision was adverse to the prosecution. I said that I thought it better to publish my reasons and proposed conclusion which I now do. I will allow an adjournment so that the parties and their legal advisers may consider wnat I have said. if, when the matter 1S again in the list, the request is to be pressed, 1t will assist if the case which the prosecution wishes stated or the questions which it wishes reserved for a Full Court be formulated and previously notified to counsel for the defendant. I 46, %, do not wish to pre-empt my decision on the request, but for the assistance of the parties I do say that it is unlikely that I will form- ulate any question for a Full Court which is a question of fact rather than of law. pages ae. '7s LB rn judgment hereto! 7 ve Me wat ante Mr Justice Sheppard. 3 \r \\n ssociate Dated 2b fags 4&3 47,