FEDERAL COURT OF AUSTRALIA Prosperity Group International Pty Ltd v Queensland Communication Company Pty Ltd (No 3) [2011] FCA 1122 Citation: Prosperity Group International Pty Ltd v Queensland Communication Company Pty Ltd (No 3) [2011] FCA 1122 Parties: PROSPERITY GROUP INTERNATIONAL PTY LTD ACN 110 539 636 and WORLDNET CORPORATION LIMITED PTY LTD ACN 113 910 124 v QUEENSLAND COMMUNICATION COMPANY PTY LTD ACN 126 049 385, AXIS TELECOMS PTY LTD ACN 126 049 205, CLEAR TELECOMS (AUST) PTY LTD ACN 129 296 573, AUSTRALIAN EQUIPMENT RENTALS PTY LTD ACN 126 049 376 and QUICK FUND (AUSTRALIA) PTY LTD ACN 116 768 711 File number: QUD 32 of 2009 Judge: LOGAN J Date of judgment: 29 September 2011 Catchwords: TRADE PRACTICES – misleading or deceptive conduct – representations made by agent of third to fifth respondents – where written terms of contract did not incorporate those representations – where representations nonetheless formal terms of contract – whether applicants relied on those statements – misleading or deceptive conduct found TRADE PRACTICES – misleading or deceptive conduct – assignment of contracts – where contracts assigned by second respondent to third respondent – where representations made by agent of second and not third respondent – whether third respondent received burden as well as benefit of those contracts – third respondent did receive burden of contracts – third respondent liable in damages – s 87 of the Trade Practices Act 1974 (Cth) not applicable to third respondent AGENCY – whether person acted as agent of third to fifth respondents – where person held himself out as an agent – where first respondent shared premises with person – where fourth and fifth respondents often used brokers to arrange contracts – where third respondent incorporated after initial contracts signed – where person represented other members of third respondent's corporate group – person was agent of respondents Legislation: Australian Securities and Investments Commission Act 2001 (Cth) ss 12BAA, 12BAB, 12DA, 12GF, 12GM Corporations Act 2001 (Cth) s 500 Trade Practices Act 1974 (Cth) ss 4, 4B, 51AF, 52, 73, 82, 87 Property Law Act 1974 (Qld) s 199 Federal Court of Australia Act 1976 (Cth) s 51A Cases cited: Hillpalm Pty Ltd v Heaven's Door Pty Ltd (2004) 220 CLR 472 considered JH Fenner & Co Ltd v Gulf Conveyor Systems Pty Ltd (1998) 41 IPR 375 considered Konstas v Southern Cross Pumps and Irrigation Pty Ltd (1996) 217 ALR 310 considered Krambousanos v Jedda Investments Pty Ltd (1996) 64 FCR 348 followed L'Estrange v F Graucob Ltd [1934] 2 KB 394 considered McDonald v Shinko Australia Pty Ltd [1999] 2 Qd R 152 considered Oraka Pty Ltd v Leda Holdings Pty Ltd [1997] ATPR 41-558 followed Rufa Pty Ltd v Cross [1981] Qd R 365 followed Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 considered Sir Edward Coke, Coke on Littleton, (1628) at p 230b Date of hearing: 7-10 February 2011 and 14 February 2011 Place: Brisbane Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 87 Counsel for the Applicants: Mr A Christie Solicitor for the Applicants: Walker Hedges & Co Counsel for the First and Second Respondents: The First and Second Respondent did not appear Counsel for the Third, Fourth and Fifth Respondents: Mr S Bell Solicitor for the Third, Fourth and Fifth Respondents: SR Law IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 32 of 2009 BETWEEN: PROSPERITY GROUP INTERNATIONAL PTY LTD ACN 110 539 636 First Applicant WORLDNET CORPORATION LIMITED PTY LTD ACN 113 910 124 Second Applicant AND: QUEENSLAND COMMUNICATION COMPANY PTY LTD ACN 126 049 385 First Respondent AXIS TELECOMS PTY LTD ACN 126 049 205 Second Respondent CLEAR TELECOMS (AUST) PTY LTD ACN 129 296 573 Third Respondent AUSTRALIAN EQUIPMENT RENTALS PTY LTD ACN 126 049 376 Fourth Respondent QUICK FUND (AUSTRALIA) PTY LTD ACN 116 768 711 Fifth Respondent JUDGE: LOGAN J DATE OF ORDER: 29 SEPTEMBER 2011 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The third respondent pay to the first applicant the sum of $617.40 by way of damages. 2. The third respondent pay interest on those damages, calculated at the rate of 5% per annum from 21 August 2008 to the date of this judgment. 3. It is declared that the following contracts made between the first applicant and the fourth respondent (AER) or, as the case may be, the fifth respondent (Quick Fund), as particularised below (collectively the "equipment rental contracts"), are void ab initio or void on and from 1 May 2010: (a) AER agreement No 092481; (b) AER agreement No 092480; (c) AER agreement No 092429; (d) AER agreement No 093905; and (e) Quick Fund agreement No A001618. 4. Enforcement of all of the provisions of the equipment rental contracts is refused. 5. The fourth and fifth respondents are respectively restrained from seeking to enforce such of the equipment rental contracts to which they are a party. 6. Save to the extent recognised in paragraph 1 of these orders by the allowance in favour of the third respondent of a set off in the amount of $23,266.75 in respect of what would otherwise be the third respondent's liability for damages in the sum of $23,884.15 so as to yield a net amount of damages of $617.40, the respective cross claims of the third, fourth and fifth respondents be dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011 IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 32 of 2009 BETWEEN: PROSPERITY GROUP INTERNATIONAL PTY LTD ACN 110 539 636 First Applicant WORLDNET CORPORATION LIMITED PTY LTD ACN 113 910 124 Second Applicant AND: QUEENSLAND COMMUNICATION COMPANY PTY LTD ACN 126 049 385 First Respondent AXIS TELECOMS PTY LTD ACN 126 049 205 Second Respondent CLEAR TELECOMS (AUST) PTY LTD ACN 129 296 573 Third Respondent AUSTRALIAN EQUIPMENT RENTALS PTY LTD ACN 126 049 376 Fourth Respondent QUICK FUND (AUSTRALIA) PTY LTD ACN 116 768 711 Fifth Respondent JUDGE: LOGAN J DATE: 29 SEPTEMBER 2011 PLACE: BRISBANE REASONS FOR JUDGMENT 1 The only active party respondents in these proceedings are Clear Telecoms (Aust) Pty Ltd (Clear), Australian Equipment Rentals Pty Ltd (AER) and Quick Fund (Australia) Pty Ltd (Quick Fund), respectively the third, fourth and fifth respondents. Even to describe these respondents as "active party" respondents is something of a misnomer having regard to the pace of interlocutory events and a need which arose to vacate trial dates offered last year. Be this as it may, by their further amended defence and cross claim, they have admitted that Prosperity Group International Pty Ltd (Prosperity Group) or, as the case may be according to the admission made, WorldNet Corporation Limited Pty Ltd (WorldNet), respectively the first and second applicants, entered into the following contracts for the provision of telecommunication services or, as the case may be, the rental of office equipment: (a) On or about 11 October 2007, WorldNet entered into a contract with Axis Telecoms Pty Ltd (Axis) for telecommunications services. (b) On or about 11 October 2007, WorldNet entered into a contract with AER for rental of the following office equipment: (i) 1 x Panasonic TDA 200 Main Equipment; (ii) 30 x Panasonic Handsets; (iii) 1 x Panasonic Voicemail System; (iv) 1 x Panasonic Premium Dect Pack; (v) 30 x Wired Handsets; (vi) 1 x LG 50" Plasma Display; (vii) 1 x Plasma Stand; and (viii) 2 x Massage Chairs (c) On or about 25 October 2007, Prosperity Group entered into a contract with Axis for telecommunications services. (d) On or about 25 October 2007, Prosperity Group entered into a contract with AER for rental of the office equipment: (i) 1 x 30 Handsets; (ii) 1 x TDA 200 Panasonic Main Equipment; (iii) 6 x Panasonic KXT 7630 AL Handsets; and (iv) 1 x KXT7636AL Panasonic Handset. (e) On or about 25 October 2007, Prosperity Group entered into a contract with AER for rental of the following office equipment: (i) 1 x Panasonic Voicemail System; (ii) 1 x Panasonic Dect Pack; (iii) 1 x LG 50" Plasma Display; (iv) 1 x Plasma Stand; (v) 23 x Panasonic Handsets; and (vi) 1 x Panasonic Voicemail. (f) On or about 25 October 2007, Prosperity Group entered into a contract with AER for rental of the following office equipment: (i) 2 x Massage Chairs. (g) On or about 6 March 2008, Prosperity Group entered into a contract with Axis for telecommunication services. (h) On or about 6 March 2008, Prosperity Group entered into a contract with Quick Fund for rental of the following office equipment: (i) 8 x Panasonic Display Handsets; (ii) 1 x DSS Console; and (iii) 19 x Wired Handsets. (i) On or about 6 March 2008, Prosperity Group entered into a contract with AER for rental of the following office equipment: (i) 5 x Panasonic Handsets. 2 Clear, AER and Quick Fund also admit that, at all material times, a Mr Jayson Croom was employed by the first respondent, Queensland Communications Company Pty Ltd (QCom). On 8 February 2010, pursuant to s 500(2) of the Corporations Act 2001 (Cth), I gave Prosperity Group and WorldNet leave to proceed against QCom and Axis. QCom, like the second respondent Axis, was then in liquidation. Neither of these respondent companies has, since then, taken an active part in the proceedings. That includes an absence of an appearance by or on their behalf at trial. While that may entitle Prosperity Group and WorldNet to judgment in default, it was not clear on the evidence at trial whether either QCom or Axis remained on the register. For that reason, I adjourned for later mention so much of the proceeding as related to QCom and Axis The balance of these reasons for judgment therefore deals with the case brought against Clear, AER and Quick Fund and with the cross claim by those respondents. 3 Further admitted by Clear, AER and Quick Fund is that Mr Croom, for and on behalf of QCom and Axis, entered into negotiations with Prosperity Group and WorldNet for the provision of telecommunications services. They admit that he represented to those companies that the telecommunications services that could be provided by Axis would be a $6,000 monthly plan for unlimited calls. That admission is qualified by the allegation that Mr Croom added, "subject to terms and conditions". These respondents also allege that Mr Croom said to Prosperity Group and WorldNet words to the effect that "both arrangements" would be "subject to contracts in writing on the respondents usual terms" [sic – para 4 (c) of their further amended defence]. They expressly deny that Mr Croom ever made representations on their behalf and otherwise deny that the representations as alleged to have been made by him were in fact made. 4 The representations which Prosperity Group and WorldNet allege were made on behalf of each respondent by Mr Croom were, according to their amended statement of claim: (a) that he could arrange for Prosperity Group and WorldNet to be provided with telecommunications services, which would never cost Prosperity Group and WorldNet more than $6,000 per month; (b) that he could arrange for Prosperity Group and WorldNet to be provided with free equipment; (c) that his representations represented the entire agreement between the parties. Particulars (i) the representations were made by Mr Croom on or in September 2007, 11 October 2007, 25 October 2007 and 6 March 2008 to Jonathan King, Robin Panozzo and Tome Bozov of Prosperity Group and WorldNet. (ii) Mr Jonathan King asked Mr Croom whether there was anything in the contracts to be brought to his attention or that he needed to know about; and (iii) Mr Croom stated that the contracts were standard stuff and that they contained the same terms as what Mr Croom had told Mr King, namely that there was a limit of $6,000 per month for telecommunications services charges under the contracts and that Prosperity Group and WorldNet would not have to pay any more than the sum of $6,000 per month for such services. 5 Reading their further amended defence (para 5) in context, Clear, AER and Quick Fund admit that, if these representations were made as alleged, they were made in trade or commerce and made with the intention that they be acted upon by Prosperity Group and WorldNet. 6 Prosperity Group and WorldNet allege that these representations were made either negligently, falsely or recklessly, without care as to their truth or falsity, or were misleading or deceptive, contrary to what was then s 52 of the Trade Practices Act 1974 (Cth) (TPA). They allege that: (a) they have received tax invoices for telecommunication services, issued by Axis for and on behalf of QCom, for more than $6,000 per month, which the Respondents knew could not be charged under the said contracts; (b) the office equipment to be provided, and which was provided, to Prosperity Group and WorldNet was not free, which the respondents knew or ought to have known at the time the representations were made; (c) Mr Croom did not advise or draw to their attention to the fair use policy included in the contracts for the telecommunications services; (d) the contracts did not provide that the maximum limit for charges was $6,000 per month, which the respondents fully well knew at the time the representations were made; (e) Mr Croom and the respondents fully well knew that the limit was not $6,000 per month for telecommunications services and that if certain events occurred they could incur charges in excess of $6,000 per month for such telecommunications services; (f) Mr Croom failed to advise them of the fair use policy and that under such a policy, upon certain events occurring they could incur charges in excess of $6,000 per month for such telecommunications services; (g) the respondents always intended to act and render charges in accordance with the fair use policy under the contracts; and (h) they should never have been advised to enter into the contracts given the respondents always knew of the state of their business. 7 Prosperity Group and WorldNet further allege that, insofar as these representations were in respect of future matters, the respondents did not have reasonable grounds for making them. 8 As a consequence, Prosperity Group and WorldNet claim that: (a) on four separate occasions between 21 May 2008 and 21 August 2008, either or each of Axis and Clear wrongfully debited an automatic direct debit authority with sums totalling $43,583.09 thereby giving rise to a claim for damages under s 82 of the TPA in that sum; (b) "the respondents" have asserted an ongoing prima facie liability of "the Applicants" to make payments under the contracts detailed above. 9 It is admitted by, materially, Clear that the four direct debit authority payments between 21 May 2008 and 21 August 2008 occurred on the following days and in the following amounts: (a) 21 May 2008 - $2,780.51; (b) 20 June 2008 - $5058.42; (c) 24 July 2008 - $5860.01; and (d) 21 August 2008 - $29,884.15. On the evidence, these payments by direct debit were made in respect of invoices bearing those same dates for telecommunications services which were issued to Prosperity Group by Clear. On 20 May 2008, Mr Jonathan King, on behalf of Prosperity Group, executed a direct debit authority in favour of Clear. The direct debits were effected pursuant to this authority. 10 Based on an allegation that QCom and Axis were the agents of AER and Quick Fund, Prosperity Group and WorldNet also allege that AER and Quick Fund were linked credit providers within the meaning of s 73(4) of the TPA. They further allege that, if there is not a bundling of all contracts between the applicants and the various respondents, the contracts between them and AER and Quick Fund are for a price less than the prescribed amount such that they fall within the definition of "consumer" for the purposes of s 4B of the TPA. On those bases they allege that they have suffered loss or damage as a result of the representations such that AER and Quick Fund are liable in damages pursuant to s 73(1) of the TPA. The damages claimed in respect of the s 73 related cause of action are not expressly pleaded in the Applicants' amended statement of claim but inferentially are the same as those claimed by them in respect of the alleged misrepresentations. 11 The Applicants additionally claim relief under s 87 of the TPA to the effect that the various contracts are void ab initio and injunctive relief restraining the enforcement of those contracts. 12 Other claims apart from the catch all further or other relief were pleaded in the amended statement of claim but these were not pressed in the Applicants' submissions at trial. 13 For their part, Clear, AER and Quick Fund have variously cross-claimed against Prosperity Group and WorldNet for amounts said to be owed by one or the other of them under the telecommunications service or equipment rental contracts. On the evidence (which differed from the originally pleaded position): (a) Clear claims from Prosperity Group the sum of $73,775.44 in respect of unpaid invoices for telecommunications services supplied either by Axis (for which it claims a right to sue) or by it in its own right. (b) AER claims from Prosperity Group the sum of $12,653,32 in respect of unpaid equipment rent under contract No 092481 dated 25 October 2007. (c) AER claims from Prosperity Group the sum of $23,221.30 in respect of unpaid equipment rent under contract No 092480 dated 25 October 2007. (d) AER claims from Prosperity Group the sum of $4,779.33 in respect of unpaid equipment rent under contract No 093905 dated 13 March 2008. (e) AER claims from Prosperity Group the sum of $40,853.62 in respect of unpaid equipment rent under contract No 092429 dated 19 March 2008. (f) Quick Fund claims from Prosperity Group the sum of $14,900.94 in respect of unpaid equipment rent under contract No A001618 dated 25 October 2007. 14 The total of AER's equipment rental related claims against Prosperity Group is $81,507.57. 15 Clear's claim of $73,775.44 in respect of supplied and invoiced but unpaid telecommunication services is made up of the following on the evidence: (a) Invoice dated 5 September 2008 – $23,151.81; (b) Invoice dated 8 October 2008 – $22,581.02; (c) Invoice dated 7 November 2008 – $15,823.64; (d) Invoice dated 4 December 2008 – $1,073.26; (e) Invoice dated 7 January 2009 – $4,288.96; (f) Invoice dated 5 February 2009 – $6,856.75. 16 For the Applicants, affidavit and oral evidence was given by Mr King, Mr Robin Panozzo and Mr Tome Bozov with respect to their respective dealings with Mr Croom. Clear, AER and Quick Fund did not call Mr Croom. Neither did their evidence go to show that, since the period in question, he had died or was otherwise unavailable to give evidence. Mr Croom's unexplained absence from the witness box does not, of course, mean that the evidence of Messrs King, Panozzo or Bozov or any one of them is to be accepted either uncritically or even at all. Nevertheless, the absence of any competing version of events from Mr Croom is a factor to take into account when weighing up what to make of the evidence of Messrs King, Panozzo or Bozov. Especially that is so given that the amended defence of Clear, AER and Quick Fund included the pleading of a positive case as to what Mr Croom had represented. 17 It emerged from Mr King's evidence and from an extract from Prosperity Group's website which became an exhibit at trial (Exhibit 1) that Prosperity Group conducts a business in which advice is given and subscriptions are sought in relation to what is known as an "index trading". On further examination, this appears to be a form of gambling on movements in various stock market indices. In any event, the business had in 2007 and continues to have a vital need for a telephone service both for the purpose of servicing existing clients or subscribers as well as for the purpose of canvassing for new business. WorldNet carried on its business from the same premises from time to time as Prosperity Group. Its business seems to have been of a similar nature to that of Prosperity Group. 18 During the years 2007 and 2008, Messrs King, Panozzo or Bozov, or companies associated with them, held all of the shares in the two applicant companies. According to the records of the Australian Securities & Investments Commission (ASIC), Mr King was, during that same period, the sole director of Prosperity Group and Mr Bozov was the sole director of WorldNet. Even though that was the formal position, I accept Mr Bozov's evidence that each of them was known informally within the companies' business premises as a "director" and he regarded Messrs King and Panozzo as his "partners". Even if strictly inaccurate in law, these descriptions well accord with his further evidence, which I also accept, which was that the three of them made major decisions concerning the operations of the companies together although each had a particular area of responsibility. These areas of responsibility were: (a) sales – Mr Bozov; (b) finance – Mr King; and (c) customer service – Mr Panozzo. 19 These differing areas of responsibility were reflected, I thought, in the level of detail with which King, Panozzo or Bozov recalled their dealings with Mr Croom. Mr King's recollection was the most detailed. This, I thought, was consistent with his responsibility for matters concerned with finance. 20 Overall, I formed a favourable impression of each of Messrs King, Panozzo or Bozov with respect to the credibility of their evidence. That was so even though the contemporaneous documents in October 2007 and March 2008, such as they are, make no reference to a $6,000 per month maximum or "cap" in respect of the total of telephone service and equipment charges. Notwithstanding the absence of such a reference in such documents, it is common ground that Mr Croom did mention this figure in his dealings with Prosperity Group and WorldNet, which necessarily means in his dealings with Messrs King, Panozzo or Bozov. This admission aside, these three men were both owners and managers within the applicants' businesses. In the latter half of 2007 they were contemplating a change of premises for business expansion purposes. As at September 2007, the companies collectively employed about 20 to 25 staff. Thereafter, they came to employ up to 40 staff. Staff numbers now are about 20. It is inherently likely, given their intimate involvement in the businesses and the expansion plans, that capping of telecommunications costs had an importance for each of them such that they might be expected to recall the essence of what Mr Croom put to them. That impression is strengthened by the fact that Prosperity Group and WorldNet had an existing telecommunications service provider – M2 Telecommunications. Messrs King, Panozzo or Bozov needed persuading that a change was to their and their companies' advantage. 21 It is not possible on the evidence to fix with precision when Mr Croom first made contact with one or the other of Messrs King, Panozzo or Bozov. What is certain is that a number of visits by him in 2007 to the then premises of Prosperity Group and WorldNet at Bundall on the Gold Coast preceded the sending by him and the receipt of a facsimile on "Technix" (Technix Pty Ltd) letterhead for Mr King's attention on 8 October 2007 enclosing a proposal and a blank from detailing terms and conditions for Axis' "Unlimited Calls Plan" . There was no particular reason why any of these men should have been able to give precision to when Mr Croom's first visit occurred. It was in the nature of what one might term "cold canvassing" by Mr Croom. He was then seeking, as he did thereafter, to persuade Prosperity Group and WorldNet to change their telecommunications service provider. 22 Only the obverse side of the Axis "Unlimited Calls Plan" as sent under cover of the facsimile of 8 October 2007. It is reproduced below: 23 What Mr King did recall of Mr Croom's initial visit was that he had expressly asked him to produce some identification verifying that he was a representative of Technix. Mr Croom had stated to him that he was Technix's regional manager. Mr King recalls that Mr Croom produced to him a laminated identification card which recorded his employment with Technix. Mr King's stated reason for his seeking the production some form of identification and his interest in knowing for whom Mr Croom acted was that he had himself previously worked as a door to door salesman. This reason carried a ring of authenticity for me, especially when I recalled the role which canvassing played in the businesses which the applicants conducted. It was only natural that Mr King, in particular, with his experience might be moved to ascertain for whom Mr Croom acted. 24 Nothing came of Mr Croom's initial visit but he was persistent thereafter in seeking to secure the custom of Prosperity Group and WorldNet. Mr King's account of these initial visits is corroborated by Messrs Panozzo and Bozov. Messrs King, Panozzo and Bozov were each extensively cross examined. I observed each of them closely when they gave their oral evidence. Neither in respect of their accounts of their initial dealings with Mr Croom nor in respect of their later dealings with him did I form the impression that any two or more of them had colluded in relation to the giving of evidence as to those dealings. 25 Mr Croom's efforts to secure the business of Prosperity Group and WorldNet persisted into September 2007. In that month he was able to persuade Mr King, in Mr Panozzo's presence, to provide him with a copy of the applicants' then largest monthly accounts from M2 Telecommunications for the purpose of putting to them a superior offer. 26 Later that month, Mr Croom returned to the applicants' then premises at Bundall and put to Messrs King, Panozzo or Bozov an offer the substance of which each of them separately recalled. This was an offer that they (their companies) would not pay more than $6,000 per month for telephone calls, regardless of volume. Of the three of them, Mr King took the lead in querying Mr Croom about the offer he made. He expressly asked him whether there was a catch to this offer as they were in negotiations about moving premises as the applicants were about to expand their businesses. To this Mr Croom replied that the catch was that the telecommunications service contract was for a period of 5 years. Upon being informed by Mr King that the applicants liked to have the flexibility of being able to change telecommunications service providers, Mr Croom stated that, as an incentive, he could provide free office equipment. During the course of this visit, Messrs King, Panozzo and Bozov walked with Mr Croom to the proposed new business premises. At this meeting, Mr King was non-committal as to whether the applicants would take up the offer. I find that, prior to 8 October 2007, Mr Croom was well aware that the applicants intended to expand their businesses with a corresponding increase in telephone call volumes during the life of the five year fixed term contractual arrangement he was promoting. Inferentially, that awareness extended to an understanding on his part that more than 20 telephone lines would be required by Prosperity Group during the life of the arrangement which he proposed, probably as soon as the change of premises occurred. 27 A yet further visit by Mr Croom followed, probably in late September or perhaps early October, prior to 8 October. Though each of Messrs King, Panozzo and Bozov was present, Mr King again was the person who took the lead on behalf of the applicants in dealing with him that day. His recollection, which I accept as accurate, as to the effect of what Mr Croom then said was that: (a) monthly telephone bills would be capped at $6,000 per month; (b) that capped fee would continue regardless of whether the volume of calls made per month increased; (c) there was a requirement to enter into rental contracts for the free office equipment as this allowed the companies which Mr Croom represented to buy telephone call prices in bulk but the rental fee would be credited to the telephone bills, thereby resulting in "free" equipment; (d) those same companies would pay out existing office equipment leasing contracts, thereby allowing the obtaining of newer office equipment; and (e) the term of the arrangement would be five years. 28 I am not persuaded that Mr Croom ever made, during any of his visits prior to 8 October 2007, an oral qualifying reference to "subject to terms and conditions". Messrs King, Panozzo or Bozov did not relate or concede his making such a qualification. This aside, the account of each of them that Mr Croom made repeated, unsuccessful efforts to secure the applicants' custom was never put in issue. As I have already observed, Mr Croom was faced with the applicants' evident reluctance to change telecommunications providers. It seems to me inherently unlikely that he would have qualified his sales promotion with language that was pregnant with provoking doubt in the minds of Messrs King, Panozzo or Bozov about the attractiveness of the alternative which he was offering. 29 A very real question in the case is offering by Mr Croom on behalf of which of the respondents? 30 That Mr Croom was employed by QCom as its regional manager is admitted. He is described as "regional manager" in the "Technix" facsimile of 8 October 2007. Technix and QCom shared premises. A comparison of the Technix facsimile of 8 October 2007 to Prosperity Group and a later facsimile of 8 February 2008 from QCom to Prosperity Group discloses that Technix and QCom operated from the same premises at 3 Balaclava Street, Woolloongabba in Brisbane. Based on the evidence and the admission, I find that Mr Croom held the position of regional manager in each of Technix and QCom. 31 The facsimile of 8 February 2008 is directed to the attention of Mr Bozov (by inference from its being marked for the attention of "Tommy") and states, "As discussed with Jason Croom, please find attached a copy of contracts signed" [sic]. Enclosed with this facsimile are equipment rental contracts between Prosperity Group and AER and related debit authorities dated 25 October 2007, related "Letters of Understanding" between QCom and Prosperity Group granting an option to purchase this equipment and telecommunications service agreements between Prosperity Group or, as the case may be, WorldNet and Axis. Mr Croom has signed each of these as a representative of QCom, AER or, as the case may be, Axis. 32 Ms Michelene Semaan, the Accounts Receivable Manger of each of AER and Quick Fund gave evidence. She was an honest and reliable witness. She stated that AER and Quick Fund did not deal directly with clients but rather with brokers. She commenced her employment with these companies in 2008 but stated that the system which she described was in place before then. This, plus the coincidence of premises as between QCom and Technix, as well as the holding of a regional manager position by Mr Croom with both companies and the facsimile sent on QCom letterhead on 8 February 2008 supplying copies of contracts signed with various of the respondents also gives rise to an inference that QCom itself, via Mr Croom, also acted on behalf of AER and Quick Fund in the various dealings with Prosperity Group and WorldNet. QCom did not act as the agent or broker for Prosperity Group or WorldNet in any of the subject transactions. On the evidence, part of QCom's business at the time was the sale of equipment. AER and Quick Fund were financiers which acquired equipment and then rented or hired this to third parties such as Prosperity Group and WorldNet. Their brokers or agents were QCom and Technix, each acting via Mr Croom. 33 Amongst the contractual documents executed on 11 October 2007 is an Axis document specifying terms and conditions for the "Unlimited Call Plan" executed by Mr Croom on behalf of Technix as sales agent for Axis and by Mr King on behalf of Prosperity Group. In form, that document is the same as the one sent in blank to Prosperity Group by Mr Croom under cover of the facsimile of 8 October 2007. A 60 month term was inserted on the plan as the length of the arrangement. Again, only the execution of a document containing obverse side, reproduced above, is proved. Further, against the background of his prior discussions with Messrs King, Panozzo or Bozov, Mr Croom put forward this "plan" as suitable even in light of the expansion plans on which he had been briefed, ie the two to twenty line limitation on the heading of the form was not intended by him to have contractual effect and was so understood by Mr King. The number of handsets for which the equipment rental agreements signed on 11 October and 25 October provide is itself eloquent in this regard. 34 The point of mentioning these October 2007 documents before the oral evidence which Messrs King, Panozzo and Bozov gave on the subject of what Mr Croom said as to the companies he represented is that, in conjunction with the admission as to QCom on the pleadings, they provide a basis for concluding and I find that, in October 2007, Technix, via its regional manager, Mr Croom, was variously acting at least for Axis, QCom and AER amongst the respondents. 35 Further, it seems inherently likely, given the arrangements which came to pass and the offers he made in September 2007 in his endeavours to secure the business of Prosperity Group and WorldNet that Technix and QCom, each via Mr Croom, were at least acting for those same respondent companies then, too. To reach these conclusions in no way depends upon accepting the evidence of Messrs King, Panozzo and Bozov as to of whom Mr Croom said he was a representative. There is nothing which would suggest that this representative role undertaken by Technix (in addition to or, as the case may be, QCom), via Mr Croom, ceased before the last of the contracts in question, ie, those dated 6 March 2008. Rather, that role appears to have continued. 36 Also before turning to their evidence on this subject, two further separately proved facts should be recorded. The records of ASIC disclose that Clear was not registered as a company until 18 January 2008. It was not until March 2008, pursuant to a written agreement that Axis sold to Clear assets which materially included its customer contracts (other than certain excluded contracts) and receivables. 37 Mr King stated that, at the very first time when he was approached by Mr Croom, Mr Croom stated to him that he represented QCom, Axis, Clear, AER and Quick Fund. He was adamant under cross examination that he was not making this up. He expressly affirmed that Mr Croom had said that he was an authorised representative of Technix, Axis and Clear. Mr Panozzo recalled Mr Croom's saying at this first encounter that he was the regional manager of Technix and that Technix was the authorised representative of a group of companies namely, QCom, Clear, and Quick Fund. He, too, maintained this evidence when cross examined as to its accuracy. Mr Bozov gave like evidence on this subject both in chief and under cross examination. 38 Mr King's evidence in chief also included a greater level of detail as to what Mr Croom had said on the subject of who he represented than the evidence of Messrs Panozzo and Bozov: In all of the conversations that I had with Mr Croom as to who the provider of the services would be, Mr Croom stated that he represented a group of companies that were all linked, and essentially one entity. Mr Croom referred to various providers of rental equipment, but always made reference to the third respondent [Clear] as the provider of telecommunications services, stating that they were a large, well respected company that had been in existence for some time. 39 Understandably, the absence of Clear's existence as a corporation on the register in September and October 2007 featured prominently in the submissions of Clear, AER and Quick Fund as to why the evidence of Messrs King, Panozzo and Bozov should not be accepted not only on the subject of what Mr Croom said as to the companies he represented but also as to what he had otherwise said or not said to them. 40 There was a superficial attraction in this submission but it jarred with the generally favourable impression which I had formed of each of Messrs King, Panozzo and Bozov when observing them in the witness box. Upon reflection, I did not conclude that this impression required revision. If anything, there is other evidence in the case which underscores why it is not at all inherently improbable that each of them might recall a use of the word "Clear" by Mr Croom, even in respect of conversations with him in September and October 2007. 41 That other evidence is to be found in the ASIC searches in respect of QCom, Clear, AER and Quick Fund. The shares in Clear, the third respondent, are held by Clear Communications (Aust) Pty Ltd (Clear Com) and Clear Communications (EurAust) AB (apparently a Swedish company – Clear Com AB)). 42 AER was incorporated on 19 June 2007. Of its issued shares, 883334 ordinary shares were initially held by Clear Com AB and are now held by Clear Com. A further one ordinary share was once held by a Dutch company, GMM Holdings B.V. What became of this share is something of a mystery on the face of the ASIC search record but it is a mystery which need not be solved in order to determine this case. QCom's shares were previously held by a Mr George Tawaf (18,000,001), Clear Com AB (18,000,001) and another Dutch company, Balderton International BV (1 ordinary share), which had the same address in The Netherlands as GMM Holdings. Mr Tawaf, in turn, was a (although not the only) director of Axis throughout the period leading up to its being placed in liquidation. The shares in Axis, which, like AER, was also incorporated on 19 June 2007 were initially held by the same companies which held the issued shares in AER and in the same respective numbers of shares. Thereafter, on a date it is not possible to determine from the ASIC search in evidence, the shares in Axis held by Clear Com AB passed to 076 804 718 Service AT Pty Ltd. 43 The point of this is that, when the identity of shareholders is known, it is by no means impossible to see how the word "Clear" featured in the recollection of each of Messrs King, Panozzo and Bozov as to what Mr Croom said to them, even in 2007, as to whom he represented or that their recollection was that, in so doing, he made reference to a group of linked companies. I find the more detailed account which Mr King gave, quoted above, as to repeated references by Mr Croom to his representing a linked group of companies inherently credible. As I have mentioned, Mr King was the most likely of the three who managed Prosperity Group and WorldNet to have the most detailed recollection, given his area of managerial responsibility. Further, given the task of persuasion which fell to Mr Croom, it is inherently likely that he emphasised linkages and strengths of those he represented. 44 Mr King and for that matter Messrs Panozzo and Bozov are mistaken in associating their recollection of the reference by Mr Croom to "Clear" in 2007 with the third respondent but this is not indicative of dishonesty or general unreliability of their part. I accept though that Mr Croom did use the word "Clear" as a descriptor. It is understandable that they have come to associate a retained memory of a reference by Mr Croom to the word "Clear" with the third respondent. It is from the third respondent that Prosperity Group came in 2008 to receive invoices for telecommunications services. 45 Technix was incorporated in 1982. It has no apparent linkage via identity of shareholders with any of the respondents. Its role though was as a representative, not as part of a group of companies linked by interlocking ownership. 46 For these reasons, I find that, though Mr Croom did not refer to Clear, the third respondent, in any of his conversations with Messrs King, Panozzo and Bozov in September or October 2007 (or thereafter for that matter), he did use the word, "Clear" in describing a linked group of companies which he represented. Subject to the qualification as to an absence of reference to the third respondent, I am satisfied that Mr Croom did indeed state that he represented the other respondents and that he did so on repeated occasions in September 2007 and October 2007 (and in March 2008) to each of Messrs King, Panozzo and Bozov. Again subject to this qualification, I accept the evidence of each of them as to the statements which Mr Croom made to them as to the features of the telecommunications service and "free" equipment which was on offer. 47 The contractual paperwork completed on 11 October 2007 was extensive and does show some signs of being completed in haste in the crossing out which is evident on a number of documents completed that day. I accept that Mr Croom did indeed say to Mr King when queried as to what was in the various contracts, that they were "just standard stuff". I do not accept though, that Mr King could not have read the contract documents then and there if he had wished. The same applies to Mr Bozov who also signed some of the documents. What is more likely is that, having made the decision to change carriers on the basis of the representations which Mr Croom had made and reassured by his answer that the contracts contained "just standard stuff", neither Mr King nor Mr Bozov then wished to read the various contractual documents before signing them. There is also an inference open, on the basis of the evidence as to the persistence it had required on Mr Croom's part to get Messrs King, Panozzo and Bozov to commit Prosperity Group and WorldNet to a change of telecommunications service, that he was anxious to have the contractual paperwork completed as soon as possible on 11 October 2007. None of this though amounts to duress. 48 A degree of haste in completion of documents does accord with Mr King's evidence as to Mr Croom's attendance on 25 October 2007 and the explanation which he gave as to there having been errors in the earlier documents. A large number of contractual documents were executed on 25 October 2007. Again, I do not accept that either Mr King or Mr Bozov could not have read through these documents had either of them wished. I do accept that Mr Croom said that day that there was nothing in them that he had not previously explained. I also accept that the representations which Mr Croom had earlier made remained operative when Mr King and Mr Bozov came to sign the various contractual documents on 25 October 2007. As on 11 October, Messrs King and Bozov did not wish to read through the various contractual documents at length. Both they and Mr Croom just undertook the task of completing and signing the documents as soon as possible. I do accept Mr King's evidence that he sought copies of the documents signed from Mr Croom and that these were not initially provided by Mr Croom. Mr Croom's lack of initial attention to this request appears to lie behind a follow up by Mr Bozov which saw copies of contracts signed sent under cover of the QCom facsimile of 1 February 2008 with the message "As discussed with Jayson Croom". 49 In relation to the rental of equipment and given the correspondence of equipment, the position appears to be that the equipment rental contracts dated 25 October 2007 as between AER and Prosperity Group replaced an earlier contract as between AER and WorldNet dated 11 October 2007 in respect of that same equipment. 50 As for those contracts dated 6 March 2008 (or later that same month), I accept Mr King's evidence that these were signed at Prosperity Group's new office and occurred in the context of his earlier requesting telephone lines to be "ported across" from Prosperity Group's old office to its new office. I also accept his evidence that Mr Croom said at the time that "re-execution" of the contracts was required in order for the porting to occur. I further accept that he again queried Mr Croom in relation to the contents of the contract documents and that he was informed that they contained the same terms and conditions as those previously signed, "all standard stuff". More particularly, I accept his evidence that Mr Croom said to him before he signed the various contract documents that the telephone account would be "capped" at $6,000 per month and that the equipment rental charges would be credited against the telephone bill each month. Neither Mr Panozzo nor Mr Bozov was present at the time that the contracts were signed on 6 March 2008. AER alleges some of the contracts were made not on 6 March 2008 but rather later that month. Nothing turns on this. Even if formally dated later than 6 March 2008, they were a sequel to the dealings between Mr King and Mr Croom on 6 March 2008 and procured as a result of the representations which Mr Croom made that day on behalf of AER (and others). 51 Mr King also stated in evidence that he did not have an opportunity on 6 March 2008 to read the contracts which were then signed. His version was that Mr Croom just presented him with those parts of the documents which needed signing. Once again, I do not accept that Mr King could not have taken time to have read the documents had he wished. The more likely conclusion in the circumstances is that, based on the statements which Mr Croom made to him, he saw no need to do this. In the circumstances, the only pressure to which he was subject was nothing more than a need to sign numerous documents in order that porting of lines might occur and an associated desire, prompted by Mr Croom's assurances, to complete this task as soon as possible. I do not accept that Mr King was under any pressure that the law would term duress in relation to the signing of the documents on 6 March 2008. 52 Having regard to the evidence which I have accepted, the alleged representations are proved. Further, they are proved to have been made on behalf of each of the named respondents, save Clear. Yet further, and even though this fact also need only be proved on the balance of probabilities, I have no doubt that, when executing various contracts on behalf of Prosperity Group or WorldNet or in signing related personal guarantees as set out in various contract documents, Mr King or, as the case may be, Mr Bozov relied upon those representations. 53 Mr King's evidence in chief ventured into other subjects in which promises made by Mr Croom in relation to services which Axis would provide had not been met. While I do not doubt Mr King's word on these subjects, they do not feature in the relief which either Prosperity Group or WorldNet seeks. I therefore do not recite this evidence. 54 As to the cross claim, there is no dispute that the telecommunications services the subject of the various invoices sued upon were in fact provided. Neither is there any dispute that the equipment the subject of the various rental agreements was delivered. I find that the services were provided and that the equipment was delivered as pleaded in the cross claim and that the equipment supplied was as pleaded in the amended statement of claim, also as detailed above. The amounts sought by way of cross claim likewise have been detailed above. The dispute is as to whether, having regard to the representations which Mr Croom made, Prosperity Group or WorldNet is liable to pay the sums sought. There is also a dispute as to whether Clear has any entitlement to sue for those amounts. 55 I have already referred to the sale by Axis to Clear of its communications service contracts in March 2008. The present sole director of Clear (and, earlier, on and from July 2008, its operations manager), Mr Kalogeras gave evidence that Clear acquired the business of Axis "in or about March 2008". The sale agreement is in evidence. Subject to exceptions which are not relevant, it provides in substance for the sale of a Axis' business, ie for such of the assets as are necessary to conduct that business. The effective date of that sale is expressed to be the date on which the sale agreement is signed. That date was 1 March 2008. Yet the documents exhibited to Mr Kalogeras' affidavit include an application by Prosperity Group, signed on its behalf by Mr King, to Axis dated 6 March 2008 and witnessed by Mr Croom. By 20 May 2008, when Mr King executed a fresh debit authority on behalf of Prosperity Group, that authority was given in favour of Clear. Yet, confusingly, as late as 2 July 2008, a Mr Barry Kennedy was corresponding on behalf of Axis with Mr King of Prosperity Group in relation to what he (Kennedy) alleged to be a breach by Prosperity Group of Axis' "Fair Use Policy" in relation to telecommunications services. Even more confusingly, the evidence discloses that, later that same month, it was Clear which was invoicing Prosperity Group for the provision of telecommunications services, as it had been since May 2008. The invoice issued then includes services provided by Clear in April 2008. 56 It was put on behalf of the applicants that there was no evidence of any assignment of the telecommunications contracts from Axis to Clear. That is not so. Under the sale agreement between these two companies the subject telecommunications contracts were assigned by Axis to Clear. That assignment at least had effect between the parties to that agreement although there is reason to doubt whether that occurred on 1 March 2008 as the sale agreement suggests on its face. 57 The discrepancies between the date on which the sale of the business occurred and how an agreement came to be made with Axis on 6 March 2008 were not explained or explored in evidence. The more one looks at the contract documents and correspondence on and from March 2008, the lack of precision in Mr Kalogeras' description of the sale as having occurred "in or about March 2008" is apt, even conservative. I thought him an honest witness but the utility of his evidence was limited by his lack of direct involvement with Clear's business prior to his assuming his initial role as its operations manager in July 2008. While I accept his evidence that Clear has never in his time used brokers, he was unaware of Axis' business, including its marketing methods. As he said, Clear had "inherited" Prosperity Group and WorldNet via its agreement with Axis. Though based on that inheritance in the sense that the telecommunications service contracts were originally made with Axis, Clear's claim for unpaid invoiced telecommunications services relates to services provided on and from May 2008, as the applicants' amended statement of claim itself recognises. The invoices progressively rendered for those services were rendered by Clear, not Axis. Insofar as s 199 of the Property Law Act 1974 (Qld) required notice of the assignment by Axis to Clear of the choses in action represented by the service contracts, Prosperity Group had notice of that assignment via the invoices prior to the bringing of the cross claim. The correspondence exhibited to Mr King's affidavit makes it plain that by September 2008 Prosperity Group and Messrs King and Bozov in particular were well aware that Prosperity Group was now dealing with Clear in relation to the provision of telecommunications services pursuant to the agreements originally made with Axis. I find that notice of an assignment to Clear of the telecommunications contracts made with Axis had occurred by September 2008. In any event, their having had the benefit of the telecommunications services and their being aware via the invoices that Clear was providing them, it would be inequitable to permit them to rely upon any lack of a formal notice of assignment. That means that Clear had the requisite standing to bring the cross claim. 58 Mr Kennedy was in the employ of Axis in 2007 and transferred to Clear in 2008 where he remained in employment. He may thereby have been able to shed greater light on dealings between the applicants and Axis, especially in relation to the transition from Axis to Clear. He was not called. His absence from giving evidence in the respondents' case was not explained. Another person not called, especially in Quick Fund's case, and whose absence was not explained, notwithstanding a reference to her in the amended defence as a person to whom Mr King was said to have made admissions as to amounts owed, was Ms Melanie Horfall. I have taken the absence of evidence from each of these persons into account on the same basis as I have taken the absence of evidence from Mr Croom into account. 59 The applicants did not in their submissions press that part of their case which asserted a liability on the part of one or the other of the respondents in respect of a negligent breach of a duty of care owed to them by Mr Croom in advising them as to the suitability of the telecommunications services contracts he was proposing. In any event, Mr Croom was not retained as an advisor nor do the circumstances of the dealings make him one. He was, in effect, a salesman. The tortious liability to which his conduct gave rise was via the tort of deceit, not the tort of negligence. 60 There is more substance in a submission put on behalf of the applicants in relation to the question of liability for the total of the alleged telecommunications service debt was that such rights as accrued to Clear, as a result of the assignment to it of the telecommunications service contracts made with Axis, would be subject to the effect in law of conduct on behalf of Axis in and in respect of the formation of those contracts. 61 I reject the alternative defence put on behalf of Clear, AER and Quick Fund that such representations as Mr Croom made on their behalf were mere puffery. I accept that not every statement made in the course of a dealing between persons in trade or commerce will necessarily constitute a representation for the purposes of s 52 of the TPA. The representations as pleaded, which I have found were made by Mr Croom, were not just exaggerations for the purpose of attracting the interest of the three men who controlled Prosperity Group and WorldNet. Rather, they were the represented features of an offer the acceptance of which Mr Croom sought to and did procure. It was those represented features which induced Prosperity Group and WorldNet to enter into the subject contracts. Mr Croom never qualified or corrected those represented features. In particular, the capping of total monthly outgoings in respect of telecommunication services charges and equipment rent over the life of the telecommunications service contract was an important feature of the deal promoted by Mr Croom, not just an effusive description. 62 The representations made by Mr Croom constituted conduct in trade or commerce on behalf of Axis, AER and Quick Fund. Prosperity Group and WorldNet relied upon those representations in entering into the subject contracts. Insofar as any of the representations contain any element of futurity and in any event, there is no evidence that Mr Croom ever had any basis for representing that the applicants outgoings would be capped at a monthly maximum of $6,000, irrespective of call volumes, for the term of those contracts. A necessary inference is that he made the pleaded representations either knowing that they were false or at least being recklessly indifferent as to their accuracy. The further statement made by Mr Croom that the contractual documents contained "just standard stuff" was either designed by Mr Croom to prevent the making of more detailed inquiry about or inspection of the pre-printed terms by Mr Panozzo, Mr Bozov or, in particular, Mr King or at least made recklessly by him in relation to the accuracy of the incorporation into those terms of a $6,000 total monthly maximum cap. Unqualified as it was, the statement amounted to a representation that there was nothing inconsistent in the pre-printed terms with the represented features and that, in order to secure those features the "standard stuff" had to be signed. 63 The essence of the "standard stuff" and a description of how the telecommunications contracts operated in conjunction with the equipment rental contracts is set out in the inaccurately titled "Customer Satisfaction Certificate" which came, as a matter of practice, to be signed on behalf of Prosperity Group (or, seemingly WorldNet) in respect of each group of equipment: With business equipment provided to you by Queensland Communication Company Pty Ltd will provide you with a Monthly Call Credit in phone calls up to the amount stipulated below. The call credit amount has been formulated using, and is based on, information that you have provided to Queensland Communication Company Pty Ltd. HOW DOES THE Solution WORK? There are two separate and unrelated agreements, a Rental Agreement for the equipment with Australian Equipment Rentals Pty Ltd "(AER)" (an external finance company) and a Telecommunications Airtime agreement with AXIS Telecoms Pty Ltd. 1. Under the Equipment Rental Agreement with ("AER") your nominated bank account or credit card account will be Direct Debited with the monthly account of [specified amount] based on a [same specified amount] (Rental), $0.00 (Stamp Duty) and $80.00 (GST) over the next 60 months. 2. Under the Telecommunications Services Agreement, AXIS Telecoms Pty Ltd will bill you for telephone usage as follows, Monthly Unlimited Plan Fee of [same specified amount] ex GST, the Monthly Mobile Plan Fee Total of $0.00 ex GST, the Monthly Other Service Plan Fee of $0.00 ex GST and the Monthly Broadband Plan Fee of $0.00 ex GST. AXIS Telecoms Pty Ltd will then allow Unlimited OnNet Calls of up to 15 minutes ("subject to the AXIS Telecoms Pty Ltd fair play policy). Mobile included calls and services will be provided as agreed on your Mobile Rate Card. All unused calls and data in any month from AXIS Telecoms Pty Ltd Mobile, Broadband and Other Service Call Plans are forfeited and cannot be used in a later month. Call usage in excess of the monthly included calls are charge at discounted rate as indicated on your specific rate card. AXIS Telecoms Pty Ltd will provide you with a Monthly Unlimited Plan Credit of [same specified amount] ex GST, the Monthly Mobile Plan Credit of $0.00 ex GST, the Monthly Other Service Plan Credit of $0.00 ex GST and the Monthly Broadband Plan Credit of $0.00 ex GST for the next 60 months. Call credit rates and discounted rates referred to in the agreement are specifically listed and endorsed, included Calls, include National, International, Local, Fixed wire to Mobile Calls ONLY (this excludes line rentals, numbers held for diversion, outbound and inbound calls to 13, 1300, 0019, 0015, 1900 numbers, call connect, directory assistance/operator connected calls. Centel Citywide, message bank and residential connections and services). The specified plan credit varied according to the equipment rented. It was inaccurate to describe the telecommunications service and equipment rental contracts as unrelated. Even via the standard terms, the plan credit ascertained by reference to the monthly rent amount provided a link. As the "Customer Satisfaction Certificate" indicates, it was QCom which was the equipment supplier. 64 While it may be accepted that s 52 of the TPA is not designed to protect the reckless or careless, neither is its protection confined to the cynical or the paranoid. The section is to be given effect according to its terms in the circumstances of a given case. In the circumstances of this case, Messrs King, Bozov and Panozzo were entitled to and did take Mr Croom at his word both as to the representations that he made and as to the absence of inconsistency in the standard form agreements. There was no want of reasonable care on the part of any of them and thus none on the part of either Prosperity Group or WorldNet. 65 Of course, the signing of the various telecommunications service and equipment rental agreements was not a mere formality. Having referred to a number of earlier authorities concerning the evidencing of adoption of contractual terms constituted by a signature, Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ observed in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [45] – [46]: 45 It should not be overlooked that to sign a document known and intended to affect legal relations is an act which itself ordinarily conveys a representation to a reasonable reader of the document. The representation is that the person who signs either has read and approved the contents of the document or is willing to take the chance of being bound by those contents, as Latham CJ put it, whatever they might be. That representation is even stronger where the signature appears below a perfectly legible written request to read the document before signing it. 46 The statements in the above authorities accord with the well-known principle stated by Scrutton LJ in L'Estrange v F Graucob Ltd that "[w]hen a document containing contractual terms is signed, then, in the absence of fraud, or, I will add, misrepresentation, the party signing it is bound, and it is wholly immaterial whether he has read the document or not". Scrutton LJ, in turn, was repeating the substance of what had been said by Mellish LJ in Parker v South Eastern Railway Co. The principle was applied in Foreman v Great Western Railway Co. A consignor of cattle sent them for transportation by a railway company. They were put in the charge of a drover, who could not read. The drover signed a contract of carriage which contained an exclusion clause. The drover's employer was held to be bound by the clause. The Exchequer Division said that "the plaintiff who sends the [illiterate] servant to sign the document is in no better or worse position than if he had signed it himself without reading it." In his lecture published as "Form and Substance in Legal Reasoning: The Case of Contract", Professor Atiyah posed, with reference to L'Estrange v Graucob, the question why signatures are, within established limits, regarded as conclusive. He answered: "A signature is, and is widely recognized even by the general public as being a formal device, and its value would be greatly reduced if it could not be treated as a conclusive ground of contractual liability at least in all ordinary circumstances." … [Footnote references omitted] To the qualification made by Scrutton LJ in the passage quoted from L'Estrange v F Graucob Ltd [1934] 2 KB 394 at 403 in these observations in the joint judgment might be now be added, "or in the absence of misleading or deceptive conduct contrary to statute". 66 Section 52 of the TPA does not require the proof of any knowledge in respect of the misleading or deceptive quality of the representations. As it happens, the applicants have proved that Mr Croom either knew that those representations were not true or at least was recklessly indifferent to their truth or falsity. There is no doubt that the applicants relied upon those representations in entering into each of the subject agreements. In those circumstances, the applicants have made out causes of action both in respect of a contravention of s 52 of the TPA as well as in respect of the tort of deceit at common law. 67 Clear has relied upon a standard term in the signed telecommunications service contracts (cl 14), which provides that: this is the whole agreement between us and you. You acknowledge that this written expression supercedes all prior representations and agreements, whether verbal or written, in connection with this Application for Telephone services. 68 For their part, AER and Quick Fund each point to another standard form term in the respective rental contracts (cl 7.2 in those to which AER was a party and cl 6.2 in those to which Quick Fund was a party), which provides that: You acknowledge that the Hiring [or in the case of Quick Fund, "Rental"] Agreement sets out the whole agreement between us in respect of the goods … 69 The misleading or deceptive conduct in which Axis, AER and Quick Fund engaged via Mr Croom not only preceded the entry into these contracts by one or the other of the applicants but induced them to enter into those contracts. It is not possible to contract out of the operation of s 52 of the TPA although the presence of "entire agreement" clauses such as these is relevant at an evidentiary level, but no means determinative, as to whether there was continued reliance upon antecedent representations. Here, there was continued reliance in each instance on the representations made by Mr Croom. The applicants continued to be misled as to the existence of a $6,000 capped total monthly maximum outgoing, irrespective of call volumes. 70 The falsity of the representations which Mr Croom had made became apparent to the applicants in 2008 as their call volumes increased to the extent that they came to receive invoices for telecommunications services which, even allowing for an equipment rent credit, exceeded a total monthly maximum of $6,000. They tried, unsuccessfully, to have Clear accept the represented position. When this failed the applicants terminated a debit authority and sought another carrier. The equipment rent continued to be paid until April 2010. 71 It was submitted for Clear that a letter directed to Clear and written on behalf of Prosperity Group by Mr Bozov in which an extension of time for payment was sought (unable to "congregate this payment") made no reference to any "cap" such that an adverse inference should be drawn as to whether there was ever any such representation made. Yet the preceding month in an email of 12 September 2008 to Clear's Ms Mansell, Mr Bozov made reference to just such a cap. Quite what Mr Bozov meant by his use of "congregate" is not certain. Worthy of note though and a probable explanation was evidence that Mr Bozov's first language was not English. 72 As to the applicants' alternative case in respect of AER and Quick Fund, which relies on their being linked credit providers for the purposes of s 73 of the TPA, the difficulty is that Pt V of the TPA does not apply to the provision of services that are financial services: s 51AF(1). Section 73 falls within Pt V of the TPA. Without limiting the effect of s 51AF(1), s 51AF(2)(a) materially provides that s 52 of the TPA does not apply to conduct engaged in in relation to financial services. The use of "in relation to" is indicative of a broader application, requiring only a relevant connection between the conduct and the provision of financial services. The linkage between the telecommunications and rental charges under the contracts is such that the conduct in which Mr Croom engaged on behalf of Axis as well as QCom, AER and Quick Fund could be classified as conduct "in relation to" the provision of services by AER and Quick Fund. If those services were "financial services", that would not exculpate them from liability for misleading or deceptive conduct as s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) makes like provision in respect of conduct "in relation to" "financial services" as does s 52 of the TPA in respect of conduct in trade or commerce. Further, s 12GF and s 12GM of the ASIC Act would, in respect of a contravention of s 12DA, entitle the applicants to no different relief than would s 82 and s 87 of the TPA in respect of a proved contravention of s 52. However, there is no equivalent of s 73 of the TPA in the ASIC Act. 73 "Financial service" is defined by the TPA (s 4) in a way which directs attention to the ASIC Act. In that Act, the term "financial service" is defined by s 12BAB. Materially, a financial service can be provided if there is a dealing in a "financial product". The latter is defined by s 12BAA of the ASIC Act but not in a way which readily applies to what is provided under the subject rental contracts. I am not persuaded that s 73 is excluded by s 51AF of the TPA. The applicants are "consumers" as defined by s 4B of the TPA because the "price" of the goods is less than the statutory maximum. In these circumstances, s 73(4) of the TPA operates so as to entitle the applicants to set up the liability of AER and Quick Fund under s 73(1) in respect of misrepresentations effected via Mr Croom in diminution or extinction of their claims for allegedly outstanding amounts. 74 The allegations in the amended statement of claim with respect to unconscionability and contractual penalties were not pressed on behalf of the applicants in submissions. 75 Insofar as Prosperity Group seeks relief under s 87 of the TPA as against Clear in respect of the assigned telecommunications service contracts, its claim must fail: Krambousanos v Jedda Investments Pty Ltd (1996) 64 FCR 348 at 355-356; Oraka Pty Ltd v Leda Holdings Pty Ltd [1997] ATPR 41-558 (the latter judgment of Burchett J was reversed on other grounds by the Full Court and it remains good authority in relation to the inapplicability of s 87 to an assignee who did not engage in the contravening conduct). In respect of those contracts it was Axis, not Clear, which, via Mr Croom, engaged in conduct in contravention of s 52 of the TPA. 76 Recognising this, counsel for the applicants put forward the alternative claim that the pleaded representations were terms of the various contracts between one or the other of them and one or the other of Axis, AER and Quick Fund. In so doing, he submitted that Clear took both the benefit and the burden of the telecommunications contracts assigned to it by Axis. Whether there is such a principle is contentious: see Konstas v Southern Cross Pumps and Irrigation Pty Ltd (1996) 217 ALR 310 at 313-314 (Konstas) where the relevant and conflicting authorities are summarised by Tamberlin J. Later in time in this Court is JH Fenner & Co Ltd v Gulf Conveyor Systems Pty Ltd (1998) 41 IPR 375 in which Moore J, referring to Konstas, acknowledged that whether there was such a principle was an open question. Since then, in the High Court, in Hillpalm Pty Ltd v Heaven's Door Pty Ltd (2004) 220 CLR 472 at [126] (Hillpalm) Callinan J has acknowledged the existence of the benefit and burden principle citing in so doing the Queensland authority, Rufa Pty Ltd v Cross [1981] Qd R 365 (Rufa). The view of Callinan J was expressed in the course of a dissenting judgment but none of the judges in the majority in that case felt it necessary to consider whether there was such a principle. In Rufa (at 371) Kniepp J did so, expressly holding that there was such a principle. His Honour (at 371) traced the principle back to Sir Edward Coke, Coke on Littleton (1628) at p 230b. Of the other judges constituting the Full Court in that case, Lucas SPJ (at 366) expressly stated that he did not disagree with the view expressed by Kniepp J and D M Campbell J (at 368) considered that the view his Honour had expressed was open. Rufa is one of the conflicting intermediate appellate authorities to which Tamberlin J refers in Konstas. In the sale agreement between Axis and Clear and subject to an immaterial exception arising from the exclusion from the definition of "Liabilities" of "Excluded Liabilities", Clear "assumes the Liabilities as and from the execution of this Agreement" (cl 4.1). That assumption of liabilities is repeated in the provision for the sale and purchase of the "Assets" (cl 3.1). Clear is given a right of indemnity against Axis in respect of claims in respect of assumed liabilities (cl 4.3). I prefer the reasoning of Kniepp J in Rufa and hold that there is such a principle. That means that Clear takes both the benefit and the burden of the assigned contracts. 77 In McDonald v Shinko Australia Pty Ltd [1999] 2 Qd R 152 McPherson JA (Moynihan J agreeing) regarded it as settled that an entire agreement clause of a like kind to those quoted above did not prevent the adducing of oral evidence in proof of fraud on the basis that such proof "opens all doors". Those clauses do not prevent treating the subject telecommunications contracts as containing the pleaded representations. 78 Prosperity Group and WorldNet ultimately came to the total of the sums paid to particularise their damages claim by aggregating the total sums paid to Axis by direct debit ($43,583.09), that paid by Prosperity Group to AER (total $63,206.00) and the total paid by Prosperity Group to Quick Fund ($10,560.00). From this it was said that monies due by Prosperity Group, capped at a maximum of $6,000 per month, should be deducted with the net amount constituting the amount of damages. Yet the represented position, which became a term of the telecommunications contracts, requires, so far as Clear is concerned, the liability of Prosperity first to be ascertained month by month, capped to a maximum of $6,000 after allowance for equipment rental credits. Where an excess has been paid the total of this is, by s 73(4) of the TPA, able to be set off in diminution of the amount claimed by AER or Quick Fund. 79 In the respect of the invoiced and paid amounts in May, June, July and August 2008, only in the month of August did Clear invoice Prosperity Group and Prosperity Group pay by direct debit a sum in excess of capped maximum of $6,000 namely $29,884.15 (the invoice appears to allow a credit for equipment rental payments). Clear is liable in damages for breach of contract in respect of this excess payment namely, $23,884.15. 80 Clear continued to provide telecommunication services from September 2008 until February 2009. In those months Prosperity Group was making monthly equipment rental payments to AER and to Quick Fund. Those monthly payments comprised the following: (a) AER agreement No 092481 - $385.00; (b) AER agreement No 092480 - $726.00; (c) AER agreement No 092429 - $1,234.00; (d) AER agreement No 093905 - $154.00; (e) Quick Fund agreement No A001618 - $440.00; Monthly total - $2,939.00 81 It is not apparent to me from the invoices concerned (including the descriptions in them of debits and credits) or the other evidence from Clear, AER and Quick Fund that, in respect of these months, Prosperity Group has been allowed a total rental credit in this monthly total or any rental credit. Allowing such a credit and then applying a monthly cap of $6,000 the following liability, if any, of Prosperity Group to Clear is derived: (a) Invoice dated 5 September 2008 – sum claimed - $23,151.81, less credit of $2,939 equals $20,212.81, which exceeds $6,000 and therefore liability capped at $6,000; (b) Invoice dated 8 October 2008 – $22,581.02 less credit of $2,939 equals $19,642.02, which exceeds $6,000 and therefore liability capped at $6,000; (c) Invoice dated 7 November 2008 – $15,823.64 less credit of $2,939 equals $12,884.64, which exceeds $6,000 and therefore liability capped at $6,000; (d) Invoice dated 4 December 2008 – $1,073.26, which is less than the available credit and therefore no liability; (e) Invoice dated 7 January 2009 – $4,288.96, less credit of $2,939 equals $1349.00, which is less than the monthly cap of $6,000 and therefore liability equals $1,349.00; (f) Invoice dated 5 February 2009 – $6,856.75 less credit of $2,939 equals $3,917.75, which is less than the monthly cap of $6,000 and therefore liability equals $3,917.75. Total liability in respect of unpaid invoices - $23,266.75. 82 A set off should be allowed as between Clear's liability in damages for the overpayment of $23,884.15 and Prosperity Group's true liability to it in respect of the unpaid invoices of $23,266.75. The result is that Clear's net liability to Prosperity Group is $617.40. Pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth), Clear should pay interest on those damages, calculated at the rate of 5% per annum from 21 August 2008 to the date of this judgment. I have selected 21 August 2008 as the commencement date for interest because that is the last date upon which a direct debit was made in favour of Clear. Prosperity Group has been kept out of its money since then. The interest rate is one which seems to me to be reasonable for the period concerned. 83 Though the telecommunications service contract was finally terminated in February 2009, payments continued to be made under the equipment rental contracts until April 2010 when the direct debiting authority was ceased. Those payments were, though, made against a background of Prosperity Group via its solicitors endeavouring in correspondence to come to some overall compromise arrangement which would embrace both the telephone service and equipment rental contracts. There was never any abandonment of the allegation that both types of contract had been procured by misleading or deceptive conduct on the part of Axis, QCom, AER and Quick Fund. Contrary to the represented position, the equipment was not in any sense "free". Prosperity Group did, though, retain the equipment and had the use of it but reserved its rights. One remedy permitted by s 87(2)(a) of the TPA where contravening conduct has been proved is the granting of a declaration that a contract is void and, if the Court thinks fit, to have been void ab initio or at all times on and after such date before the date on which the order is made as is specified in the order. I propose to grant this relief so as additionally to include void on and from 1 May 2010. In addition, I propose to make an order under s 87(2)(ba) of the TPA refusing to enforce the rental equipment contracts and to restrain the taking of any action to enforce them, including any action to recover from Prosperity Group a sum said to be owing under those contracts. In those circumstances, it is unnecessary to grant any relief under s 73(4) of that Act. 84 For these reasons, save to the extent recognised by set off from the damages otherwise payable by Clear to Prosperity Group, the cross claims brought by Clear, AER and Quick Fund will be dismissed. 85 I make no orders in relation to WorldNet. As I have found, the equipment rental contract dated 11 October 2007 to which it was a party was later replaced by one to which Prosperity Group was a party. The state of the paperwork in relation to those contracts was such that it was prudent for that company to be joined as an applicant. Its presence as a party did not add to the costs of the proceeding. 86 The amounts at issue and the relief claimed in these proceedings were such that, after the making of orders in respect of the first and second respondents under the Corporations Act, there was no need for the case to remain in this Court. It could thereafter have been heard and determined in the Federal Magistrates Court. For their own reasons, the parties chose not to seek remittal. Though Prosperity Group has substantially succeeded as against Clear, AER and Quick Fund, my provisional view is that it should have its costs taxed on the basis that, after 8 February 2010, Prosperity Group's costs should be taxed on the basis that the proceedings could have been heard in the Federal Magistrates Court. 87 There will be orders accordingly. I certify that the preceding eighty-seven (87) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. Associate: Dated: 29 September 2011