Re William Albert Brown v Riverstone Meat Company Pty Limited [1985] FCA 179 (30 May 1985)

FEDERAL COURT OF AUSTRALIA

Re: WILLIAM ALBERT BROWN
And: RIVERSTONE MEAT COMPANY PTY LIMITED
Nos. NSW G 34-44, 47, 49-56 and 60-64 of 1983
Trade Practices
(1985) ATPR para 40 - 576

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION
Wilcox J.

CATCHWORDS

Trade Practices - Prosecution - False representation as to composition of goods - Description of nature of packaged meat - Offal described as "beef head meat" contained ovine and porcine meat - Offal described as "mutton skirts" contained bovine meat - Representations made to purchaser and to the Department of Primary Industry, not to a consumer - Whether relevant representation made - Whether representation to Department is a representation "in trade or commerce" - Sufficiency of proof of analysis of samples - Availability as admissions of correspondence and agreement for compensation - Whether defendant has established that contravention was due to reasonable mistake - Meaning of "mistake" in s.85 of Trade Practices Act - Penalty - Multiple offences of substantially similar nature - Meaning of "occurred at or about the same time" -- Circumstances affecting amount of penalty.

Trade Practices Act 1974 ss. 53(a), 79, 85

Bevanere Pty Limited v Lubidineuse (Full Court 24 April 1985) applied. Westham Dredging Company Pty Limited v Woodside Petroleum Development Pty Limited (1982) 46 A.L.R. 287 not followed.

Boyle v Wright (1964) V.R. 699 discussed and applied.

Larmer v Power Machinery Pty Limited (1977) 29 F.L.R. 490, Re Kurring-gai Co-operative Building Society (No 12) Limited [1978] FCA 50; (1978) 36 F.L.R. 134 applied.

HEARING

SYDNEY
30:5:1985

ORDER

THE COURT ORDERS THAT IN RELATION TO EACH OF THE MATTERS G34, G 35, G 36, G 37, G 38, G 39, G 40, G 41, G 42, G 43, G 44, G 47, G 49, G 50, G 51, G 52, G 53, G 54, G 55 and G 56 of 1983:

1. The defendant be convicted of a contravention of

s.53(a) of the Trade Practices Act 1974 being the
offence alleged in each of the respective
informations in those proceedings.

2. The defendant pay a fine of one thousand dollars
($1,000.00) to the District Registrar of this Court
within twenty-one (21) days of this day.

3. The defendant pay the costs of the prosecutor in the
proceedings.

THE COURT FURTHER ORDERS THAT IN RELATION TO EACH OF THE MATTERS G 60, 6 61 and G 62 of 1983:

1. The defendant be convicted of a contravention of
s.53(a) of the Trade Practices Act 1974 being the
offence alleged in each of the respective
informations in those proceedings.

2. The defendant pay a fine of three thousand three
hundred and thirty-three dollars ($3,333.00) to the
District Registrar of this Court within twenty-one
(21) days of this day PROVIDED HOWEVER that upon
payment to the said District Registrar of the penalty
of ten thousand dollars ($10,000.00) required to be
paid pursuant to the order in matter G 63 each of the
said fines shall cease to be required to be paid.

3. The defendant pay the costs of the prosecutor in the
proceedings.

THE COURT FURTHER ORDERS THAT IN RELATION TO MATTER G 63 of 1983:

1. The defendant be convicted of a contravention of
s.53(a) of the Trade Practices Act 1974 being the
offence alleged in the information in that
proceeding.

2. The defendant pay a fine of ten thousand dollars
($10,000.00) to the District Registrar of this Court
within twenty-one (21) days of this day.

3. The defendant pay the costs of the prosecutor in the
proceeding.

THE COURT FURTHER ORDERS IN THAT RELATION TO MATTER G 64 of 1983:

1. The information be dismissed.

2. The prosecutor pay to the defendant its costs in
relation to that proceeding, such costs being limited
to those costs (if any) which were incurred by the
defendant only in relation to that proceeding and
which would not have been incurred by it in defending
the other proceedings heard simultaneously with that
proceeding.

NOTE: Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules.

DECISION

There are before the Court 25 informations laid by William Albert Brown -- an officer of the Trade Practices Commission -- against Riverstone Meat Company Proprietary Limited. The informations -- which have, by consent, been heard together -- are in substantially similar terms, each alleging a contravention of s.53(a) of the Trade Practices Act 1974 and, accordingly, an offence against s.79 of that Act. The necessary authority to institute proceedings has been granted by the Minister, as required by s.163(4) of the Act, and no question arises as to that authority. Section 53, which is contained within Part V of the Act, insofar as it is presently relevant, provides:

"53. A corporation shall not, in trade or
commerce, in connexion with the supply or
possible supply of goods or services ... -

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

(aa) ...

(b) ...

(c) ...

(d) ...

(e) ...

(f) ...

(g) ..."

Section 79(1) relevantly provides:

"A person who contravenes a provision of
Part V other than section 52 is guilty of an
offence punishable on conviction -

(a) ...

(b) in the case of a person being a body
corporate - by a fine not exceeding
$50,000."

2. It is admitted that the defendant is a company duly incorporated in New South Wales and a "corporation" within the meaning of the Trade Practices Act. The evidence establishes that the company carries on the business of a livestock slaughterer and meat processor, packer and distributor at premises situate at Railway Terrace, Riverstone near Sydney. The establishment is of a substantial size, employing some 200 - 300 people on a single shift. It produces, although apparently not exclusively, meat for export. Consequently, it has become registered under the Exports (Meat) Regulations, made under the Customs Act 1901, as an "export establishment" and its operations -- at least in relevant respects -- are governed by the terms of those regulations. Pursuant to reg.24 it has been alloted a number -- 503 -- which must appear on the design bearing the words "Australia Approved" prescribed by reg.33 to be affixed as an inspection stamp to all meat produced at the factory which is intended for export. That stamp may be affixed only to meat prepared under the supervision of officers of the Department of Primary Industry ("D.P.I.") and inspected, and passed fit for export, by such an officer. For the purpose of supervising the preparation of export meats and making the necessary inspections the Department has, for at least 20 years, stationed officers at the defendant's premises. At the period to which these informations relate, August and September 1982, a normal shift of officers would have comprised a veterinary officer, a supervising inspector and about 20 meat inspectors.

3. Below the slaughter floor of the premises is an area known as the offal room. At the relevant time, material was passed down to the offal room through a chute or by means of a small elevator. Within the offal room the material was packed into cartons, about two feet six inches long by about 18 inches wide by six inches in depth, and taken to the scales for weighing. Near the scales were located a number of trays containing various types of offal from which a carton could be topped up, if it was underweight, or into which excess material could be placed, if the carton was overweight. The standard procedure at the time was that, after weighing, the cartons were produced to a D.P.I. meat inspector, under whose supervision an employee of the company put a pre-numbered D.P.I. seal on the carton. Upon that seal was stamped the prescribed wording "Australia Approved 503". The date of production was stamped elsewhere on the carton. The carton was then taken to a cold store pending distribution.

4. On 16 August 1982 Mr Jack Jolley, a truck driver, took delivery from the defendant of a load of 713 cartons; of which he understood approximately 356 cartons to contain "beef head meat". Beef head meat was described in the evidence as being "the skeletal muscle which is salvaged from the skull of the bovine" with the exclusion of the cheeks, the tongue and the brain. Such meat is entirely bovine in origin. At the time, Mr Jolley was handed a delivery receipt addressed to a meat company carrying on business in Wagga Wagga, James Barnes Pty Limited, in which the contents of the load were itemised as follows:

" - ctns B/L beef briskets S.P.
9 ctns brisket fat
308 ctns beef hearts
- ctns beef head meat
- ctns brisket trim
- ctns beef brisket"

James Barnes is itself a meat exporter, its premises being registered under the number 39. It had, on 15 July 1982, forwarded to the defendant a written order for 8.5 tonnes of "boneless beef head meat" at 95 cents per kilogram. This order was numbered 458. Mr Jolley signed the original delivery receipt to acknowledge receipt of the load. He was handed a delivery slip issued by the defendant, dated 16 August 1982 and addressed to "James Barnes Wagga Wagga", which described the load as containing: "356 ctns frozen beef head meat S.P.", "308 ctn frozen beef hearts" and "49 ctn frozen beef brisket fat S.P.". The slip quoted the order number 458. Mr Jolley drove directly to Wagga Wagga and entered the premises of James Barnes Pty Limited shortly after midnight. He parked the truck and went to sleep. At about 7 - 7.30 a.m. Mr. James Simpson, a D.P.I. inspector at James Barnes' premises, broke the seals on the doors of the truck and employees of James Barnes unloaded its contents. Mr Jolley stated that the cartons were delivered in the same condition as that in which they were received by him and that, to the best of his knowledge, nobody interfered with them in any way. His statement -- which is not challenged by the defendant -- is supported by the fact that Mr Simpson found the door seals in an undamaged condition.

5. Mr Simpson inspected the load. Accompanying it was a D.P.I. Meat Transfer Certificate issued by a D.P.I. officer at Riverstone and identifying the consignment in the same manner as the delivery slip. Mr Simpson checked the details and signed and returned to Riverstone a duplicate of that certificate. He said that he did not himself count the cartons; James Barnes employees did that. But he said that he "did a spot check of all cartons coming in to see that they met with the -- what was written on the m.t.c.". He thought that he would have looked at 75 per cent of the beef head meat cartons. Each of the cartons which he examined bore the appropriate D.P.I. numbered seal, the trade description printed on the carton "Beef Head Meat", and a date of production stamp.

6. The cartons were held in James Barnes' store. Eight days later, on 25 August 1982, Mr David Schulz, another D.P.I. meat inspector, inspected some of the cartons in the store, including some of the batch of "beef head meat" cartons received from the defendant on 17 August. Those cartons which he inspected bore the various stamps and inscriptions described by Mr Simpson. He took samples from three separate "beef head meat" cartons, following D.P.I. standard procedure. This procedure involves breaking the D.P.I. seal on each carton, collecting by a drill and three-quarter inch auger bit a meat sample weighing not less than 50 grams, placing the sample from each carton in a separate new plastic bag, and sealing the bag with a numbered tag completed with identification details. The collection equipment must be cleaned between each carton so as to avoid cross-contamination of samples. Mr Schulz then completed a D.P.I. form styled "Specimen Advice Note - Species", generally referred to as a "S.A.N. note", in which he recorded the number of the establishment of origin, the tag number, the stated production date and the description of the meat. The S.A.N. note completed by Mr Schulz on that day referred to ten samples, only three of which related to the product of the defendant. In relation to those samples, the establishment of origin number was shown as 503, the production dates as being 29 March 1982, 30 March 1982 and 31 March 1982 and the description, in respect of each sample, as "Beef Head Meat".

7. The samples taken by Mr Schulz were submitted, through departmental officers, to the Australian Government Analytical Laboratory ("A.G.A.L.")in Pymble, Sydney. The evidence discloses the intermediate handling of the samples. The samples arrived at the laboratory with their seals intact. There is no reason to suspect that they were tampered with between the time that they were taken by Mr Schulz and the day, 30 August 1982, upon which they were submitted to analysis by one or both of two technical assistants employed by the laboratory, Ms Judith Thompson and Mr Domenico Riitano. Both of these assistants were experienced in carrying out testing to determine the species of animal from which meat was taken, using a procedure called agar gel diffusion. Under this procedure the meat sample under investigation and an anti-serum are placed in adjacent wells cut in an agar gel, a gelatinous substance obtained from seaweed. The meat extract and anti-serum diffuse towards each other through the agar until they meet. If matching proteins are present, a reaction occurs which is apparent as one or more lines of precipitation in the agar between the wells. The process involves an incubation period of about two hours, at the expiration of which the result is read off the slide and recorded on the S.A.N. note. The anti-sera used for the tests are tested, upon receipt, against meat samples provided for that purpose by D.P.I. and a control test is carried out in respect of each slide. Although counsel for the defendant cross-examined in some detail in regard to the procedure, there was in the end no submission made that the procedure should be regarded as ineffective for the purpose to which it is directed; and within the limits claimed for it. I see no reason to doubt the appropriateness of the analysis or the care with which it was carried out in respect of the samples received from Wagga Wagga.

8. The results of the three samples of "beef head meat" received from Wagga Wagga were recorded on the S.A.N. note, apparently by Mr Riitano, as being respectively "bovine and ovine", "bovine and porcine" and "bovine and porcine". The word "ovine" refers, of course, to sheep meat and "porcine" to pig meat. Because the result did not tally with the claimed species, the technical assistants repeated the tests, with the same results. For the same reason a further test was carried out, a procedure called iso-electric focussing. This process involves dissolving in water proteins out of the meat sample, placing a tiny piece of the resultant solution onto an agarose gel -- agarose gel being purified agar -- and subjecting it to an electric current. The proteins of the various species of meat migrate at a different rate between positive and negative poles of the current and they stop when they reach their neutral charge. The plate, therefore, provides a permanent record of the proteins in the meat sample, with some indication of the proportion of the various species. The iso-electric focussing tests in relation to the three Wagga Wagga samples were performed by Ms Jill Simpson, a technical officer at the laboratory. Ms Simpson explained the procedure in evidence. No criticism has been made of it. The iso-electric focussing tests revealed that one sample contained between 20% and 30% ovine meat, the balance being bovine meat, one sample contained 15 to 25% porcine meat, the balance being bovine meat and the third sample contained about 10% porcine meat, the balance being beef. Dr Kenneth Newton, a microbiologist employed as a Senior Bacteriologist in the laboratories and who is in charge of meat species testing, checked the results of both the agar gel and iso-electric focussing tests, verified the correctness of the result and certified the S.A.N. note.

9. Apparently as a result of those tests, Mr Colin Macintyre, a D.P.I. veterinary officer at Riverstone, on 13 September 1982 examined 95 cartons, each duly sealed and labelled "Beef Head Meat" which he had taken from the defendant's cold store. He selected 25 cartons, each of which bore a different date of production, the dates ranging from 23 July 1982 to 26 August 1982, and had a sample taken from each carton by a D.P.I. meat inspector, Mr Ronald Reay. Mr Reay followed the D.P.I. standard procedure. The samples were dispatched through departmental channels to A.G.A.L. where they were subjected to agar gel tests by Ms Thompson and Mr Riitano and iso-electric diffusion tests by Ms Simpson. Once again Dr Newton checked, and confirmed, the results. The tests revealed that the meat in 16 of the 25 cartons was other than pure bovine meat. The impurities ranged from five cases of 5 - 10% ovine, balance beef though several cases of about 30% ovine and some cases where beef was less than 50% to two cases where beef was not detected at all.

10. On 30 September 1982 Mr Barry Allison, another D.P.I. meat inspector stationed at Riverstone, examined 60 cartons in the cold store which were marked with the trade description "mutton skirts". "Mutton skirt" is a term used to describe the membraneous part of the diaphragm of sheep or lamb, internal muscle separating the thoracic and abdominal cavities. It is, of course, "ovine" meat. He took samples -- using the D.P.I. standard procedure -- from seven cartons, produced on different dates in late July and early August 1982, and forwarded them to A.G.A.L. Agar gel tests were carried out by Ms Thompson and Mr Riitano. They found that four of the samples were a mixture of ovine and porcine meat. Dr Newton checked the agar gel tests but, on this occasion, no iso-electric focussing tests were performed.

11. The three samples taken at the premises of James Barnes have resulted in a total of five informations being laid against the defendant. Each information alleges that the defendant "being a corporation did in trade or commerce in connexion with the supply of goods falsely represent that the goods were of a particular composition in contravention of s.53(a) of the Trade Practices Act". The particulars in each summons refer to a supply by the defendants "to one J. Jolley for James Barnes Pty Limited" of 356 cartons each labelled or described as "beef head meat". The summons in matter G.60 refers to what was described as "carton 1" which, upon analysis, was found to contain ovine meat mixed with beef head meat. The summonses in matters G.61 and G.62 refer to the cartons respectively described as "carton 3" and "carton 2", each of which was found to contain porcine meat mixed with bovine meat. The relevant representations, in respect of matters G.60, G.61 and G.62 are said to be the trade description or label on the carton: "Beef head meat". The summons in matter G.63 refers to the whole delivery of beef head meat, containing in all about 356 cartons, the relevant representation being the description of that meat in the delivery slip as being 356 cartons of beef head meat. The summons in matter G.64 also relates to the whole delivery, the representation in this case being that contained in the delivery receipt form provided to, and signed by, Mr Jolley. In respect of each information the prosecutor relies upon the evidence of the analysis at A.G.A.L. to establish that each of these three cartons -- and therefore the delivery as a whole -- contained meat other than beef head meat. The result is said to be that the description "beef head meat" was a false representaion of the composition of the contents.

12. Two submissions have been made on behalf of the defendant in support of the proposition that, in respect of these five informations, no contravention of s.53(a) occurred. First, it is said that no relevant representation was made. The existence upon the three cartons of the description "beef head meat" is not contested. The wording of the delivery slip and of the delivery receipt -- both of which are in evidence -- is beyond dispute. But it is said that the making of the representations to Mr Jolley and, through him, to James Barnes was not a representation to which s.53(a) applied. Counsel referred to the view expressed by St. John J. in Westham Dredging Company Pty Limited v. Woodside Petroleum Development Pty Limited (1982) 46 ALR 287 at pp 297-298 that the words "trade or commerce" in s.52 of the Act -- and the position under s.53 must be the same --imputed regularly of activity and that they had no application to a commercial transaction of a "private nature", by which his Honour meant a transaction not involving a consumer. The application of that approach would create difficulties in a case such as this, in which the sale was to a purchaser intending to further process the meat before sale to the ultimate consumer but in which, upon the evidence, once the meat has been frozen it is not possible visually to detect the presence of non-bovine offal in beef head meat. However, in Lubidineuse v Bevanere Pty Limited [1985] FCA 134; (1984) 3 F.L.R. 1 at pp. 13-17, I explained my reasons for concluding that the approach taken by St. John J. was unduly restrictive in its application of the concept of representations being made in trade or commerce. The view I expressed was upheld by a Full Court upon appeal in that case: see Bevanere Pty Limited v. Lubidineuse (Morling, Neaves and Spender JJ., 24 April 1985) pp 16-17 wherein the Court said:

"It is true that conduct falling within s.52
frequently occurs when statements are made by a
corporation to members of the public, but, ...
it does not follow that s.52 is confined to
statements directed to the public or some
identifiable section of it".

In the light of the Full Court decision, the submission that the relevant representations were not representations to which s.53 relates must be rejected.

13. However, in one respect there is, in my view, a difficulty about the representations made to James Barnes. I see no problem about the three cartons from which the samples were taken. It was proved that each of them bore the description "Beef Head Meat" -- a representation as to the composition of their contents for all to see. In relation to the delivery slip there was a specific reference to 356 cartons of frozen beef head meat, the order number quoted corresponding to that of the order for that type of meat. The slip was clearly intended to be interpreted as a statement that, of the total delivery, the 356 cartons which represented themselves as beef head meat were in fact beef head meat delivered in satisfaction of that order. And the delivery slip identified the remaining cartons, by number and description, in a manner which clearly indicated that they contained only bovine meat. The delivery receipt was not so precise. It did not specify the number of cartons of beef head meat and it did not describe the other items in the load in such a way as clearly to indicate that they were bovine product. The receipt referred to "brisket fat" and to "brisket trim", without specification of the relevant species. The existence of three cartons of mixed brisket trim would be not inconsistent with the terms of the delivery receipt. The evidence does not negate the possibility that the three cartons contained mixed brisket trim. This, of course, is unlikely but the lack of particularity in the receipt makes it impossible to say that there was a false representation in relation to the three cartons which were sampled, or any of them. I think that summons G.64 must be dismissed.

14. The defendant submits in relation to all of the informations, including this group of five "James Barnes" matters, that the prosecutor has not established beyond reasonable doubt that the cartons contained material other than bovine meat. The submission is that the evidence relating to the agar gel tests is unsatisfactory because it was not possible for Ms Thompson or Mr Riitano to say which of them carried out particular steps in the testing procedures. However, the evidence of each of these witnesses is that all of the relevant steps were done by one or other of them. Each of them were experienced in carrying out these tests. They were accustomed to working together. Mr Riitano apparently wrote down the results of the tests, either from his own observations of the slides or from what was relayed to him by Ms Thompson. Ms Simpson carried out iso-electric focussing tests which confirmed the results of the agar gel tests -- and provided information as to the extent of the intrusion of other meats -- and Dr Newton checked the whole exercise. Under those circumstances, I do not think that the fact that it is not known which technical officer carried out which particular action matters at all. The steps were carried out by a competent person and the slides checked by Dr Newton. On the whole of the evidence there is no room for doubt that each sample contained meat other than beef head meat.

15. On the issue of falsity, counsel for the prosecutor rely upon certain documents obtained from the defendant pursuant to a notice under S.155 of the Trade Practices Act. This material includes a letter dated 10 September 1982 from Mr A. P. Dyer, General Manager of James Barnes, to Mr R. Golding, General Manager of the Angliss Group; of which group the defendant is a member. Mr. Golding is also a director of the defendant. That letter dealt with the marketing difficulties experienced by James Barnes as a result of the analysis and sought compensation. In due course an agreement was made for payment of compensation. A cheque for $21,163.80 was paid to James Barnes by the defendant in return for a Deed of Release. However, the negotiations specifically proceeded upon the basis that the defendant did not admit any liability and this position was maintained in the recitals in the Deed of Release. Evidence was given by Mr Dyer that his company had enjoyed a lengthy and amicable business relationship with the defendant, and with other members of the Angliss Group. Particularly under those circumstances, the payment of compensation -- even in such a significant sum -- is not necessarily to be ascribed to a consciousness of guilt.

16. Counsel also rely upon the contents of a telex sent on 14 September 1982 by Mr T. P. Jones of the defendant company to Mr K. R. Constantine, Chief Veterinary Officer of D.P.I., in which the statement was made:

"Upon receipt of this advice we immediately
investigated our procedure in the offal packing
department and as a result I am satisfied that
it was possible that the minute amount of pork
and lamb head meat saved at Riverstone could
have inadvertently been packed together with
beef present. I would stress that the content
of lamb and pork would be extemely small.
Nevertheless as from today procedures have been
instituted to absolutely ensure that such an
error cannot occur again."

Counsel for the prosecutor contend that this statement should be regarded as an admission by the defendant of the falsity of its representations as to composition of the meat sold to James Barnes. I do not think that it can be so regarded. In the first place it is not certain that it relates to the meat sold to James Barnes. The second batch of tests, from the "beef head meat" samples collected by Mr Reay, had been analyzed on that very day. Information as to the results may have reached the defendant before the telex was dispatched. Secondly, the admission made in the telex goes no further than a concession of the possibility of an admixture. It falls short of the unequivocal statement which would be necessary to found an admission of the fact of admixture. I am satisfied beyond reasonable doubt that each of the three cartons from which samples were taken at James Barnes' premises by Mr Schulz contained meat other than beef head meat but I reach that conclusion solely by reference to the evidence as to the results of the various analyses at A.G.A.L. I place no reliance whatever upon either the payment by the defendant of compensation to James Barnes or the content of the telex to Mr. Constantine.

17. I have considered for myself the chain of evidence adduced by the prosecutor in support of his claim of contravention of s.53(a) by the defendant in respect of the "James Barnes" cartons. I think that the evidence is complete and persuasive. I do not think that any other matter in defence of the claim of contravention is even arguable by the defendant. The argued matters being rejected, it must be held that contraventions have been proved.

18. In addition to arguing that the prosecutor had not established a contravention of s.53(a) in relation to matters G.60 - G.64 inclusive, the defendant placed reliance upon s.85(1)(a) of the Trade Practices Act. That provision reads:

"85(1) Subject to sub-section (2), in a
prosecution under this Part in relation to a
contravention of a provision of Part V, it is a
defence if the defendant establishes -

(a) that the contravention in respect of
which the proceeding was instituted
was due to reasonable mistake;"

Sub-section (2) requires prior notice to the prosecutor of the intention to rely upon s.85(1); a requirement which was satisfied in this case.

19. It will be noted that, under s.85(1), the defendant carries the onus to establish the exculpatory facts relied upon -- in this case reasonable mistake. The section does not refer to the requisite standard of proof but, in accordance with accepted principle, the defendant need only satisfy the cvil standard: proof upon the balance of probabilities. See Ballard v Sperry Rand Australia Limited (1975) 6 A.L.R. 696 at p 706 and Guthrie v. Doyle Dane and Bernbach Pty Limited [1977] FCA 13; (1977) 30 FLR 116 at p 120.

20. In connection with the meaning to be accorded to the word "mistake" in s.85(1)(a) counsel for the defendant relied upon a passage in the judgment of Smith J., of the Victorian Supreme Court, in Boyle v. Wright (1969) VR 699. The defendant was charged with selling loaves of bread below the prescribed weight, in contravention of the Weights and Measures Act 1958 (Vict.). By s.92 of that Act it was a defence, inter alia, for the defendant to prove that the commission of the offence was due to "a bona fide mistake" and that he had taken all due precautions and exercised all due diligence to prevent the commission of the offence. In relation to the defence of mistake, his Honour said at p.701:

"Upon the ordinary and natural meaning of the
language of the section it would be sufficient
for the defendant to show that the cause must
have been a mistake A or mistake B, though he
cannot say which it was. It would also be
sufficient for him to show that the cause must
have been a mistake A or accident B, and I see
no reason why it should not be sufficient for
him to show that it must have been some mistake
(or some accident) of a general description or
class. Of course it may happen, in a particular
case that the defendant's inability to show what
was the precise cause of the underweight loaves
being produced will result in the tribunal being
unable to feel satisfied that the cause was, in
fact, a mistake or accident at all. And, in
general, the less specific the inferences are
that can be drawn from the evidence, the more
risk the defendant runs that the tribunal will
feel unable to be satisfied that the claim for
protection under s.92 has been made out."

21. The approach taken in Boyle v Wright is, I think, equally applicable to s.85(1)(a). However, it should be noted that, although Smith J. said that it was not necessary for a defendant relying upon such a defence to demonstrate which one out of two mistakes, or out of a class of mistakes, had caused the short weight, he did insist that it was necessary for the defendant to demonstrate that the cause of the short weight was a bona fide mistake (or accident). It is not enough that the defendant show a mere possibility of a bona fide mistake. In the present case the defendant called no evidence. It did adduce, by way of cross-examination, evidence that there were a number of topping up trays -- which apparently usually held different types of meats -- near the scales. One may speculate about the possibility that inadvertent mixing occurred because of an employee reaching into a wrong tray for topping up material but this is mere speculation; there is no basis whatever to conclude that this was, in fact, the cause of the various mixtures. It is equally possible that, for some reason not explained by the evidence, the mixing was the result of deliberate action. I emphasise that I make no finding that the mixing was the result of deliberate action; it would be proper to make such a finding only if there were cogent evidence to that effect, and there is no evidence whatever. The point, however, is that there is no evidence to negative deliberate action so that this possibility cannot be ruled out; and, as counsel for the defendant concede, there being no evidence of mistake, one can only reach a conclusion of mistake by a process of elimination after finding that the hypothesis of deliberate action must be rejected as being inconsistent with the evidence.

22. There are three other difficulties about the defendant's submission. The evidence shows that several of the samples contained a major proportion of the"foreign" meat; indeed, in two cases, only the "foreign" meat -- being not less that 90% of the whole -- was detected upon the analysis. It is possible to understand that a packed carton, being slightly underweight, might be topped up from an incorrect tray so that it might contain say 5 - 10% of "foreign" meat. It is difficult to see how inadvertent topping up could account for a carton containing say 30% of "foreign" meat; the initial packing would have had to be very obviously short. It is even more difficult to see how faulty topping up of a packed carton could account for the whole, or almost the whole, of the meat in that carton being of the incorrect species.

23. The second difficulty about the hypothesis is that the evidence shows that the mixtures occurred in relation to packings carried out upon a total of 20 different days, mostly in July and August 1982 but including three days in March 1982. The repetition of mixing upon so many different days is inconsistent with a casual mistake upon a particular occasion. If mixing was the product of carelessness rather than of deliberation this could only have been because of some chronic problem, some deficiency in the adopted system of work. But not only was there no evidence of the existence of a defective system of work of such a nature as to create the problem; counsel for the defendant took some trouble to obtain evidence from the D.P.I. officers that they had no complaint about the method of operations of the defendant. In the face of that evidence -- and as there is no reason to doubt the competency of the D.P.I. officers -- it is difficult to conclude that the problem stemmed from a lay-out deficiency in the offal room.

24. Finally, if it were found that the mixing had resulted from a deficiency in the system of operations in the offal room, then questions would arise whether such a deficiency constituted a "mistake" within the meaning of s.85(1)(a) and, if so, whether such a mistake was "reasonable". In the absence of proved facts to which one may apply the words of s.85(1)(a) it is undesirable to offer any firm view but it is not clear to me that the word "mistake" should be regarded as apt to refer to a contravention occasioned by a chronically defective system of operations in a manufacturing establishment. The word "mistake", in this context, would appear to be intended to refer to a casual and isolated error in respect of a particular matter; which error caused a contravention. Nor, if the system was so defective as to result in the mixing of "foreign" meats on numerous days over a significant span of time, is it easy to say that the "mistake" was "reasonable". I need not say more about the application of the paragraph. The necessary substratum of facts is not proved. The defendant has not made out a defence under s.85(1)(a).

25. The offences alleged in each of the informations in proceedings G.60, G.61, G.62 and G.63 have been proved.

26. The remaining 20 matters may be discussed together. They consist of 16 informations arising out of the samples taken by Mr Reay from the "beef head meat" cartons on 13 September 1982 and four informations arising out of the "mutton skirt" samples taken by Mr Allison on 30 September 1982. In relation to each of those matters the defendant repeats the submission based upon Westham Dredging, the submission relating to the inability of Ms Thompson and Mr Riitano to say which of them carried out particular steps in the analysis and its reliance upon s.85(1)(a). For the reasons already set out, I reject those submissions in relation to each of those informations. It is true that, in respect of the four "mutton skirt" informations, no iso-electric focussing test was performed but the results of the agar gel tests were verified and confirmed by Dr Newton. There is no reason to doubt their accuracy.

27. In respect of these 20 informations the defendant puts two additional arguments. The various informations allege a representation to the D.P.I. as to the composition of each carton. The case for the prosecutor is that there was such a representation, by the trade description stencilled upon the particular carton, at the time at which the carton was presented for sealing and stamping. The defendant says that there is no evidence that the particular cartons were so labelled at that time and that it is a possible view of the facts that the trade description was affixed to the outside of the cartons after they were sealed. It may be commented that it is highly unlikely that the defendant would wish, or that the D.P.I. would permit, such a procedure. It would be hard to imagine a system more productive of confusion and of the possibility of the delivery to purchasers of incorrect orders. Moreover, indifference by the D.P.I. to the existence of a trade description upon cartons presented for sealing is difficult to reconcile with the fact that, in his telex of 14 September 1982, Mr Jones thought it necessary to seek the agreement of Mr Constantine "to alter the description" (of the cartons found to contain other meats) "from 'beef head meat' to 'head meat trimmings'". However, it is not necessary to consider what conclusion should be drawn from these matters. In his statement, admitted by consent into evidence as proof of its contents, Mr McIntyre -- who has worked for the D.P.I. at Riverstone since 1964 -- described the sequence of packing in the offal room. The first step in the sequence, he said, was "the trade description of the meat is usually stencilled on the cartons before packing on the day of packing but it is possible that the stencilling could be done the day before (e.g. a big packing job may require thousands of cartons)". The second step was the packing of meat into a carton, the third the production of the carton for approval by the D.P.I. and the fourth the closure of the cartons and the application of the relevant stamp. This evidence was not challenged. It is consistent with the oral evidence of Mr Allison that the cartons "would be stencilled but they might do 50 or 60 at a time, they can do any number of those and leave them in the carton room". It is inconsistent in detail with the evidence of Mr Reay that, to his knowledge, the stencilled matter was applied at the time of manufacture of the carton, not at the defendant's works. However, whether the stencilling was done by the manufacturer or by the defendant, the evidence of all three of these witnesses supports the common sense position that the trade description was, as a matter of practice, applied to each carton before it was packed, approved and sealed.

28. Finally, the defendant submits that a representation to the D.P.I. is not a representation "in trade or commerce". The purpose of Part V of the Trade Practices Act, it is submitted, is the protection of consumers and it is difficult conceptually to treat the representations to the D.P.I. as within its purview; those representations not being made to a consumer or to a person who will purchase the food for re-sale to a purchaser but to a government department having functions in relation to the control of exports. To a substantial extent, it seems to me, this submission is but a repetition of the argument put in reliance upon the decision of St. John J. in Westham Dredging and it overlooks that one purpose for which the D.P.I. exercises export control is for the protection of consumers; although another purpose, no doubt, is the protection of the reputation of the Australian meat industry. However, the answer to the submission is that s.53 contains no such qualification. The only limitations imposed by the section are that the representations must be made "in trade or commerce" and "in connexion with the supply or possible supply" of goods. The words "in trade or commerce" have a wide ambit: see Larmer v Power Machinery Pty Limited (1977) 29 F.L.R. 490 at p.493 and the Full Court decision in Bevanere v Lubidineuse. In Re Ku-ring-gai Co-operative Building Society (No 12) Limited [1978] FCA 50; (1978) 36 FLR 134 at p 139, Bowen CJ., in referring to the matters comprised within the terms "trade" and "commerce", specifically mentioned the transport and delivery of goods. The obtaining of a D.P.I. seal is a condition precedent, under the Export (Meat) Regulations, to the delivery for export of goods to which the regulations relate. It would appear that the whole of the activities of the defendant at its premises at Riverstone were undertaken in trade and commerce. The obtaining of D.P.I. approvals was a fundamental part of those activities. And, of course, the obtaining of approvals was something done in connexion with the supply of the goods. Without the approval and sealing of a particular carton there could be no supply of that carton to the export market. The case falls squarely within the opening words of s.53.

29. In my view there is no substance in any of the matters raised on behalf of the defendant in relation to the informations in proceedings numbers G.33 - G.44, G.47, and G.49 - G.56. Once again, it appears to me upon a consideration of the whole of the evidence that no other arguable question arises as to its sufficiency. Each of these offences is proved.

30. I will not, at this stage, enter any convictions or make any formal orders. Pursuant to O.49 r.5 of the Federal Court Rules I propose to allow to the parties the opportunity of filing affidavits in relation to any matters which they may wish to put before me, in addition to the existing evidence, for consideration in relation to the matter of penalty. After discussion with counsel I will give directions as to the time within which such affidavits must be filed and fix a date for hearing of that matter.

REASONS FOR JUDGMENT ON PENALTY

31. On 1 May I indicated my view that, in relation to 24 out of the total 25 informations, the offences should be found to be proved. Pursuant to directions then made the defendant has filed two affidavits dealing with matters relevant to penalty. One of those affidavits is made by Ngaire Macdonald, a consultant dietitian, who deposes that beef head meat, sheep head meat, pork meat and mutton skirts are all edible protein. She states that there is no dietary or nutritional disadvantage to any consumer arising out of the admixture of these meats, on the basis of an admixture ranging from as little as 5-10% to as much as 90% of ovine or porcine meat, provided that the fat content of the meat species is broadly the same.

32. The second affidavit is that of Terence Patrick Jones, New South Wales manager of the Angliss Group of companies, a partnership of which the defendant is a member. That affidavit deals in some detail with the system of operations at the defendant's premises. It appears that, in the slaughtering area, there are separate chains for the processing of cattle, sheep and lambs (handled alternatively) and pigs and calves (also handled alternatively). Offal is removed, in each chain, at two separate points; one dealing with internal organs and the other with head offal. Head meat, when saved, is placed in a plastic bucket and lowered through an enclosed shaft to the edible offal packing room below. Offal of any particular species is supposed to be kept separate from that of any other species. Only one bucket -- and therefore the offal of only one species -- may be lowered at a time. Mr. Jones states that only ovine and bovine -- and not porcine -- head meat is ever saved. The distinction between ovine and bovine head meat is, he says, "readily made as the colour and size of beef headmeat is considerably darker and larger than in the case of sheep headmeat". Head meat is packed into cartons each weighing exactly 60 lbs.; exact weight being a normal requirement of the processors who purchase this material. There are separate tables for the packing of the offal of each species but, at the relevant time, there was a common scale area equipped with a rack containing a series of trays which held sundries required to make up the exact weight. The necessary weight adjustments were made at that common scale. The carton was then strapped, sealed and dispatched to the freezer section.

33. It appears from Mr Jones' affidavit that the production of beef head meat and mutton skirts was in 1982 a relatively minor part of the defendant's business. Against total sales of $91,939,525 beef head meat contributed only $25,393 and mutton skirts $9,286. A total of 29.3 tonnes of beef head meat and -- by calculation from Mr Jones' figures -- about 10.7 tonnes of mutton skirts were processed in that year.

34. Mr Jones states that immediately after learning of the admixture of the meat delivered to James Barnes he went to Riverstone and inspected the offal department. He says that it became obvious to him upon such examination that "it was at least possible" for product to be mixed at the scale area in the course of the addition or subtraction process necessary to achieve an exact weight of 60 lbs.. Mr Jones directed that, as an immediate measure, the company should save only beef head meat. About one week later he directed that the company revert to saving other species but that, until separate scales for each species could be provided, the company discontinue the practice of weighing the cartons. By March 1983 separate weighing stations had been provided for each species and the company then reverted to exact weighing.

35. Mr Jones states that the policy of the defendant has always been, and continues to be, that its products must be true to label in all respects. He denies that the acts giving rise to the present contraventions were deliberate upon the part of management and states that he is not aware of any matter or thing which would warrant the view that they were deliberate upon the part of any employee or employees of the company.

36. Counsel for the defendant submit that there is no evidence to suggest that the contraventions of the Trade Practices Act committed by their client were other than accidental. The prosecutor does not submit to the contrary and I accept that the matter of penalty should be approached upon the basis that there is nothing to indicate any deliberate breach. Even so, there are a number of circumstances which reflect poorly upon the company. This is not a case in which, upon a single occasion, meat of one species has been mixed by an inadvertent employee with meat of another. As I pointed out in my judgment on liability, mixtures occurred in relation to packings carried out upon a total of 20 different days. If -- as Mr Jones suggests in his affidavit -- the cause of the problem was at the weighing station, there was a serious and persistent problem at that point. According to Mr Jones, bovine head meat is easily distinguishable from ovine head meat. The employees responsible for the topping up and weighing of cartons must, upon Mr Jones' hypothesis, have been very careless indeed, and persistently so. Their performance raises questions as to their selection and supervision. Moreover, it would appear, both from the fact of the numerous admixtures and from Mr Jones' description of the processes adopted in the offal room, that there was no system of checking the contents of the cartons before sealing. It is true that, assuming that the meats inadvertently mixed with the "beef head meat" and "mutton skirts" were edible ovine and porcine meat and edible bovine meat respectively, with similar fat content, no dietary or nutritional disadvantage would have been suffered by any consumer as a result of the various mixtures. Nonetheless, as Mr Jones himself recognizes, accurate labelling is of prime importance to purchasers of the company's product and, ultimately, to the reputation and prosperity of the Australian meat industry. A system of work which permits the repetition, over numerous working days, of unintended mixtures with consequent false labelling is open to serious criticism. It is also true that, as counsel for the defendant point out, the D.P.I. officers at the premises had not complained of any deficiency in the system of work. If Mr Jones' hypothesis is correct, they may have been at fault in failing to see the potential problem but -- as counsel recognize -- the primary responsibility for instituting and maintaining a proper system of work which will, amongst other things, ensure accuracy to label rested with the company. Its failure adequately to discharge that responsibility is the cause of the various contraventions.

37. The absence of any evidence to suggest that the subject contraventions were deliberate or that the foreign material would have been deleterious to a consumer is a powerful factor in favour of the defendant in relation to penalty. Four other matters, which are not the subject of dispute, were justifiably, in my view, relied upon by its counsel: the prompt and effective action of Mr Jones to identify and to rectify the apparent cause of the problem, the payment of acceptable compensation to James Barnes, the co-operation of the company with the D.P.I. in its enquiry into the contraventions and the previous good record and high commercial reputation of the defendant. Counsel added a further matter: the absence of any need to apprehend any future contraventions by the defendant. As to that matter I think that all that one can say is that, if Mr Jones' diagnosis of the cause of the problem is correct, the steps taken by him would seem to have reduced significantly, if not entirely eliminated, the likelihood of any repetition from that cause. There is nothing to indicate the likelihood of repetition from some other cause but it is perhaps too sanguine a view to say that there definitely will be no future contravention of this Act. No doubt the company will profit by this experience but, as with any other company, the possibility exists whilst trading continues.

38. The maximum penalty for a breach of s.53 of the Act provided by s.79, in the case of a body corporate, is $50,000 for each offence. However, s.79(2) provides an important qualification, upon which the defendant relies. It reads:

"79(2) Where a person is convicted of
two or more offences constituted by, or
relating to, contraventions of the same
provision of Part V, being contraventions that
appear to the Court to have been of the same
nature or a substantially similar nature and
to have occurred at or about the same time
(whether or not the person is also convicted
of an offence or offences constituted by, or
relating to, another contravention or other
contraventions of that provision that were of
a different nature or occurred at a different
time), the Court shall not, in respect of the
first-mentioned offences, impose on the person
fines that, in the aggregate, exceed the
maximum fine that would be applicable in
respect of one offence by that person against
that provision."

39. The various offences which I have found proved each arise under the same provision of Part V, namely s.53(a). They are of a substantially similar nature. In relation to the four James Barnes' offences, each of the relevant facts took place "at or about the same time". The three cartons of meat were packed upon three successive days, 29,30 and 31 March 1982. The representations relied upon by the prosecutor, that is the representations to James Barnes, were made at the one time. Section 79(2) applies to these four offences, considered as a group.

40. In relation to the 20 offences arising out of the analysis of samples taken from the cartons still at Riverstone a similar position applies. These cartons were packed over a total of 17 different days between 23 July and 25 August 1982. The various representations relied upon by the prosecutor, to the D.P.I., were made upon those days. I think that, within the meaning of s.79(2), it may be said that each of these 20 offences took place "at or about the same time". It is true that in some cases the representation was that the carton contained beef head meat whilst in others it was that it contained mutton skirts but this does not affect the substance of the matter. Each offence was of a similar nature.

41. I do not accept the view that the four James Barnes' offences must be treated as having been committed "at about the same time" as the other 20 offences. It is true that the actual delivery to James Barnes took place on 16 August, within the period of the 20 offences, and that it was upon that date that the charged offences were complete. But these three cartons had been packed nearly five months earlier. It was at that time that the conduct occasioning the breaches occurred. Indeed, to compare like with like, I note that had the prosecutor elected to bring a change identical to that in the 20 other cases, the offences in relation to the James Barnes' cartons would have been complete in March. It seems to me that the purpose of s.79(2) was to avoid a multiplication of the available maximum penalty because of the circumstance that similar actions or omissions made at a substantially similar time have given rise to a multiplicity of offences. It would not, in my view, be consistent with that intention to treat the contraventions arising out of the March processing as having occurred at the same time as the contraventions arising out of the July-August processing simply because the prosecutor has elected to rely upon a representation in relation to the former made during the currency of the latter. For the purposes of s.79(2) the James Barnes' contraventions should be regarded as not having occurred at or about the same time as the other 20 offences. It follows, in my view, that the maximum penalty available to be imposed in relation to the totality of the offences is $100,000; being $50,000 in respect of the four James Barnes' offences and a further $50,000 in respect of the other 20 offences.

42. For the reasons I have outlined in relation to s79(2) it is appropriate to assess separately a penalty in respect of the four James Barnes' offences and in relation to the other 20 offences. I take into account, in the defendant's favour, each of the matters to which I have already made reference. I take into account that the production of beef head meat was a comparatively minor aspect of the defendant's business; although that consideration cuts two ways in that the James Barnes' delivery of 16 August 1982 was of a quantity amounting to almost 30% of the yearly production of beef head meat and the small scale of the operation should have made supervision easier. I also bear in mind the necessity to emphasize, both to this defendant and to other trading companies, the necessity, in the interests of purchasers and ultimate consumers, to establish and to maintain a system which will ensure the accurate labelling of products. In respect of the James Barnes' offences I impose a total penalty of $10,000.

43. It is important to ensure that there is no duplication of penalty because of a repetition of the false representation to the same recipient. It is equally important to ensure that a proper penalty is not avoided by the circumstance, if it should occur, of a successful appeal against a particular conviction, to which the total penalty has been attached, there being -- because of that circumstance -- no penalty attached to the offence arising out of the second representation. The appropriate course is, therefore, to fix a penalty in the full sum of $10,000 in relation to matter G 63, which arises out of the false representation upon the delivery slip relating to the whole consignment to James Barnes but to provide that, if that penalty is paid, there be no additional penalty in matters G 60, G 61 and G 62 in respect of the repetition of the same false representation upon each of the three cartons. If however, for any reason the penalty in matter G 63 is not paid, it would be inappropriate that the defendant escape without penalty in relation to these last three matters. I propose, therefore, to impose a penalty of $3,333 in relation to each of these three matters but to provide that, if the penalty in G 63 is in fact paid, those three smaller penalties shall not be required to be paid.

44. The acts and omissions giving rise to the remaining 20 offences are of a similar nature to those giving rise to the James Barnes' offences. But they are shown to have extended over a much longer period. Any assumption that the March contraventions may have been contributed to by the pressures of work over a particular few days is impossible in relation to the July-August processing. On the contrary the length of the period emphasizes the extent of the deficiencies in system and supervision. Having regard to the length of the period, but again bearing in mind the factors previously mentioned, it is appropriate to impose a total penalty of $20,000 in relation to these latter 20 offences. There is here no element of duplication -- as between a representation relating to the whole and representations relating to part -- so that I propose to distribute this total sum equally over all 20 offences, resulting in a penalty of $1,000 in respect of each matter.

45. It follows that the total penalty required to be paid by the defendant, in relation to all 24 offences in respect of which convictions will be entered, is $30,000. The defendant must pay the costs of the prosecutor.