Re Trade Practices Commission v Robert Sterling [1980] FCA 12; 28 ALR 497 (21 February 1980)

FEDERAL COURT OF AUSTRALIA

Re: TRADE PRACTICES COMMISSION
And: ROBERT STERLING
No. G155 of 1978
Trade Practices
28 ALR 497

COURT

IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
Lockhart J.

CATCHWORDS

Trade Practices - consumer protection - application for injunction - misleading and deceptive conduct in relation to sale of land.

Constitutional Law - corporation's power - injunction against natural person - whether s. 80 of Trade Practices Act 1974 exceeds the legislative power of the Commonwealth - valid law of the Commonwealth - whether s. 80 is confined to contraventions capable of being committed by the person who is alleged to have aided, abetted, counselled or procured or induced, or attempted to induce or to have been knowingly concerned in, or party to, those contraventions.

The Constitution (62 and 63 Vict. c. 12) s. 51 (XX)

Trade Practices Act 1974 (Cth.) s. 52, s. 80.

Crimes Act 1914 (Cth.) S. 5, s. 7A.

HEARING

SYDNEY
21:2:1980

ORDER

1. The respondent be restrained until further order from aiding, abetting, counselling or procuring any company or person to engage, in trade or commence, in the conduct of advertising, representing, offering for sale or selling interests in land in a manner that is misleading or deceptive in contravention of s. 52 of the Trade Practices Act 1974;

2. The respondent be restrained until further order from inducing or attempting to induce any company or person to engage in any of the conduct aforesaid and from being in any way, directly or indirectly, knowingly concerned in or party to such conduct by any company or person;

3. The respondent pay the applicant's costs of this proceeding including any reserved costs; and

4. Liberty reserved to apply.

DECISION

The Trade Practices Commission ("the Commission") seeks injunctions pursuant to s. 80 (1) of the Trade Practices Act 1974 ("the Act") to restrain Robert Sterling ("the respondent") from (a) aiding, abetting, counselling or procuring any company or person to engage, in trade or commerce, in the conduct of advertising, representing, offering for sale or selling interests in land in a manner that is misleading or deceptive or is likely to mislead or deceive in contravention of s. 52 of the Act; (b) inducing, or attempting to induce, any company or person to engage in such conduct; and (c) being in any way, directly or indirectly, knowingly concerned in, or party to, such conduct by any company or person.

The Facts

1. General

Robert Sterling Pty. Limited (formerly known as Bidero Pty. Limited) ("the company") was incorporated on 15 June 1973 under the provisions of the Companies Act 1961 (N.S.W.). The directors and shareholders of the company, at all material times since August 1975, have been the respondent (who, before March 1976, was known as Emod Tariznyas) and his wife Susan Sterling. Since August 1975 the respondent has been the managing director of the company and in charge of its day to day activities.

The business of the company was the sub-division and selling of land.

The company was wound up by the Supreme Court of New South Wales in its Equity Division on 28 July 1978 and John Edward Walker appointed liquidator. The company was then insolvent, and insufficient funds have been realised to allow dividends to be paid to creditors. The liquidator has been unable to determine the precise amount of the company's deficiency as the statement of affairs has not been submitted by the directors.

The company's activities centred primarily around two parcels of land, one near Ballarat, Victoria known as the "Paradise Waters Estate" and the other near Maroochydore, Queensland known as the "Tropicana Cove Estate".

2. Paradise Waters Estate

The Paradise Waters Estate has an area of about 226 hectares and is situate about thirteen kilometres from the city of Ballarat. Pamphlets issued by or on behalf of the company contained statements that the Estate was planned for the construction of some 2000 dwellings containing 6500 people or about 1/10th of the population of Ballarat, with provision for commercial buildings, shops, schools, hotel/motel, community centres, playing fields, parks and public open space. The development was to extend over a period of three years. The pamphlets stressed the proximity of the Estate to the City of Ballarat and that the policy of the Government of the State of Victoria was to accelerate the growth of Ballarat which itself is some one hundred and thirteen kilometres from Melbourne. The advantages of proximity to Lake Burrumbeet were emphasised in the pamphlets. They said that the Estate would have proper roads, fully kerbed and guttered, with sealed footpaths to conform with Shire requirements; that there would be cycle paths and footways, water, gas, electricity and telephone services which would be reticulated underground throughout the Estate. The pamphlets said that consultants to the Shire of Ballarat had indicated that the provision of water supply to the Estate was technically feasible and that full sewerage of all blocks was proposed.

Some of the pamphlets contained a statement of the "consultant personnel to date" engaged or retained by the company including town planners, urban designers, consulting engineers, consulting scientists, licenced surveyors, civil engineers and people described as sociologists, economic and social planners and project co-ordinators.

This gives a broad picture of the development proposed as the Paradise Waters Estate.

3. Tropicana Cove Estate

This proposed development was on Queensland's Sunshine Coast, about three kilometres west of Maroochydore on the Maroochydore Road. The proposed development was of 502 housing sites, together with some town house development and a commercial block. It was proposed that there would be public parks and other community facilities.

4. Company Officers

Each of the following persons, at all material times since August 1975, was employed or engaged by the company in the position set opposite his or her name: -

(a) the respondent - managing director and a shareholder;

(b) Susan Sterling, the respondent's wife, a shareholder, director and the

secretary of the company;

(c) Gerry Barwick - general manager and sales representative;

(d) Shane Brownless - sales representative;

(e) Hanna Elias - sales representative;

(f) Neil Sorensen - sales representative;

(g) Peter O'Shea - sales representative;

(h) Mike Di Silva - sales representative;

(i) Malcolm Logan - sales representative; and

(j) Gerry Dyer - sales representative.

5. Summary of the two cases

The Commission alleges that the company by its directors, servants and agents, at all material times since August 1975, in trade or commerce, advertised, represented, offered for sale and sold or purported to sell, interests in the Paradise Waters Estate and in the Tropicana Cove Estate and that such conduct was misleading or deceptive.

The conduct complained of consisted of the publication of pamphlets and other documents and oral representations made to potential buyers of interests in the Estates.

Most of the conduct that is said to be misleading or deceptive is not disputed. Little evidence was adduced by the respondent. Neither he nor his wife gave evidence. There was some dispute as to the evidence given by persons who purchased interests in either of the two estates, not so much as to what they were told by representatives of the company or as to what they read in pamphlets published by or on behalf of the company, but as to the views or impressions they formed from what they had been told or read. Ultimately, very little turns on any conflicts in the evidence on questions of fact.

The company, after September 1975, engaged in a vigorous promotion campaign in relation to Paradise Waters Estate and Tropicana Cove Estate, including the distribution of pamphlets at shopping centres and "mail drops" into letter boxes, although the latter was mainly done on a test basis in Sydney. Enquiries by telephone or by returning the tear sheet at the bottom of the literature were followed by sales representatives telephoning and then calling on the persons who made the enquiry. The interviews that followed varied in length of time, but frequently resulted in the signing of contracts on the spot by the person making the enquiry.

6. The company's documents

The company distributed, from time to time, a number of documents which are alleged by the Commission to be misleading or deceptive in certain respects. I shall refer to each of them in turn.

(a) Pamphlet titled "The Two Sides of Robert Sterling". This is a sheet of paper advertising Paradise Waters Estate on one side and Tropicana Cove Estate on the other. The side advertising Paradise Waters Estate displays a picture of a building described as "Kryal Castle", a modern motor car parked in front of it and the respondent, with one foot placed nonchantly on the front of the car, gazing into the distance. It invites the reader to "Walk into living history at 'Paradise Waters Estate'." It paints a brief but glowing picture of the Estate, stressing the opportunity for rapid capital gain due to the rise in land values and says "at $" (the figure is inserted) "for 1/2 acre which is two potential building blocks, this has to be one of the best real estate investments you can make". It invites the reader to tear off the slip at the bottom of the sheet and return it to the company for "obligation free details" and states the telephone number of the company.

The other side refers to the Tropicana Cove Estate and invites the reader to "Escape to the sun at the fabulous 'Tropicana Cove'." Prominently displayed is a picture of an attractive beach with a power boat moored near the shore, a modern motor vehicle near the water, and a picture of the respondent, this time leaning in casual style across the roof of the car looking into the distance; whilst in the foreground there lies a dark-haired, scantily clad young lady gazing in the general direction of the motor car, the respondent or both. The sheet gives a very brief description of Tropicana Cove and describes it as "White sandy beaches, crystal blue ocean and endless sunshine. Admit it - whatever turns you on - it's at 'Tropicana Cove'." It states "'Tropicana Cove' the great escape is excitingly priced at" (the price is inserted) "for 1/2 acre which is potentially 2 building blocks." It has a tear sheet at the bottom, which is the back of the other tear sheet.

About 50,000 copies of this pamphlet were printed and distributed over a seven to eight month period, mainly in Sydney. It was used for promotion purposes by being distributed at shopping centres by women on behalf of the company.

This pamphlet came to the attention of a number of witnesses including a Miss Masterson, a shop assistant from Richmond, Victoria; a Miss Donovan, a cashier clerk from Neutral Bay, Sydney; a Mrs. Petty, a widow of Campbelltown, New South Wales; and a Mr. Murray, ambulance officer of Ashfield, Sydney. Each of the witnesses subsequently entered into a contract for the purchase of an interest in one or other of the Estates and paid money to the company. I shall refer to this aspect of the case more fully later.

(b) Pamphlet titled "Robert Sterling Pty. Limited. The Secret to Land Investment". It describes how an investor can make a substantial capital gain from a minimum capital outlay by buying a block in a sub-division of land. It sets out arguments in favour of investing in land and concludes by saying: -

"All the Robert Sterling Estates are in Government sponsored

Decentralisation areas.

Robert Sterling has obtained all council approvals (in principle) for the Estates, so nothing is left to chance.

Your initial investment is your only investment and it is possible to turn $3,000.00 into $10,000.00 to $12,000.00 over a period of 2-4 years.

We can show you how to achieve all this without even drawing a cent out of your own bank account.

Robert Sterling".

This pamphlet came to the attention of a Mr. Bond, a civil engineer of Cabramatta, Sydney; Miss Donovan, Mrs. Petty and Miss Masterson. Like the others, Mr. Bond also paid money to the company.

(c) Pamphlet titled "The divine right of only the very rich to make money is abolished]". This pamphlet has a picture of a well known radio and television personality in Australia with his hand placed firmly over a bowler-hatted, cigar-smoking gentleman, apparently intended to convey the impression that the ordinary man at last has come into his own. It stresses the advantages of the Paradise Waters Estate. It says, amongst other things: -

"It is a beautiful lakeside development offering water-skiing, sailing and fishing facilities that are already in great demand. Each 1/2 acre is 2 potential building blocks, Torrens Title, too. $4750.00 per 1/2 acre

(lakeside). $3250.00 per 1/2 acre (others).

Robert Sterling Pty. Limited has 560 acres of prime land for a new suburb of Ballarat. If you buy a 1/2 acre in the estate, it could be developed into 2 prestigious residential A building blocks worth $10,000.00 and more. The lakeside blocks are worth more than $15,000.00 each. Yes, $2950.00 buys land worth more than $20,000.00 and you could receive as much as $10,000.00 after development costs have been deducted. Yes, $4450 buys lakeside land worth $30,000.00 and you could receive as much as $20,000.00 back."

This pamphlet was read by Mrs. Petty and Mr. Bond.

(d) Pamphlet titled "Robert Sterling Pty. Ltd. congratulates you on your purchase of Paradise Waters Estate". This pamphlet gives some information about the company in the following terms: -

"The managing director of Robert Sterling Pty. Ltd. is Mr. Robert Sterling, A.A.S.A.,F.T.I.A. Mr. Sterling is a registered public accountant, company auditor and income tax consultant and has, for many years, advised people in a professional capacity on matters of real estate investment. Mr. Sterling has personally been most successful in shopping centre, flat and unit developments, along with his land sub-divisions, some 14 years experience and a wealth of expertise make Mr. Sterling the

ideal principal of a dynamic team.

During a time when some real estate developers are experiencing difficulties, Robert Sterling Pty. Ltd. has for the past two years achieved record sales and profits, this is because Mr. Sterling chose his land investments carefully and picked progressive areas such as Ballarat which is a regional growth centre.

Land will always appreciate in areas where the demand is strong and the Robert Sterling company with its knowledge and expertise may be relied upon to carry this project to fruition and bring substantial profit to all participants."

It sets out a lot of information about Ballarat as a growth centre, comparing its growth pattern to areas such as Canberra's Belconnen and Sydney's Campbelltown and mentions a number of the advantages of the Paradise Waters Estate. It also has copies of advertisements that appeared in "The Australian Accountant" for June 1976 indicating the support of the Government of Victoria for decentralisation of industry.

This pamphlet was read by Mrs. Petty, Miss Donovan and Mr. Bond.

(e) Pamphlet titled "Robert Sterling Pty. Ltd. Paradise Waters Estate". It again stresses the proximity of the proposed sub-division to Ballarat and the Victorian Government's sponsorship of growth centres. It contains a cutting from the "Sydney Sun" newspaper of October 27, 1976 bearing a picture of the premier of New South Wales, and suggests that, to his concern, three major companies have moved their operations out of New South Wales to other States, including Victoria.

The pamphlet contains other cuttings from newspapers, all to the effect that Victoria is a thriving State, that Ballarat is a burgeoning metropolis and that the Paradise Waters Estate is "a shore-side haven", "away from the crowds", "housing land beside this lake's a money-maker". This pamphlet also bears a prominently displayed picture of the same radio and television personality viewing the Paradise Waters Estate. The last page of the document engages in a cost analysis showing the return from blocks of land in the estate measured against the investment cost and says in bold print

"Development costs will be recouped from the sale of one block.

All other profits remain yours."

It says:

"Investment Cost.

The development is syndicated to allow small investment.

1/2 acre of development (lakeside) $4850.00

1/2 acre of development (inland) $3850.00.

Investment security.

A real estate contract is signed and exchanged for the land.

A title deed is issued in the purchasers name.

He is a joint tenant with other syndication members.

The land being separately deeded can be sold at any time. The currently quoted price for sub-divisional land is $12,000.00 per acre (not lake front).

A syndication agreement is signed by the purchaser allowing the title to be mortgaged for purposes of development costs."

This pamphlet was read by Miss Donovan.

(f) Pamphlet titled "Heard The Good News And The Bad News?". It portrays in cartoon form the advantages of investing with the company. It contrasts the profits to be made by investing with the company in land as opposed to buying a motor car. It says: -

"Two years ago Tony "Two years ago Jack bought
bought his bright a piece of our land for
shiny car for $3950.00 with $100.00
$2,000.00. deposit.

The good news. The good news.

Tony's car is still The block is still the
shiny. The body only same.
has a bit of rust.
The engine needs a It is now worth $7700.00.
tune and a few minor
repairs.

The bad news. The bad news.

The car is worth People keep pestering him
$900.00." to sell it to them."

There is displayed a picture of a tree, with its branches and leaves heavily laden with dollars. The tree is placed on what is described as "Jack's land", and is being looked at by Jack whose face bears an expression of contentment. The picture is contrasted with another portraying Tony looking at his car with an air of disappointment. The reader is invited to telephone the company or to cut out an attached coupon and return it to the company.

This pamphlet was placed in letter boxes in Sydney's Western Suburbs. About 5,000 to 10,000 copies were printed and distributed.

(g) Pamphlet titled "Paradise Waters Estate, Ballarat". It displays a symbol over the name of the company depicting a warrior astride a war horse, slaughtering a dragon, and bears the inscription "Veni Vidi Vici" - a rather free representation of Julius Caesar's victory of Zela concluding the Pontic Campaign.

Again this document describes the virtues of the Paradise Waters Estate, its proximity to Ballarat and the advantages enjoyed by that city. It contains an analysis of development costs per lot and an estimate of profit per acre. On the inside back page it contains a statement of the "Consultant Personnel to Date" together with the names of the company's bankers and solicitors in Sydney and Melbourne.
This document was read by Mr. Bond and a Mr. McEvoy, a sales representative of Balgowlah. He too invested money with the company.

(h) Pamphlet titled "The Sterling Report". This pamphlet sets out in simple form the various steps that a potential investor with the company should take. On the cover of the "Report", which purports to be "A Complete Guide to Real Estate Investment", the words appear "Everything you wanted to know . . . but didn't know enough to ask."

It says: -

"Step 1

The cheapest way to buy land is as raw land. That way you don't pay the profit of all the people who handled the land before you, such as Developers, Speculators, etc. You buy a half acre interest in a larger allotment. All our Estates have an Interim Development Order from the council or a Plan of Sub-division approved . . .

Step 2

You sign an agreement with a Development Company to do a Development.

Step 3

On sealing of Working Drawings, funds are borrowed by the Development Company to do a Sub-division on your behalf . . . .

Step 5

One block of land is sold to repay the cost of Development and to pay the Development Company 10% on the cost of the Sub-division. The balance of all monies are yours. You can sell all your land and get cash or you can keep a block. If you keep a block, you have a fully serviced block of land worth a very substantial amount of money."

This document also describes the experience and expertise of the respondent.

(i) Document titled "Memorandum of Title". It is on paper of large size, coloured blue, and says: -

"Be it known that Mr./Ms. do hereby own as tenants in common, in the whole of the land, namely the land containing acres, roods, perches, or thereabouts and being allotment, section E, parish of Burrumbeet, County

of Ripon, as per contract of sale.

Dated this date of 197 ."

It then purports to bear the signature of the respondent and has a mauve seal to the left of the signature.

This document was received by a number of the witnesses including Mrs. Petty, Mr. Bond and Miss Donovan.

(i) Form of Contract titled "Contract of Sale of Land" in which the vendor's name is stated to be "Robert Sterling Pty. Ltd." and which relates to the Paradise Waters Estate.

(j) Form of Contract titled "Contract of Sale of Land" in which the vendor's name is stated to be "Robert Sterling Pty. Ltd." and which relates to the Tropicana Cove Estate.

Although the evidence does not enable it to be said precisely how many contracts were signed by purchasers, at least 256 contracts were signed, 217 relating to Paradise Waters Estate and 39 relating to Tropicana Cove. Fifty-five contracts were signed in 1975, 142 in 1976 and 59 in 1977.

Most of the sales were made to Sydney residents, in particular residents of the western suburbs of Sydney to whom the promotion campaign was primarily directed. Some sales were made to residents of Melbourne. The sales commenced about September 1975. Although there is no evidence of the precise number of sales' representatives employed by the company over the period of its operations, there was a turnover of up to one hundred representatives engaged by the company in relation to the Paradise Waters Estate.

7. Representations

Representations were made orally and in writing by the company's directors, servants or agents in the course of the business of the company, to potential buyers of interests in land in Tropicana Cove Estate and Paradise Waters Estate. I shall deal with each representation in turn.

1. It was represented to potential buyers that they would be entitled, upon the payment of money and the signing of a contract, to an interest in the land known as Paradise Waters Estate or in the land known as Tropicana Cove Estate and that such an interest entitled each of them to exclusive possession of either a piece of land with an area of one-half of an acre or two pieces of land each with an area of one-quarter of an acre.

Counsel for the respondent relied on certain of the documents, including the various contracts of sale and the memoranda of title, to support the conclusion that purchasers must have realised that what they were buying was merely an interest as a tenant in common with other buyers of land in the relevant sub-division.

The witnesses who swore affidavits and who were cross-examined as to their understanding of what they were buying all impressed me as truthful and reliable. None of them were people of keen business acumen. In my opinion none of them understood the true nature of the interest they were buying. They relied upon what they read, and more particularly, upon what they were told by the representatives of the company, in some cases the respondent himself.

I formed a firm view that none of the witnesses understood the phrase "tenancy in common". Each of them thought that he or she was buying his or her own block of land. Indeed, a perusal of the various pamphlets to which I have already referred conveys clearly to my mind that the reader would be under the belief that he or she was buying a block of land. The pamphlets refer to "blocks of land", "1/2 acres", "1/4 acres", and "return per acre".

Mrs. Petty is an English woman who came to Australia in the 1970's. She is a widow aged sixty-eight and lives in a rented flat belonging to the Housing Commission of New South Wales. Although she had some clerical experience in a solicitors' office in England for about six years, the firm did no conveyancing work. She thought that when the deeds issued to the land, it would give her title to her own block of land. She thought that she was being sold a piece of land out of a larger piece and that she would have the deed to her land within a short time after she paid the moneys which the general manager of the company, Mr. Barwick, said she had to pay; and that thereafter her land would be developed in conjunction with the other land in the Paradise Waters Estate. She knew at the time she signed the contract that she was not then entitled to a specific block of land; but she thought that a specific block would be allocated to her a few weeks later. She had no idea of the true nature of a tenancy in common. She relied on what she read and, more particularly, on what she was told by the company's representative, Mr. Barwick. I should add that Mr. Barwick gave no evidence in these proceedings. I have no hesitation in accepting Mrs. Petty as a truthful and reliable witness. She paid $3,250.00 to the company, which appears to have been her life savings.

Miss Donovan is a "cashier clerk". Essentially she relied in making her purchase on what she was told by Mr. Barwick. Although Mr. Barwick discussed the proposed contract with her, together with certain of the pamphlets, she relied on his explanation of what they said. She thought she was buying a piece of land and that she would have title to two blocks each having an area of one-quarter of an acre, before the development work commenced. Mr. Barwick said to her that once the blocks of land she was buying were sold, she would have enough money to enable her to buy her own house. At the time Mr. Barwick arrived at her house to interview her, she had intended to buy a house; but by the time he left she had bought an interest in undeveloped land. She paid the company $2,083.24.

Mr. Murray is an ambulance officer of Ashfield, Sydney and he thought that he and his wife were buying a half acre of undeveloped land, and that after the land together with the other land in Tropicana Cove was developed, they would be able to select their specific two blocks. He had no idea of the true nature of a tenancy in common. He arranged finance to purchase the interest in the estate through Lombard Australia Limited ("Lombard"). The Murrays paid the company $4,536.00 by 19 July 1979.

Mrs. Pullen is a married woman. She knew at the time of the signing of the contract by her husband and her that they had no interest in a specific block of land but thought this arose after the development was completed. They were interested in the land at Tropicana Cove and they too obtained finance for the purchase through Lombard. Lombard was used because the representatives of the company said they could arrange finance for prospective purchasers through Lombard. She thought that the title to the two blocks would be obtained in about twelve months from the date of signing the contract. Their commitment to Lombard is $5,151.00, the benefit of which was received by the company. Lombard paid a cheque to her and her husband for $4,950.00 which they indorsed and sent to the office of the company. At the time she gave her evidence, a total of $3,956.00 had been paid by her and her husband to Lombard and by the time they finish paying off their obligations, they will have paid $5,151.00. The $5,151.00 is the said sum of $4,950.00 plus $125.00 premium for life insurance cover and $76.00 stamp duty. The Pullens did not own their own home and had never bought real estate before.

Mr. Bond is a civil engineer of Cabramatta Sydney. He had the impression from what Mr. Barwick told him that the sub-division of the land at Paradise Waters had been approved by the relevant local council in principle and that all was ready to proceed with the sub-divisional work save for rezoning. Although he conceded in cross-examination that the allocation of two one-quarter of an acre blocks would not be made to his wife and him until the conclusion of the development work, he believed that what he and his wife were buying were two blocks of land. The moneys paid by Mr. and Mrs. Bond were $500.00 which the company received by bank cheque.

Mr. McEvoy is a sales representative and he thought that his wife and he were buying one acre of land in the Paradise Waters Estate, the specific land to be designated just before the development started. He did not understand the provisions of the contract. Neither of them looked at the provisions very much because they relied on what Mr. Barwick told them. The contract was signed by Mr. and Mrs. McEvoy. Again, finance was arranged by the company through Lombard. Lombard drew a cheque in their favour for $3,944.00 which they took to their own bank and obtained a bank cheque in favour of the company, which they paid to it. The sum of $4,500.00 is arrived at by adding to the sum of $3,944.00 other moneys which represent the liability of Mr. and Mrs. McEvoy to Lombards.

Miss Masterson was a shop assistant of Richmond, Victoria when she signed her contract. She clearly had no idea of what a tenancy in common was and thought that she was buying two one-quarter acre waterfront blocks at Paradise Waters Estate. She relied on what the salesmen told her, namely Mr. Barwick and Mr. Dyer. Although she saw the reference to tenancy in common in the contract when she bought the land, she did not have a great deal of opportunity to read through the whole contract, and when she did see the words, they did not mean a great deal to her.

Most of the witnesses had never bought real estate before. They relied on what they were told by the representatives of the company, paying little regard to what they read in the contracts themselves. Expressions in the contracts which they did not understand were explained to them by the representatives of the company and they accepted what they were told as true.

It is an all too familiar story. This is a clear case of members of the public, who are inclined to rely on what they are told by fast-talking salesmen, subscribing money on oral and written representations made to them which are false and then losing their money. None of them have received back from the company or any other corporation or person any of the moneys paid by them.

What the various purchasers were buying in the case of both sub-divisions was an interest as a tenant in common together with other purchasers in the whole of the land comprised in the relevant sub-division. They were not buying an interest in land which entitled them to exclusive possession of either a piece of land having an area of half an acre or two pieces of land each of which had an area of one-quarter of an acre. This is what the purchasers who gave evidence before me thought they were buying. I have no doubt that their state of mind was induced by what they read from the pamphlets and by what they were told by the sales representatives of the company and in some cases by the respondent himself. The representations were untrue, misleading and deceptive.

2. Another representation made to potential buyers of land was that the company was the owner of the land known as Paradise Waters Estate and the land known as Tropicana Cove Estate.

The land known as Paradise Waters estate is land situate near Ballarat, Victoria and consists of the land in Crown allotments numbered 8, 9 and 10, 10A, 11B, 11C, 11D, 12A, 12B, 12C, 12D, 13, 14, 14A, 15A, 15B, 15C, 15D, 15E and 15F in section E of the Parish of Burrumbeet, County of Ripon, Shire of Ballarat.

The land known as the Tropicana Cove Estate is land situate near Maroochydore, Queensland and consists of land in certificate of title, volume 5256, folio 202 being portion 97 in the County of Canning, Parish of Mooloolah containing 32.37 hectares more or less and in certificate of title, volume 5320, folio 234 being lot 2 on registered plan No. 141993 in the County of Canning, Parish of Mooloolah containing 32.47 hectares more or less.

Some of the pamphlets refer to the company as having title to the land or at least infer this. The contracts of sale provided that the company was the vendor, and nothing appears in the contracts to indicate that the company did not have title to the relevant land. It is true that a person may contract to sell land to which he has no title at the time of the contract, and that the mere statement that he is the vendor does not necessarily imply that he then has title to the land. But there can be no doubt that each of the purchasers who gave evidence thought that he or she was buying an interest in land to which the company then had legal title.

Miss Masterson expected her land to be allocated to her within three weeks of signing the contract and the representative of the company, Mr. Dyer, told her that she could expect her title deeds in about three week's time. Interestingly enough, Miss Masterson's contract is in respect of lot 9. Although title to some of the lots in the relevant sub-division had been transferred to the company a month or two before she signed her contract, lot 9 was not one of them. Miss Masterson asked the respondent himself for title to be given to her two one-quarter of an acre blocks. The reply, which she received by letter signed by the respondent himself on behalf of the company, not only did not tell her that she would not receive title to the two one-quarter of an acre blocks, but its language induced her to believe that she would receive such title in the immediate future. In truth the company never had legal title to the relevant land.

The history of the title to the Paradise Waters land is not without complexity. It is sufficient for me to say that at all material times the company did not have a legal estate in fee simple in any but a small portion of the land in the Estate. The company had agreed in April 1974 with the then owners of the Estate to buy it for a purchase price of $396,500.00 on deferred terms as to payment. In November 1974, Brayburn Securities Pty. Limited ("Brayburn"), a company having no connection with the company, took a transfer by way of assignment from the then owners of the land of their interest therein and became the registered proprietor of the land subject to the contract in favour of the company. In February 1966, the respondent requested Brayburn to grant it partial transfers of various titles of land, but Brayburn declined to do this. This request was repeated by letter from the company's solicitors in April 1976 but again was not acceded to by Brayburn. No firm proposal to refinance the contract was ever received by Brayburn from the company.

The contract of sale relating to the Paradise Waters land provided for completion on 30 January 1977. The company defaulted in payment of the balance owing on that date. The company negotiated with Brayburn an extension of time for completion until 20 April 1977. After discussions between the company and Brayburn a variation agreement of 25 July 1977 was entered into between them pursuant to which the company made payments of $70,000.00 in reduction of the balance owing under the contract and, in consideration of those payments, it received partial transfers in respect of certain lots. The company defaulted in its obligations under the contract as varied by the variation agreement. A notice of recission of the contract was served on the company on behalf of Brayburn in July 1978.

The land at Tropicana Cove was registered in the name of a company Barrenjoey Pty. Limited until the estate in fee simple was transferred to a company, Favita Pty. Limited ("Favita") in September 1976 subject to a mortgage in favour of Lombard. The respondent and his wife, at all material times, have been shareholders and directors of Favita.

The evidence is not clear as to what the relationship is between Favita and the company or as to what arrangements, if any, have been made between the two companies for the transfer of title to purchasers of land in the Tropicana Cove Estate from the company.

I am satisfied that the company represented orally and by pamphlets to potential purchasers that it was the owner of the land both at Tropicana Cove and Paradise Waters in the sense that it held the legal estate in fee simple or, otherwise was in a position to give good title to a purchaser in respect of his or her purchase of a lot in the relevant sub-division. This representation was untrue, misleading and deceptive.

3. The company represented that it had obtained the approval of the Ballarat Shire Council in the case of the Paradise Waters Estate and the approval of the Maroochy Shire Council in the case of the Tropicana Cove Estate to sub-divide the land and to develop it by installing services such as roads, kerbing, guttering, water, electricity, gas, drainage and sewerage.

The pamphlet titled "Robert Sterling Pty. Limited. The Secret To Land Investment" states at page seven "Robert Sterling has obtained all council approvals (in principle) for the Estates, so nothing is left to chance." The reference to the "Estates" is to all the Estates answering the description of the "Robert Sterling Estates" which were then being offered to the public including the Paradise Waters Estate and the Tropicana Cove Estate.

Witnesses gave evidence that they believed from what they had been told by the company's representatives and from what they had read in the company's documents that council approvals had been obtained by the company and in effect that all that remained to be done by the councils was a formality. Miss Masterson gave evidence that she understood when she signed the contract that the land at Paradise Waters had already been sub-divided into blocks and that one of them was already hers, although the specific block was to be allocated later; and that "the lots had already been sub-divided in some way on paper, or whatever".

Miss Donovan was under the impression that the development of the Paradise Waters Estate was definitely going ahead, that whatever had to be done by the Victorian Government or the Ballarat Shire Council either had been done or would be done; but there was no room for doubt that the development would go ahead.

Mr. Hollioake, who has been the shire engineer of the Council of the Shire of Ballarat since August 1958, gave evidence about the zoning of the land at Paradise Waters Estate and the position of any sub-division of the land. The respondent in February 1974 submitted general schematic plans to sub-divide the land into about 2,000 residential allotments, the council considered his proposal and said that "subject to satisfactory negotiations and reports, council could view favourably proposed developments." The council informed the respondent of this decision in March 1974. In August 1974, the council received a letter from B. E. Hayden & Co. Pty. Limited, ("Haydens"), real estate agents of Ballarat, stating that the respondent had decided to integrate the Paradise Waters land with a neighbouring property held by clients of Haydens "for the purpose of planning the total area and one 'town plan concept'." The neighbouring property was also the subject of a proposal for residential sub-division to be known as "Cardigan Village".

In November 1974, the council held a special meeting which was attended by a number of people including representatives of Haydens and its consultants. The meeting was held for the purpose of discussing the proposed Cardigan Village project and the Paradise Waters project. By letter of 20 December 1974, the council informed Haydens that the Cardigan Village concept, including the Paradise Waters land, had been approved in principle. Mr. Hollioake gave evidence that this meant the council was prepared to approve residential development in that area. The letter also stated that the council was prepared to seal stage one of the plan, which did not include any development of the Paradise Waters land, provided certain requirements were met. Mr. Hollioake said this meant that the council had received conditional approvals from the relevant Government and Municipal regulatory bodies in respect of stage one of the plan and approved or sealed stage one subject to final approvals being obtained and subject to all other relevant requirements being complied with.

In August 1975, the council received a letter dated 12 August 1975 from the respondent's firm namely E. Tariznyas and Company, a firm of registered public accountants, in which the writer of the letter queried the use to which the Paradise Waters land could be put under the relevant zoning. In August 1975 the council received a further letter from the respondent's firm informing the council that the proposed joint development between himself and Haydens had been cancelled and that the respondent intended to proceed on his own. The council acknowledged receipt of both these letters and informed the respondent of the conditions relating to what was then the "corridor" zoning of the land to which I shall refer a little later. Since 18 September 1975, the council has received no further plans or correspondence from the respondent or the company. Nothing further has been done so far as the council is aware in respect of any proposed sub-division or development of the Paradise Waters Estate. The council has never received any formal application, that is, one in accordance with the Local Government Act 1958 (Victoria) for sub-division of the Paradise Waters land.

As to the Tropicana Cove Estate, evidence was given by a Mr. Reading, the town planning officer of the Maroochy Shire Council since September 1973. The land known as the Tropicana Estate was zoned "rural" in February 1973 and rezoned "rural B" in July 1976. The zoning "rural B" means, as did the former zoning "rural", that the council's consent is required to sub-divide any parcels of land within that zone into blocks of less than 10 hectares, or to build more than one house on any parcel of land within that zone.

In February 1976, the council received a letter from the consulting surveyors acting on behalf of Favita for the rezoning of the land from its then rural zoning primarily to residential zoning. There then ensued correspondence between the council and other persons, some of whom acted on behalf of Favita, relating to the application for rezoning and sub-division of the land.

The current status of the application to re-zone and sub-divide the land is that the council has merely agreed in principle to stage one of the rezoning and sub-division proposal in respect of the land, but nothing further will be done by the council until the required bond is lodged with it. No plan of sub-division of any of the relevant land in the Tropicana Cove Estate has been lodged with the council, merely an application to sub-divide. The bond is approximately $114,000.00. Once the bond is received, a number of approvals would have to be obtained before the land involved in stage one could be finally sub-divided. The council would then commence the re-zoning procedure which means applying to the Local Government Department in Brisbane to change the zoning of the land to residential A. Assuming the land is rezoned, it will then be necessary for Favita to apply to formally sub-divide the residential A land into allotments.

Stage one relates to part of what is known as Lot 2 on registered plan 141993 comprised in certificate of title volume 5320 folio 234. Lot 2 has an area of 32.47 hectares. The approval in principle is in respect of portion of that land only. The remaining part of the Tropicana Cove Estate, namely portion 97 having an area of 32.37 hectares, is not even the subject of approval in principle.

I have no doubt that the representations made both orally and in writing by and on behalf of the company and by the respondent himself, in relation to both the Paradise Waters land and the Tropicana Cove Estate land were false, misleading and deceptive.

4. The company represented to potential purchasers of land in the Paradise Waters Estate that it was likely that the Ballarat Shire Council would soon alter the zoning of the land from "corridor" zoning to residential A zoning.

In the pamphlet titled "The Divine Right Of Only The Very Rich To Make Money Is Abolished]" the statement is made "With a shift of population from Melbourne to Ballarat, a constant and unsolicited demand is there for more residential A land. The Burrumbeet area and the lake side in particular is the best choice without doubt".

On the last page of the pamphlet titled "Paradise Waters Estate", the statement is made: -

"Zoning The rural zoning has been suspended and is now zoned "Corridor" and is subject to an Interim Development Order. The responsible authority, the Shire of Ballarat, requires final plans for residential sub-division before Residential A zoning will be granted. Approval in principle has been granted."

Mr. Hollioake gave evidence that pursuant to an interim development order made pursuant to the Town and Country Planning Act 1961 (Victoria) published in Victorian Government Gazette on 6 August 1975, the land referred to therein, which included the Paradise Waters land, is zoned "corridor" and cannot be sub-divided for residential purposes into allotments less than 40 hectares in area without the consent of the council, nor can a dwelling house be erected on a parcel of land less than 40 hectares in area without the consent of the council.

The council informed the respondent by letter of 18 September 1975 of the conditions relating to "corridor" zoning of land. The letter informed the respondent that if he wished to apply for a change of zoning: -

"Council will give the matter consideration provided that full and acceptable information is provided on any proposed future development of

the land.

It must be understood that while council will assist in every way possible, there is no assurance that a change in the zoning will be agreed to, either by council or the Town and Country Planning Board."

An enclosure with the letter specifies a number of conditions attaching to

the "corridor" zoning. Since the council's letter, there has been no alteration to the zoning of the Paradise Waters land.

The statement in the pamphlet "Paradise Waters Estate" which I have cited is misleading and deceptive because it suggests that, although the land is zoned "corridor" and is subject to an interim development order, "residential A" zoning will be granted once final plans for residential sub-division have been submitted and accepted by council. This was an untrue statement. A lot of matters had to be attended to, in addition to the submission of final plans for residential sub-division, before the zoning would have been changed by council; and the letter from council to the respondent of 18 September 1975 was a clear warning to the respondent that there was no assurance that there would be a change in the zoning. The use of the word "final" in reference to the plans for residential sub-division is clearly misleading because it suggests that rezoning is little more than a formality.

The respondent tendered in evidence a report prepared at his request by a firm of Melbourne town planning consultants known as "Interplan Pty. Limited" ("Interplan"). The report was sent to the respondent on 22 July 1977. Under the heading "Rezoning requirements", the report states that there is a number of obstacles to the rezoning of the land from "corridor" zoning including satisfying the State Rivers and Water Supply Commission and the Environment Protection Authority on the question of reticulated water and sewerage, and that this would mean the preparation of a tentative plan of sub-division, a tentative layout of sewerage, water supply and storm water reticulation treatment and a report on proposed treatment. The report mentions that these plans would have to be submitted to the County Roads Board and the State Electricity Commission of Victoria, although it says that from the discussions with those two instrumentalities there appear to be no problems in this regard. It says that if the State Rivers and Water Supply Commission and the Environment Protection Authority give approval, the next step is the obtaining of approval to rezoning from the Ballarat Shire Council and the Town and Country Planning Board. The report states: -

"The whole area of the Lake Burrumbeet catchment is environmentally sensitive and therefore any proposed new estate would be more carefully scrutinized by Local and State Government authorities."

This report confirms the evidence of Mr. Hollioake and leads to the conclusion that a great deal had to be done by and on behalf of the respondent and the company and a number of Victorian Government instrumentalities before the land could be rezoned to "residential A" zoning. I have no doubt that the full implications of this were well known to the company and to the respondent at all material times. Not only are certain of the pamphlets misleading, but the oral representations made on behalf of the company to various prospective purchasers were also misleading. There is no doubt that a number of the statements made orally to prospective purchasers made it clear that the then zoning of the Paradise Waters Estate was "corridor" zoning; but they were led to believe that the zoning would be changed soon by the Ballarat Shire Council to the appropriate residential zoning.

It is clear from Mr. Hollioake's evidence that, so far as he is aware, none of the relevant steps to put in train the rezoning of the land were taken and that the steps were many and various. I need not refer to them in detail.

5. The company represented that the Maroochy Shire Council would soon alter the zoning of the Tropicana Cove Estate land from "rural" zoning to "A" residential zoning.

It is clear from the evidence of Mr. Murray that the impression he gained from what he had read and, more particularly, what he had been told by Mr. Sorensen on behalf of the company, that the one possible impediment to the Tropicana Cove Estate development proceeding was a sugar cane railway line which goes through the estate, the line being subject to a ninety-nine year lease which the company was then negotiating with the owners to buy out. He realised that if those negotiations did not prove successful the development could not proceed; but he was assured by Mr. Sorensen that its completion was only a formality. The true state of the zoning was never brought to his attention, nor was it ever suggested to him by Mr. Sorensen, or anybody else on behalf of the company, that there was any impediment to the development of the estate for residential purposes by reason of the zoning of the land. The position is much the same with Mrs. Pullen who, together with her husband, signed a contract for purchase of a block in the Tropicana Cove Estate; except in their case, there was not even mention of a problem with the railway line.

I have already referred to the evidence of Mr. Reading, the town planning officer of the Maroochy Shire Council, which establishes that the council has merely agreed in principle to stage one of the rezoning and sub-division proposal in respect of portion of the Tropicana Cove Estate, but that nothing would be done until the required bond was lodged; and that council had not approved in principle the rezoning and sub-division of the remainder of the land. Most contracts of sale that have been signed by purchasers for the purchase of blocks of land in the Tropicana Cove Estate relate to the land which is not even the subject of approval in principle.

I am satisfied that this representation is false, misleading and deceptive.

6. The company represented that the development of the Paradise Waters Estate and the Tropicana Cove Estate was likely to be completed within a maximum period of two years.

Miss Donovan was told that development of the Paradise Waters Estate would be completed in March 1979, a little under two years from the time of the representation to her. Miss Masterson was told that the development of the Paradise Waters Estate would be completed "within about 18 months or two years" of the representation, which was 27 August 1977. The representations to these witnesses were made in 1977; yet they were made to the knowledge of the company and the respondent at a time when there had been no communication of any significance whatever with Ballarat Shire Council since September 1975. The evidence of Mr. Hollioake, Mr. Dohrmann (a consulting engineer who was at all material times a director of Water Science Engineering Australia Pty. Limited, a company that provides scientific and engineering advice to clients and who was retained by the respondent to prepare a feasibility study of the sewerage and drainage aspects of the proposed sub-divisional development near Lake Burrumbeet) and of a Mr. Martino establishes clearly that a period of two years from the date of the representations was utterly unrealistic.

As to the Tropicana Cove Estate, Mr. Murray gave evidence that he was told by the relevant representative of the company that the development would be over a two year period, the date of the representation being 28 June 1976.

It is clear from the evidence, in particular that of Mr. Reading, that such estimate of time is again utterly unrealistic; but, in addition, it was made when the company and the respondent knew that immense problems faced a developer in developing the land at Tropicana Cove Estate. This representation was untrue, misleading and deceptive.

7. The company represented that it had a number of prominent, well qualified and experienced consultants.

Certain of the pamphlets published with the authority of the company described a number of persons and firms as consultants to the company. The document titled "Paradise Waters Estate Ballarat" in its last page set out the names of five firms and the name of a particular person being a member of, or otherwise associated with each firm, and the particular consultant engaged by the company, together with the qualifications of the person named and his or her occupation.

Not only were persons who read the pamphlets led to believe that the personnel named were consultants retained by the company to the date of publication of the document; but Mr. McEvoy gave evidence that when he was interviewed in October 1975 by the respondent himself, he showed him a copy of that document and that he had been impressed when he saw it. He said: "It looked very good to me. A lot of titles behind the engineers, senior engineers, civil engineers, licenced surveyor and town planner."

The truth is that none of those five companies or firms had ever been retained by the company. Indeed, on 1 December 1975, a letter was written by Water Science Engineering Australia Pty. Limited to the respondent as managing director of the company and to various instrumentalities such as the State Rivers and Water Supply Commission of Victoria, the Ballarat Shire Council, and the Ballarat Water Commissioners, and to Haydens. The letter was signed on behalf of each of the five bodies named as consultants by persons having authority to do so, in these terms, so far as material: -

". . . . Robert Sterling Pty. Limited has printed and issued promotional material inviting the public to be involved in the development of land near Lake Burrumbeet, Victoria and has quoted the above firms - and some

staff members - as "consultant personnel to Robert Sterling Pty. Limited.

None of these firms have ever been retained by Robert Sterling Pty. Limited and some of the advertising material has been prepared without the authority of these firms. We ask you to immediately withdraw from circulation, any literature or advertisement which quotes any of the abovenamed firms as consultants to the Paradise Waters Estate or to Robert Sterling Pty. Limited. We also ask you to immediately write a letter to the Editor of the 'Ballarat Courier' newspaper stating that we are not consultants to Robert Sterling Pty. Limited or to Paradise Waters Estate."

This is yet another false, misleading and deceptive representation made by

the company to the knowledge of the respondent, who himself made the representation to Mr. McEvoy.

In my opinion the company by its directors, servants or agents made each of the representations to which I have referred to the public and, in particular, to persons who entered into contracts with the company to buy interests in land in Paradise Waters Estate or the Tropicana Cove Estate. The representations were made by the company in the course of its business. Clearly the company was a trading corporation for the purposes of the Act. The contrary was not suggested.

The representations, insofar as they were made by directors, servants or agents of the company, were made by them in the course of their duties on behalf of the company and were false, misleading and deceptive.

The representations were material in that they materially contributed to each of the persons to whom they were made entering into his or her contract with the company for the purchase of an interest in land in either of the two estates.

In my opinion, none of these people would have paid the moneys they did to the company in the absence of the representations made to them.

Constitutional Point

It was submitted on behalf of the respondent that s. 80 exceeds the legislative power of the Commonwealth Parliament because it seeks to empower the court to enjoin a person, not being a foreign corporation or a trading or financial corporation formed within the limits of the Commonwealth within the meaning of s. 51 (XX) of the Constitution, from contravening or attempting to contravene a provision of Part IV or V of the Act or from aiding, abetting, counselling, or procuring or inducing or attempting to induce a person to contravene such a provision or from being knowingly concerned in or party to the contravention by a person of such a provision or from conspiring with others to contravene such a provision, otherwise than in the course of interstate or overseas trade or in the course of other activities over which the Commonwealth Parliament has legislative power.

It was not suggested that any provisions of Part IV or V were themselves invalid, as it was assumed that they fell within s. 51 (XX) of the Constitution as being laws with respect to corporations or were within s. 122.

The submission is misconceived and is conclusively answered by the decision of the High Court in R. v. The Judges of the Australian Industrial Court & Anor; Ex parte C.L.M. Holdings Pty. Limited & Anor. [1977] HCA 6; (1977) 136 C.L.R. 235.

The C.L.M. Case concerned the validity of s. 79 of the Act which created an offence punishable by fine for contravention of a provision of Part V other than s. 52. The prosecutor was charged with offences against s. 53 (a) and the prosecutrix was charged under s. 5 of the Crimes Act 1914 (Cth.) with being knowingly concerned in the commission of offences by the prosecutor. The leading judgment was delivered by Mason J., with whom the other members of the court agreed. It was held that s. 79 was a valid law of the Commonwealth Parliament, that it operated so as to subject to a penalty persons who, according to the terms of Part V, are capable of contravening its provisions and who do so. The validity of s. 79 was held to be supported by the heads of constitutional power which supported the relevant provisions of Part V.

It was held that the extended application which s. 6 (2) and (3) give to s. 79 is supported by the heads of power which support those provisions.

The effect of the extended operation given to the Act by s. 6 (2) and (3) was discussed by Mason J. at pp. 243 to 245. His Honour said at p. 245: -

"When s. 6 (2) and (3) give the Act an extended operation by providing that the Act (or Div. 1 of Pt V) shall have the effect it would have if the reference to 'corporation' included a person not being a corporation, the result is that the relevant sections are to be read as if they were expressed in the form 'corporation and a person not being a corporation'.

Section 53 (a), read in the light of s. 6 (2) would then provide:

'A corporation shall not, in trade or commerce, and a person not being a corporation shall not, in trade or commerce - -

(i) between Australia and places outside Australia;

(ii) among the States;

(iii) within a Territory, between a State and a Territory or between two Territories; or

(iv) by way of the supply of goods or services to Australia or an authority or instrumentality of Australia,

in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services - -

(a) falsely represent that goods or services are of a particular standard, quality or grade, or that goods are of a particular style or model.'

It is apparent then that, quite independently of the application which s. 79 (a) has to s. 55, s. 79 (a) has an application to s. 53 and to other sections in Pt V once the Act is given the additional operation for which s. 6 (2) and (3) make provision. So understood s. 79 (a) is supported by the heads of constitutional power on which s. 6 (2) and (3) are based."

It follows that s. 52 (1) of the Act which is the relevant provision of Part

V in this case, is to be read as follows: -

"A corporation shall not, in trade or commerce, and a person not being a

corporation shall not, in trade or commerce -

(i) between Australia and places outside Australia;

(ii) among the States;

(iii) within a Territory, between a State and a Territory, or between two Territories; or

(iv) by way of the supply of goods or services to Australia or an authority or instrumentality of Australia,

engage in conduct that is misleading or deceptive or is likely to mislead or deceive."

Section 5 of the Crimes Act provides, so far as relevant to the C.L.M. Case:

-

"Any person who . . . by 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 . . . . shall be deemed to have committed that offence and shall be punishable accordingly."

It was held that the operation of s. 5 is not confined to a principal offence which is capable of being committed by the person who is alleged to have been knowingly concerned in its commission. Mason J. said at p. 246: -

"There is no limitation in the language which confines the operation of the section to principal offences capable of being committed by the person who is alleged to have been knowingly concerned in their commission . . . The point here is that if a head of constitutional power enables the Parliament to legislate so as to create a particular offence, then that head of power or the incidental power will authorise provision having the same effect as s. 5 of the Crimes Act in its application to a person who is knowingly concerned in the commission of the offence."

It was sought on behalf of the respondent to distinguish the C.L.M. Case on the ground that s. 79 subjected to penalty persons who contravened provisions of Part V whereas s. 80 empowers the court to grant injunctive relief. The distinction is obvious, but it is not material. If the reasons of the High Court apply to a section of the Act that creates offences and to the Crimes Act a fortiori, it governs a section that empowers the court to remedy a civil wrong.

It follows that s. 80 is supported by the heads of constitutional power which sustain the validity of s. 6 (2) and (3) and is a valid law of the Commonwealth Parliament.

The next submission on behalf of the respondent was that the operation of the paragraphs of s. 80 (1) relevant to this case, namely paragraphs (f), (g) and (h), are confined to contraventions capable of being committed by the person who is alleged to have aided, abetted, counselled or procured or induced, or attempted to induce or to have been knowingly concerned in, or party to, those contraventions. In other words, a person is not liable to be restrained from, for example, aiding or abetting another person to contravene s. 52 unless he is himself capable of contravening that section (paragraph (b)). As the respondent is not a corporation, s. 80 cannot reach him as an aider or abettor. Similarly, as to paragraphs (g) and (h).

The argument fails for the reasons I have already given. The C.L.M. Case concludes the point against the respondent. A natural person may contravene s. 52.

The argument fails for another reason. Paragraphs (f) and (h) are derived from s. 5 of the Crimes Act. Paragraph (g) is similar in notion and purpose to s. 7A (a) of the Crimes Act, albeit that it is expressed in different language.

Paragraph (i) is similar to s. 86 (1) (c) of the Crimes Act.

What Parliament has done is to permit the grant of injunctive relief to remedy a civil wrong by reference to notions which, if the wrong had been criminal, would be found in the provisions of the Crimes Act.

Paragraphs (f), (g) and (h) (also paragraph (i) although it is not directly in issue in this case) impose primary liability on those who fall within them. A person is primarily liable if he is an aider or abettor (paragraph (f)). It is not a secondary or ancillary liability. Nor is his liability dependant upon an anterior liability of the other person to whom the paragraph refers. So it is with paragraphs (g), (h) and (i). There may or may not be an anterior liability. Indeed, the very act of attempting to induce a person to contravene a provision of Part V (s. 80 (1) (g)) assumes no antecedent contravention by that person.

The following passages from the reasons for judgment of Mason J. in the C.L.M. Case at pp. 246 and 247 are apposite: -

"Section 5 of the Crimes Act, so far as it is relevant, provides:

'Any person who . . . by act or commission is in any way directly or indirectly knowingly concerned in, or party to, the commission of any offence against any law of the Commonwealth . . . shall be deemed to have committed that offence and shall be punishable accordingly.'

There is no limitation in the language which confines the operation of the section to principal offences capable of being committed by the person who is alleged to have been knowingly concerned in their commission. In Mallan v. Lee [1949] HCA 48; (1949) 80 C.L.R. 198, at p. 210, Latham C.J. rejected a submission to the contrary, a submission which is indistinguishable from that now presented on behalf of the prosecutrix. Dixon J. and McTiernan J. decided the case on other grounds but, as I read their judgments, they offered no opinion on this question.

Earlier a similar submission was put forward in R. v. Goldie; Ex parte Picklum [1937] HCA 65; (1937) 59 C.L.R. 254, at pp. 255-256. It was rejected by each of the two judges who found it necessary to decide the point (Starke J. (1937) 59 C.L.R., at pp. 263-26; and Evatt J. (1937) 59 C.L.R., at pp. 271)). There Picklum an Australian resident who did not, and could not, enjoy the status of a prohibited immigrant, was charged with having been knowingly concerned in the commission of an offence under s.7 of the Immigration Act 1901-1935. It was an offence which could only be committed by a prohibited immigrant. Starke J. said

'. . . I see no constitutional objection to the Commonwealth prohibiting its citizens aiding and abetting the contravention of the Immigration Acts or any other laws of the Commonwealth under such sanctions as it deems expedient. It is a common expedient to make persons falling within the provisions of such a section principals participating in the offence and punishable accordingly, and I perceive no constitutional difficulty in such a provision.'

The point here is that if a head of constitutional power enables the Parliament to legislate so as to create a particular offence, then that head of power or the incidental power will authorize a provision having the same effect as s.5 of the Crimes Act in its application to a person who is knowingly concerned in the commission of the offence."

The arguments of the respondent fail.

General

In my opinion, the company, in trade or commerce, engaged in conduct that is misleading or deceptive and thus contravened s.52(1).

Section 80 of the Act provides that the court may grant an injunction restraining a person from engaging in conduct that constitutes or would constitute -

"(f) aiding, abetting, counselling or procuring a person to contravene

such a provision;

(g) inducing, or attempting to induce, a person, whether by threats, promises or otherwise to contravene such a provision;

(h) being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision;"

The reference to "such a provision" is a reference to a provision of Part IV

or V of the Act. Part V includes s.52.

As to certain of the misleading or deceptive conduct to which I have referred, the respondent was himself directly involved and he made the representations personally to the person concerned. As to all of the conduct by the company to which I have referred, in my opinion, the respondent aided, abetted, counselled and procured the company to engage in such conduct; induced, and attempted to induce the company to engage in such conduct and was directly, knowingly concerned in the engaging in such conduct by the company. He and his wife were the directors and shareholders of the company. His wife played a limited role in the company's affairs. The respondent was the guiding force behind the company's day to day activities and was its managing director. There is abundant evidence to establish the respondent's role in these matters.

The letterhead of the respondent's firm "E. Tariznyas & Company" bears a shied inscribed with the words "Honesty Accuracy." This is hardly apt to describe the activities of the respondent in relation to the sale of land in the two estates involved in this case. The representations to the public were neither honest nor accurate.

A symbol frequently appeared on the company's letterhead embossed in a silver colour and contained the words "Veni Vidi Vici." This is a more accurate description of the company's activities provided one regards the vanquished as the investors.

The calling card used by Mr. Barwick, who described himself as "National Sales Manager" of the company, contained a quotation from Shakespeare's "Julius Caesar":

"There is a tide in the affairs of men, which, taken at the flood, leads on to fortune."

I do not know who, if anyone, made any fortune in this matter, but certainly the investors did not.

In my opinion, the respondent was involved in contraventions of sub-section (1) of s.52 of the Act in the various respects the subjects of my earlier findings; and the persons who suffered loss did so by reason of the conduct of the company that was done in contravention of s.52(1) of the Act and in which the respondent was involved. As to the respondent being involved in a contravention of s.52(1), see s.75B.

In my opinion this is an appropriate case for enjoining the respondent. The absence of the company as a party does not matter. The actions of the respondent which are capable of being restrained under s.80 are independent of the acts of the company itself which constitute the relevant contraventions of s.52(1).

It was submitted by counsel for the respondent that no injunction should lie against the respondent because the company was now in liquidation and was insolvent and would be highly unlikely to ever trade again, so that there would be no continuing conduct on the part of the company which could be aided, abetted etc. by the respondent.

Sub-section (4) of s.80 specifically empowers the court to grant an injunction to restrain a person from engaging in relevant conduct whether or not it appears to the court that the person intends to engage again or to continue to engage in conduct of that kind. In my opinion, the company has committed serious breaches of s.52 and the respondent has aided, abetted, counselled or procured those breaches and induced or attempted to induce the company to contravene the relevant provisions and has been knowingly concerned in and party to the contraventions. The public interest requires that an injunction lie against the respondent.

As to costs, before the hearing commenced, the solicitors for the respondent wrote a letter to the Crown Solicitor for the Commonwealth stating: -

"Our client emphatically denies that he or any company of which he is or was an officer, or any other person or company over which he has or had any authority or control, has engaged in conduct of a kind which would

entitle the plaintiff to an injunction under s.80.

Further, our client says that he has no intention of engaging in any such conduct in the future, either directly or indirectly, and neither does he intend to aid, abett, counsel, procure, induce or attempt to induce any other person or company to engage in such conduct.

However, notwithstanding the foregoing, we have been instructed to advise on a without prejudice basis, that our client is prepared to submit to the specific orders sought in the order to show cause dated 8 December 1978 provided that such order is made by consent and without admission and without the making of any finding of fact adverse to our client.

If agreement can be reached upon the foregoing proposal, our client is agreeable to discuss the question of costs, but at this stage, our client would be prepared to agree that each party pay their own costs."

The Crown Solicitor replied by letter saying that the Commission desired

that the court make findings of fact in addition to granting the injunction sought; and that, unless the respondent was prepared to consent to the making of findings of fact, it appeared unlikely that agreement could be reached between the parties.

There the matter rested until the beginning of the hearing when counsel for the respondent informed me that the respondent's attitude as conveyed in his solicitors' letter was still the same.

This was relied on by the respondent as a ground for resisting injunctions, findings of fact and an order for costs against him. In my opinion, nothing contained in the letter from the respondent's solicitor presents any reason why injunctions should not be granted and findings of fact made. The respondent was prepared to consent to the injunctions sought but only on the basis that they were without prejudice and without admissions. Nor did he consent to an order for costs against him. The Commission was at liberty to take the course it did of pressing for findings of fact and the making of injunctions and for an order for costs. In my opinion, the Commission is entitled to an order for costs in its favour.

I make the following orders :-

1. That the respondent be restrained until further order from aiding, abetting, counselling or procuring any company or person to engage, in trade or commerce, in the conduct of advertising, representing, offering for sale or selling interests in land in a manner that is misleading or deceptive in contravention of s.52 of the Trade Practices Act 1974;

2. That the respondent be restrained until further order from inducing or attempting to induce any company or person to engage in any of the conduct aforesaid and from being in any way, directly or indirectly, knowingly concerned in or party to such conduct by any company or person;

3. That the respondent pay the applicant's costs of this proceeding including any reserved costs; and

4. I reserve liberty to apply.