Re Juris Wilde v Menville Pty Ltd; Michael Anthony Pagonis; Kevin William Harrick; David Robert Kirkham [1981] FCA 6; (1980) 50 FLR; 380; 44-50; 54-56; 63-68 of 1980 Trade Practices (9 February 1981)

FEDERAL COURT OF AUSTRALIA

Re: JURIS WILDE
And: MENVILLE PTY. LTD.; MICHAEL ANTHONY PAGONIS; KEVIN WILLIAM HARRICK; DAVID
ROBERT KIRKHAM [1981] FCA 6; (1980) 50 FLR 380
Nos. 31-41; 44-50; 54-56; 63-68 of 1980
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Smithers J.(1)

CATCHWORDS

Trade Practices - false representations in relation to employment and profitability of business involving investment of money and performance of work - Pleas of guilty - Assessment of fines - Enforcement of fines by the imposition of imprisonment in default of the payment of fines -

Crimes Act 1914, ss.5 and 18A - Applicability of State Law -

Crimes Act 1958 (Vic) s.439(1)(A) - Magistrates (Summary Proceedings) Act 1975 (Vic.) ss.82, 106(1) - Trade Practices Act 1974 ss. 5(a), 53B, 59(2) and 79(2).

Trade Practices - Consumer protection - Supply or possible supply of goods and services - False representations that goods had particular history - False or misleading statement in advertisement seeking person for employment - Offer to engage in business activity requiring investment of money and performance of work - False or misleading statement as to profitability or risk of business activity - Persons knowingly concerned in contraventions of Trade Practices Act - Assessment of penalties - Fixing of term of imprisonment in default of payment of fines - Applicability of State law - Judiciary Act 1903 (Cth), s. 79 - Crimes Act 1914 (Cth), ss. 5, 18A - Trade Practices Act 1974 (Cth), ss. 53(a), 53B, 59(2), 79(2) - Crimes Act 1958 (Vic.), s. 439(1)(a) - Magistrates (Summary Proceedings) Act 1975 (Vic.), ss. 82, 106(1). The respondent Menville Pty. Ltd. pleaded guilty to fourteen charges under the Trade Practices Act 1974 - three under s. 53(a), three under s. 53B and eight under s. 59(2). The company traded under the business name Latrobe Truck Sales. The respondent Harrick was a director of the company and the respondent Pagonis was the person in relation to whom a business name "Latrobe Street Transport Consultants" was registered under the Business Names Act 1958. The respondents Pagonis, Harrick and Kirkham pleaded guilty to charges under s. 5 of the Crimes Act 1914 of being knowingly concerned in the commission by the company of contraventions of the Act: in respect of Pagonis the contraventions relied upon were three of s. 53(a) and three of s. 59(2); in respect of Harrick one of s. 53(a), one of s. 53B and three of s. 59(2) and in respect of Kirkham one of s. 53B and one of s. 59(2). The terms of the relevant legislation appear from the judgment.

It was established that the respondent company had at relevant times promoted the sale of trucks by presenting to potential purchasers composite propositions under which it offered to them positions as owner drivers with established carrying firms or companies described as "permanent" or "on contract". Such positions did not exist.

Held: (1) Amongst the circumstances relevant to the fixing of an appropriate punishment for the offences were: (a) the importance of the untrue representations in relation to the transaction in which they were an influence; (b) the degree to which the relevant representation departed from the truth; (c) the degree of wilfulness or carelessness in the making of the incorrect representation; (d) the extent to which the representations were disseminated.
(2) (a) The offences were very serious but were not at the top of the scale of misconduct to which the Act was directed. (b) Pursuant to s. 79(2) of the Act some of the offences were contraventions of the same provision of the Act, were of the same nature as each other and occurred at or about the same time.
(3) In relation to the individual respondents the court was obliged to fix and impose a term of imprisonment in default of the payment of a fine because: (a) By reason of s. 18A of the Crimes Act 1914 the laws of the State of Victoria were to be applied in relation to this question. (b) The instant proceedings concerned summary offences and the only general Victorian provisions dealing with the enforcement of payment of fines imposed on summary convictions were contained in ss. 82 and 106 of the Magistrates (Summary Proceedings) Act 1975. Those provisions were wide enough to include the subject under consideration in the instant case and were a law of the State dealing with the topic of enforcement of fines imposed on convictions for summary offences. John Robertson & Co. Ltd. v. Ferguson Transformers Pty. Ltd. [1973] HCA 21; (1973), 129 CLR 65; L. Grollo & Co. Pty. Ltd. v. Nu-Statt Decorating Pty. Ltd. (No. 2) (1980), 47 FLR 44; De Vos v. Daly [1947] HCA 12; (1947), 73 CLR 509, referred to.
(4) The fixing and imposition of a term of imprisonment in default of the payment of a fine was not a punishment for the primary offence but was designed to encourage payment of the fines.
(5) In the circumstances appropriate fines were: (a) a total of $75,000 in respect of the fourteen informations laid against the company; (b) a total of $18,500 in respect of the six informations laid against Pagonis and in default of payment of that sum a total of eighteen months' imprisonment; (c) a total of $19,000 in respect of the five informations laid against Harrick and in default of payment of that sum a total of eighteen months' imprisonment; (d) a total of $8,000 in respect of the informations laid against Kirkham and in default of payment of that sum a total of nine months' imprisonment.

HEARING

Melbourne, 1980, October 7-9, 13; December 23; 1981, February 9. 9:2:1981
INFORMATIONS.

H. T. Nathan Q.C., for the informant.

A. Garantziotis, for the respondents.

Cur. adv. vult.

Solicitors for the informant: B. J. O'Donovan, Commonwealth Crown Solicitor.

Solicitors for the respondents: Haines & Polites.
T. J. GINNANE

ORDER

Group 1

1. In proceeding VG No. 31 of 1980 against the company pursuant to s.53(a) of the Act,

(a) the company be fined $1,000;

(b) the company shall pay the amount of such fine to the Registrar of the Court within 30 days of this date or should a later date be fixed by this Court by such later date;

2. In proceeding VG No. 32 of 1980 against the defendant Pagonis pursuant to s.5 of the Crimes Act and s.53(a) of the Act,

(a) the defendant be fined $1,000;

(b) the fine be paid to the Registrar of this Court by 1 December 1981.

(c) in default of payment of such fine within the time so fixed the defendant be imprisoned for one month.

Group 2

1. In proceeding VG No. 33 of 1980 against the company pursuant to s.59(2) of the Act,

(a) the company be fined $5,000;

(b) the company shall pay the amount of such fine to the registrar of the Court within 30 days of this date or should a later date be fixed by this Court by such later date.

2. In proceeding VG No.34 of 1980 against the defendant Pagonis pursuant to s.5 of the Crimes Act and s.59(2) of the Act,

(a) the defendant to be fined $4,000;

(b) the fine be paid to the Registrar of the Court by 1 September 1982;

(c) in default of payment of such fine within the time so fixed the defendant be imprisoned for four months.

Group 3

1. In proceeding VG No. 35 of 1980 against the company pursuant to s.53(a) of the Act,

(a) the company be fined $7,000

(b) the company shall pay the amount of such fine to the Registrar of the Court within 30 days of this date or should a later date be fixed by this Court by such later date.

2. In proceeding VG No. 36 of 1980 against the defendant Pagonis pursuant to s.5 of the Crimes Act and s.53(a) of the Act,

(a) the defendant to be fined $4,500;

(b) the fine be paid to the Registrar of the Court by 1st June 1983;

(c) in default of payment of such fine within the time so fixed the defendant be imprisoned for five months.

3. In proceeding VG No. 37 of 1980 against the company pursuant to s.59(2) of the Act,

(a) the company be fined $5,000;

(b) the company shall pay the amount of such fine to the registrar of the Court within 30 days of this date or should a later date be fixed by this Court by such later date.

Group 4

1. In proceeding VG No. 38 of 1980 against the company pursuant to s.59(2) of the Act,

(a) the company be fined $5,000

(b) the company shall pay the amount of such fine to the registrar of the Court within 30 days of this date or should a later date be fixed by this Court by such later date.

2. In proceeding VG No. 39 of 1980 against the defendant Pagonis pursuant to s.5 of the Crimes Act and s.59 (2) of the Act,

(a) the defendant to be fined $3,500

(b) the fine be paid to the Registrar of the Court by 1 March 1984;

(c) in default of payment of such fine within the time so fixed the defendant be imprisoned for three months.

3. In proceeding VG No. 40 of 1980 against the defendant Harrick pursuant to s.5 of the Crimes Act and s.59(2) of the Act,

(a) the defendant to be fined $4,000;

(b) the fine be paid to the Registrar of the Court by 1 December 1981;

(c) in default of payment of such fine within the time so fixed the defendant be imprisoned for four months.

Group 5

1. In proceeding VG No. 41 of 1980 against the company pursuant to s.59(2) of the Act,

(a) the company be fined $6,000

(b) the company shall pay the amount of such fine to the registrar of the Court within 30 days of this date or should a later date be fixed by this Court by such later date.

Group 6

1. In proceeding VG No. 44 of 1980 against the company pursuant to s.53B of the Act,

(a) the company be fined $10,000

(b) the company shall pay the amount of such fine to the registrar of the Court within 30 days of this date or should a later date be fixed by this Court by such later date.

2. In proceeding VG No. 45 of 1980 against the company pursuant to s.59(2) of the Act,

(a) the defendant to be fined $5,000

(b) the company shall pay the amount of such fine to the Registrar of the Court within 30 days of this date or should a later date be fixed by this Court by such later date.

Group 7

1. In proceeding VG No. 46 of 1980 against the company pursuant to s.53B of the Act,

(a) the company be fined $100

(b) the company shall pay the amount of such fine to the Registrar of the Court within 30 days of this date or should a later date be fixed by this Court by such later date.

2. In proceeding VG No. 47 of 1980 against the company pursuant to s.59(2) of the Act,

(a) the defendant to be fined $5,900

(b) the company shall pay the amount of such fine to the Registrar of the Court within 30 days of this date or should a later date be fixed by this Court by such later date.

Group 8

1. In proceeding VG No. 48 of 1980 against the company pursuant to s.53(a) of the Act,

(a) the company be fined $5,000

(b) the company shall pay the amount of such fine to the Registrar of the Court within 30 days of this date or should a later date be fixed by this Court by such later date.

2. In proceeding VG No. 49 of 1980 against the defendant Pagonis pursuant to s.5 of the Crimes Act and s.53(a) of the Act,

(a) the defendant to be fined $2,500;

(b) the fine be paid to the Registrar of the Court by 1 December 1984;

(c) in default of payment of such fine within the time so fixed the defendant be imprisoned for two months.

3. In proceeding VG No. 50 of 1980 against the defendant Harrick pursuant to s.5 of the Crimes Act and s.53(a) of the Act,

(a) the defendant to be fined $3,000;

(b) the fine be paid to the Registrar of the Court by 1 September 1982;

(c) in default of payment of such fine within the time so fixed the defendant be imprisoned for two months.

4. In proceeding VG No. 54 of 1980 against the company pursuant to s.59(2) of the Act,

(a) the company be fined $5,000

(b) the company shall pay the amount of such fine to the Registrar of the Court within 30 days of this date or should a later date be fixed by this Court by such later date.

5. In proceeding VG No. 55 of 1980 against the defendant Pagonis pursuant to s.5 of the Crimes Act and s.59(2) of the Act,

(a) the defendant to be fined $3,000;

(b) the fine be paid to the Registrar of the Court by 1 September 1985;

(c) in default of payment of such fine within the time so fixed the defendant be imprisoned for three months.

6. In proceeding VG No. 56 of 1980 against the defendant Harrick pursuant to s.5 of the Crimes Act and s.59(2) of the Act,

(a) the defendant to be fined $3,500;

(b) the fine be paid to the Registrar of the Court by 1 June 1983;

(c) in default of payment of such fine within the time fixed the defendant be imprisoned for three months.

Group 9

1. In proceeding VG No. 63 of 1980 against the company pursuant to s.59(2) of the Act,

(a) the company be fined $10,000

(b) the company shall pay the amount of such fine to the Registrar of the Court within 30 days of this date or should a later date be fixed by this Court by such later date.

2. In proceeding VG No. 64 of 1980 against the defendant Kirkham pursuant to s.5 of the Crimes Act and s.59(2) of the Act,

(a) the defendant to be fined $5,000;

(b) the fine be paid to the Registrar of the Court by 1 December 1981;

(c) in default of payment of such fine within the time so fixed the defendant be imprisoned for five months.

3. In proceeding VG No. 65 of 1980 against the defendant Harrick pursuant to s.5 of the Crimes Act and s.59(2) of the Act,

(a) the defendant to be fined $5,000;

(b) the fine be paid to the Registrar of the Court by 1 March 1984;

(c) in default of payment of such fine within the time so fixed the defendant be imprisoned for four months.

Group 10

that:

1. In proceeding VG No. 66 of 1980 against the company pursuant to s.53B of the Act,

(a) the company be fined $5,000

(b) the company shall pay the amount of such fine to the Registrar of the Court within 30 days of this date or should a later date be fixed by this Court by such later date.

2. In proceeding VG No. 67 of 1980 against the defendant Harrick pursuant to s.5 of the Crimes Act and s.53B of the Act,

(a) the defendant to be fined $3,500;

(b) the fine be paid to the Registrar of the Court by 1 December 1984;

(c) in default of payment of such fine within the time so fixed the defendant be imprisoned for four months.

3. In proceeding VG No. 68 of 1980 against the defendant Kirkham pursuant to s.5 of the Crimes Act and s.53B of the Act,

(a) the defendant to be fined $3,000;

(b) the fine be paid to the Registrar of the Court by 1 September 1982;

(c) in default of payment of such fine within the time so fixed the defendant be imprisoned for four months.

In each of the above proceedings it is further ordered that: -

(1) in each case against the defendant Menville Pty. Ltd. the company shall pay the costs of the proceedings including the proofs of the acts and matters performed by its agents;

(2) in each case against an individual defendant that defendant pay the costs of those proceedings so far as they relate to work performed additionally to that performed in the particular proceedings against the company to which those proceedings relate;

(3) the question of granting relief pursuant to s.21B(d) of the Commonwealth Crimes Act is reserved; and

(4) liberty to apply is granted.

Orders accordingly.

DECISION

The defendant Menville Pty. Ltd. (the company) pleaded guilty to fourteen charges under the Trade Practices Act 1974. Three of those charges related to contraventions of that part of s.53(a) of the Act which provides that a corporation shall not in trade or commerce, in connection with the promotion of the supply of goods falsely represent that the goods have had a particular history.

Three of the charges related to contraventions of s.53B of the Act which provides that a corporation shall not publish an advertisement seeking a person or persons for employment, whether by the corporation or by another person, that contains a statement that is false or misleading in a material particular.

Eight of the charges relate to contraventions of s.59(2) of the Act which provides that where a corporation invites persons to engage or participate or to offer or apply to engage or participate in a business activity requiring the investment of moneys by the person concerned and the performance by them of work associated with the investment of moneys by the persons concerned the corporation shall not make a statement that is false or misleading in a material particular with respect to the profitability or risk of the business activity.

The defendant Pagonis has pleaded guilty to six charges of being knowingly concerned in the Commission by the company of contraventions of the Act. Three of these were contraventions of the provisions of s.53(a) of the Act and three of s.59(2).

The defendant Harrick has pleaded guilty to five charges of being knowingly concerned in the commission by the company of contraventions of the Act, one under s.53(a) one under s.53B and three under s.59(2).

The defendant Kirkham has pleaded guilty to two charges of being knowingly concerned in the commission by the company of one contravention by it of the provisions of s.53B and one contravention of s.59(2) of the Act.

The defendants are each convicted of the offences to which they have pleaded guilty.

In respect of these offences the company is fined a total of $75,000 in respect of the fourteen informations laid against it. The defendant Pagonis is fined a total of $18,500 in respect of the six informations laid against him with provision that in default of the payment of the fines imposed he shall suffer the period of imprisonment referable to the fines stated in the order. Should he default in the payment of all six fines the total period of imprisonment would be eighteen months. The defendant Harrick is fined a total of $19,000 in respect of the five informations laid against him with provision that in default of the payment of any of the fines immposed he shall suffer the period of imprisonment referable to that fine stated in the Order. Should he default in the payment of all five fines the total period of imprisonment would be eighteen months. The defendant Kirkham is fined a total of $8,000 in respect of the two informations laid against him with provision that in default of the payment of any of the fines imposed he shall suffer the period of imprisonment referable to that fine stated in the Order. Should he default in the payment of both fines the total period of imprisonment would be nine months.

General

The Company, Menville Pty. Ltd., which was incorporated under the law of Victoria, carried on business at 315 Latrobe Street Melbourne as a dealer in used Motor Trucks doing much of its business under its registered business name "Latrobe Truck Sales" The company held a licence as a motor trader under the Motor Car Traders Act 1973 of the State of Victoria. The defendant Harrick was at all material times a director of Menville Pty. Ltd. (the company).

The defendant Pagonis was at all material times the person in relation to whom a business name "Latrobe Street Transport Consultants" was registered under the Victorian Business Names Act 1958.

On numerous occasions between July 1979 until March 1980 the company promoted the sale of trucks by presenting to potential purchasers composite propositions under which it offered to them positions as owner drivers with established carrying firms or companies described as "permanent" or "on contract". Such positions did not exist. The twenty-seven cases now before the Court concern transactions with ten men nine of whom were induced to purchase trucks from the company by false and misleading statements concerning the availability of such "positions". They were imposed upon by one or other of the personal defendants who secured and betrayed their confidence. The propositions were brought to the notice of the potential purchasers by evocative advertisements substantially in the form of the one set out in the discussion of the various cases before the Court which appears below.

The promotion of the sale of the trucks was based upon the prospect of assured work and income, to men hungry for work. It was this which the defendants exploited. Persons attracted by the advertisement had its message confirmed by one or other of the individual defendants. They would confirm that the earnings stated in the advertisements were genuine and convey the impression that they were able to arrange for the customer to obtain a position with an established transport company with which the necessary work to produce those earnings was assured and the position was permanent or on contract. The stated prospective earnings if realised, would have been adequate to maintain a good vehicle and to provide a satisfactory livelihood. Nine of the ten men who responded to the advertisements gave evidence. Most of them appeared to be in the category of unsophisticated workingman, fearing no evil in their dealings with other men. Those who induced them to buy trucks knew, in a number of cases, that to buy the trucks they had to mortgage their houses and of course enter into large obligations to finance companies. In various cases the trucks were shown to be unreliable, and in one case, and probably in others the price much in excess of its real value.

In the commission of the offences the defendants were able to inject a semblance of reality into the notion that they could provide permanent contract work or positions because there were a number of transport organizations in and around Melbourne which carried out transport work for large business entities such as B.H.P., G.M.H., C.R.A., McEwans and others and who did engage owner drivers to carry the freight of those entities in Victoria and Interstate. These carriers engaged regular drivers but appear to have been willing to give work to other drivers when it was available on the same sort of basis as work given to cabs on the rank. It was there that the customers of the company fitted, if anywhere. But the trucks on the rank were many and the work available for new drivers was sporadic and inadequate. The result was that those who had purchased trucks from Latrobe Truck Sales soon found that despite their best efforts the earnings were far below what had been held out to them as certain, and in most cases that their costs were beyond their means. Their efforts to survive involved them in excessively hard work, loss of money, the wrecking of their family financial structure, the prospect of long years of work to pay off the burdens incurred in buying their trucks and general despair.

The defendant company operating through the personal defendants was quite ruthless in representing the transactions they proposed as attractive viable propositions. The trouble was that the work promised was just not available. The evidence before me does not disclose the actual earnings of truck drivers who were regular drivers of the transport companies. Except in one instance I do not know how the defendants fixed upon the amounts of earnings which they stated their truck purchasers would earn. I think they had a general knowledge of cartage rates and chose figures on an optimistic estimate of what continuous operations with a good truck might be expected to bring in. But their customers were in no position to obtain such regular work. Certainly for them there was nothing in the nature of a position, with assured regular work either on contract, or permanent employment or otherwise.

In the case of work to which the customer Voges was referred, namely, work with Beacon Transport Company who carried out deliveries for McEwans of Melbourne, the defendant Pagonis had been informed by one Simpson the Manager of Anchor Transport Company, which like Beacon Transport Company was a division of the Coulson Transport Group, that some drivers for Beacon made about $500 per week and that Beacon did have enough work to provide carrying work for additional drivers. Simpson seemed tentative about the nature of the evidence he gave. He expressed the view, which was difficult to understand, that the figure he stated should not have been advertised. Nevertheless he did say and I believe that he did mention the figure of $500 and to that extent Pagonis had justification for stating to Voges that $500 was the possible gross weekly earnings to be achieved with Beacon Transport Company. It would seem however, that even if that gross sum were earned $125 of it would be payable to Beacon as commission. Simpson certainly said nothing about a permanent position. There is a charge against the Company but no charge against any of the personal defendants in respect of the Voges transaction.

From what I have been informed on behalf of the defendants, relief in the civil courts to those who have suffered losses seems unlikely. The only one of the nine men who bought trucks and suffered losses who obtained his money back was a Greek man a relation of whom is said to have conveyed to the defendants that repayment would be the better course of valour and whose message was believed. The tenth man did not purchase a truck, as before he completed the purchase, he discovered for himself that he had been misled. He had however paid a deposit of $500 which he has not recovered.

Discussion of the Relevant Events

1. The first group of proceedings relates to a transaction with one Kelly and comprises VG No. 31 of 1980 and VG No. 32 of 1980. VG 31 concerns a contravention by the company of s.53(a) of the Act on 4 July 1979. Section 53(a) of the Act provides that a corporation shall not in trade or commerce in connection with the supply or possible supply of goods or services or in the connection with the promotion by any means of the supply of goods or services falsely represent that goods have had a particular history. The charge was that in the circumstances postulated in the section the company falsely represented to one Kelly that a Bedford motor vehicle numbered KXD 854 had a particular history, namely that it had belonged to a man who had recently died and its sale was being handled for his family. VG No. 32 of 1979 is a charge against one, Michael Anthony Pagonis that he was knowlingly concerned in the commission of the offence the subject of the last mentioned proceeding VG No. 31 of 1979 in that it was he who actually made the representation referred to therein. The charge is brought under s.5 of the Crimes Act 1914 (Commonwealth) which provides that any person who is in any way directly or indirectly, knowingly concerned in the commission of an offence against any law of the Commonwealth, shall be deemed to have committed that offence and shall be punished accordingly.

2. The second group of proceedings also relates to the transaction with Kelly and comprises VG No. 33 of 1979 and Vg No. 34 of 1980. VG No. 33 concerns a contravention by the company of s.59(2) of the Act. That section provides as follows: -

"59(2) Where a corporation, in trade or commerce, invites, whether by advertisement or otherwise, persons to engage or participate, or to offer or apply to engage or participate, in a business activity requiring the investment of moneys by the persons concerned and the performance by them of work associated with the investment, the corporation shall not make, with respect of the profitability or risk or any other material aspect of the business activity, a statement that is false or misleading in a material particular."

The charge against the company was that the defendant company did contravene section 59(2) of the Act in that it did in trade or commerce invite Leon Paul Kelly to participate in a business activity requiring the investment of monies by him and the performance by him of work associated with the investment and did with respect to the profitability or risk or any other material aspect of business activity make statements that were false or misleading in a material particular, namely, that, on or about the 6th July 1979 the company did make statements as to the profitability or risk or other material aspect of the business activity in that it did by its servant or agent Michael Anthony Pagonis make statements to Leon Paul Kelly: -

(a) that there was a guaranteed earning of at least $20,000 per year if the said Leon Paul Kelly purchased a Bedford motor vehicle registered number KXD-854 from La Trobe Truck Sales;

(b) that with the weekend work that would be available the said Leon Paul Kelly should easily earn $550.00 per week;

(c) that if he, Leon Paul Kelly, purchased a Bedford motor vehicle registered number KXD-854 he would carry on the contract held by the said motor vehicle which included work with Phillips, Pioneer, IBM and BHP;

(d) that the place he, Leon Paul Kelly, would be working for was as big as T.N.T.

The invitation alleged included an advertisement published by the defendant which was in the following terms: -

"OWNER DRIVER

1 Perm. Position

$2000 P. Mnth.

This is a permanent position with one of Melbourne's leading transport companies. Position is to take over 5 ton 45 cub. met. van working metro. and country. earnings $2000 p.m. but can be higher depending on ability. For interviews ph. 60-1663."

Evidence was called from which it appeared that Kelly was attracted by this advertisement and called on the company where Pagonis made statements in substance in accordance with those alleged in the summons. There can be no doubt that Kelly was led to believe that regular work of a reliable kind with substantial companies such as Pioneer, Phillips, B.H.P. and I.B.M. would be available to him through the defendant company's arrangement with such companies if he bought the Bedford truck and was willing to work and that such work would have a permanent character and that his earnings would be as stated. Mr. Kelly bought the truck for $10,000. He was told to report to Karyall, a carrying company which engaged in truck deliveries to do such work as it could obtain. Mr. Kelly found that there were no contracts with the substantial companies who had been referred to. He had to be content with such work as Karyall allotted to him. He earned nothing like the promised earnings. In addition, although he had been told the truck was in good condition the differential and gear box and other parts gave up in a few months and he was involved in expenses for repairs of close to $8000. Mr. Kelly had to give up looking to Karyall for work because of the inadequate amount of work and earnings therefrom. He now looks for his own work and is carrying on as an independent carrier.

It is clear that Kelly was induced to borrow money to buy the Bedford truck by a belief inspired by the defendant that the defendant could put him in the way of work of a permanent nature which would return him a very satisfactory income. There was no justification for the defendant painting this optimistic picture. It took advantage of Mr. Kelly's desperate desire for employment to lead him into a seriously losing proposition by misrepresentations as to the realities of the situation.

VG No. 34 is a charge against Michael Anthony Pagonis that he was knowingly concerned in the commission of the offence the subject of the last mentioned proceedings VG No. 33 of 1980 in that it was he who actually made the false and misleading statements the subject of that offence. The charge is brought pursuant to s.5 of the Crimes Act 1914.

3. The third group of proceedings relates to a transaction with one Athanasiades and comprises VG Nos. 35, 36 and 37 of 1980. Proceeding VG 35 concerns a contravention of s.53(a) of the Act by the company. The charge is that contrary to the provisions of that section the company did on or about 12 July 1979 falsely represent to Samuel Athanase Athanasiadis that goods namely a Daihatsu motor vehicle registered No. ACV-402 would have a new engine and new gear box in it and did on or about 25 July 1979 falsely represent to the said Athanasiadis that the engine in that vehicle was new.

VG No. 36 of 1980 is a charge against the said Pagonis that he was knowingly concerned in the commission of the offences the subject of proceeding VG 35 of 1980 in that on or about 12 July 1979 and 25 July 1979 it was actually he who made the false representations referred to in those proceedings. The proceedings were brought pursuant to s.5 of the Crimes Act 1914.

Proceedings VG 37 of 1980 concerned a charge against the company in respect of a contravention of s.59(2) of the Act in that it invited the said Athanasiadis to participate in business activity requiring the investment of monies by him and the performance by him of work associated with the investment did with respect to the profitability or risk or other material aspect of the business activity make statements that were false and misleading in a misleading particular, namely that by way of advertisement and verbal statements of the said Pagonis statements were made to the said Athanasiadis that three positions as owner driver were available and that the earnings which he would obtain therein were $400 per week. The advertisement was in the following terms: -

"OWNER DRIVERS

NEW BUSINESS

OPPORTUNITIES

There are now 3 posns. avail. for reliable people wishing to become Owner Drivers working 5 day week metro area. Earnings on own ability can be as high as $450 p.w. Guar. min. $325 p.w. This is definitely a perm. contract posn. For further information and interview ph. manager. 60-1663."

Attracted by this advertisement Mr. Athanasiadis attended at Latrobe Truck Sales and was interviewed by Mr. Pagonis mentioned above. Pagonis told him that if he had the truck which Latrobe Truck Sales was willing to sell him he would make $400 per week clear with the opportunity of increasing that to $600 per week if he worked on Saturdays and Sundays. Mr. Athanasiadis asked how much the job with the truck would cost and was told $7,500 to $8000. The arrangement made was for the purchase by Athanasiadis of a Dyna truck but during the negotiations a Diahatsu was substituted which Athanasiadis was told was a better truck with a new engine and a new gear box. From what was said Athanasiadis understood that he would look to Latrobe Truck Sales for the job. He was told to report to Allbright Messenger Trucks. He was told not to drive too fast because the engine was new. He was told to check the oil and water each morning. On the way to Allbright Messengers the truck broke down in the middle of Tullamarine freeway, apparently it boiled for want of water. On arrival at Allbright Messenger Services he told the manager he was from Latrobe Truck Sales sent by Michael Pagonis who said that Allbright Messengers had a job for him at $500 per week clear. The Manager said he did not know Pagonis save that Pagonis had rung him up about two weeks before and asked if he had another driver's position. It would seem that Allbright had said "yes" and that the driver might make $400 per week but he would only earn as much as he worked and that Allbright was only working on deliveries and that he would have to pay 25% of his earnings to Allbright.

That evening the 4th and 5th gears dropped so Mr. Athanasiadis arranged for a mechanic to examine them. The mechanic's view was that the engine and gear box were certainly not new. As a result Athanasiadis took the truck back to Latrobe truck Sales who agreed to repair it. This took some time and Latrobe Truck Sales lent him another truck and sent him to Anchor Transport Services where he spoke to Mr. Simpson. Simpson said he could not possibly make $400 per week, that Anchor would take 25% of what he earned and Athanasiadis would have to pay $40 per month insurance and $20 for the two-way radio.

In due course Athanasiadis received his Daihatsu truck back from Latrobe Truck Sales. He later worked with Omega Transport for about ten days. But despite his efforts his earnings with these transport companies or getting such work as he could for himself did not at any stage reach $400 per week and or anything approaching that amount. After about six months the truck broke down again. Athanasiadis repaired it himself but it was thereafter nearly every week to the mechanic. After a year the gear box and engine collapsed. Athanasiadis did not have the money to repair the truck and it is useless in its present state.

4. The fourth group of proceedings relates to a transaction with one Lefebure and comprises VG No. 38, 39 and 40 of 1980. Proceeding VG No. 38 concerns a contravention of s.59(2) of the Act by the Company. The charge was that it did in trade or commerce invite Serge Lindsay Lefebure to participate in a business activity requiring the investment of moneys by him and performance by him of work associated with the investment and did with respect to the profitability or risk or any other material aspect of the business activity make statements that were false or misleading in a material particular. Mr. Lefebure was attracted to the Company by an advertisement published by it in the Melbourne "Sun" newspaper on 9 July 1979 in the following terms: -

"OWNER DRIVERS

NEW BUSINESS OPPORTUNITIES

There are now 3 posns. avail. for realiable people wishing to become Owner Drivers working 5 day week Metro. area. Earning on own ability can be as high as $450 p.w. Guar. min. 325 p.w. This is definitely a perm. contract posn. For further information and interview ph. manager 60 1663."

In the first instance the false oral statements were actually made by the said Pagonis and were to the effect that the advertised guaranteed minimum weekly earnings of $325 per week were genuine and that Mr. Lefebure could earn as high as $550 per week. He informed Lefebure that Latrobe Truck Sales carried on business as a transport company under the name "Guardian Business Consultants" and that he would be operating from 315 LaTrobe Street. That was the address of both Latrobe Truck Sales and Guardian Business Consultants. After these conversations Mr. Lefebure was told to come back next day. This he did and was met by Pagonis who said "Congratulations you have been successful to the job. Just step into my office and we will fill out the necessary paperwork.". This was done. Thereafter Pagonis produced a Mazda Truck stating that this was the best available and that "It will cost you $10,000 and you will be guaranteed work.". Mr. Lefebure asked where did he work, where was his first job and who was going to train him. He was told to report to one Derek at Karyall at 71 Southern Road Mentone. Mr. Lefebure said "Why do I have to go to Karyall. You have always told me that I will be operating from 315 LaTrobe Street". He was told that if he went to Karyall they would fulfil the second part of the agreement and give him a two-way radio and give him his weekly pay. Lefebure went to Karyall Transport and Derek told him the rules were that he had to be at Mentone at eight o'clock every morning and the work was distributed from there. He said "You work and you get paid. If there is no work you do not get paid". Lefebure said he had been guaranteed $325 per week "and now you are telling me something different" Derek said, "Who told you that" - "I said the people at Latrobe Truck Sales" and Derek said - "Latrobe Truck Sales and us are two different bodies, we are not related at all" Derek then said "You work for four weeks without getting paid and you get your first week's payment in the fifth week". Mr. Lefebure endeavoured to get work from Karyall, earning $630 in seventeen days. He said "I saw I was getting nowhere with Karyall. You had to be there at eight o'clock in the morning, sitting in your truck twiddling your thumbs, get a job at eleven o'clock, they sent you over to the other side of town then when you were there you had to ring them and every time you had to drive back to Mentone, sit again for three or four hours before you get another hour's job. So in fact you were on your feet for twelve to thirteen hours a day to get three or four hours work.". Mr. Lefebure decided it was costing him too much to continue. He complained bitterly to Pagonis for he was not earning anything like $325 a week. Pagonis asked him to come in and said "I will get you something better this time" Lefebure went in and was introduced to the defendant Kirkham, who said "I will arrange something with Associated Owner Drivers and you will earn big money this time." So Lefebure reported to Associated Owner Drivers where Kirkham introduced him to the Director who said "You come here, if there is a job we will give it to you". He pointed out that Associated Owner Drivers had nothing to do with Latrobe Truck Sales. Lefebure persisted in his attendance at Associated Owner Drivers. The work there was very limited. He went looking for work on his own account but found little. Persevering with the work with the truck was involving him in heavy expenses. He came to the conclusion that he would have lost his house and everything he had because of the repair bills and other expenses. So he decided that he should sell the truck and get back to his ordinary occupation of accountant. Throughout the transaction he incurred much hard work, disappointment and lost about $4000.

VG No. 39 of 1980 is a charge against the said Pagonis brought pursuant to s.5 of the Crimes Act 1914 that he was knowingly concerned in the commission of the offence the subject of proceeding VG No. 38 which arose out of the circumstances set out above.

VG No. 40 of 1980 is a charge against one Kevin William Harrick brought pursuant to section 5 of the Crimes Act 1914 that he was knowingly concerned in the commission of the offence the subject of VG No. 38 of 1980. To that charge the defendant has pleaded guilty, but there are no details of the actual conduct engaged in by him in the commission of the offence. He was of course a director of the company.

5. In the fifth category is a proceeding which relates to a transaction with one Voges and comprises VG No. 41. It concerns a contravention of s.59(2) of the Act by the Company. The charge is that contrary to the provisions of that section the company invited one Barry Robert Voges to participate in a business activity requiring the investment of monies by him and the performance by him of work associated with that investment and made statements with respect to the profitability of the business activity that were false or misleading in a material particular.

The circumstances were that in response to an advertisement published by the company on or about 15 August 1979 Voges telephoned the Company premises and spoke to one Kirkham. Voges inquired about certain positions which had been advertised for owner drivers. He was told that he would be required to purchase a truck for about $10,000 and that there were various positions that were available with an annual income of $20,000 to $26,000. Later he attended the company's premises and spoke to Kirkham. Kirkham told Voges that if he bought the truck the company would get him a permanent contract position with McEwans where he would carry out forty delivery "drops" per day at $2.20 per drop which worked out at around $20,000 per year. He said that Latrobe Truck Sales was part of Coulsens (a large transport organization) and because of that they were able to "get trucks with McEwans". Voges said he would invest and take the job. Finance to $7000 was arranged with Custom Credit Limited and the balance of $3000 was arranged through the ANZ Bank on the security of Voges' house. Voges was referred not to McEwans but to Beacon Transport which had a contract with McEwans. No contract with Beacon Transport was available to Voges but Beacon Transport was willing to and did include him amongst carters which it would engage to do deliveries as the work was available. But there were too many trucks and too few deliveries. Voges persevered for some two months but there were much fewer than forty deliveries per day. His earnings for the whole of September 1979 were $600 and thereafter he averaged some $200 - $220 per week gross. He found he was losing money with no prospects of improving his position and decided to sell the truck and try to obtain other work. He sold the truck for $6000 and lost about $4000 in the transaction and acquired an obligation to pay off this $4000 at $103 per month over four years.

6. The sixth group of proceedings relates to a transaction with one Zerafa and comprises VG No. 44, and 45 of 1980. Both those charges concerned an advertisement published by the company in the "Sun" newspaper on 9 October 1979 in the following terms: -

"OWNER DRIVERS
LOCAL DELIVERIES

$2000 Per Month

There now exists a vacancy within our fleet of owner operators for a conscientious self motivated person not necessarily with experience to join our fleet and to buy and operate an ex-company vehicle. The successful applicant would be working within the general cartage side of the fleet throughout the Melbourne and Metro. areas and will work five days a week min. with cas Saturday and Sunday work always available. For appointment phone Transport Manager 60 1662."

The charge in VG 44 is laid pursuant to s.53B of the Act in respect of the publication by the company on 9 October 1979 of false and misleading statements in an advertisement seeking a person for employment. The falsity of this advertisement was that the company had no basis for suggesting that it could arrange or provide work for owner drivers with earnings of $2,200 per month. The company had no fleet of owner operators. No ex company vehicle was available. The company had no grounds for suggesting it could arrange for employment on five days a week minimum with cash Saturday and Sunday work available. However, this charge relates to the misconduct the subject of VG No. 45 of 1980 and is in essence merely an aspect of that misconduct.

VG No. 45 of 1980 is also brought against the Company. It concerns that aspect of the advertisement and supervening oral statements by which the company invited one Zerafa to participate in a business activity requiring the investment of moneys by him and the performance of work associated therewith and therein made statements false in a material particular with respect to the profitability thereof contrary to s.59(2) of the Act. As a result of this advertisement and false statements of one Kirkham repeating the falsehoods set out above Zerafa mortgaged his house to buy a truck for $10,000, discovered that the work to which he was directed returned much less than $2200 per month, namely $666 for one month and $902 the next. In the next month he found he could not carry on. The truck had defective brakes, lights and clutch and has cost much money for repairs. Doing the best he can with the vehicle he is earning some $250 per week gross and must service the mortgage on his house and keep his wife and three children as best he can using the truck.

7. The seventh group of proceedings relate to a transaction with one Agius and comprises VG No. 46 and No. 47 of 1980. VG No. 47 of 1980 concerns an advertisement published by the company on 11 October 1979 in respect of which the charge against the company is that thereby and otherwise contrary to s.59(2) of the Act the company did invite one Angelo Agius to participate in a business activity requiring the investment of moneys by him and work by him associated therewith and made statements with respect to the profitability of that activity that were false and misleading in a material particular. The advertisement was in the following terms: -

"OWNER DRIVERS
LOCAL
DELIVERIES
$2200 PER MONTH

There now exists a vacancy within our fleet of owner operators for a conscientious self motivated person, not necessarily with experience, to join our fleet to buy and operate an ex-company vehicle.
The successful applicant would be working within the general cartage side of the fleet throughout the Melbourne and Metro. areas and will work five days a week min. with cash Saturday and Sunday work always available. For appointment phone Transport Manager 60 1662."

The advertisement was false in that the company had no fleet of owner operators, there was no vacancy for which there could be a successful applicant, the successful applicant would not be working as part of the company's fleet, there was no vacancy in which the successful applicant would work five days a week with cash Saturday and Sunday work always available.

Attracted by the advertisement although he could not write or read English one, Angelo Agius, attended the company premises, was interviewed by David Kirkham who confirmed that if he brought the truck he would get the job and earn $2200 per month. Agius agreed, mortgaged his house and paid the $10,000. He was referred to Anchor Transport where he was told his earnings would be $1600 per month. He complained about this but decided to continue. He could not manage the work owing to his inability to read or write English. He returned to the Company, reminded Kirkham that he had said he could have his money back if the proposals did not work out. Kirkham denied this. However it appears that some relation of Agius telephoned Kirkham and there was some talk of shooting and the Company remembered its promise and repaid the $10,000. Mr. Agius lost about $500 in various expenses as a result of the transaction.

VG No. 46 of 1980 concerns the same advertisement. It is a charge that in contravention of s.53B of the Act the Company did thereby publish an advertisement seeking a person for employment that contained statements which were false and misleading. The false statements are set out above in relation to VG No. 47 of 1980. I consider that the penalty in respect of this offence should be nominal. The substantial contravention of the Act was that dealt with in VG No. 47 of 1980.

8. The eighth group of proceedings relates to a proposed transaction with one Sullivan and comprises VG Nos. 48, 49, 50, 54, 55 and 56 of 1980. VG No. 48 relates to a contravention by the company of s.53(a) of the Act arising out of a statement made on or about 3 March 1980 by Pagonis to Michael John Sullivan that an Isuzu Motor vehicle registered No. AAF 172 had been owned by Menville Pty. Ltd. trading as Latrobe Truck Sales since it was new. This statement was untrue and was made in contravention of s.53(a) of the Act which prescribes a corporation falsely representing in trade or commerce in connection with the promotion of the supply of goods that the goods have a particular history.

VG No. 49 of 1980 is a proceeding against Michael Anthony Pagonis concerning the making by him of false representation the subject of proceedings VG No. 48. The charge is made pursuant to s.5 of the Crimes Act 1914 on the basis that Pagonis was knowingly concerned in the commission of the offence the subject of VG No. 48 of 1980.

VG No. 50 of 1980 is a proceeding against Kevin William Harrick concerning the making by him of false representation the subject of proceedings VG No. 48. The charge is made pursuant to s.5 of the Crimes Act 1914 on the basis that Harrick was knowingly concerned in the commission of the offence the subject of VG No. 48 of 1980.

VG No. 54 of 1980 concerns a contravention by the Company of s.59(2) of the Act on and about 3 March 1980 whereby the company published an advertisement and otherwise invited one Michael John Sullivan to participate in a business activity requiring the investment of moneys by him and the performance by him of work associated therewith and did make statements that were false or misleading in respect of the profitability thereof contained in the advertisement which was in the following terms: -

"OWNER/OPERATOR
INTERSTATE

We are in need of an experienced operator to become self employed on a sub-contract basis with one of Melbourne's leading transport co. The successful applicant would be purchasing an ex co. semi trailer and will be required to work between Melbourne, Sydney and Adelaide. We anticipate that the right operator would earn in the vicinity of $80,000 pa gross. People wishing to apply for this position would be home buyers and would be self-motivated and keen to succeed. Finance is available to approved purchaser on no deposit. Phone Manager, 60 1663."

Confirming the terms of the advertisement Michael Anthony Pagonis and Kevin Harrick made statements to Sullivan that contracts would be arranged with such notable companies as B.H.P., G.M.H., Conzinc RioTinto and that the company guaranteed three return trips to Sydney, a fortnight so that Sullivan would make $80,000 in a year without any trouble.

In truth the company had and could give no contracts. The best it could do was to send Sullivan to one of the transport companies such as Mulgrave Associated Transport or Anchor Transport from whom they might or might not receive cartage work to do according to the state of their business and the number of truck drivers competing for the work.

The truck had belonged to four owners other than the company or Latrobe Truck Sales prior to 3 March 1980 and was not then registered in either of those names. Sullivan caused enquiries to be made. He discovered that the truck had had a number of previous owners, became disenchanted and called the transaction off. He lost $500 which he had paid as a holding deposit.

VG No. 55 of 1980 relates to a charge against the said Pagonis. It is brought pursuant to s.5 of the Crimes Act 1914 for that he was knowingly concerned in the commission of the offence the subject of VG No. 54 of 1980 in that he verbally made the statements referred to in the preceding discussion of that offence.

VG No. 56 of 1980 relates to a charge against one, Kevin William Harrick. It is brought pursuant to s.5 of the Crimes Act 1914 for that the said Harrick was knowingly concerned in the commission of the offence the subject of VG No. 54 of 1980 in that he took a direct part in the publication of the advertisement by signing a cheque for the cost thereof which cheque was drawn on the account of Latrobe Truck Sales Menville Pty. Ltd., of which the said Harrick is a director and manager.

9. The ninth group of proceedings relates to a transaction with John Michael Purchase and comprises VG No. 63, VG No. 64 and VG No. 65 of 1980. VG No. 63 concerns a contravention by the company of s.59(2) of the Act between 6 February and 2 April 1980 whereby the company published an advertisement and otherwise invited Purchase to participate in a business activity requiring investment of moneys by him and the performance by him of work associated therewith and did make statements that were false or misleading in respect of the profitability thereof contained in the advertisement which was in the following terms: -

"OWNER DRIVERS
LOCALLY

We have one permanent position buying and driving a LWB Luton Peak van fitted with a power tailgate. This is a permanent sub-contract position with excellent earnings capacity for the right person.

INTERSTATE

Buying and driving a semi-trailer working with cubic loads between Melbourne, Sydney and Adelaide on a permanent sub-contract basis, earning up to $78,000 gross p.a. only self motivated persons need apply as these positions are permanent and earnings are entirely up to the individual and their own ability. Finance is available for purchase of vehicles on no deposit to approved purchasers. Phone Manager 60 1663."

The circumstances were that Purchase was attracted by the advertisement. One David Kirkham for the company confirmed that with the truck which would cost $30,000 Mr. Purchase would earn $78,000 per year - that was a genuine figure. It would be made up of at least three trips a fortnight and they would earn him at least $5,400 per month. He said he was representing Associated Owner Drivers and that Mr. Purchase would be working with them on a permanent contract guaranteeing work for the truck if he was willing to do the work. Mr. Purchase put a mortgage of $22,000 on his house and signed a contract to purchase the truck the total payments on a four year hire basis being $45,000.

Associated Owner Drivers was quite willing to give Purchase a share of its available cartage but in the first three months Mr. Purchase earned less than $6000. He had to give up working for Associated Owner Drivers and has managed to get cartage work near his home which is bringing him a gross income at a rate of just over $30,000 per year.

It appears that the truck purchased by Mr. Purchase from the company for $30,000 was purchased by the company for $11,200 on 29 November 1979 and that the trailer had a value of approximately $4000. It was that combination which Purchase acquired for the sums set out above. He also acquired a claim from Associated Owner Drivers that the trailer belongs to them and it is now in their possession.

VG No. 64 of 1980 relates to a charge against David Robert Kirkham pursuant to s.5 of the Crimes Act 1914 that he was knowingly concerned in the commission of the offence the subject of VG No. 63 of 1980 in that it was David Robert Kirkham who confirmed that the earnings of $78,000 quoted in the advertisement was a genuine figure and that if Purchase purchased a truck for $30,000 he would earn that amount by travelling three trips per fortnight to Sydney and return earning $5,400 each month working for Associated Owner Drivers and that the work was permanent and the loads were cubic. Kirkham was the controlling person in the negotiations with Purchase. He gave Purchase the impression that he was a representative of Associated Owner Drivers as well as of the Company and Latrobe Truck Sales. He had an office at Associated Owner Drivers' establishment at Mulgrave which assisted him to give this impression. Little basis, save the inordinate desire to sell the truck and trailer to Purchase, is visible to support the earnings statement made by Kirkham.

VG No. 65 of 1980 concerns a charge against Kevin William Harrick brought pursuant to s.5 of the Crimes Act 1914 for that Harrick was knowingly concerned in the commission of the offence the subject of VG No. 63 of 1980. Harrick was well aware of the representations made to induce Purchase to buy the truck and trailer mentioned and personally took an active part in negotiating the sale.

10. The tenth group of proceedings relates to a transaction with one Watts and comprises VG No. 66, VG No. 67 and VG No. 68 of 1980. VG No. 66 concerns a contravention of s.53B the charge being that the company on 22 January 1980 did cause to be published an advertisement seeking a person for employment that contained statements false in a material particular, namely, that the income from such employment was stated to be up to $78,000 gross per annum working with cubic loads between Melbourne, Sydney and Adelaide on a permanent sub-contract basis.

The advertisement was published in the Melbourne Sun in the "situations vacant" column and was in the terms following: -

"INTERSTATE

Buying and driving a semi trailer, working with cubic loads between Melbourne, Sydney and Adelaide on a permanent sub contract basis earnings up to $78,000 gross p.a. Only self motivated persons need apply as these positions are permanent and earnings are entirely up to the individual and their own ability. Finance is available for the purchase of vehicle on deposit to approved purchaser. Ph. manager on 60 1663."

In respect of this charge the defendant pleaded guilty but no surrounding evidence was submitted to the Court by the prosecution and no explanation was offered to the Court by the defendant.

VG No. 67 of 1980 concerns a charge against Kevin William Harrick brought pursuant to s.5 of the Crimes Act 1914 for that being a director of the company he was knowingly concerned in the commission by the company of the offence the subject of proceedings VG No. 66 of 1980. The defendant pleaded guilty to this charge. Neither the prosecution nor the defendant offered any evidence of the circumstances surrounding the commission by the defendant of this particular offence.

VG No. 68 of 1980 concerns a charge against David Robert Kirkham brought pursuant to s.5 of the Crimes Act 1914 for that being an agent or servant of the company was knowingly concerned in the commission by the company of the offence the subject of proceedings VG No. 66 of 1980. The defendant pleaded guilty to the charge. Neither the prosecutor nor the defendant offered any evidence of the circumstances surrounding the commission by the defendant of this particular offence.

Punishment

It is clear that the offences are very serious and the problem is to assess punishment appropriate thereto. Imprisonment is not authorised by the Act. But heavy money maximum penalties are specified therein. The maximum fine for the Company in respect of each offence is $50,000. In respect of the personal defendants $10,000 is the maximum for each offence.

The Trade Practices Act is designed to promote conditions of trade which are fair and honest and in which reliance can be placed on statements made with respect to matters which are material to transactions which are being promoted. The reprehensible feature of the misconduct of the Company through the agency of the personal defendants was the deliberate creation in the minds of the victims of a belief in the reality of the earnings which they were told they would achieve in stable employment on the purchase of the trucks the company wished to sell to them. Indeed one cannot but be struck by the confident ruthless and almost brazen manner in which the personal defendants handled the various transactions both in the initial stages and when complaints came in. The defendants offered no explanation of their conduct.

Mr. Garantziotis made the best possible plea on their behalf but found it difficult to do more than impress upon the Court that the penalty should reflect reason and not indignation or at least mere indignation, that it should be adequate to punish and yet not of such a nature as to crush. Evidence was given to the Court that the resources of the personal defendants were small, indeed that the men were in very difficult financial circumstances. Counsel also stated that the Company was in a similar position. Accordingly the kind of penalty which must necessarily follow from the application of the Act will place heavy, but it is anticipated not crushing burdens on the defendants. The Court can extend the time for payment in appropriate circumstances.

In the light of all the circumstances, despite the serious nature of the offences it is clear that, considered in their place in the scale of misconduct to which the Act is directed they are far from the top.

In the assessment of appropriate punishment for these offences one must have regard to all relevant circumstances. The importance of the untrue representations in relation to the transaction in which it was an influence is one such circumstance. In these cases the untrue representations were the dominating factor. The degree to which the representations departed from truth is another such circumstance. In these cases they departed from the truth in vital respects. The degree of wilfulness or carelessness in the making of the incorrect representation is another such circumstance. In these cases the representations were made quite wilfully as part of a deliberate strategy to induce in the other party to the transactions a belief in facts which did not exist, but the existence of which was critical. The extent to which the representations were disseminated is one such circumstance. In these cases there was only one person who made an unfortunate purchase as a result of each advertisement. But the width and manner of the dissemination is relevant because it was part of the strategy employed to induce the belief of the other parties in the truth of the representations. Efforts made to correct the situation created by the misrepresentations are relevant. Only in one case was money returned to the other party.

Parliament has indicated very clearly that it regards imprisonment as inappropriate for this class of offence. Although a contravention of the relevant part of Part V of the Act is a criminal offence, a monetary fine is regarded as adequate punishment whether considered as retribution or deterrent. As the monetary fines that may be imposed are quite high, and the primary targets of the Act are corporations which cannot be imprisoned, this policy can be seen to have a basis in reason. However, in the case of corporations which are without assets the punishment imposed by way of a monetary sanction may well be illusory. But the actual conduct which constituted the criminal offences of the corporation was committed by individual persons. By virtue of s.5 of the Crimes Act 1914 individual persons who engage in such conduct are deemed to have themselves committed the relevant offence and they are liable to the monetary sanction set out above, namely $10,000 in respect of each offence. In the case of the bankruptcy of an individual on whom a fine has been imposed and which is not paid the amount of the fine is not a provable debt whether it was imposed under the law of the Commonwealth or otherwise. (See Bankruptcy Act 1966 s.82(3)) However, as in the case of a bankrupt corporation, the individual may be a person without the resources to meet the fines. The Act does not expressly say what is to be the consequence of that situation. However, it is not to be thought that Parliament intended that if the offender could not pay the fine that was the end of the matter. As a result it would seem that in these cases the Court must deal at this stage with the matter of enforcement of payment of the fines imposed on the individual defendants.

Provision relevant to the situation where an Act provides for the imposition of a fine but does not itself provide for the means or conditions of enforcement has been made by the Commonwealth Parliament. That provision is in s.18(A) of the Crimes Act 1914 (the Commonwealth Crimes Act) which provides as follows: -

"18A. (1) The laws of a State or Territory with respect to the enforcement of fines ordered to be paid by offenders, including laws making provision for or in relation to -

(a) the awarding of imprisonment in default of payment of fines;

(b) the allowance of time for payment of fines;

(c) the payment of fines by instalments; or

(d) the giving of security for the payment of fines,

shall, so far as those laws are applicable and are not inconsistent with the laws of the Commonwealth, apply and be applied to persons who are convicted in that State or Territory of offences against laws of the Commonwealth.

(2) A reference in this section to fines shall be read as including a reference to pecuniary penalties, costs or other amounts ordered to be paid by offenders."

The effect of this section is that State law relating to the matters specified and applicable to persons convicted by State Courts under State laws shall apply so far as they are applicable and not inconsistent with the laws of the Commonwealth and shall be applied by Federal Courts to persons convicted in that State or Territory by such Courts of offences against the laws of the Commonwealth. The personal defendants are persons so convicted. It is a law of the State of Victoria contained in s.439(1)(a) of the Crimes Act 1958 (the Victorian Crimes Act) that the Supreme or County Court shall, in the case of indictable offences punishable by fine (whether in addition to or in lieu of any other punishment), fix a term of imprisonment in default of payment of the fine. The section states: -

"439. (1) (a) Where after the commencement of the Crimes (Amendment) Act 1964 any person is adjudged by the Supreme Court or the County Court to pay a fine in respect of any indictable offence (whether in addition to or in lieu of any other punishment) the Court shall order that the fine be paid to the Prothonotary or to the registrar (as the case requires) either forthwith or within such time as the Court allows and that in default of payment of the fine as aforesaid the person be imprisoned for such term not exceeding two years as the Court thinks fit and fixes by the order."

But this provision does not apply to the current proceedings because they are in respect of summary offences.

So far as the statutory law of Victoria is concerned it would seem that the only general provision dealing with the enforcement of payment of fines imposed on summary conviction of offenders is s.106 of the Magistrates (Summary Proceedings) Act 1975, the material terms of which are as follows:

"106(1) Notwithstanding anything in any Act where a Magistrates' Court stipediary magistrate or justice imposes a fine the following provisions shall apply: -

(a) . . .

(b) Except in the case of a corporation the Court magistrate or justice shall order that in default of payment of the amount of the fine the offender shall be imprisoned -

(i) . . .

(ii) where the amount of the fine exceeds $50 but does not exceed $100 - for a term of not more than two months;

(iii) . . .

(iv) . . .

(v) where the amount of the fine exceeds $500 - for a term of not more than twelve months;

(c) The fine shall be payable forthwith or, where the person fined is not present at the time the fine is imposed within 21 days after service on him of a notice given under paragraph (d) or in either case as allowed under section 82;

. . ."

Section 82 of that same Act is in the following terms,

"82. A Magistrates' Court by whose conviction or order a sum of money (including costs) is adjudged to be paid or, in the case of a conviction, any stipediary magistrate to whom the defendant applies at any time after the conviction may do all or any of the following namely: -

(a) Allow time for the payment of the sum of money;

(b) Direct payment of the sum of money to be made by instalments;

(c) Direct payment of the sum of money or the instalments thereof to be made at such time or times and in such place or places and to such person or persons as are specified by the Court or stipendiary magistrate;

(d) Direct payment of the sum of money or the instalments thereof to be made in accordance with an agreement in writing to be filed in the Court."

If ss. 106 and 82 of the Victorian Magistrates (Summary Proceedings) Act 1975 are applicable to the offences now under consideration, within the meaning of s.18A of the Commonwealth Crimes Act, then the law expressed therein concerning the enforcement of payment of fines applies and must be applied by the Federal Court.

Those sections do not, of course, apply by their own force to the proceedings in the Federal Court. But they are provisions concerning the subject of the enforcement of fines payable by persons summarily convicted by a Magistrates Court stipendiary magistrate or justice in respect of any offence with which any of such tribunal has jurisdiction to determine. The language of s.18A of the Commonwealth Crimes Act is similar to that used in s.79 of the Judiciary Act 1903. In connection therewith it has been accepted that a State law only applies in proceedings in a Federal Court if on the proper interpretation of the State provision its terms are wide enough to include the subject which is under consideration in the Federal Court. But it was pointed out by Mason J. in John Robertson v. Phillips Industries [1973] HCA 21; 1973 1 A.L.R. 21 at pp.43 and 44 that: -

"The broad purpose of s.79 is to ensure that the laws of the States are applied by courts in the exercise of federal jurisdiction. In general that purpose is achieved by the application of a State law according to its terms. Indeed, s.79 contains no express provision which would enable a court exercising federal jurisdiction to alter the language of a State statute and apply in it that altered form. However, the presence of the words "including the laws relating to procedure evidence and the competency of witnesses" exhibits a clear intention that State laws relating to those topics should apply to federal jurisdiction. This purpose would fail partly in its objective if State laws on these topics are to be given a literal application under s.79 by the courts other than State courts. State laws dealing with matters of procedure, as the earlier consideration of s.37 of the Limitation of Actions Act has shown, are often expressed so as to apply to State courts only, and in some instances they refer to particular State Courts.

To ensure that State laws dealing with the particular topics mentioned in the section are applied in the exercise of federal jurisdiction by courts other than State courts, it is necessary that State laws be applied according to the hypothesis that federal courts do not necessarily lie outside their field of application. Section 79 requires the assumption to be made that federal courts lie within the field of application of State laws on the topics to which it refers, at least in those cases in which the laws on the topics to which it refers, at least in those cases in which the State laws are expressed to apply to courts generally. This departure from the general principle that the section requires a State law to be applied according to its terms is justified, indeed demanded, by the clear requirement that State laws on the topics mentioned are to be applied in federal jurisdiction."

Gibbs J. although taking a different view from Mason J. concerning the actual provision relevant in that case, said at p.38: -

"It is also settled that s.79 does not give a new and or extensive meaning to State laws which it renders binding on a court exercising federal jurisdiction; it applies those laws with their meaning unchanged: . . . To that last proposition it is, however, necessary to add a qualification. Section 79 may render applicable in a court exercising federal jurisdiction a State statute which either by its express provisions or upon its proper construction is limited in its application to the Courts of the State: see per Menzies J. in Pedersen v. Young (110 C.L.R., at 167-8). If the laws of a State could not apply if, upon their true construction as State Acts, they related only to the courts of the State, it would seem impossible ever to find a State law relating to procedure, evidence or the competency of witnesses that could be rendered binding on courts exercising federal jurisdiction, because most, if not all, of such laws, upon their proper construction, would be intended to apply in courts exercising jurisdiction under State law. In spite of the doubts that have been expressed, I consider that s.79 would require this Court, sitting in original jurisdiction in a State, to apply a State statute of limitations (Cohen v. Cohen [1929] HCA 15; (1929) 42 C.L.R. 91, at 99; (1929) A.L.R. 204; Pedersen v. Young, supra; cf. William Crosby & Co. Pty. Ltd. v. Commonwealth of Australia [1963] HCA 6; (1963) 109 C.L.R. 490 494; (1964) A.L.R. 22) or a State Act giving a court power to stay proceedings on the ground that the parties had agreed to submit the matter to arbitration (Huddard Parker Ltd. v. Mill Hill (Ship) [1950] HCA 43; (1950) 81 C.L.R. 502, at 507-8 (1950) A.L.R. 918; cf. Lady Carrington Steamship Co. Ltd. v. Commonwealth [1921] HCA 49; (1921) 29 C.L.R. 596) or a State Act regulating procedure (Bainbridge-Hawker v. Minister of State for Trade and Customs for the Commonwealth [1958] HCA 60; (1958) 99 C.L.R. 521, at 536-7) notwithstanding that those Acts, on their proper construction, were intended to apply only to the courts of the State, but provided that they were otherwise appropriate to the circumstances of the Case."

It would appear to me that it is sound to say that s.106 and 82 of the Magistrates (Summary Proceedings) Act 1975 constitutes a law of the State dealing, in the language of Mason J., with "the topic" of enforcement of fines imposed on convictions for summary offences specifically referred to in s.18A(1) of the Commonwealth Crimes Act. Accordingly just as the reference in s.79 of the Judiciary Act to "the laws relating to procedure evidence and the competency of witnesses" justified and required something more than a literal interpretation of the State law there under consideration, so the specification in s.18A of the Commonwealth Crimes Act of the topics with respect to which State laws are to be applied appears to require what may be called a liberal approach. That approach should proceed according to the assumption that Federal Courts lie within the field of application of State laws on the topics to which they refer.

As stated by Mason J. this assumption may be limited to those laws which are expressed to apply to Courts generally. However, it would seem that that possible limitation may well respond to the nature of the provision contained in the Commonwealth Crimes Act, for instance s.18A and of the topic specified therein. In relation to the topic of enforcement of fines in summary convictions the obvious place to find a law thereon, expressed with as general an application as may be expected, is in a law dealing with those Courts in which such convictions as are entered, are exclusively convictions on summary offences.

A similar problem came before this Court in L. Grollo & Co. Pty. Ltd. v. Nu Stat Decorating Pty. Ltd. and Others Australian High Court & Federal Court Practice (Vol. 2) No. 65-026 concerning the applicability by virtue of s.79 of the Judiciary Act, of s.263(2) of the Victorian Companies Act 1958 to an action commenced in the Federal Court against a company in liquidation. I would refer to the discussion therein which led me to conclude therein that that section was applicable to an action under the Trade Practices Act 1974 commenced in the Federal Court. See also DeVos v. Daley [1947] HCA 12; (1946) 73 C.L.R. 509 dealing with the application in the exercize of Federal jurisdiction by a New South Wales Magistrates Court of s.82(2) Justices Act (N.S.W.) 1902-68.

Accordingly it is my view that in these matters the Federal Court should apply the law on the topics specified in s.18A of the Commonwealth Crimes Act which appears to be the law of Victoria on those topics as contained in ss. 106 and 82 of the Magistrates (Summary Proceedings) Act 1975.

It may be observed, also, that Parliament could have vested jurisdiction to hear and determine matters arising under Part V of the Trade Practices Act 1974 in State Magistrates courts presided over by a Police Magistrate. In such cases there would be no doubt that the provisions of s.106 would relate to fines imposed by the magistrate. It is clear therefore that the terms of the provisions of s.106 in their ordinary meaning are wide enough to cover the topics referred to if regard is had to the assumption referred to in the remarks of Mason J. set out above.

Two observations are pertinent to the enforcement of fines by imprisonment. Firstly the fixing and imposition of a term of imprisonment in default of the payment of a fine by reason of s.18A is compulsory so far as this Court is concerned where relevant State laws apply. Secondly, if this were not so, impecunious persons would infringe the Act with impunity and cause great loss and damage to people by virtue of their conduct, such as is revealed in this case.

Accordingly I regard it as necessary to order and fix the terms of imprisonment applicable in each case in default of payment of the fines imposed and in doing so have in mind that Parliament excluded imprisonment as the primary punishment for the offences. Parliament has indicated in the clearest possible way that contraventions of the sections with which the defendants have been charged are to be punished by fines and not by imprisonment. The period of imprisonment contemplated in s.18A of the Commonwealth Crimes Act is solely to enforce the payment of those fines and is not be considered as a punishment for the primary offence. It is designed to encourage payment of the fines and questions of ability to pay inevitably obtrude. Accordingly in assessing the period of imprisonment that should be imposed it is relevant for the Court to remember that the burden of a fine to a man who can pay it is not to be compared with the burden of imprisonment for default of payment by a man who does not have the money. In a sense, in such a case, imprisonment is the effective punishment, and it is a punishment of an altogether different nature and intensity from that of the primary kind of punishment contemplated by Parliament. It is not satisfactory that for the same offence the nature of punishment falling upon a poor man should differ from that suffered by a man with money. But the available means of punishment are limited and Parliament chose fines as the punishment because it regarded that course as the most appropriate. It no doubt had in mind that the Court would have the considerations above in mind and would take such action as seemed just in the light thereof.

It is necessary to keep in mind also that a measure such as directing the service of terms of imprisonment concurrently is not available to the Court and that remissions incidental to imprisonment imposed as a primary punishment may not be an incident of imprisonment for non-payment of a fine. That the defendants are required to pay to the prosecutor costs of the proceedings as ordered is also relevant. It is a consequence that where, as in this case, a series of offences are dealt with at the same time, terms of imprisonment may be shorter than might otherwise have been the case.

Mr. Garantziotis submitted under s.79(2) of the Act that various combination of the offences dealt with herein were in some cases contravention of the same provision of Part V of the Act and were of the same nature as each other or of a substantially similar nature and occurred at or about the same time. So far as this is so the total fines imposed in respect of such contraventions do not exceed the maximum fine that would be applicable in respect of one offence by the same defendant against the provision in question.

Having regard to the nature of the various offences in respect of which fines have been imposed on the various defendants and the dates on which the relevant contraventions were committed and the amounts of the fines imposed as hereinafter stated, I do not think there is any doubt that the provisions of s.79(2) have been observed.

In each case the question of granting relief pursuant to s.21B(d) of the Commonwealth Crimes Act is reserved.

Also in each proceeding liberty to apply is granted.