% S -" Gort * NUDGMENT No. 4407.85 CATCHWORDS CRIMINAL LAW - more than one representation alleged — whether bad for duplicity - whether statements made on one occasion may constitute a single offence - single enterprise doctrine - amendment. TRADE PRACTICES —- prosecution against company -— whether natural person "knowingly concerned in" contravention - natural person the chief actor. Trade Practices Act 1974, ss.53(c), 79 Crimes Act 1914, s.5(1) Federal Court Rules, 0.49 Danelle Dobinson Dillon v. buke Lawrence Chin Qld G5S7-61 of 1987 Danelle Dobinson Dillon v. Kingly Commodities (Qld) Pty Ltd Qld G62 -67 of 1987 PINCUS J. BRISBANE Id AUGUST 1988 SEN Tr np tne ee eee ey > pepo oe eee eee —- IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION eee QLD G57-61 of 1987 BETWEEN: DANELLE DOBINSON DILLON Prosecutor AND: LUKE LAWRENCE CHIN Defendant QLD G62-67 of 1987 BETWEEN: DANELLE DOBINSON DILLON Prosecutor AND: KINGLY COMMODITIES (QLD) PTY LTD Defendant MINUTES OF ORDER JUDGE MAKING ORDER: PINCUS J. DATE OF ORDER: 10 AUGUST 1988 WHERE MADE: BRISBANE IN G57 OF 1987, THE COURT ORDERS THAT: 1. the matter be adjourned to give the prosecution the opportunity of amending the particulars so as to charge one offence only; 2. the matter be adjourned to the Registrar to be restored on the list on application made to him; 3. the defendant pay the costs of and incidental to the proceedings, to be taxed. IN G58 OF 1987, THE COURT ORDERS THAT: 1. the defendant is convicted of the contravention of s.53(c) of the Trade Practices Act 1974 with which he was charged; pe ee * .° 2. the matter be adjourned to the Registrar to be restored on the list on application made to him; 3. the defendant pay the costs of and incidental to the proceedings, to be taxed. IN G59 OF 1987, THE COURT ORDERS THAT: 1. the defendant is convicted of the contravention of s.53(c) of the Trade Practices Act 1974 with which he was charged; 2. the matter be adjourned to the Registrar to be . restored on the list on application made to him; 3. the defendant pay the costs of and incidental to the proceedings, to be taxed. IN G60 OF 1987, THE COURT ORDERS THAT: 1. the defendant is convicted of the contravention of s.53(c) of the Trade Practices Act 1974 with which he was charged; 2. the matter be adjourned to the Registrar to be restored on the list on application made to him; 3. the defendant pay the costs of and incidental to the proceedings, to be taxed. IN G61 OF 1987, THE COURT ORDERS THAT: ' 1. the summons and information be amended so as to ' replace the words "guilty of an offence against ' Section 79 of the Trade Practices Act 1974 as amended by virtue of Section 5 of the Crimes Act 1914 as amended" by the words "guilty of an offence by virtue of s.79(1)(d) of the Trade Practices Act 1974"; 2. the defendant is convicted of the contravention of ' s.53(c) of the Trade Practices Act 1974 with which he was charged; 3. the matter be adjourned to the Registrar to be restored on the list on application made to him; 4. the defendant pay the costs of and incidental to the proceedings, to be taxed. IN G62 OF 1987, THE COURT ORDERS THAT: 1. the matter be adjourned to give the prosecution the opportunity of amending the particulars so as to charge one offence only; Pores oe ae Nt oe ee pew ee es 2. the matter be adjourned to the Registrar to be restored on the list on application made to him; 3. the defendant pay the costs of and incidental to the proceedings, to be taxed. IN G63 OF 1987, THE COURT ORDERS THAT: 1. the defendant is convicted of the contravention of s.53(c) of the Trade Practices Act 1974 with which it was charged; 2. the matter be adjourned to the Registrar to be restored on the list on application made to him; 3. the defendant pay the costs of and incidental to the proceedings, to be taxed. IN G64 OF 1987, THE COURT ORDERS THAT: 1. the defendant is convicted of the contravention of s.53(c) of the Trade Practices Act 1974 with which it was charged; 2. the matter be adjourned to the Registrar to be restored on the list on application made to him; 3. the defendant pay the costs of and incidental to the proceedings, to be taxed. IN G65 OF 1987, THE COURT ORDERS THAT: 1. the charge be dismissed. IN G66 OF 1987, THE COURT ORDERS THAT: 1. the defendant is convicted of the contravention of s.53(c) of the Trade Practices Act 1974 with which it was charged; 2. the matter be adjourned to the Registrar to be restored on the list on application made to him; 3. the defendant pay the costs of and incidental to the proceedings, to be taxed. IN G67 OF 1987, THE COURT ORDERS THAT: 1. the defendant is convicted of the contravention of s.53(c) of the Trade Practices Act 1974 with which it was charged; 2. the matter be adjourned to the Registrar to be restored on the list on application made to him; ee pene mee ve ae repens or eer owes y Fe ae ee ee rey wee -—-="18 —-"--— the defendant pay the costs of and incidental to_ the proceedings, to be taxed. ° Settlement and entry of orders. is dealt with in Order 36 of the Federal Court Rules. —— --= IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION ee QLD G57-61 of 1987 BETWEEN: DANELLE DOBINSON DILLON - Prosecutor AND: LUKE LAWRENCE CHIN Defendant QLD G62-67 of 1987 BETWEEN: DANELLE DOBINSON DILLON Prosecutor AND: KINGLY COMMODITIES (QLD) PTY LTD Defendant PINCUS J. 10 AUGUST 1988 REASONS FOR JUDGMENT These are eleven prosecutions for alleged breaches of the Trade Practices Act 1974, five against Mr Luke Chin, and the other six against Kingly Commodities (Qld) Pty Ltd, a company in liquidation. The charges are all brought in reliance on s.53{c) of the Act, the relevant part of which reads as follows: "A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of er eee ee we aod - mt pape or ons $+ = - - + -- goods or services or in connexion with the promotion by any means of the supply or use of goods or services - (c) represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits . . they do not have". The charges were all but uncontested. There was no dispute as to the facts. Mr Chin was represented by counsel who did not cross~examine and called no evidence. The other defendant was unrepresented. The prosecution case was, pursuant to arrangements made during directions hearings, put on affidavit, but some short additional evidence was called. Duplicity Counsel for Mr Chin initially took only one point as to the charges against him and that is dealt with below, but during the course of the hearing, after completion of the evidence, I raised the question whether any or all of the charges against either defendant were bad for duplicity. Argument ensued, and the decision on that question was reserved. It is necessary to deal with it first, as in each case, on one view, there is more than one representation alleged. There is no necessity to set out all the charges in the first instance; it is sufficient to take as an example the case which, as to the duplicity point, presents the greatest is difficulty. In No. G57 of 1987, Mr Chin is charged that in or about mid-April 1986 at Brisbane, he was a person knowingly concerned in a contravention of s.53(c) of the Trade Practices Act 1974 by Kingly Commodities (Qld) Pty Ltd whereby it, in trade or commerce, in connection with the promotion of the supply of services, represented that services had certain benefits which they did not have. Under s.79(2) of the Act: "Where a person is convicted of two or more offences constituted by, or relating to, contraventions of the same provision of Part V, being contraventions that appear to the Court to have been of the same nature or a substantially similar nature and to have occurred at or about the same time (whether or not the person is also convicted of an offence or offences constituted by, or relating to, another contravention or other contraventions of that provision that were of a different nature or occurred at a different time), the Court shall not, in respect of the first-mentioned offences, impose on the person fines that, in the aggregate, exceed the maximum fine that would be applicable in respect of one offence by that person against that provision." It will be noted that s.79(2) assumes that persons may be convicted of contraventions of Part V of the same nature and occurring at the same time. Part V includes s.53. Apart from s.79(2), the only provision in the Act which throws any light on the question of duplicity is s.79(3), which is Similar in its general purpose and its language to the former. Section 163(2) confers jurisdiction on this Court to Tet er oe ot hear and determine prosecutions under the Act. The rules relating specifically to prosecutions are in 0.49. They require that a prosecution for an offence be ' commenced by summons upon information (r.1), that the summons state the offence with which the defendant is charged (r.2(1)(a)) and that the summons be divided into paragraphs (r.3(1)). Then 0.49 r.3(2) says: "So far as convenient, each paragraph shall deal only with one matter". In my view that does not imply that an information or a summons may relate to more than one offence; nor do the forms of summons and information (Nos. 51 and 52) do so. When these rules were made, the practice was, as to criminal charges other than those brought by indictment, that only one charge could be the subject of a single proceeding. The rules appear to be drawn on the assumption that there will be one summons for each charge. The summons and information in the charge I have mentioned (G57 of 1987) are also drawn on that basis, but the problem is that the charge has been particularised and evidence has been led in such a way as to suggest that in reality more than one offence is charged in the summons. In brief, the particulars allege that Mr Chin, on behalf of Kingly, offered to manage an investment by one Jill Lee in commodity futures, and gave her various items of information which are particularised as follows: "In the course of making the said offer, LUKE LAWRENCE CHIN said to Jill Lee that: (i) because two opposing futures contracts would be purchased as an investment, whether the market went up or down, Jill Lee would make money; ee ee aia ialen diene tamer eee eed ta. (ii) whatever money Jill Lee gave to Kingly for the purpose of trading in commodity futures would represent only 10% of the total investment as Kingly would put in the other 90% and that consequently Kingly had an interest in ensuring that the investment would not result in a loss; Jill Lee could not lose her money; If Jill Lee invested $20,000, Kingly could guarantee an income from the investment of $500 tax free per week; the profits earned by Jill Lee would not be taxable." The particulars do not make it clear whether the five statements set out were made on the same occasion. The evidence of Jill Lee is to the effect that they were nat. It reads in part as follows: "1 I met LUKE CHIN who is a cousin of my husband in 1980 when my husband and I came to Australia from Malaysia for a holiday. When we settled here in 1982 my husband and I met him again. LUKE CHIN told us that he had joined KINGLY COMMODITIES (QLD) PTY LTD and that it was a good opportunity for investment. LUKE CHIN told us of friends, whom he knew, investing with Kingly through him. LUKE CHIN told us he needed $30,000 to meet a target to keep his job and sought our help saying he would make sure we would make a profit on our investment. LUKE CHIN explained it was just like the stock market but said we could not lose because he would purchase two positions, what he called an up position and a down position, saying whether the market moved up or down we could not lose. LUKE CHIN said the investment was tax free because it was an overseas investment. He said it was connected with the futures market in Hong Kong and Japan and with Kingly in Hong Kong. He also said it was connected with the Sydney Exchange but it was much bigger as it was operating on an international level. Voter eee eee ce BO ee ene nes apenas ae a — - oo; 5. I did not know anything about the futures market. LUKE CHIN showed us a list of people who had made money. He also said that he had experts to help him look after the accounts and that he was only involved in selling the services. LUKE CHIN said the money I was investing only represented 10% of the money that would actually be invested as the company would put in 90% of what was being invested as they were international dealers. On about the 20th or 2ist April 1986, LUKE CHIN came to our house to discuss the investment having made an appointment to see us, after talking a lot about it to us previously. I can recall that many of these representations were a few days prior to the 21st April 1986 as LUKE CHIN was anxious for us to sign. I had a fixed deposit of $10,000. I gave him a cheque for that amount and he said he would not cash it until I told him. The reason for this was that I had to release the fixed deposit in order to fund that cheque. It was on that day also that I signed 'a client authority in acknowledgement. He said he had to register it with the company and so took it away. I only received a copy of that some months later when I demanded it from him. It was then also that I got a receipt. On the day after I signed the client authority in acknowledgement LUKE CHIN came to our home and told me I had made a profit of $2,000 and wrote it on a piece of paper. It was the same type of paper that he had used to show us a list of people who had made a profit before I invested. It was on that occasion that he also said to me that I would not have enough to maintain an account of my own by just investing $10,000. He asked me to borrow a further $10,000. I did this and borrowed from the ANZ. I invested the money with Kingly. He said I needed to put in $20,000 to make sure that I could run an account of my own. He said it was not wise to share the investment with anyone else. He also said that it would not be necessary for me to work full time because I could earn at least $500 a week tax free from my investment." aoe Of the items of information particularised, (i), (ii) and (iii) are covered by the general statement in para.7 that "many of these representations were a few days prior to the 21st April 1986". Representation (iv) is dated "On the day after I signed the client authority" and representation (v) was made on that day, and also apparently earlier (para.4). Mr Sofronoff, for the prosecution, argued that all these representations, if false, constituted a single offence. In my opinion that is not so, unless the Court is free to adopt the "single enterprise" doctrine referred to below. | The authorities concerning duplicity are numerous, but the most useful of them for present purposes are those which deal with making false statements and the like. As a generalisation, these authorities are based upon the view that one must find a single element as the essence of the charge, unless the statute indicates otherwise. There are other cases which take a more liberal view - e.g. Jemmison v Priddle (1972) 56 Cr.App.R. 229. The first of the false statement cases is Montgomery v. Stewart (1967) 116 C.L.R. 220, where the charge was one of issuing a false prospectus. Section 43 of the Companies Act 1958 (Vic.) provided: "Where in a prospectus there is any untrue statement of wilful non-disclosure any person who authorized the issue of the prospectus shall be guilty of an offence ... unless he proves either that the statement or non-disclosure was immaterial or that he had reasonable ground to believe and did, up to the time of the issue of the prospectus, believe the statement was true or the non-disclosure wet eee nee een ee er ee ray e immaterial. ..." ' The point taken was that the prospectus included more than one untrue statement and it was said for the defendant that each untrue statement in a prospectus is a separate offence. By a majority, the argument was rejected. Barwick C.J. said at p.223 that "... the offence created by s.43 is the single act of authorizing the issue of a prospectus which contains any untrue statement or wilful non-disclosure", and Menzies J. said that: "The gist of the offence ... is the authorization of the issue of a prospectus of a particular character - that is, one containing any untrue statement or wilful non-disclosure" (p.231). KittoJd., who dissented, did so on the basis that "... the 'unless' clause presents alternatives each of which must be intended to be available with respect to a single untrue statement or wilful non-disclosure" (p.225). A similar problem arose in R. v. Bartlett [1972] Qd.R. 337, decided by the Full Court of the Supreme Court of Queensland. There the statute provided (in part): "Any person who - (a) by his conduct; or (b) by his statements (whether oral or written); or (c) by both his conduct and his statements (whether oral or written), falsely and with knowledge of the falsity represents that any act has been done or that any circumstances have occurred, which act or circumstances as so represented is or are such as reasonably call for investigation by the police, shall be guilty of an offence", Ss aati ee a nn . tet at * * - Meee On the face of it, the case is a strong one for the prosecution here, for although two separate statements were alleged to have been made to two different police officers, one on August 2, 1970, and the other on August 4, 1970, the objection that the complaint was bad for duplicity failed; the Court took the view that: ",.. the gravamen or gist of the offence created ... is the creation by false representation of a belief in the existence of a situation or state of affairs which calls for investigation by the police. This false representation may be made by conduct or by oral statements or by written statements or by both conduct and statements (whether oral or written). The reference in the section to conduct and statements merely describes the ways or means by which the material act or circumstances may be represented" (p.343). Here, it could not be said that the gravamen of the offence is the creation of a particular belief; it is making a representation of a certain kind. The third of these cases on false statements and the like is R. v. M. & Ors, (1979) C.L.C. 40-565. Section 176 of the Crimes Act (N.S.W.) read in part: "Whosoever, being a director, or officer, of any body corporate, or public company, makes, circulates, or publishes, or concurs in making, circulating, or publishing, any written statement, or account, which he knows to be false in any Material particular, with intent to deceive, or defraud ... or with intent to induce any person to become a shareholder ... shall be liable to penal servitude for fourteen years." ass as Ree we pe ee 10. The question at issue was similar to that in Montgomery v. Stewart. The defendants were alleged to have published a written notice to shareholders which was false in seven respects, and so the charge was argued to be duplex. That argument was upheld by the trial judge, but the Court of Criminal Appeal ruled to the contrary, saying: ' "There was but one offence alleged, namely, the concurrence in the publishing of a statement knowing it to be false in a material particular, and the falsity of the statement could be in one respect or in many respects." The last of the cases in this category to which I will refer is the decision of the Court of Criminal Appeal for South Australia in a perjury case, Traino 27 A Crim R 271. The case is of some importance for the purpose of resolution of the present problem, in that the false statements complained of could be said to have been made by Traino on one occasion, namely that on which he gave the evidence the subject of the charge; the statements related to Traino's physical condition. The Crown fought its case "on the basis of the combined effect of statements, rather than any individual statement" and King C.J., with whom the other members of the Court agreed, approved of that approach. However, his Honour made it clear that to avoid duplicity the statements complained of had to "amount to a single false statement" (p.273). He had no difficulty —- "in envisaging a situation in which the cumulative effect of a number of false statements, perhaps each chargable as a separate perjury, May amount to a single compendious lie which is chargable as such in a single count." 11. re wees In the case before him, his Honour held that the language of the particulars described "not a single compendious statement about the appellant's physical capacity but more than one statement about more than one specific task". The conviction was set aside. , Although the reasons to which I have just referred relied upon Merriman's case, they would, if applied to the case before me, support the view that each falsehood complained of must be the subject of a separate charge, unless a number can be seen to have, taken together, the effect of a "single compendious lie". None of these cases casts doubt upon the existence or strength of the rule against duplicity. However, in the Director of Public Prosecutions v. Merriman [1972] 3 All E.R. 42, there is ae oe to be found a dictum that: See also the reference by Lord Morris, "The rule against duplicity, viz. that only one offence should be charged in any count of an indictment ... has always been applied in a practical, rather than in a strictly analytical, way for the purpose of determining what constituted one offence. Where a number of acts of a similar nature committed by one or more defendants were connected with one another, in the time and place of their commission or by their common purpose, in such a way that they could fairly be regarded as forming part of the same transaction or criminal enterprise, it was the practice, as early as the 18th century, to charge them in a single count of an indictment." (Lord Diplock, p.59) charge in respect of what might be called one activity .... at p.47, to "a single arya nee nd aan a ~ — Mes eee 12. Other cases can be found, principally in England, in which such an approach has been used. Mr Sofronoff argued that here there are "a number of acts of a similar nature ... connected with one another ... by their common purpose, in such a way that they could fairly be ' regarded as forming part of the same transaction ...". I agree that the various statements attributed to Mr Chin reasonably accord with this description, but application of the Merriman doctrine would be inconsistent, at least so far as it concerns cases of false statements and the like, with the basis upon which all the four cases to which I have referred were decided. For example, in Montgomery v. Stewart, there was only one act, the authorisation of the issue of the prospectus, and the untrue statements in it were certainly connected with one another; yet no member of the High Court sought to apply such a doctrine as was put forward in Merriman's case in the prosecution's favour, so as to render unnecessary resort to the considerations which were used, in the end, to resolve the point. Further, no such doctrine as was espoused in Merriman's case was adopted by the Full Court of this Court in Hughes v. R. (1983) 49 A.L.R. 110, where the Court remarked: "An indictment may include one or more counts, but each count must allege the commission of a distinct and separate crime" (p.116). In my opinion, one cannot necessarily lump a number of statements together as constituting one contravention of s.53(c), Wwe toe, cee re mye wee — cote Se we ee we ee ~ epee 13. "on the basis that they are connected by their common purpose. Each representation is a separate contravention. But the inclusion of the plural words "characteristics, accessories, uses or benefits" in s.53(c) makes it clear, if the point would otherwise have been doubted, that more than one attribute may be claimed for goods or services, in a single misrepresentation. In my opinion, the fact that a collection of oral or written material delivered on a single occasion contains a number of falsehoods within s.53(c) does not oblige the Court to hold that more than one contravention has taken place. I do not regard the result of Traino as directly governing the extent to which the rule against duplicity affects s.53(c) cases. But it seems to me impossible to hold that there is only one contravention; there are at least two. The statement particularised in (iv), that if Jill Lee invested $20,000, Kingly could guarantee an income from the investment of $500 tax free per week, cannot sensibly be said to be part of the same representation or representations which had previously been made; it related to a new situation, in that Jill Lee had already committed herself by paying money and Luke Chin desired more. The point appearing on the face of the proceedings, it has to be noticed whether or not any objection is taken. Under the English Summary Jurisdiction Act 1848, "no objection shall be taken or allowed to any information, complaint, or summons for any alleged defect therein in substance or in form " A duplex charge is bad in substance: Rodgers v. Richards ve eae ene nee pel npn tn eee ore woo ee 14. [1892] 1 9.B. 555. Under legislation of that kind, a duplex charge must not be dismissed on that account, but the prosecutor has to elect on which charge he will proceed: Hedberg v. Woodhall (1913) 15 C.L.R. 531. Section 21A of the Crimes Act 1914 is a provision of this type and gives the Court power to amend, if that . can be done without injustice to the defendant. It appears to me to follow that the proper course is to afford the prosecution an opportunity of amending the particulars in G57 of 1987 so as to charge one offence only. Prosecutions against Company Of the six prosecutions in this group, five concern Mr Chin's actions. It is convenient to deal with each separately. No. G62/87 This is a charge against the company relating to the matter involving Jill Lee, details of which are set out above. That is, the charge is precisely the same as that which I have referred to in discussing G57 of 1987, except that it is brought against the company, which is alleged to have contravened the relevant provision (s.53(c) of the Act), not merely to have been knowingly concerned in a contravention. The particulars allege, of course, that Mr Chin acted as the servant of the company. It follows from what I have already said that this case ao rw Prien eee 15. "cannot be disposed of, but must be adjourned to enable the prosecutor to apply, if so advised, to amend so as to eliminate the duplicity. No. 663/87 4 This is a charge of the same kind as that just mentioned -, i.e. the information says that the company was guilty of an offence against s.79 of the Trade Practices Act 1974 as amended, in that it "did, in contravention of Section 53(c) of the said Act, in trade or commerce, in connection with the promotion of the supply of services, represent that services had certain benefits which they did not have". The particulars allege that Mr Chin told one Rose Poh that if she gave money to the company to invest in commodity futures, there was no risk of loss, that because two opposing futures contracts would be purchased as an investment she would make money whether the market went up or down, and that the profits would not be taxable. Rose Poh has made an affidavit saying, in effect, that Mr Chin told her these things on 20 April 1986 in connection with a discussion about investing in commodity futures. There is evidence that Mr Chin was at the time acting as agent for the company, and evidence from which it may safely be inferred that anyone having the slightest familiarity with futures trading would have appreciated that the statements made were Pe ee ee pee ey ie 16. The company did not appear to defend, as I have mentioned, and I can see no difficulty about proof of this charge. It is, however, desirable to mention some aspects of the rather voluminous evidence placed before me. , Mr R.K. Halloran, a man with extensive experience in the futures industry, has sworn that "there was every chance capital could be lost" by the activities in which Rose Poh was asked to engage, and "in fact, additional funds may in certain circumstances be required over and above the original deposit". Mr Halloran also points out that if there were "two opposing futures contracts", then the client would lose because of the commission charges, any gain being offset by a corresponding loss. These matters might seem obvious enough, and one would expect that none but the very gullible could be persuaded otherwise; similarly, with respect to the assertion that the profit would not be taxable. But it is no part of the prosecution's case that Rose Poh acted reasonably in acting upon the statements made to her by Mr Chin. What she did was invest $15,000, some of it borrowed from relations, the investment of which promptly returned, according to Mr Chin, a small profit. She borrowed more money from her daughter and put that in; then she received a margin call of over $7,000. She took steps to protect her position, apparently realising by then that Mr Chin's assurances were untrue, but in the end lost about $17,000. BIRR a ere ae ee nee ? cae renee wap ot Sante moe ae oe ee eee. 17. Mr L.V. Hosking, Chief Executive of the Sydney Futures Exchange, has explained the company's connection with the Hong Kong Futures Exchange, on which it was supposedly trading. He has drawn attention to irregularities and even absurdities in the documents used by the company. [It does not appear to me, however, that evidence of that kind is directly relevant to the charge. The essence of the prosecution's case is that Rose Poh was induced to give Mr Chin money by false statements to the effect that means would and could be used to ensure that there was a profit rather than a loss, and a tax-free one at that, whereas the truth was that Rose Poh was being invited merely to gamble. Even if the transactions in which the company were engaged were conducted ina regular and honest way, the statements made to induce Rose Poh to borrow money and pay it to Mr Chin would not have been true Another example of the sort of evidence just dealt with is that of Deborah Catherine Horne, who has been for some years an investigating officer employed by the Sydney Futures Exchange Limited. This deponent examined records of the company's transactions relating to Rose Poh and others. She gives examples of methods of trading which are, to say the least, odd, and some of which seem to have been designed only to generate commissions. Further, Nancy Tong Sui-Lan, a government securities officer in Hong Kong, has given evidence that on some days when the defendant company purported to have traded on behalf of clients, it performed no trades at all, and that on most days when it purported to do so, the trades actually conducted did not reconcile with those which it claimed to have made. In my opinion, a considerable quantity of the material Spe mene» 1 awe rare nearer ae 18. produced was not necessary for proof of the charges. G64/87 , ft This is a further charge based upon statements made by Mr Chin. It is alleged, in effect, that he said to Teresa Standring that if she gave money to the company for investment in commodity futures, she was guaranteed 120% return and return of between $250 and $300 per week, and that the profits would not be taxable. Her affidavit shows that these statements were made, with one possible exception. As to the question of taxation, it is said that: . "Luke Chin was asked about the taxation implications and he said that it was not necessary to declare the profits made on futures trading as it was similar to winning on the horses. He also said that a lot of his clients did not use their own names and that there was no way in which the Taxation Department could know of their profits." This is unclear, read as a whole. The first sentence accords with the prosecution's case; the second does not, but rather conveys the information that clients might hope to get away, by non~disclosure with non-payment of tax. I am not satisfied that the representation meant that the profits were not taxable. In my opinion, failure of the Crown to establish one of the three particulars of falsity does not prevent the Court from finding the offence to be proved on the basis of the other two particulars, and I find that it is so proved. fs ee pein eee ee wo 19. G65/87 nA The charges here are of the same character as those already dealt with, with the difference that the servant of the defendant company is alleged to have been one Alan Evans. The particulars assert that Alan Evans said to Gregory Matzkow, in effect, that if he put money into commodity futures there was no chance of losing the money, and that because two opposing futures contracts would be purchased, he would make money whether the market went up or down. Mr Matzkow, who is an accountant, has given evidence that Mr Evans explained, by using charts, how the commodity futures market worked. He asked Mr Evans whether there was a risk involved in the investment; "I told him I could not afford to lose any money. He assured me that I would double my money by Christmas which was six months away." As to the opposing contracts, Mr Evans "told me that it did not matter whether the market went up or down I could still make money". In this case, it does not appear to me that the case is proved, within the particulars. The assurance about doubling money by Christmas is quite a different statement from that alleged, as is the other statement; there is a small but important difference between "could" and "would", in this context. No doubt it was true, as a general proposition, that whether the market went up or down, the customer could still make money. 20. "No. G66/87 Here, the statements complained of are once again alleged to have been made by Mr Chin. The allegation is that Mr Chin told Lin Fong Lee that if she put $20,000 in, the company could guarantee a $40,000 return within four months and a $100,000 return within a year, that she could not lose her money, that because two opposing futures contracts would be bought, she would make money whether the market went up or down, and that she would not have to pay tax. Lin Fong Lee has sworn that statements to the effect I have mentioned were made, and I find them all to have been false. The only one requiring special comment is the profit projection. The section speaks of the services having "characteristics ... uses or benefits they do not have", and there is room for argument whether a profit projection falls within that description. In my opinion, in the circumstances of this case, it does. The matter was placed before the prospective customer on the basis that there was a regular system of trading in operation calculated to produce these results; plainly on the evidence, it was not likely to do so, and the probability was that it would produce a loss, as it did. No. G67/87 This is a charge of the same character, the customer being one Jonathan Lee, who was told by Mr Chin that because two opposing futures contracts would be purchased he would make money ttt ree ee Meeee 2i. whether the market went up or down, and that there was no way he could lose his money. Jonathan Lee's affidavit swears that statements to that effect were made, and I find that they were made and were false. The specific instance given by Mr Chin related to sugar futures and was that: "he would invest $5,000.00 in a buyer position which would make a profit if the sugar went up and the other $5,000.00 would be invested in a down position so that our money would make a profit if the sugar went down. ... whichever way the market went, either up or down, it would always make a profit." As has been mentioned above, the truth was that method of operation was certain to produce a loss, not a profit, for any profit om one contract would be matched by an equal loss on the other, to which one would have to add the commissions charged on the real (or purported) trading. Prosecutions Against Mr Chin Personally The five prosecutions against Mr Chin are those which correspond with the six mentioned above with the exception of G65/87 relating to statements made by Alan Evans - the charge which will be dismissed. Mr Chin's counsel, Mr Douglas Campbell, argued that it was not shown that Mr Chin had sufficient knowledge of the circumstances to be caught by the provisions of s.5(1) of the Crimes Act 1914, reading as follows: 22. "Any person who aids, abets, counsels, or procures, or by any act or omission is in any way directly or indirectly knowingly concerned in, or party to, the commission of any offence against any law of the Commonwealth or of a Territory, whether passed before or after the commencement of this Act, shall be deemed to have committed that offence and shall be punishable accordingly." That provision governed the criminal liability of Mr Chin prior to 1 June 1986, not being a corporation nor caught by any of the special provisions in s.6 concerning telephonic services and the like. He could not be liable as a principal. fhe significance of the date I have mentioned, 1 June 1986, is that on that day a new s.79(1) of the Act came into operation, having been inserted by s.47(1)(a) of Act No. 17 of 1986; the amendment applies only to offences committed on or after 1 June 1986. All the charges relate to representations made before 1 June except that in No. 61 of 1987 and the corresponding charge against the company, No. 67 of 1987. To deal first with the application of s.5(1) of the Crimes Act 1914 to Mr Chin (a matter not debated before me), it is arguable that, on the basis of a dictum of the majority of the High Court in Yorke v. Lucas (1985) 158 C.L.R. 661 at p.671, it cannot apply because the representations complained of were made by Mr Chin himself. That case concerned the effect of s.75B of the Trade Practices Act defining "a person involved in a contravention of a provision of Part IV or v". Such persons are defined in terms which correspond to those of s.5(1) of the Crimes Act, with the Se ee envengne ' 23. exceptions that s.75B adds two other categories, namely inducing a contravention and conspiring to effect one. What is said by the majority of the High Court in their reasons (at p.671) is. discussed in my judgment in Trade Practices Commission v. Frendship Aloe Vera Pty Ltd (unreported, 10 June 1988). If that dictum were regarded as applicable here, the result arrived at would be that Mr Chin could not convicted, as being himself the maker of the representations in question. In Wright v. Wheeler Grace and Pierucci Pty Ltd (French J., 22 April 1988, unreported), s.75B(1) was construed in the way suggested in the Yorke v. Lucas dictum, but I propose to adhere to the view taken in the Frendship Aloe Vera case and apply it to the construction of the words "in any way directly or indirectly knowingly concerned in" in s.5(1) of the Crimes Act. It is my opinion that Mr Chin fits the description just quoted. The question whether s.5(1) of the Crimes Act is on its proper construction capable of applying to a person such as Mr Chin is not directly dealt with in any of the cases just mentioned, nor in the decision of the Full Court of this Court in Enzed Holdings Ltd v. Wynthea Pty Ltd (1984) 57 A.L.R. 167 at p.178. However, the decision last mentioned is authority binding on me as to the application of the expression "knowingly concerned in", in s.75B of the Trade Practices Act, to cases of this sort; it appears to me that it should be treated as binding also in applying the identical words in s.5(i) of the Crimes Act. As I have mentioned, s.5(1) of the Crimes Act was Wor meee eeererey nengreenrnes Sey e anes y oo 24. supplanted as to offences committed on or after 1 June 1986 by the new s.79(1) of the Trade Practices Act, whose wording is such as to make the Enzed case, again, require a conclusion that Mr Chin was knowingly concerned in the contravention by the company. That is the proper result of the only case to which the new s.79(1) applies namely G61 of 1987. ' All of the five proceedings against Mr Chin were drawn so as to allege that he was "guilty of an offence against Section 79 of the Trade Practices Act 1974 as amended by virtue of Section 5 of the Crimes Act 1914 as amended". As to the offence of 2 June 1986, that wording is inappropriate and the summons and information in G61 of 1987 will be amended so as to replace the words just quoted by "guilty of an offence by virtue of s.79(1)(d) of the Trade Practices Act 1974". To return to Mr Campbell's point about Mr Chin's knowledge, there appears to be ample evidence against Mr Chin on that issue. Reliance was placed by Mr Sofronoff on RCA Corporation v. Custom Cleared Sales Pty Ltd (1978) 19 A.L.R. 123, in support of the view that one may presume that a person has the ordinary understanding of those engaged in his line of business, but it does not appear to me that in this case one has to call in aid any such presumption. In each case Mr Chin was not merely a salesman, but was the line of communication between Kingly Commodities (Qld) Pty Ltd and the customer; he took and paid money, described the method of operation in detail and gave the customer, from time to ween eee ee een 25. time, an account of the alleged progress of trading. There is a good foundation for an inference that Mr Chin was thoroughly familiar with the mode of operation of the business in all its aspects. I hold that he was knowingly concerned in the commission of the offence by the company and is therefore deemed to have committed that offence under s.5(1) of the Crimes Act 1914, Conclusions On the view I take as to the issue of duplicity, it is permissible to bundle together statements made on a single occasion to constitute one offence. It follows that a conviction will be recorded as to each of the charges except Nos. G57 and G62 (where an opportunity will be afforded to enable the prosecutor to apply for an amendment) and No. G65, the charge relating to statements made by Alan Evans. The matter will be relisted to determine penalty in the cases where there is a conviction and to allow the question of amendment to be dealt with. t certify that this and the Dy preceding Pages are a true copy of the reasons for judgment herein of His Honour Mr. Justice Pincus 4 a Beir Associate Dated /O August /4@8 Counsel for Prosecutor: Mr W. Sofronoff Solicitor for Prosecutor: Director of Public Prosecutions Counsel for Luke Lawrence Chin: Mr D.Jd. Campbell Solicitors for Luke Lawrence Chin: Catt Smith Dates of Hearindq: 31.5.88 & 2.6.88