b | q CATCHWORDS Trade Practices - bait advertising - admissiblitv of evidence tending to show authority to act on behalf of corporation - whether conduct of servants was engaged in "on behalf of" the corporation within sub-s.84(2) - admissibilitv of evidence concerning question whether corporation "took reasonable precautions and exercised due diligence to avoid the contravention" within para.85(1l)(c). Markby v. The Queen (1978) 140 C.L.R. 108 Perry v. The Queen (1982) 57 A.L.J.R. 110 Sutton v. The Queen (1984) 58 A.L.J.R. 60 Fraser Hennleing Ftv. Limited v. Cody (1945) 70 C.L.R. 100 Ex parte Gerard & Co. Ptv.Limited; Re Craia (1944) J4 S.R.(N.S.W.) 370 Barrett v. Steel Products Co.Pty.Limited £19621 N.S.W.R. 981 Woods v. Brookes (Milk) Limited (1963) 1 W.L.R. 795 Chappell v. Ross and Sons Ptv. Limited [1969] V.R. 376 T.P.C. v. Queensland Aagreaates Ptv. Limited 'No.3) (1982) 61 F.L.R. 52 Dohertv v. Traveland Ptv. Limited (1982) A.T.P.R. 40-323 T.P.C. v. Tubemakers Australia Limitad (1983) A.T.P.R. 40-358 T.P.C. v. Mobil Oi] Australia Limited (1984) A.T.P.R. 40-482 Maisev v. Mudceeraba Village Estates Ptv. Limited (unreported: Federal Court of Australia 22 May 1985) Tesco Supermarkets Limited vy. Nattrass £1972] A.C. 153 Universal Telecasters (Old.) v. Guthrie (1978) A.T.F.R. 40-062 Wings Limited v. Ellis C1984] 1 W.L.R. 731 Darwin Bakeries Ptv. Limited v. Sully (1981) 51 F.L.R. 30 Trade Practices Act 1974 sub-s.96(1), 96°22), 84(1), 84(2);3 para.85(1)(c). WALPLAN PTY. LTD. v. JOHN RALPH WALLACE G47-50 OF 1985 ' Ue CORAM: \ SWEENEY, LOCKHART AND NEAVES JJ. 19 DECEMBER 19985 SYDNEY CE eT OC ee ee en . eon IN THE FEDERAL COURT OF AUSTRALIA ) } QUEENSLAND DISTRICT REGISTRY ) NO. G47-50 OF 1985 ) ) GENERAL DIVISION ON_APPEAL FROM A_ SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN : WALPLAN PTY. LTD. Appellant AND: JOHN RALPH WALLACE Respondent MINUTE OF ORDER JUDGES MAKING ORDER: SWEENEY. LOCKHART & NEAVES JJ. WHERE MADE: SYDNEY DATE OF ORDER: 19 DECEMBER 1985 THE COURT ORDERS THAT: 1. The appeals against the convictions of the appellant of charges G22 of 1984, G23 of 1984, G24 of 1984 and G25 of 1984 are dismissed. 2. The appellant pay the costs of the respondent of this appeal. Note: Settlement and entrv of orders 15 dealt with in Qrder 36 of the Federal Court Rules. ne ee ome ee Ne I ee eee mee ee ee oe IN THE FEDERAL COURT OF AUSTRALTA ) ) QUEENSLAND DISTRICT REGISTRY ) NO. G47-50 of 1985 ) GENERAL DIVISION ) ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA Between: WALPLAN PTY. LTD, Appellant and JOHN RALPH WALLACE Respondent THE COURT: Sweeney, Lockhart and Neaves Ju. DATE : 19 December 1985 PLACE : Sydney REASONS FOR JUDGMENT Sweeney J. I have had the advantage of reading the reasons for judgment of my brother Lockhart. I agree with those reasons and with order that the appeals should be dismissed with costs. I certify that the preceding page 1s a true copy of the Reasons for Judgment herein of The Honourable Mr, Justice Sweeney. Dated: 9 December 1985 ssociate IN THE FEDERAL COURT OF AUSTRALIA ) ) QUEENSLAND DISTRICT REGISTRY ) No. G47-50 of 1985 ) ) GENERAL DIVISION ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALTA BETWEEN : WALPLAN PTY. LTD. Appellant AND: JOHN RALPH WALLACE Respondent Coram: Sweenev, Lockhart and Neaves JJ. Date: 19 December 1985 REASONS FOR JUDGMENT LOCKHART J. sinale Judge 56(1) and (2) of the Trade Practices Act 1974 ("the Act"). These are appeals against convictions of the appellant by a of this Court in respect of four offences under sub-ss. Those sub-sections relate to what is sometimes called "bait advertisina" and they provide: "66(1) A corporation shall not, in trade or commerce, advertise for supply at a special price goods or services that the corporation does not intend to offer for supply at that price fora period that is, and in quantities c-hat are, reasonable having reaard to the nature of the market in which the corporation carries on business and the nature of the advertisement. eae ett See ie ee re ee ee re eee ee ee -- - AW ee ee te ES Ee men i adn ce ee a eA te te tb ee ht 2. (2) A corporation that has. in trade or commerce, advertised aoods or services for supply at a special price shall offer such aqoods or services for supply at that price for a period that is, and in quantities that are, reasonable having regard to the nature of the market in which the corporation carries on business and the nature of the advertisement." The charages arose out of the conduct by the appellant of its business of selling second-hand motor vehicles in Underwood. Brisbane. Two of the four charges relate to a Ford Falcon XD Sedan and the other two to a Holden Commodore Sedan. In respect of each vehicle there was one charage under sub-s. 56(1) and oridginallv two chardes under x sub-s. 56(2), a total of six charges. When the hearing commenced before his Honour two of the charages under sub-s. 56(2) were dismissed and his Honour agave leave to the prosecution to amend the two remaining 'charges relating to sub-s. 56(2) (one in respect of each vehicle}. I shall mention later the reasons which led his Honour to take this course. The charage under sub-s. 56(1) in respect of the Commodore vehicle was that the appellant advertised it for supplv at a special peice, that it did not intend to offer the vehicle for supply at that price for a period that was reasonable having regard to the nature of the market in which the appellant carried on business and the nature of the advertisement. The particulars of the charaqe were that on 18 March 1983 the appellant in the Dailv Sun newspaper. which has a wide circulation in Brisbane. advertised that it would supply a Commodore vehicle at a special price of $2,990 and that it did not have the intention referred to in the sub-section (charge G22 of 1984). A ww oe Fe ee we no ay som ~ oN 3. similar charge was brought for contravention of sub-s. 56(1) in relation to the Ford motor vehicle (charge G23 of 1984). After the primary Judge allowed the prosecution to amend the charges for contravention of sub-s. 56(2), the charge in respect of the Commodore was that the appellant contravened sub-s. 56(2) in that. having in trade or commerce advertised the vehicle for supply ata special price, it failed to offer the vehicle at that price fora period that was reasonble having regard to the nature of the market in which the appellant carried on business and the nature of the advertisement. The particulars of the charqge as amended said that the alleqed offence was committed on 18 and 19 March 1983 (G24 of 1984). A similar charaqe was brought in relation to the Ford vehicle for contravention of sub-s. 56(2) (G25 of 1984). The advertisement in question which appeared in the Dailv Sun on 18 March 1983 depicted and described three different vehicles: and it was not disputed bv the appellant before his Honour that each item in the advertisement could be the subject of a separate charge. His Honour rejected, however, a submission of the prosecution that the word "offer" in sub-s. 56(2) means "offer specifically to each person who enquires" with the consequence. if this be right, that each time a customer enquired after the advertised vehicle and was refused supply, a separate offence was created. His Honour held that the expression "offer for supply" in sub-ss. 56(1) and (2) referred to makina goods or services available, not to offering them specifically to anv person. It was for these reasons that his Honour dismissed two of the ee ee ee ee - wee ee ee weer oe cae eneamemeialentonanies Bealitetertecemens maimed — 4 pee «4 ty FO ae ia Sly etnies OE nek tly he tee Ea eet OT BL 8 4, charges brought under sub-s. 56(2). His Honour's findings on these questions were not challenged before us. I mention them by wav of background to the appeal. The questions on which this appeal turns involve a fairlv detailed analvsis of the facts. Mv statement of them relies principally upon the findings of the primary Judqae. On Friday 18 March 1983 the appellant caused the advertisement mentioned above, which was a full page advertisement. to be published in the Daily Sun. It showed pictures of the three motor cars and had a heading "$300 Cash Deposit Or Your Car As Full Deposit". Each of the cars was advertised at a price of $2,990 under the reference to which appeared "$22.59 per week". suagesting that terms were available. Two of the cars were described in the advertisement as a "79 Commodore" and a "79 Ford XD". There was nothing to suaqqdest that the cars were other than in first-class condition: and a note at the foot of the advertisement said "Trade Your Old Car As Full Deposit and Drive Away Today". Other notes at the foot of the advertisement stated "Prices Remain For One Week" and "All Vehicles in Stock At Date of Compiling Advertisement". His Honour was satisfied that the cost of acquisition of the Commodore was $3,780 and that of the Falcon $4,330. His Honour was satisfied also that the retail value of each vehicle would have been substantiallv more than that shown in the advertisement, so that 1t was clear that the price of each was a "special price" within the meaning of s. 56 and that it would sell verv quickly unless' the appellant took steps to prevent or delav such a sale. A Mr. Derek Cornick saw the advertisement and went to the vard of the appellant on Friday, 18 March 1983 at about 7.45 a.m.. After entering the vard he sawa man standing to the side of the building in the vard and enquired about the Ford car. The man told him that it had been sold. Mr. Cornick asked about the Commodore and was given the same answer. Later he left the vard and on the same day telephoned one of the telephone numbers mentioned in the advertisement as being the number of the appellant and was told 'that the two cars were still for sale, A Mr. Crawford gave evidence that shortly before 18 March 1983, he noticed. when visiting the appellant's car vard. a Commodore sedan with its grill lifted out and he thought this was a "strange way to leave 1t". On the evening of 16 March, two davs before the advertisement appeared. Mr. Crawford noticed that the vehicle's arill and one headlicht had been removed. On the evening of Fridav,. 18 March 1983 Mr. Crawford read the advertisement and then went to the car vard and noticed a Ford vehicle which had three interior door panels missina. He visited the vard on Saturday. 19 March 1983 and spoke to a man. who was apparently a salesman. to ensure that the two vehicles he had found were those referred to in the advertisement. The man said that thev were and confirmed that the vehicles were still for sale. That man went to the office in the car vard telling Mr. Crawford to wait until somebody arrived with the kevs to the vehicles. Soon afterwards aman came and Mr. Crawford was qgiven the kevs to them. His Honour found that possession of the keys of the vehicle showed a likelihood that the man in possession was connected with the re ee tee he nt a ney ee meme A Ane ee ky nny Hee 5 eee management of the appellant. Mr. Crawford offered to buy the Falcon vehicle bv paying $1,500 cash then and the remainder in cash on the following Monday. As an alternative he offered to pay the balance by cheque and to pick up the car when the cheque was cleared. His Honour said that obviousiv either would seem to have been a more attractive proposal from the point of view of the appellant than Mr. Crawford's paying $300 deposit and the balance at $22.59 per week as suggested in the advertisement. However, the salesman did not accept either proposal but said that both proposals would have to be referred to the manaqer. Subsequently another man arrived who went into the office at the car vard and sat at a desk. He confirmed that he was the manager. The manager was told of Mr. Crawford's proposal but declined it saying "It will all have to be in cash". Mr. Crawford promptly left and returned with the cash and with his son, Philip. Upon his return, another man, apparently a salesman, said that the Falcon which Mr. Crawford wished to buv was still not sold. Mr. Crawford attempted to start the Falcon but it had a flat battery and would not start. He then spoke to another salesman, described in the evidence as havina Maori features, and was told by him as to the cars in question "Thev are sold. I have bought them. I am going to back-yard them. 34,490 if vou want it." Mr. Crawford spoke to the manager again who was then accompanied by the man with Maori features and who told the manager that he had just bought the two cars. When Mr. Crawford complained to the manager that he had just been told that the vehicles were for sale the manaqger said "You heard the man: he has bought the car. You buy them off him if you want them." Mr. Crawford left the office and again confirmed with the salesman that the two vehicles had not been sold. Mr. Crawford's evidence about the events relating to the supposed sale to the man with Maori features was corroborated by his son Philip. His Honour accepted both the Crawfords as credible witnesses. Other evidence was given before his Honour about enquiries to the appellant's car vard on Saturday 19 March 1983 when the enquirer was told that the Ford 'vehicle shown in the advertisement was still for sale and the enquirer was encouraged to ""qet down here 1f you want to buv the car". His Honour was satisfied that neither vehicle was qenuinelv available for sale at the advertised price on either 18 or 19 March 1983. He found that the claimed sale of both vehicles to one of the salesmen in the vard (the man with Maori features) was spurious and part of the means of discouraging or preventing the sale of the "bait" vehicle. His Honour found that the reasonable period spoken of in sub-s. 56(2), as defined with reference to this case. plainly included the day of appearance of the advertisement (Fridav, 18 March) and the following dav. His Honour also allowed evidence of what was called "similar facts" to be given before him. He expressly said that he did not rely on the so-called similar fact evidence to corroborate that the events ee me ee ep ee ee ey wwe ee 8 ee -- - Rm me eeentnmnmnnecnmtarinnt Ae theta meters Stamnes wen bon ment ned aticeionn cate erneannn wee Remnant mime an eS ene dda ats eos 8. of 18 and 19 March 1983 occurred as alleged. but he treated it as being relevant to two questions; first, whether what was done had the authoritv of the appellant and second. a related question, whether such precautions were taken to prevent the commission of an offence so as to permit the appellant to raise the defence under para. 85(1)(c) of the Act which provides: "B5(1) Subject to sub-s. (2), 1n a prosecution under this Part in relation to a contravention of a provision of Part V. it is a defence if the defendant establishes - (c) that - (i) the contravention in respect of which the proceeding was instituted was due to the act or default of another person, to an accident or to some other cause bevond the defendant's control: and (ii) the defendant took reasonable precautions and exercised due diligence to avoid the contravention." In support of this defence the appellant called evidence that it gave oral and written instructions to prevent the commission of an offence of the kind charged in this case. His Honour said that the sort of evidence given in this respect was exemplified by a memorandum dated 3 December 1982. This was a memorandum from Mr. N.E. McKerrow, the general manager of the appellant. directed to "Management & Sales Staff" relating to the subject of "complaints and advertising". The document exhorted the salesmen of the appellant with respect to vehicles advertised at "special" prices not to do any of the thinas ees dete ta ee ee ee ee Me ee wt ent a as 9. which the evidence shows thev did. For example, they were told that if a client came to inspect an advertised vehicle and was shown it but did not want to buy, he was not to be shown any other vehicle except by request. Also "if the advertised vehicle is sold. please do not show him or her any other vehicle unless he requests you to do so". His Honour referred to this exhortation as "quixotic" advice, inconsistent with at least the tone of the response made by Mr. Brooks who controlled the appellant when the allegations were put to him bv an officer of the Trade Practices Commission. Mr. Brooks was in charge of the operations of the appellant at relevant times and did not rely upon any assertion that what was done was contrary to instructions. The "similar fact" evidence related to events that followed an advertisement inserted bv the appellant on Fridav, 7 January 1983, also in the Daily Sun, which was not unlike the advertisement the subiect of this appeal. His Honour noted that the date of the 7 January advertisement was close to that of the circular of 3 December 1982 on which considerable reliance was placed on behalf of the appellant. The "similar fact" evidence consisted of evidence in the main from Karen Ann Smith and a friend of hers, Janelle Lahrz. Mrs. Smith qave evidence that, on the day she saw the advertisement. she telephoned the number mentioned in the advertisement and enquired whether a 1979 XD Falcon priced at $2,990 in that advertisement was for sale and was told that it was. She was invited to come the next we re Ne te ce a ee ee iN 'y. a3 mene amarts oe vere, hiaen! Peer nmtainntn mmemainnierhn til marie teat ARIE WL ERR wy eee on Meee FF mee ent tek s+ r -- 10. dav to see it. She telephoned again later the same dav about the car and was told that it was a Monza red vehicle not in bad condition, but that she would have to get a roadworthiness certificate. The person who answered informed Mrs. Smith to come by at 10.00 a.m. the next dav. Mrs. Smith came as suqgested accompanied by Janelle Lahrs. She met a salesman who was described in the evidence as being of Maori appearance and enquired about the vehicle. He told her "That over there and it is under three lots of finance". He said that it was not "any good", that she would have to spend at least $3,000 on 1t and, that the motor and qearbox had "had it". He ~ took her to more expensive XD Falcons. A little later Mrs. Smith took the matter up again with the same salesman and said "the car seems to be QO.K. to me". He replied "It has had it: it is only a sales gimmick: do not touch it" and again mentioned "three lots of finance". Mrs. Smith left the vard and cang its telephone number from the premises of friends. She was told when she enquired about the same vehicle that it was still for sale. She made a similar telephone enquiry a little later with the same result. A week later Mrs. Smith and her husband went to the appellant's car vard and looked at the same car. It had been hichly polished and Mrs. Smith was told that it had been sold. His Honour said that he was "left with the suspicion" on the whole of the evidence that in a systematic wavy the appellant was advertising cars at a special price as bait and then bv various means discouraging people from buying them: but he said that he could not Peeiget ie nee eee ne tee ee aa . - wee as . . ~- * - 4 Pees ae ate a en i er ad 11, find that that was the appellant's regular method of operation. He said that he reaarded the evidence about Mrs. Smith's experience in January as relevant on the ground that it tended to support the prosecution's case that on the occasions in question in March what was done had at least the acquiescence of the management of the appellant and as refuting the appellant's s. 85 case. He said that the incident involving Mrs. Smith and the Monza red Falcon qained particular strenath from the evidence that , bhe vehicle was in fact sold for $5,990 (some $3,000 more than the advertised price) on 14 or 15 January 1983. He said that he did not believe that if it was genuinely for sale from 7 January at $2,990 it would be likely to have remained unsold until 11 January. Mr. McKerrow explained the higher price in part by saying that $900 was spent on the car; but his Honour said he did not believe that Mr. McKerrow knew how much, if anvthing, was spent on it and that he was of the opinion that his evidence on that point was not candid. His Honour found that the evidence of Mr. McKerrow and toa lesser extent that of Mr. Parker. the sales manager of the appellant, was unconvincing and he did not believe that genuine efforts on the part of the management of the appellant were made to prevent the occurrence of events such as those involved in the case. His Honour found that. although he accepted the evidence of the prosecution witnesses as substantially true. he was not prepared to find bevond reasonable doubt that the conduct of the aqents or servants of the appellant conflicting with performance of the dutv Oe ee re ee eee ee wen wee eee wee me es prescribed by sub-s. 56(2) had the actual authoritv of the appellant. ""Hé was satisfied that that conduct was engaged in by the agents or servants of the appellant in the course of their emplovment. His Honour then concluded that it followed that such conduct was enaaded in "on behalf" of the appellant and therefore sub-s. 84(2) attributed that conduct to the appellant. His Honour heid that, although each agent or servant of the appellant was "another person" within the meaning of para. 85(1)(c), the defence under that provision was not made out. His Honour rejected the defence based upon s. 85 on the aground that he was not satisfied on the balance of probabilities that the use of the advertised vehicles as mere "bait" occurred despite the best efforts of the appellant. He said that he thoucht the probabilitv was the other wav. His Honour also concluded that the two charges based on sub-s. 56(1) of the Act had been proved. He based that finding upon his findings relevant to sub-s. 56(2) that neither vehicle was offered for supply for a reasonable period at the price mentioned in the advertisement because on 18 and 19 March 1983 neither was qenuinely for sale at the advertised price. He said that what the prosecution had to do was to exclude anv doubt about the proposition that the vehicles in question were not intended to be placed genuinely on sale at the price advertised on 18 March for a reasonable period. He said that the fact that they were not so placed did not conclude the matter because the appellant might have intended to put them on sale and then at RS eT ae He A te a Nite ere eRe mere a Stein i nate en et etme at ee ee - tom 14. The consequence of these submissions was said to be that the prosecution must fail on the two alleged contraventions of sub-s. 56(2) in view of the primary Judge's finding that he was not satisfied bevond reasonable doubt that the acts founding the charges were actually authorised by of the appellant. As the evidence of the events of 18 and 19 March was relied on also to establish the absence of the requisite intent for the purposes of sub-s. 56(1) those two charaes based on that sub-section must also fail. Third, it was submitted that his Honour wronaly rejected the appellant's defence under para. 85(1)(c) of the Act in that he erred in receiving into evidence the "similar fact" evidence from Mrs. Smith and Mrs. Lahrs about events in January 1983. Reliance was placed upon Markby v. The Queen (1978) 140 C.L.R. 108; Perrv v. The Oueen (1982) 57 A.L.d.R. 110: and Sutton v. The Queen (1984) 58 A.L.J.R. 60. I shall turn first to the question whether Mr. Cornick's evidence was wrongly admitted. A person's authority to act on behalf of a company may be proved by direct evidence of the qrant of authoritv; for example, a resolution of the Board of Directors or in some instances the articles of association themselves. But the authority may be established otherwise than by direct evidence: it may be inferred from circumstances. Once the circumstances have been proved a prima facie case of the existence of the authoritv may be established: but the other party to the proceeding may lead evidence to negate the prima facie case. It is impossible to define exhaustively the relevant circumstances, but they may include evidence Tm weet hte enema he Fe en ee or nee ee ee ee metenen She toe a a ne « "ee 15. of the office held by the person whose authority is in question, statements made by him, the time when and the place where the statements were made and the acquiescence of others who govern the company's affairs in the statements made. Of course, care must be taken before admittina the person's own statements that he had authority to act on behalf of the company. Those statements are inadmissible unless accompanied by other evidence supporting the existence of his authoritv. Particular care must be exercised by a trial dudae on this question when hearing a criminal charqe, especially if there is a jiury. Sometimes for convenience and the™ orderly conduct of a trial the presiding Judge may admit statements of this kind provisionally, leaving it to be established later in the case whether the requisite connection exists between the person and the company, especially if counsel for the plaintiff or the prosecution undertakes to complete the chain of evidence. See Fraser Hennleins Pty. Limited v. Codv (1945) 70 C.L.R. 100: Ex parte Gerard & Co. Pty. Limited, Re Craig (1944) 44 S.R.(N.S.W.) 370: Barrett v. Steel Products Co. Ptv. Limited (19621 N.S.W.R. 981: Woods v. Brookes (Milk) Limited (1963) 1 W.L.R. 795: and Chappell v. Ross & Sons Ptv. Limited C1969] V.R. 376. Counsel for the appellant did not challenge the finding of the primary Judge relating to the events of Saturday, 19 March 1983 including the evidence of Mr. Crawford of the conversations with persons present at the appellant's car vard who spoke to him that dav. It is plain that there was sufficient evidence to support the admissibilitv of those conversations as binding the appellant. AL eg tree mer inl Heereteeementtel tees & e "1m 16. It is the evidence of Mr. Cornick about his conversation with a person at the appellant's car yard early in the morning on Friday 18 March which was said to be inadmissible. The point is of sianificance because it was common ground that there was no other evidence of relevant events of 18 March except, of course. the publication of the advertisement itself. Notwithstandina the rather slender reed upon which the responsibility of the appellant for the acts and statements of the person to whom Mr. Cornick spoke on the morning of 18 March rests, in my opinion it has not been established that his Honour erred in admitting that evidence. Mr. Cornick went to the vard in response to the advertisement published earlier that morning in the Dailv Sun newspaper and spoke to a man standing beside the car vard office. There is some suaqgestion in the evidence that the car vard was not open then and that it did not open until 8.30 a.m... But that was evidence which did not find favour with his Honour. However, whether technically open for business or not, Mr. Cornick entered the appéllant's premises on the Friday morning, walked through them and inspected cars there. There is no suaqgestion that his entry or progress was impeded or unlawful or otherwise than in the usual course of business activities of the appellant's car vard. Also, the advertisement was published on that same morning presumably because Fridavs and weekends were expected to be busv days. Obviously Mr. Cornick assumed that the man to whom he spoke was a salesman in the employ or service of the appellant and nothing which he said to Mr. Cornick dispelled that impression. In the circumstances it has not been established that the primary Judge erred in finding that the man was a salesman of the appellant and that his conduct on 18 March Rime ee rt a mt te meena hk ae te hin ae Fm te MR Le we a ee ee . ~ ee om 17. towards Mr. Cornick was in the course of the appellant's business. His Honour must have concluded that a prima facie case had been established that the man bound the appellant in the discussions with Mr. Cornick and that it was not displaced by evidence to the contrary. Even if the evidence of Mr. Cornick was inadmissible it does not follow that the charges must be dismissed. The two charges for contraventions of sub-s. 56(2) are that the appellant, having advertised the two cars for supply at a special price, did not offer them for supply at that price for a period that was reasonable having reqard to the nature of the market in which the appellant carried on business and the nature of the advertisement. The period was particularised in the summons as 18 and 19 March 1983. If the case for the prosecution fails in relation to 18 March it still leaves the. evidence about 19 March which raises the question whether that would sufficiently satisfv the requirement of sub-s. 56(2) that there be a reasonable period for which the cars were offered for supply. As the appellant's business was selling used motor vehicles and the advertisement was published on the Friday obviously to attract the busy late week and week-end trade in mv view the failure to offer the cars for supply at the special price on the Saturday would be sufficient to bring the two charges within sub-s. 56(2). I reject the argument that, if the only evidence of breach of sub-s. 56(2) relates to the events of 19 March. which rests essentially on Mr. Crawford's evidence and that of his son, the trial Judge could not have been satisfied bevond reasonable doubt that the et et te ee we th ee ee me eee 6 ee re eee ee ee ere meee ra _ . 4 Cert ce MDC ee a a — 18. appellant contravened that sub-section. His Honour accepted the evidence of Mr. Crawford and the corroborating evidence of his son. There is no substance in this around of attack on the findings of the primary Judge, I turn to the questions relatina to sub-s. 84(2). His Honour was not able to find bevond reasonable doubt that the conduct of the servants or adqents of the appellant which conflicted with the performance of the duty prescribed by sub-s. 56(2) had the actual authority of the appellant, but found that it was engaged in by them in the course of their employment and it therefore followed that such conduct was engaged in "on behalf" of the appellant within the meaning of sub-s. 84(2). The construction of sub-s. 84(2) must therefore be considered. Section 84 appears in Part VI of the Act titled "Enforcement And Remedies". Althoucgh sub-s. 84(1) 1s not directly involved in this case it is necessary to refer to it. Sub-section 84(1) concerns intention and sub-s. 84(2) concerns conduct which, in each case, is deemed to be that of the corporation. Sub-sections 84(1) and (2) provide: "B4(1) Where, in a proceeding under this Part in respect of any conduct enaaged in by a _ bodv corporate, being conduct in relation to whicha provision of Part V applies, it is necessarv to establish the intention of the body corporate, it is sufficient to show that a servant or aqent of the bodv corporate by whom the conduct was engaged in had that intention." (2) Any conduct engaged in on behalf of a body ee te Rete = el bi he md aR oe eee —-—- ee ee er ar se, Som 20. House of Lords in Tesco Supermarkets Limited v. Nattrass £1972] A.C. 153. But sub-s. 84(1) adopts a different test to Tesco: see Universal Telecasters (Qid.) v. Guthrie (1978) A.T.P.R. 40-062 and Tubemakers, Under sub-s. 84(1) it is not necessarv for the intent to be that of a person who posseses the directing mind and will of the corporation: it is sufficient if that person having the intent is a servant or agent of the corporation. This is a large extension to the organic theory enunciated in Tesco. Sub-section 84(2) Ls obviously a provision of wide application. It is, in my opinion, an extension of the principles enunciated in Tesco. Where proceedings are brought against a corporation for contravention of a provision of the Act the corporation's liability may be determined either by applying the principles of Tesco or bv sub-s. 84(2). The sub-section is not concerned with intention and I aqree with what Toohey J. said about this in Tubemakers at p. 44,326. IT cannot accept the submission of counsel for the appellant that sub-section 84(2) onlv applies where a person had the corporation's actual (be it express or implied) authoritv to engage in the conduct in question. If the sub-section had so limited an operation it would. I think, fail to achieve any useful purpose. Tt would be largely a restatement of the general law. It is a statutory provision designed to facilitate proof of the responsibility of a corporation for the acts of its directors. servants, agents and others. It is desiaqned to attribute to a corporation conduct of eo ee ns . ro . « owe meee sero - ek eee Aednmienme ah pe AM bw Meme tah Ahm meno nek me eset & deen 6 1 4 a Ce A ad 21. others for which the corporation would not necessarily be otherwise responsible. The phrase "on behalf of" is not one with a strict legal meaning and it is used in a wide range of relationships. The words are not used in anv definitive sense capable of general application to all circumstances which may arise and to which the sub-section has application. This must depend upon the circumstances of the particular case; but some statements as to the meaning and operation of the sub-section mav be made. In the context of sub-s. 84(2) the phrase sugaests some involvement by the person concerned with the activities of the company. The words convey a meanina similar to the phrase "in the course of the body corporate's affairs or activities". The words "on behalf of" also encompass acts done bv a corporation's servants in the course of their employment: but those words are not confined ta the notion of fhe master/servant relationship. Sub-section 84(2) refers to conduct bv directors and agents of a body corporate as well as its servants. Also, the second limb of the sub-section extends the corporation's responsibilitv to the conduct of other persons who act at the behest of a director, agent or servant of the corporation. Hence the phrase "on behalf of" casts a much wider net than conduct by servants in the course of their emplovment, although it includes it. The second limb of the sub-section reinforces my view that the words "on behalf of" qovern both limbs of the sub-section. It mav be possible to read the second limb as if it was not qualified bv the wee ee ee ee See ene meee Sy cee ene come ene npn ee Lee ee ee - - ee es te ek tn tema oennteas eh id ote em at mt teem Net tm ON Fc mot nn kt 22. words-"on behalf of" and relate back only to the opening words of the sub-section "any conduct engaged in"s but the more ordinary and natural meaning of the sub-section when read as a whole is that the conduct by the various persons to whom it refers must be enaaged in "on behalf of" the corporation to uttract the benefit of the deemed responsibility of the corporation. If this were not so a corporation could be liable by the application of the sub-section vet be unable to avail itself of defences under sub-s. 85(1) in circumstances where the only nexus between the corporation and the conduct complained of is the fact that a director. servant or aqent (whether he be in a position of authority in the corporation or at the bottom of the corporation's ladder) directed that the conduct be énaaged in. Counsel for both parties emphasised the relationship between sub-s. 84(2) ands, 85 which provides defences to prosecutions under Part VI for contraventions of Part V. I aqaree that there is a nexus between the two provisions, indeed a close one; but the relationship must not be taken too far because sub-ss. 84(1) and (2) have operation bevond prosecutions for contraventions of Part V. Manv examples come to mind, but an obvious one is s. 52 of the Act which prohibits corporations from, in trade or commerce, engaging in misleading or deceptive conduct. Contraventions of s. 52 do not constitute offences against the Act (sub-s. 79(1)): yet sub-ss. 84(1) and (2) mav be relied on bv parties to proceedings for injunctions (s, 80). damages (s. 82) or other orders (s. 87) which involve contraventions of s. 52. It is important therefore not to treat sub-ss. 84(1) or (2) as mirror images of s. 85. ee Co ns Yen eden ae ee wt Le we rie ee eT mmihee ete oh meetin ' oar sale he - . Se cr om — 23. Sub-section 84(2) attributes responsibility to a corporation for a wide range of conduct engaged in by others provided that it was engaged in on behalf of the corporation, whether actually authorised by it or not. But the defences provided by s. 85 must have been reaqarded by the leqislature as safeguarding against injustice that might otherwise have been occasioned by the width of the operation of sub-s. 84(2). Although for some purposes of company law it may be sufficient to show that conduct of an agent was "on behalf of" the corporation if it is established that it was for the benefit of the corporation. I see no justification for importing this concept into the construction of sub-s. 84(2). Tt would unduly restrict the ordinary and natural meaning of the lanquage of the sub-section. I agree with Toohey J.'s observations in Tubemakers at p. 44,327. Sub-section 84(2) is an enlarging provision of gqeneral application under the Act. It extends to proceedings, both civil and criminal, and is desianed to eliminate the necessitv to apply the various and at times divergent tests of the common law relating toa corporation's responsibility for the acts of its servants or agents. It extends those common law principles in order to facilitate proof of a corporation's responsibility. To alleviate injustice which micht otherwise flow from the width of its extended reach where contraventions of the provisions of Part V are involved the legislature has fashioned s. 85 as an instrument of enlarged defences to which the corporation may have recourse. x an ak Mees ae 5. [st : [J ' ee ty atta mend Mee ae and anne metas aen ed St Tae Sie nts me we ake ek a a re ee ' Ad am fi i" 24. The next submission of counsel for the appellant with which I shall deal is that the trial Judge erred in holding that, although each agent or servant of the appellant was "another person" within the meaning of para. 85(1)(c), the defence under that provision was not established. Paragraph 85(1) (ce) presents some nice questions of construction. The reference in the sub-paragraph to "another person" is not merely a reference back to the expression "other person" in the second limb of sub-s. 84(2). A corporation can only act through others, generally natural persons. Tt is, I think, seriously arquable that para. 985(1)(c) applies where the conduct in question is that of any person who is not the corporation itself or one of the persons who carry out the functions of direction and management of the corporation and its affairs. The distinction between "the rulina officers" (the description of Lord Widgery C.J. in Coupe v. Guyett (1973) 1 W.L.R. 669 at 675) of a corporation or "those who constitute the directing mind and will of the company" (Denning L.J.'s oft cited description in H.L. Bolton (Engineering) Co. Limited v. T.J. Graham & Sons Limited (1957) 1 QO.B. 159 at 172) on the one hand and people in the company who are mere servants and agents on the other hand is now well known and it is a distinction closelv related to the present question: see Tesco Supermarkets Limited v. Nattrass (supra); Wings Limited v. Ellis C1984] 1 W.L.R. 731: Universal Telecasters (Qid.) Limited v. Guthrie (supra) per Bowen C.d. and 551-552 per Franki J.. Where a contravention of a provision of Part V of the Act requires an intent by the corporation so that it is not guilty unless the requisite SONAL meen A ame tee mee PaaY etd ante alain bm mate Ny ne Ee ne mt Bare mk ante ee me aww -- - wre eA Se 25. intent was a state of mind of one or more of the persons who constitute the directing mind and will of the corporation. the argument that the defence under para. 85(1)(c) is restricted to other persons within the corporation gains, I think, greater strength. But the defences afforded by s. 85 relate to anv prosecution under Part VI in relation to any contravention of a provision of Part V. Some of those contraventions require an intent by the corporation. Section 54, which deals with the offering by corporations of gifts and prizes, is one example. Other contraventions do not require such an intent. Section 53 is an example: Darwin Bakeries Fty. Limited v. Sully (1981) 51 F.L.R. 90. The logic of the dichotomy between those who direct and manage the corporation and its other servants or agents become less obvious in the case of contraventions akin to absolute offences where the intent of the corporation is irrelevant. So it may be that the meaning of the expression "another person" in para. 85(1)(c) is to be gathered. not in'an absolute sense, but according to the circumstances of the particular case: or the words may simply mean any person other than the defendant which in the case of a corporation means anv person other than the corporation itself considered as a legal entity. It it not necessary for me to decide this question as his Honour found that the acts of each servant or agent of the appellant relating to the events of 18 and 19 March were the acts of "another person" within the meaning of para. 85(1)(c). His Honour's conclusion that the defence under para. 85(1)(c) was not made out was essentially one of fact and included his ene ree an arse mee ee See tere, en eee ay ee ete er ee eee " ae oe —- meme ee ee + ee ee Ce ere ". et ~ a ee nee me ae mee nee ~- 26. assessment of the credibility of witnesses, an assessment qenerally unfavourable to the appellant's case. The submission that his Honour erred in receiving the "similar fact" evidence of Mrs. Smith and Mrs. Lahrs about events in January 1983 fails. In relation to para. 85(1)(c) that evidence is not in my view "similar fact" evidence at all. It is simply evidence touching, first. the question whether the contraventions were due to the act or default of some person other than the appellant or to an accident or some other cause beyond its control and second, whether the appellant took reasonable precautions and exercised due diligence to avoid the contravention. The measures taken and systems instituted by the appellant to safequard against occurrences of the kind involved in the conduct with which this case is concerned were matters to which this evidence was directed. Flainly the gap of some two months or so between the January and March incidents was not so areat as to render the evidence inadmissible or unreliable on the issues arising under para. 85(1)(c). The evidence of Mrs. Smith and Mrs. Lahrs was admitted by his Honour for other purposes as well, but his Honour's reliance upon it was substantiallv for the purpose to which I have just referred. The appeals should be dismissed with costs. I certify that this and the twenty-five (25) preceding pages are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Lockhart. Rowan Darke. Dates: (G44, December, 1995" Associate ee ae ee ne Pa ae cee em me ee ee - . de eg eileen ar nn 1a atin teen eet eat ent nt lw at a > * wef ea > "3 oe - eee toi. versIN THE FEDEPAL COURT OF AUSTRALIA ) ) QUEENSLAND DISTRICT REGISTRY ) Nos. G 47-50 of 1985 ) GENERAL DIVISION ) ON APPEAL FROM A SINGLE JUDGE OF THE FECERAL COURT OF AUJSTPALIA BETWEEN : WALPLAN PIY. LIMITED Appellant AND: JOHN RALPH WALLACE Reapendent ao oe) ect Be = Sweeney, Lockhart and Neaves JJ. ba] wyin] 19 December 1985 Cy Neaves J. I have had the advantage of reading the judaement prenared br Gockhart J. I agree chat the apreals should be 2isamissed with costs for the rvreascns given cy his Honour. vr I certify that this pa is a crus copy cf the Reasons for Judament herein of the Honcuratie Mr tbe e Neaves. ed ty a7) iy he Dated: 19 December 1985