CATCHWORDS Trade Practices - Misleading and deceptive conduct - False representation by company in contract of purchase - Claim for amount of loss or damage suffered by reason of contra- vention of s.52 - Liability of managing director as an aider and abettor to the contravention - Liability as a "party to the contravention" - Construction and operation of s.75B - Meaning of any person "involved in" the contravention. Trade Practices Act 1974 ss. 52, 75B, 82 Crimes Act 1914 s.5 MILES RICHARD YORKE AND SUE ELIZABETH YORKE v. ROSS MELVILLE LUCAS No. G11 of 1983 Bowen, C.J., Lockhart and Beaumont JJ. Sydney 23 September, 1983. IN THE FEDERAL COURT OF AUSTRALIA ) ) SOUTH AUSTRALIA DISTRICT REGISTRY ) No. Gll of 1983 ) GENERAL DIVISION ) - ON APPEAL from a decision of the Honourable Mr Justice Fisher made 16 September, 1982 and 10 February, BETWEEN: MILES RICHARD YORKE and SUE ELIZABETH YORKE Appellants AND: ROSS MELVILLE LUCAS Respondent ORDER JUDGES MAKING ORDER: Bowen C.J., Lockhart and Beaumont JJ. DATE OF ORDER: 23 September 1983 WHERE MADE: Sydney THE COURT ORDERS THAT: - 1. The appeal be dismissed. 2. The appellants pay the respondent's costs of the appeal. tn a TRALIA IN THE FEDERAL COURT OF AU SQUTH AUSTRALIA DISTRICT PEGISTRY ~wewr ee GENEPAL DIVISION No. Gll of 198 LeS) ON APPEAL from a single Judge of the Federal Court of Australia BETWEEN: MILES RICHARD VORKE and SUE ELIZABETH YORKE Appellants AND: 6 wa Ww MELVILLE LUCRS Respondent COR&aM: Bewen, C.J., Lockhart and Beaumont, JJ. DATED: 23 September, 1983. REASONS FOR JUDGMENT THE COURT: This appeal raises imoortant questions as to the construction and operation of s.75B or che Trad: Draczices Ast, 21974 '"thne Act' , de The appellants commenced proceedings in this Court claiming the amount of the loss or damage which they allegea was suffered b 'g them by the concuct or the respondent Ross Melviile Lucas and three others - Poss Lucas Pty. Comated., Treasureway Stores Pty. Limitec '""Tréasureway") ana Zevin Thomas Mahoney. The conduct was sara to ctorcravene 3.52 of the Act. Tre claim 'fcc damages 15 aaae cursuant to s.82. Under that provision, & serscr wns s.uflfctrsz less damage by conduct of another person that was done in contravention of a provision ci Part V may recover the amount of the loss or damage not only against that other person but also acainst anv person 'anvolved an" the contravention. A person so "involved" ais defined in s.75B of the Act. The question here is whether Mr. Lucas was a person "involved in" contraventions by the other parties mentioned. The contraventicns arose cut of the sale by Treasureway of its scetail record business to the appellants through the agency of Ross Lucas Pty. Limited, a real estate and business agent. Mr. Lucas 1S managing director of that last mentioned company. Mr. Mahoney 1s a director of Treasurevay. Mc. Lucas and Mr. Mahoney were alieged te have aided, abetted, counsailed or procurec or to have been knowingly concerned in. or party to, the concuct in question ana thus, by virtue ot s.75B, to be lianla ror the amount or the appellants' loss or damage as cersons 'involved in" the contravention. The proceedings were heard by a single Judge of this Court (Fisher, J.) who gave three 'cudqmenrts. Yas Honour took this course, at the request of tne parties, dad wuesticns relatina <9 this C A. o Decause the i1ssues inc ci i) Court's jurisdiction to 2 y yuasment adainst "Mec. Mancnev ana Mr. Lucas as individuals anc ic sscurre Preasuciwary arc Mr. Mahoney to indemnity Ross Lucas Pty. Limitea and Mr. Lucas. The validity or s.75B was challenged. The High Court had not delivered iudagment in Fencott v. Muller (1983) 16 A.L.R. 41 when the proceedings were before Fisher, J. it a iM was thought by the parties that the High Court's judgment in that case would probably resolve the constitutional aduestions which were said to arise in this case. It 1s not necessary for present purvoses to distinguish between the chree judgments of Fisher, d. Hrs Honour concluded chat Treasurewav had ou =] fu torches i) a in conauct poth misieading and deceptive by al Lan in) ely representing 1n the contract of purchase between itself as vendor and the appellants as purchasers that the averacde weekiy turnover of the business during the lél--ant seéciod was $3,500.00. His Honour said that it followed. as a necessary consequence, that a representation that che aross profit of the business was $1,290.00 ver weesx was alse misleaaina. He found tnat the appeliant, Mr. Jforke, was induced by that conduct to enter into the contract of purchase. His Honour heid that Ross Lucas Ptv. Limited had also contravened s.52 of the Act by acting as agent for Treasureway, but that its contrcaventicn was unwitting. dis Honour assessed the loss o2f the acpellants at 372,000.00, ordered that there be iudoment for the apreliants ain chat sum aqdainst Treasureway and Ross Lucas Ptr. Limitec, but erderea that execution on tre iucament against xcss Lucas cs Pty. Limited be stayed until further order, that 1s, until such tame as the Court could determine that company's right, 1f any, to an indemnity from Treasureway and Mr. Mahoney. His Honour accepted that 5.52 involved no question of intent on the part of Ross Lucas Pty. Limited, relying in particular upon the remarks of Gibbs, C.J. in Parkdale Custom Built Furniture Pty. Limited v. Puxu Ptv. Limited 1982: 42 A.L.R. 1 (at p.5). Fisher, J. held that Mr. Manonev aided and abetted or, alternatively, was knowingly concerned in the contravention by Treasureway, and, by virtue of s.75B, was a person involved in that contravention and therefore liable in damages pursuant to 5.82. He entored dJudaqment against Mr. Mahoney in the sum of $72,000.00. His Honour found. "There ais no doubt that Mr. Lucas was acting exactly in accordance with the instructions and anformation given to him as managing director of Ross Lucas Pty. Ltd. by Mr. Mahoney. He sufriciently carerul to obtain ar Mahoneyv's written conrismat: on least three occasions 32 the turn figure and he heard Mr. Mancney srailiy conficm if te Mr. Yorke. aren he returned frem an-—overseas irip ne askea My. Mahorey ror an up to Gate Srsi2rt Tiqure and he souant ana or©tainea conrtirmation chat the weekiy cturncver was $3,500 serore he resumed nis efforts to sell che business. My caltimace finding was that Mr. Lucas conscientiously and carefully passed on to Mr. Yorke the anstructions and intormations he received from Mr. Mahoney and this fandinag is not disturbed bv the evidence aqiven by Mr. Mahoney.' The position then is and I rind that Mr. Lucas was not aware and had no reason to suspect, that the information concerning turnover which he relayed to Mr. Yorke was incorrect. He made all appropriate enquiries from Mr. Mahoney and was entitled to be satisfied by the answers he was given, particularly as the turnover fiqure which he was supplied yeceivec some suoport from the actounts or Treasureway. He ard not know of or Suspect, and had no ¢ceason to suspect. the anaccuracy of the turnover rigures and in no way could it pe said that he acted recklessly or deliberately abstained from asking questions or pursuing enquiries." Although certain or these findings were challended by the appellants, we are satisfied that thev were open to his Honour. We are not persuaded that he iell into error in makindg thos? finding uw His Honour said that in his opinion the authorities established that it must be proved tnat Mr. Lucas was aware er should have been aware or the relevant facts before he could be said to have been involvea in the rtontrarention. His Honour found that knowleace of falsity of the information conveyea as to the turnover of the business was not necessary to establish a contravention ov xzoss Lucas Pty. Lamited, but that actual or constructive knowledge was necessarily involved in establishing a contravent1on by a person who is alleged to have participated as an aider or abettor. His Honour found that Mr. Lucas did not aid, abet, counsel or procure the contraventions and was not knowingly concerned in, or party to, the conduct which constituted the centravention whether it pe the cotaucc cf Treasurexay cor Ross Lucas Pry. Limi a fu n claims against Mr. Lucas. The appellants appealed to this Court from that portion of the judgments of Fisher, J. wnich dismissed the application of the appellants fer recov lity yy against Mr. Lucas. It as that appeal which was heard oy us. The only question argued on the appeal was whether Fisner, J. was correct in hoiding that Mr. Lucas waz wat lisanle under s "58 as a verson involved in the tont¢caventicn. The appellants submitted that Mr. Lucas was involved in the contravention of Ross Lucas Pty. Limitec by reason of s.75B which provides. "7S5B. Ac tg eference ain this EN person involved in & ctontrave 2 provision of Part IV or Y snaii re £280 as a reference 20 Aa cerscon wno - (a) has aided, abetted, counselled or procured the contravention: (b) has anduced. whether by threats ox wvromises or otherwise, the contravention; (c) has been in any way, darectly or indirectly, knowingly concerned in- or party to, the contravention; or (d) has conspired with others to effect the contravention." Some or che lancuage of 5.75R was apparently derived from s.5 of the Crimes Act, 1914(Cth.). It provides that any pecson who "aids. apets, counsels, or procures, or by act or omission 1s in any way directly or indirectly knowingly concerned in, or a party to," the commission of any offence against any law or che Commonwealth shall be deemed to have committed that offence and is punishable accordinglv. The purpose or 5.7 ei) tu . unscfar a lates ta ta it £ a sub-s.8Z(1), 18 to extend tne liapility for loss or damage to persons who are found in certain accessory situations in relation to the corporate contravenor of Part IV or Part or the Act. It ius to be noted tnat vording similiar to that contained in paras. (a). (D), .2 and ca oF 5.°5B is user un 3ss.76, 78, 80 and 30AA. The curpose varies sligntly in these other sections. Section 76 provides for the umposition of a pecuniary penalty on a person who has contravened or attempted to contravene a provision of Part Iv. It also provides for the imposition of such a penalty upon persons who are found in the same accessory situations as are specified in s.75B. Section 77 provides tnat bthe Minister or the Trade Practices Commission may institute proceedings in the Court for the recovery of the penalty erovided for by s.76 This if 3&3 TivLi crocecding. iecticn 7a crovides tnat criminai eroceedings ago not lie against 4a b person that that person nas contravened or vy reason onl Me attempted co contravene a prevision of Part IV or is a person in one of the accessory situations. Furthermore, sub-s.85(6}) provides that where in any proceed:ndgs under Part VI against & oersan other than a pocy corporate, it appears to the Court that the person has or may have engaged zn conduct in contravention of a provision of Part IV or in Br. a) .cr ian (e- oor my roncuct veaferred (3 in para. put that the person acted honestiy ana rceascnaoly anc sucht ie} Tairiy to be excused, tne Court may relreve nim from liability for penalty or damages. Section 79, which may be crontrastaa v1rin =.7#&, proviaes chat a person who contravenes a srovision of Part 7 ether than s.52 2s guilty of an surissable on comviction by 4 faicly supstantiai Fine wnien varies according to wnether tne contravenor 25 2 2cay corporate cr natural person. It will be noted that s.79 does not itself reach out to cover persons in an accessory situation (but cf. Crimes Act, 1914, s.5 and see The Queen v. The Judges of the Australian Industrial Court; Ex parte €.L.M. Hoiainds Pty. Limited (1977) 136 C.L.R. 235 per Mason, J. at p. 246). Section 80 provides that the Court may grant an unjunction restraining a person from engaging in conduct that constitutes or would constitute a contravention of a provision of Part IV or V or attempting to contravene such a provision. It also provides that the Court may grant such an injunction against a person who 15 i1n an accessory situation. Section 80AA may be compared with 5.80. It was submitt2a tnat Mr. Lucas aided or abetred the contravention (para.75Bla)), alternatively, 21t was said, he was "party to" the contravention tpara.75Bic)). We turn tirsst to the supmission as tc ging ana ip abetting. The expressions in s.75B aldea' ana "anettea", like the expressions "counselled", "procured" and "conspired with others", are well known to the criminal law. Generally "aiding" and 'abetting" sugqest presence at tne scene of the offence. In R. v. Giennan +13 W.N. (N.S.W.) 609, the Couct of Criminai Aspeal in Nev South Wales (Herron. C.d., Mason, J.A. and Taylor, g.: said .at p.613): 10. "At common law mens rea was an essential element ain the conviction of an aider and apettor. This was a consequence Tleowing .rin the existence of mens rea as an element in common-law offences and the concept that the aider and abettor was a participant in the substantive common-law offence who did not commit a separate and independent offence. The application of the doctrine of aiding and abetting to statutory offences involving no element ort intention 1s not without its difficulty, for that doctrine, as we have said, had its origin im ocommen-law errences involving mens ré3. its purpose was to laentify participants. other than the actual perpetrator, with the commissicn of the common-law ottence. so as to convict them or that offence. As the offence involved an element of intention 1t was necessary to show that they were participants and that, as such, thev were parties to the intention which was an element in the offence. In the aoplicatzion or the doctrine to a statutory offence which dees not involve an element of intention, 1t 1s necessary to establish participation by the defendant in the offence, but in circumstances in which the existence of an antenticn on the c r perpetrator is immaterial t> zuile. b But 1t does not follow that knowledge or the facts necessary to constitute the statutory offence 1s not a material element ain the conviction of an aider and abettor. Notwithstanding the absence or a requisite intention as an ingredient in the ffence, it is of e is necessary cto show that the asrendant participated in the commission of an offence. Where the offence consists of the doing of an act which viewed in zsciation 15 innocent. put whictn, when done in particular circumstances. of bry a Particular person, >ecomes a prohibited act, particzsation in the offence is not estaplisned by proving that the Gefendant a55iste ce encouraged the doing of the ace in re for him the n currence. ll. There 1s a2 large body of judicial authority in England which supports this proposition and which asserts that a person cannot be convicted of aiding and abetting the commission of an offence unless he knew the facts which must be proved to show that an offence has been committed ..." We agree with those remarks. In our view, they are pertinent here. We also agree with the rcliowind passage tt ns ro) no w 'oO Ld Lords 236-7). m the an Johnson v. Youden was cudamenct of Lord Geddard C.J. in Jennson v » £5u a 1) n "Before a person can pe convicted of aiding and abetting the commission of an offence he must at least know the essential matters which constitute that offence. He need not actually know that an offence has been committed. because he may nov xncw that che facts constitute an offence and ianorance of the law 1S not a defence. If a person knows ail the facts and 1s assisting another person to do ctain things. and it turns out tn acing sf mnese things con \ perscn who = aldaing and < because to ailiow fey ali those facts but I did not know tha D n w raunod >a wo Oo Pode UW a 3 oct aQe wp re) Sra an offence was committed.' would allowing him to set up ignorance of t law as a defence." Q 'OG 'G ue) ie] <¢ p a. a) hey (tT fat w oOLs) te he c) ty ti He Churchili v. wtaiton (13 12. Those remarks of Lord Goddard were, as were the remarks of the Court of Criminal Appeal of N.S.W. in Glennan's case, made with reference to statutory offences where the intention of the offender was not a necessary element. However, as was acknowledged in Glennan's case (at p.b614) 1t 1s not essential that actuai knowledge of ail the essential facts or matters which constitute an offence 1s necessary before a person may be convictea as an aider and abettor. Shutting one's eyes to the obvious, of deliberately failing to obtain knowledge by making reasonable inquir in circumstances wnere the defendant te uspects the eé nce of a fact whicn mav be revealed upon ta ¥ 15s a m a inquiry. may render a person liable as an aider and abettor: Carter v. Mace (15491 2 All E.R. 714; Davies. Turner & Co. Limited vv. Brodie £19547 3 Ail E.R. 283. Passive acquiescence may suffice where tne aiaer oar apettor has the capacity to control the principal offender and 15 present when the offence 1s committed, but fails to exercise tnat right although aware that the conduct of the principal offender must have involved a breach of the law: Su Cros v. Lambourne £1907] 1 K.B. 40. 13. In Glennan's case the Court said (at p.614): "It may, therefore, be conciuded that, in the case of statutory offences in wnich intention 1s not a necessary element, the law does not "#zulre actual knowledge on the part of the aider and abettor of all the essential facts of the orfence. The element of knowledge or intention required of an aider and abettor might perhaps be more accurately expressed by saying that it must be snown that he either knew or suspected the |eaxistence DF f42ts which would constitute che commission or tne offence or, perhaps. that he acted recklessly, not caring whether the facts existeca or not. Mere failure to make an inquiry which, 1f made, would yiela knowledge of an essential fact, 1s not in itself enough to constitute knowledge of the Tact, foc 1t 2s accepted that to act negligently does not make a person an aider and abettor (Callow v. Tillstone see also Bovker vv. Prem2er Eee Co.*. But the circumstances of a oiven case may be such as to reveal not merely a failure to make an inquiry, but a Tallure to make an inquiry which is or such a kind as to suc¢gest that the defendant has delibera acstained Irom acauicing knowledge osecause nae suspected the existence of a tact which would have been ascertainea on inquiry, or that the defendant has actea recklessly in the sense that he did not care whether the facts existed or not (Carter v. Mace; cf. Davies, Turner & Co. Ltd. v. Brodie). In our opinion neither 5.100 oF che dustices Act nor s.4+E cf tne Motes Trarfic Act shoulc be read as affecting an alteration to the rules of the commen law concerning aiding anc apnetting AS we have already observecac. s.idv of the Justices Act iS A orsSceGural srovisicn and does not aiter che supstantive common-law rules in relation tc misdemeanours. Section +E creates a 14. criminal oifence on the part of the perpetrator, he who drives or attempts to drive; except in so far as it attracts the common law as to participation in an offence, 1t creates ne orfence on the ovart of any other person. In accordance with the rule that a penal statute snould be construed strictly, 1% should not be read as creating a new and different offence on the part of any other person--for example, by creating a duty to prevent the commission of an offence by another, or as altering the basis of common-law liability for aiding and abetting. Section 4E 15 an iliustration of 2 StaAtL Tory offomece the |Scsence oF which ns the doing of an act by a person naving & particular condition or characteristic. Viewed in isolation the act which 15 prohibitec, namely the driving of a motor vehicle, 15 innocent and of frequent occurrence. By force of the statute, when undertaken by a verson having the prescribed condition or characteristic 1t constitutes an offence. Te cannot be that 1t 2s an orfence aqaiznset the statute tor a person, who nas no knowlecge, susdicion, or reason to pelieve that the perpetrator has the prescribed condition, to vermit cr encourage the perpetcator to drive 2 notcr vehicisc. It 1s net 2 satisfactcry answer <> the Sltuation whicn woula otnesrvise 2715€ 735 Say tnat the aefrendcant may estabiisn by way of defence that he honestly believea on reasonable grounds that the act was innocent because, firstiy, the statute appears to displace that common-law defence and, secondly, even if the common-law defence wers availabie, it would in any event leave che onus witn the defendant of estaplishing iaczx of knowledge on his vara in that resect it must be kept in oo the common-law defence tly or the elements c be established in orde- to obtair & conviction. The the Ful decision 15. 1 Court was of on the evidence the appellant haa actual knowledge appellant least had that 1t was circumstances were that uninsured and it was a case in as owner the or an Genz v. inconsistent with what we have saii, the opinisn that Miller even actual knowledge of the fact." In Lenz Vv. the Full Court of appellant was or procured the driving of a moto force in relation to the motor vehicle a poi complying with Part IV of the Motor Vehicles Acc, It was proved that an uninsured driven on a road on tne permission, of the appeliant. It necessary Try the prosecution to new that - = mctczs venacle was ne Napier, C.d. and Travers, "The prohibitzon. in s.i Vehicles Act, 18 1n the A verson snali not vehicle ona road unie znsurance complying witn force in vrelaticon te tne prohibition is siainiry sense that the liabilic any person criving tne the Supreme commission yr vehacle or on Miller £1965] S. charged with having aided, ean A.S.R. Court cr South 23 not motor ctraiie: whiin the trailer strong grounds for suspecting uninsured, insufficient to show if abpett orfence, a road without for Was the at the . a decision of x xy Poe § tralia, the ] 24, counselled namely, the cnere being in icy of insurance 1959-1962. a 14, atin he O to ir fou Oo cb te a a esd ju u se De "4 MOTOL wa 'd % u pa] J. a uw PEO tery @ <¢ O hh hI hel a Ba (h a in) iva % OF Jct vd rm) : 1 tt bb ey "tT (a) ' . fa iu fi] ws O fey fy 'Os ve instructions, nm tt ke tw ut oO Yow nicle had been er with the TNAT 1t was MOT tne apteLsant t 9.12): Motor arms: motor cy oF foun The m tne 2a on theout 16. the necessity for any proof that he or she unew that 1t was uninsured. rte seems to us that there can be no doubt that any other person, who causes the driver to contravene the section. isa party to the contravention, and under 5.53 of the Justices Act is liable to be prosecuted for, and convicted or, che offence." In their reasoning, Napier, C.J. and Travers, J. accepted the general proposition that a person cannot be convicted of aiding and abetting the commission of an orrence unless he knew the essential facts wnich must be proved to show that an offence has been committed. subject to these qualifications (at p.1l): "In the first place, it 1s to be observed that anyone may be deemed to know anything to which he shuts his eyes (Cook v. Stockwell; Johnson v. Youden). Secondly, there 1s the principle laid down in Mousell Bros. Ltd. v. London and North-Western Railway Co. as follows: 'While orcima facie a principal is not to be made criminaliv ressonsible for the acts or Als servants, yet the heqislature may prohibit an act or enforce a duty in such words as to make the prohibition or the duty absolute; in which case the principal is liable if the act is in fact done by his servants. To ascertain whether a2 particular Act of Parliament has that effect or not, regard must be had to the object of the statute, the words used, tne nature of the duty laid down, the person upon whom 1t 1s imposed, the person by whom it would an ordinary clrcumstances be pertormea, and the peéerscn upon wnom the penalty is impcsed.' we ey - 1?. In that case, and in Provincial Motor Cab Co. v. Dunning and Gough v. Rees there was the relation of master and servant; but it seems to us that the reasoning 1s capable or general application, and in recent cases (Carter v. Mace; Quality Dairies (York) Ltd. v. Pedley it has been carried to its logical conclusion. These authorities show that the special Act may be couched an such terms as to imply a duty to foresee and prevent the act or thing that is the offence. In such circumstances, any party, who could and should prevent the act or thing, but omits te doa so, 1s party to and paYtliipates in tae sifence. In our opinicn, the latter qualification can have no application in the present case. We do not think chat, by employing an interpretation provision such as s.75B which 1s of a kind well known to of the criminal law, 1t was nntendea by Parliament that a special and absolute duty should be imposed upon those concernea in tne management of ct a corporation ho take positive steers to wh "S o rev rt) n ra) 1: nh osc 1) bay corporation engaging in conduct of the type op ty (b A. Ae "M4 s.52 where they nave no knowledge, actual or constructive of the essential facts necessary to constitute a contravention of the section. In our view, the imposition of a personal liability upon the manaqement of a corporation with limited liability in those circumstances would invoeive a significant departure Irom the previous iegislative provisisns st vwnicn s.75B as a& tydical example and woule requics explicit language to effect sucn a change. No such language is to he Tound here. Instead, Parliament nas chosen, as its 18. dictionary, an ainterpretation provision, in the form of s.75B, which picks up the traditional legislative formula employed in the criminal law. That formula has always been interpreted to require actual or constructive knowledge of the essential facts said to constitute the offence before a person can be liable as an aider or abettor. It is true that s.52 may be contravened ry notwithstanding the absence o an intent to mislead or decezve on tne part of tne contravencr. The ilirability imposed by the section is absolute in that sense (see Hornsby Building Information Centre Pty. Limitea v. Svdney Building Information Centre Limited (1978) 140 C.L.R. 216 per Stephen, J. (at p.228) and Parkdale Custom Bualt Furniture Pty. Lamited v. Puxu Pty. Limited (supra)}). But 1t does not follow that knowleage of the facts necessary to constitute a contravention of s.52 1s not a material element in tne finding agatnst a persor of alaing of abetting the contravention. To show that a defendant aided or apetted the contravention, 1t 1s necessary to 2staplish that he knew of the essential facts cr matters which constituted the contravention, although it 1s not necessary to prove that he su ie] a ia) a ts jw I w pa] cr j4 i) knew that they 1n fact constictutec such It follows that Mr. Lucas coula nor be nelia ts have contravened s.52 as an aider or anettor unless the Tourr is satisfied that he knew of tne essential facts ar matters 19. constituting the contravention including knowledge that the relevant representations as to the weekly turnover of the record business and its gross profit were incorrect. The uncorrectness or those representations 1s essential to support a finding of misleading or deceptive conduct. Mr. Lucas had no actual knowledge whatever of their uncorrectness and it is not suggested that the circumstances of the case warrant an inference of constructive knowledge on nis cart of che character oF tne conduct rcompisined of. He) Argument was also addressed to us to the efiect that, whatever the position may be under para.75Bla) as to aiding and abetting. Mr. Lucas was nevertheless "party to" the contravention within the meaning of para.75Bi(c). One of the dactionary meanings of the term is: one wno takes part, parficipates, or 1s concerned in some action or affair; a participator: an accessory" (Oxrtord Enalisn Dictionary). Its orcinary of ocpular meaning was adopted by Pennycuick V-C ain In Re Maidstone Builaings Provisions Lta. £19713 1 W.L.R. 1085. There it was heid that the company secretary was not, merely by virtue of that office, a "party to" the carrying on of the company's business with intent to defraud czsaitors w BP than tne meaning of 5.332(1) of the Companies Acz. 1948. The Vice-Chancellor held that the expression "party to more than "participates in", "takes vart in in", but aunvolved some cositivye stexcs. Thus, 1:5 was held 20. that omission by the secretary to give certain advice to the directors was not being a party to carrying on the business an a fraudulent manner. He said (at p.1092): "The expression 'parties to the carrying on of the business' is not, I think, a very familiar one, but so far as I can see, the expression 'party to' must on 1ts matural meaning indicate no more thin 'participates ain,' 'takes part in' ce 'concurs in.' And that, it seems to me, involves some positive steps of some dacure, I donen thirk 1+ can be sala hat somecne 15 party tc carcying on 2 business 12 he takes no positive steps at all. So in order to bring a person within the section you must show that he is taking some positive steps in the carrying on of the company's business in a fraudulent manner." To be "party to" a contravention of a provision of Part IV or V requires, in our view, that the defendant's participation in the contravention involves some mental element. Tn this connection, it 2183 important tc consizer the meaning and effact of the stner provisions of s.75B because in our view there 1s preséeme ti Lael eh Lhe provisions a requirement that the involvement of the defendant was other than annocent. We have already mentioned that to aid or abet the contravention rn a a) (D a) wi fi ty H st requires that the defendant knev the facts of natters which must be proved to estaplish the contravention. 21. The word "counsel" 1s probably equivalent to "instigate": Stephen's Digest of Criminal Law 9th Ed. at p. 18; R. v. Baker (1909) 28 N.Z.L.R. 536 at p.544 per Cooper, J. Its ordinary meaning is to urge the doing or adoption of a plan or design (Macquarie Dictionary). "To procure means to produce by endeavour. You procure a thing by E8tting cut to see that it haepens anc taking tne arprcpriaté steps tr orcaucc that happening." Attornev-Generai's Reference (No. 1 of 1975) £19751 1 Q.B. 773 per Lord Widgery, C.J. (at p.779). Both notions of counselling of procuring involve an element of intent: Gough v. Bees (1929) 46 T.L.&. 1923. Inducing a contravention in the context of para.75Bib) connotes, in sur view, some act or compulsion by force or threat of force or some act of persuasion ofr stimulation aimed at ensuring that an act 1s committed which constitutes a contravention. The word "incite" 1s akin to "anduce", though "induce" probably covers a wider field. "Incite" 1s a word familiar to the criminai taw anda invoives some deliberate act of rousing, stimulating, ursing or spurring on: Young 7. Casseis 'ifit:' 22 N 3.0 R. 552 5er Stout, C.J. (at 0.854). Thus sometning more tnan innocent participation by the defendant 135 involvea in the notion of Ww wo inducing a person to commit a contravention. The word 'tnduce" appears in other sections of the Act: for example, para.49(4)(a). 5.57 ana para.96(3)(b). The use of that word in chose provisions 21S not inconsistent with the meaning which we have attached to it in the context of s.75B. The phrase "knowingly concerned in" (para.75B(c)) plainly requires a mental element, namely. knowledde of the relevant facts (see Mailan v. Lee (19401 80 I.ELE. La @ at ie re The act of conspiring with other to errect rO) wu contravention (para.75Bid)) necessarily involves an element =F antention. requiring an agreement between two or more a) w gole te effect a oroscrinped act. We can aiscsrn no reason wnv Parliament woulda have antenaea that a section which renders raturs. cersins _iapis tor 32 contravention Dv 2 corporaticn snould require some mental element or absence oF innocence in every case to which ait refers except one which itself requires in its first limb that the person vas "knowingly" concerned in the contravention. This 15 especralivy so wner tne vera earty' 15 founcad in accessory orcvisions cf: crimin sucn as s.5 of the Crimes Act, isi-4 The words "party to the contravention" necessarily connote 1n our view that a person assents to or concurs in the conduct which constitutes the contravention. He must therefore know or be aware of the essential facts or matters which must be proved to establish the contravention. We do not think that the word "knowingly" should literally be read as qualifying both the phrases "concerned in" and "party to" ian st tC us tc Chis in para. 75Ric). Two considerations i a on First, it woula be unnecessary to precede the onrase to" with the word "knowingly" as the requisite element of knowledge 1S inherent in the concept of being a "party to" 4 contravention. Secondiy, the placement of the commas in para.75B(c) 1s zundicative of the draftsman's intentions. In Fencott v. Muller, supra, Gibbs, C.J. said (at p.48); "By the compinec provisions of sec.75B and 82, the Parliament has made natural persons liable in damages for a contravention by the corporation only 12 they have been involved in the manner described by sec.75B, which. in wmy opinion, refers to a close rather than a remote involvement in the contravention. in the most general words of sec.75B, those of para.(c), the word 'kncwingl7y Slanificantly confines the cperation or the provisien."" In our opinion, the words "party to the contravention" refer to a person who participates in, or assents to the contraventicn in question. Tc be regarded as participating in or assenting, such a person must actually or constructively be aware of the elements constituting the contravention. To our minds, it 1s not sufficient to render an individual liable if he 1s shown to be aware of some only oar chose elements. Where the concraventiscn in questicn relates to engaging in trade or commerce in conduct that is misleaaing, one of the elements involved 1s that the conduct 1s misleading. If a person sued under s.82 for damages as a person involved in the contravention 1s unaware of the essential facts and matters constituting the contravention, then he lacks knowledge of an essential element of che contravention. He cannot, in our view, in those circumstances, be regarded as a party to Ehe contravention .2fb. Gutheie v. Dovle Dane & Bernoach Pty. Simared (19377) 16 A.L.R. 241 at p.244 but see Tapereil, Vermeesch & Yarlana, Trade Practices and Consumer Protection, 2nd Ed. at p.604). By applying the "organic" theory of company law, criminal liability of a corporation can arise wnere an orfence is committed in the course or the corporation's Ss aflairs to such a a business by a person in contcol oF 2 degree that 1t may fairly be sata to think and a n Tv threougn ham so that his actions and intent are the actions anda untent of the corporation (see Halsbury's Laws of Englana, 4th Ed. Vol. 11 at p.30 Universai Telecasters (Qlid.) Ltd. " v. Guthrie (1977) 18 A.L.R. 531 at 9.535 per Bowen. C.J.). It may be that where, in accordance with this principle, a corporation 1s guilty of a crime, the person whose actions and intent are those of the corporation will himself also be criminally liable (see Halsburv's Laws of England, 4th Ed.Vol 11 atop. 31 (fn.(7)). But, in the case of a statutory offence, this will depend upon the consteuction of the Legislation snvolved. In the present casé, no question arises of the extended operation of $5.52 by vistue of sub-s.6(2) or (3) of the Act as in tne C.L.M. case. supra. Since s.52 only applies to corporations, Mr. Lucas cannot be liable for any contravention of s.52 as & principal party. He can only be liable, 1F at all, as a secondary 9 arty or we qj the kind described in s.75B. For the reasons we have given, at should be assumed that the Legislature. 1n adopting a ercvision in the terms of 5.753, was awace of the judicial interpretation of Similar provisions insofar as they imported a requirement of actual or constructive knowledge of the relevant facts. No doubt, it was within the constitutional competence or Parliament to cender an accessory liable without the neea to e2estanlish any such knowledqe. But, qiven the adoption, in s.75B, sf the traditional language of accessory orovisicns sucn as 5.5 oF the Crimes Act, 1314, we must infer thac 27 was 2ntendea that the meaning of such orovisions, as explained py a 26. considerable body of judicial authority, should be applied here also. This 1s especially so when it would appear that sub-s.82(1), when read with s.75B, gives the Court no discretion 1n the sense that the measure of damages cannot be adjusted to reflect the degree of involvement or blameworthiness of the person upon whom liability is imposed (see Fencott v. Muller, supra at p.78 per Dawson, J.). It 1s clear from the facts of the case, as round by tne primary Judge, that Mr. Lucas did not know, nor dia he suspect or have reason to suspect, that the statements made by him to Mr. Yorke about the business of Treasureway were ancorrect. Thus, he could not have been party to the contravention of s.52 within the meaning of para.75Bic). It was next submitted by counsel for Mr. Lucas that tne misleading or deceptive conduct was that of Treasureway ny ty. Limited ana Mr. ct w ana Mr. Manoney anc chat Ross Lucas Lucas were, ta the knowledge of Mr. Yorxe, merely cshanneis for the communication of information from the vendor to him. It was said that, in those circumstances, no conduct of Ross Lucas Pty. Laimaited or Mr. Lucas in fact misied or deceived Mr. Yorke or was likely to mzsleaa 3¢ certeive him, £o that Ross Lucas Pty. Lamited dic not contravene s.52 and Mr. Lucas could not have been invsivea in any tontrcavention. in other words, there may weli be & cistinction 70 o8 drawn between, for example, engaging in concuct for the purposes 27. of s.52 and making a statement for the vourposes of s.53(e) (see Universal Telecasters (OQld.) Ltd. v. Guthrie, supra). It may be said that the conduct was in truth that of Treasureway alone and the role of Ross Lucas Pty. Limited and Mr. Lucas was no more than that of an "innocent instrument": see White v. Ridley (1978) 140 C.L.R. 342 per Stephen, J. (at p.359) and thus outside s.52. There is force in this submission but, in view of our findings on the eaclier submissions, it 1s not nec ssary to consider ic. We would dismiss the appeal with costs. wey we eee