ACN 158 148 951 Pty Ltd v Prout
[2019] WASCA 59
•9 APRIL 2019
___________________________________________________________________________
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: ACN 158 148 951 PTY LTD -v- PROUT [2019] WASCA 59
CORAM: BUSS P
MAZZA JA
ALLANSON J
HEARD: 11 MARCH 2019
DELIVERED : 9 APRIL 2019
FILE NO/S: CACR 134 of 2018
BETWEEN: ACN 158 148 951 PTY LTD
Appellant
AND
CHAD ANTHONY PROUT
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: JENKINS J
Citation: ACN 158 148 951 PTY LTD -v- PROUT [2018] WASC 190
File Number : SJA 1008 of 2017
Catchwords:
Criminal law - Appeal - Where appellant convicted at trial - Where primary judge upheld notice of contention and dismissed appeal - Whether notice of contention impermissibly departed from respondent's case at trial - Whether Criminal Appeals Act, s 14(3) empowered the primary judge to dismiss the appeal
Legislation:
Australian Consumer Law (WA), s 151
Criminal Appeals Act 2004 (WA), s 14
Criminal Procedure Rules 2005 (WA)
Fair Trading Act 2010 (WA), s 32
Result:
Leave to appeal granted on ground 1
Leave to appeal refused on grounds 2 and 3
Appeal allowed
Category: B
Representation:
Counsel:
| Appellant | : | G Cridland |
| Respondent | : | J L Derby |
Solicitors:
| Appellant | : | GG Legal |
| Respondent | : | Department of Mines, Industry Regulation and Safety - Legal Services Directorate |
Case(s) referred to in decision(s):
Australian Competition and Consumer Commission v Hillside (Australia New Media) Pty Ltd trading as Bet365 [2015] FCA 1007
Bennett v Carruthers [2010] WASCA 131
Gartner v Brennan [2016] WASC 89
Giorgianni v The Queen (1985) 156 CLR 473
Nuhana v The State of Western Australia [2018] WASCA 79
Robinson v The Queen [2006] NSWCCA 192; (2006) 162 A Crim R 88
Scolaro v Shephard [No 2] [2010] WASC 271
Yorke v Lucas (1985) 158 CLR 661
JUDGMENT OF THE COURT:
The appeal
The appellant was the ultimate holding company in a group of related companies, the Clean Energy Enterprises Group.
In 2015, the appellant was charged with 23 charges under the Fair Trading Act 2010 (WA) and the Australian Consumer Law (WA). On 5 December 2016, it was convicted in the Magistrates Court at Perth on all charges.
Jenkins J upheld an appeal in relation to the convictions on all but one charge, and those convictions were set aside. The primary judge found that the magistrate had erred in convicting on the remaining charge,[1] but upheld a notice of contention and dismissed the appeal on that charge. The appellant now appeals from that decision.
[1] PE 17685 of 2015.
The critical issue at trial was whether the appellant was criminally liable for making false representations, when those representations were in emails that another company in the Clean Energy Enterprises Group sent to consumers.
The present appeal turns on a different question: did the primary judge err in upholding the appellant's conviction on a basis that differed from how the respondent had put its case at trial?
The charge
In deciding this appeal, it is not necessary to refer further to the appellant's convictions on the 22 charges under other sections of the Fair Trading Act which, on appeal to the primary judge, were set aside.
Relevantly, the prosecution notice alleged that from 27 June 2013 to 11 August 2014 the appellant, in trade or commerce, in connection with the promotion of anti‑islanding testing (AIT) services, made a false or misleading representation as to the need for AIT services.[2] The appellant's conduct was alleged to be contrary to the Australian Consumer Law s 151(1)(l) and an offence under s 32 of the Fair Trading Act. The offence is a crime.
[2] AIT is a test carried out on domestic solar systems providing electricity into a network: see Trial ts 137 ‑ 138.
The respondent alleged the representation was made in emails, sent between 27 June 2013 and 11 August 2014, to separate recipients.[3] The emails were sent under the name Solarshop.
[3] Trial ts 7.
No objection was taken to the prosecution notice at trial, and it was not argued on appeal, but our view is that the prosecution notice did not comply with the Criminal Procedure Act, sch 1 cl 2(4), which requires a charge to allege one offence only. Each representation to a different consumer, if false, was a separate offence. Had the separate representations been alleged in separate charges, greater attention may have been given to the variations in the factual circumstances over the period covered by the charge.
Factual background
The respondent alleged that during 2013 and 2014 the appellant contacted a number of former customers of Solar Shop Australia Pty Ltd and Unleash Solar (another supplier of domestic solar panels) and offered services including AIT.[4] Six of those customers were sent emails which included an attachment containing the representation alleged to be misleading and deceptive. The primary judge described the attachment in this way:
The Solarshop logo was printed in the top right-hand corner of the attachment. Centred at the bottom of the page was the word Solarshop. Underneath it were the address, phone number and web address which were on the email. Underneath those details were the ACN and ABN of SSG Pty Ltd. Underneath those references were three names and web addresses, with a vertical line between each of them. They were 'Clean Energy Enterprises', the appellant's then name, 'Commsolar' the appellant's previous name and 'Commercial Power Solutions'. Whilst the appellant's name and web address appeared first, it had no more prominence than any of the other names. The names of the businesses and email addresses were in smaller font than the printing in the body of the attachment but they had some prominence because they were centred, bolded and separate from the printing above them.[5]
[4] Primary reasons [22].
[5] Primary reasons [31].
The six emails with the attachment were received in May 2014, July 2014 (four emails), and August 2014.[6]
[6] Two other customers received emails in July 2013. The emails did not include the attachment.
The primary judge summarised the facts as follows.[7]
[7] Primary reasons [17] ‑ [21].
The offence was alleged to have been committed during 2013 and 2014 when the appellant's name was Clean Energy Enterprises Pty Ltd. The appellant has also had the following names:
•3 May ‑ 19 July 2012 - Clean Energy Enterprises Pty Ltd;
•20 July ‑ 21 August 2012 - Commsolar Pty Ltd;
•22 August 2012 ‑ 21 December 2015 ‑ Clean Energy Enterprises Pty Ltd;
•22 December 2015 ‑ 29 December 2015 ‑ Australian Electrical Installations and Logistics Pty Ltd; and
•30 December 2015 onwards - ACN 158 148 951 Pty Ltd.
Mr Daniel Cobb was the appellant's sole director throughout 2013 and 2014.
From 24 October 2012 Solar Shop Group Pty Ltd was the registered user of the business name Solar Shop (or Solarshop).
At all material times, the appellant held all of the shares in Solar Shop Group Pty Ltd.
On 11 July 2013, the Department of Commerce in Western Australia issued a media statement which stated that consumer protection was investigating reports from Western Australian consumers who had been approached by a solar panel company to conduct AIT testing on their units and 'falsely claiming that this annual test is mandatory under WA Law'.[8]
[8] Primary reasons [127].
On 22 November 2013, the Commissioner for Consumer Protection wrote to Mr Cobb, as director of the appellant (and as director of Solar Shop Group Pty Ltd), enclosing a draft media statement which the Commissioner intended to publish, and referring to the complaints that had been received. The enclosed media statement was headed 'Warning about solar panel company misleading consumers (Solarshop and Clean Energy Enterprises)'. It said:
Solar Shop Group Pty Ltd and sole Director Mr Daniel Cobb, based in Cremorne, is charging WA consumers $330 for [AIT] and falsely claiming that this annual test is mandatory under WA law. Consumer Protection has received 53 formal complaints from Solar Shop customers since October 2012, as well as from customers of an associated company Clean Energy Enterprises Pty Ltd of which Mr Cobb is also sole Director.[9]
[9] Primary reasons [128]. And see exhibits 20 and 21, Green AB 367 - 371.
Mr Cobb responded in writing and later, on 21 January 2014, took part in a voluntary interview.
The trial
The trial was heard in July 2016 before Magistrate De Maio.
The respondent opened its case at trial on the basis that:[10]
(1)The appellant is a company which installs and maintains systems, commonly known as solar panels.[11]
(2)The appellant purchased customer lists from other solar panel companies that went into liquidation and which had used the Solarshop brand.
(3)During 2013, the appellant contacted former customers of 'Solarshop' offering services, including the AIT services the subject of the charge.[12]
(4)On each occasion a representative from the appellant contacted the consumer by telephone and followed up with an email which stated that the consumer required an AIT on their solar panel systems in accordance with state and federal requirements.[13]
[10] Trial ts 4.
[11] Trial ts 4.
[12] Trial ts 4.
[13] Trial ts 5, 7.
Evidence was received from the recipients of the emails. The respondent also relied on evidence of the interview between Mr Cobb and officers of Consumer Protection in January 2014.
The respondent called expert witnesses to establish the falsity of the alleged representation. Having regard to the limited issues on appeal, it is not necessary to delve into the expert evidence.
At the conclusion of the prosecution case, the appellant submitted that the prosecution had chosen the incorrect entity, and that it had no case to answer. In response, the respondent submitted that Solar Shop Group Pty Ltd made the representations acting as an agent of the appellant with respect to the residential arm of the appellant's business, alternatively that the appellant had acquired the use of the brand name Solarshop and made the representations under that name.[14]
[14] Trial ts 228.
The magistrate did not uphold the submission and the appellant adduced evidence.
Mr Cobb then gave evidence on behalf of the appellant.
In final submissions, the respondent shifted from its earlier position and argued that the appellant allowed its brand to be used and that the appellant 'made the representation, by way of the Solar Shop brand being used as part of the Clean Energy Enterprises Group of companies'.[15]
[15] Final written submissions [28].
The learned magistrate delivered her decision on 5 December 2016. Her Honour found the appellant liable on the basis that it made the representations using the brand name Solarshop. Her Honour found:
116Clean Energy cannot hide behind a corporate veil. The evidence of the consumers, which is corroborated by the exhibits tendered in evidence, including ASIC documentation, proves beyond reasonable doubt that the Solarshop referred to by the representatives and in email correspondence, must only refer to the brand name used by Clean Energy to conduct its domestic business.
117Mr Daniel Cobb cannot hide behind the corporate veil created to shield Clean Energy from the transactions and its representatives.
118Solarshop was the brand name used because of its close connection with the initial installation company and clearly in circumstances where Clean Energy had taken over the operations of Solar Shop Group Ltd, and had absorbed its business entirely.
119It follows therefore that the court finds that Clean Energy is the correct entity in relation to those charges proffered against the company.[16]
[16] Magistrate's reasons, quoted by the primary judge at [172]. The magistrate referred to the appellant as Clean Energy.
The appeal to the primary judge
The critical issue at trial and on appeal before the primary judge was whether it was the appellant which made the false or misleading representation.
Her Honour stated the respondent's case at trial:
As a starting point it is necessary to understand the way in which the respondent puts its case against the appellant. It is not in dispute that prosecuting counsel opened the case against the respondent on the basis that its liability was as a principal offender. She said that the respondent sought to prove that the appellant contacted the consumers, that the people who spoke to the consumers were 'representatives from [the appellant]' and that the emails to the consumers were sent by 'representatives of [the appellant]'. There was no suggestion in the prosecutor's opening that the liability of the appellant was derivative through SSG Pty Ltd or that a corporate veil had to be lifted in order to attribute criminal responsibility to the appellant.[17]
[17] Primary reasons [187].
After carefully analysing the reasons of the learned magistrate, the primary judge concluded that the learned magistrate 'must have found the appellant guilty because it carried on business under the brand name 'Solarshop''.[18]
[18] Primary reasons [208], [210].
The primary judge held that this finding was inconsistent with the magistrate's other findings.[19] Her Honour identified other errors, including inconsistent findings about important issues, and a failure to give reasons for rejecting the evidence of Mr Cobb on important issues.[20]
[19] Primary reasons [218].
[20] Primary reasons [223].
The primary judge, however, dismissed the appeal by reference to a notice of contention filed by the respondent. The notice was in the following terms:
If the magistrate erred in concluding … that the Appellant carried on the business of 'Solar Shop' and thereby engaged in the conduct the subject of each of the charges, then the Appellant can be convicted on charge 17685/2015 on the basis that it made the representations the subject of that charge by reason of its name appearing on those communications for the purposes of promoting the connected nature of the businesses in the Appellant's group. (emphasis added)
In submissions in support of the notice of contention, the respondent said:
The inclusion of the appellant's name in the relevant documents containing the representations went beyond benign association between different entities within a group. The appellant was at the head of a group of related companies which it 'looked after' and it was to be publicly listed. The appellant was adopting and endorsing what was being said as part of the business of one of its 'brands', 'Solar Shop', which traded under its banner. Any representations made in the course of the business of 'Solar Shop' were representations made by the appellant.[21]
[21] Written submission before primary judge [59].
Those submissions demonstrate the extent of the departure from the case put by the respondent at trial.
The primary judge considered the notice of contention by reference to s 14(3) of the Criminal Appeals Act 2004 (WA), by which:
The Supreme Court is not required to set aside or vary a decision of a court of summary jurisdiction because the court omitted to make any necessary finding of fact if the facts or evidence -
(a)in substance support the decision; or
(b)justify the finding,
and the Supreme Court, under subsection (1), may instead either vary the decision or substitute another decision for it.
The primary judge upheld the respondent's contention, and found that the appellant had itself made the false or misleading representation as to the need for AIT testing. Dismissing the appeal, her Honour said:
253I am satisfied beyond reasonable doubt that the appellant made the representation to consumers with whom the appellant and SSG Pty Ltd had dealings in the course of promotional activities for the purpose of supply of AIT and other maintenance services to potential customers. This is so even accepting that SSG Pty Ltd was the supplier and dealer of such services. The appellant was the provider of shared services to SSG Pty Ltd. It was the holding company of SSG Pty Ltd. It was in SSG Pty Ltd's commercial interests to be associated with the Clean Energy Group of companies of which the appellant was part. If SSG Pty Ltd attracted business by virtue of the attachment then that was in the appellant's commercial and business interests. I have no difficulty in concluding that the appellant made the representation in trade or commerce.
254I am satisfied beyond reasonable doubt that from July 2013 to August 2014 the appellant itself made a false or misleading representation as to the need for AIT testing in circumstances where it knowingly allowed its name to be placed on the attachment when the representation contained in the attachment was false and the appellant knew that the representation as to the need for AIT testing was considered to be false or misleading by the regulatory authorities. I also take into account that it was not clear from a simple reading of the attachment that it was in fact prepared and issued on behalf of SSG Pty Ltd.
255I emphasise that this finding is not based on any assertion that the appellant controlled the actions of SSG Pty Ltd. It is based on the fact that the appellant knowingly allowed its name to be placed on the document that contained the representation and that when it did so it knew that the representation was contained in the attachment and that it was regarded to be false or misleading by the regulatory authorities. The conduct of the appellant in allowing its name to be placed on the attachment created a situation in which consumers would associate it in trade or commerce as a promoter of AIT for the reasons represented in the attachment. The appellant was conducting itself in trade and commerce. The message which the appellant wished to pass to the consumers was that it was associated with Solarshop and in that context that the attachment and the representation in it was not only Solarshop's document but it was also the appellant's document. Therefore I uphold the respondent's Notice of Contention in respect of the false and misleading charge.[22]
[22] Primary reasons [254] - [255]. See also at Primary reasons [237].
The appeal to the Court of Appeal
The appellant appeals on three grounds:
1.The Learned Judge erred in law, including by failing to afford the appellant procedural fairness, in dismissing the appeal and upholding the notice of contention on a basis:
(a)outside and inconsistent with the prosecution case opened and run at trial in the Magistrates Court,
(b)different to the contention specifically raised by the respondent, and
(c)not squarely put to the appellant to allow the appellant to address the basis and be heard adequately or at all.
2.The Learned Judge erred in law in concluding that the appellant made the charged representation based on irrelevant considerations which were the Learned Judge's
(a)finding of fact that the message that the appellant wished to pass to consumers was that the appellant was associated with Solarshop, and
(b)conclusion that it was not clear from the simple reading of 'the attachment' that 'the attachment' was in fact prepared and issued on behalf of another corporation, SSG Pty Ltd,
and the Learned Judge should instead have given proper weight to the relevant considerations identified and applied in the analogous factual scenario in the Bet365 case.
3.Having accepted/found that the misleading or false representation was contained in 'the attachment' authored and approved by and issued to consumers by another corporation, SSG Pty Ltd, and that the appellant's name was also written on 'the attachment', the [Learned Judge] then erred in law and/or fact in concluding that the appellant also made the representations by relying upon findings of fact that, after being made aware of the Department of Commerce's 11 July 2013 media release, the director of the appellant knew-
(a)the representation was contained in 'the attachment', and
(b)'the attachment' was not changed and was still being distributed to consumers,
which findings of fact are not reasonably open on the evidence.
Ground 1
The appellant's primary argument on ground 1 is that the notice of contention advanced a case which impermissibly departed from the case which the respondent ran at trial.
Ground 1 may be approached by considering two questions: first, could the magistrate have convicted the appellant at trial on the basis stated in the notice of contention; second, does the Criminal Appeals Act confer power on a single judge to uphold the verdict on this basis?
The appellant primarily addressed the first question.
The appellant relied on authorities considering the situation where a trial judge directs a jury upon a basis for conviction that had not been relied upon by the prosecution at trial. The relevant legal principles, in relation to a trial before a judge and jury, were stated by Johnson J in Robinson v The Queen.[23] In particular, his Honour said:
Unfairness to the accused in the conduct of the trial resulting from the trial judge's direction to the jury upon a basis for conviction not relied upon by the Crown may arise from a range of tactical disadvantages, including an inability to cross-examine Crown witnesses, adduce evidence in the defence case and make closing submissions to the jury on the matter. Even if the prejudice to the accused was confined to the inability to address the jury upon the question, that itself is capable of being a most significant area of prejudice.[24]
[23] Robinson v The Queen [2006] NSWCCA 192; (2006) 162 A Crim R 88 [137] - [149] (Spigelman CJ & Simpson J agreeing). And see Nuhana v The State of Western Australia [2018] WASCA 79 [69].
[24] Robinson v The Queen [146] (citations omitted).
In Scolaro v Shephard [No 2], Martin CJ applied these principles to proceedings before a magistrate, and said:
…when questions of the adequacy of particulars, or of changes in the prosecution case, or of a trial judge leaving the case to the jury on a different basis to that put by the prosecution, or, as in this case, the magistrate having allegedly found the case on a basis different to that put by the prosecution, the essential question is one of fairness to the accused.[25]
[25] Scolaro v Shephard [No 2] [2010] WASC 271 [65]; Gartner v Brennan [2016] WASC 89 [63] ‑ [64] (Pritchard J).
What is fair will depend on the factual circumstances of the particular case, and the elements of the offence charged. The prosecution will not normally be confined to one only of a number of alternative factual scenarios which are consistent with each other, and equally consistent with guilt.[26]
[26] Scolaro v Shephard [No 2] [64].
The case put forward in support of the notice of contention is not factually consistent with the respondent's case at trial. Where the respondent had alleged that the appellant, through its representatives, itself made the false representation, it now contended that the appellant's liability was founded on 'adopting and endorsing' the false representations made by another person. The alternative cases are inconsistent with respect to the fundamental factual issue of who made the relevant representation to consumers.
The primary judge introduced an additional factor in finding that the appellant's conduct 'created a situation in which consumers would associate it in trade or commerce as a promoter of AIT for the reasons represented in the attachment'.[27]
[27] Primary reasons [255].
The case advanced in the notice of contention also required different elements to be proved to establish liability for the offence.
The offence under s 151 of the Australian Consumer Law is an offence of strict liability. The essential facts to be established for liability include the making of the representation and the falsity of the representation, but not the appellant's knowledge of the falsity.
Where the allegation is that a person was involved in the commission of an offence by being knowingly concerned in the commission of the offence,[28] it must be shown that person had actual knowledge of the essential matters which constitute the offence.[29]
[28] Fair Trading Act, s 32.
[29] See Yorke v Lucas (1985) 158 CLR 661, 667, 676 ‑ 677; Giorgianni v The Queen (1985) 156 CLR 473, 481.
In our opinion, the case formulated in the notice of contention, and argued before the primary judge, is not properly characterised as a case of primary liability but attributes liability to the appellant for being knowingly concerned in the commission of an offence by another company.
We are satisfied there was such a departure from the charge and from the case the appellant was called upon to meet at trial, that it would not have been open for the magistrate to convict on the basis stated in the notice of contention or, to the extent they go beyond the notice, on the findings made by the primary judge.
The appeal to the primary judge was brought under pt 2, div 2 of the Criminal Appeals Act. The rules in pt 14 of the Criminal Procedure Rules 2005 (WA) govern the procedure in appeals to a single judge under the Criminal Appeals Act. Those rules do not permit the filing of a notice of contention. The powers of a judge on appeal are set out in s 14 of the Criminal Appeals Act.
Section 14(2) confers power to dismiss an appeal if the court considers that no substantial miscarriage of justice has occurred. The respondent did not submit that this was an appropriate case for the operation of s 14(2).
Her Honour considered the notice of contention by reference to s 14(3), which applies where the magistrate 'omitted to make any necessary finding of fact'. Section 14(3) has been said to reflect the common law principle that a failure to give adequate reasons for a decision does not necessarily lead to the decision being set aside.[30] It is not necessary to decide whether that is the extent of its operation. We note, however, that the language of s 14(3), in the statutory context, does not empower the Supreme Court, on appeal, to uphold a conviction upon a basis that is materially different from the prosecution's case at trial and, for that purpose, to make any necessary findings of fact if the facts or evidence justify the findings.
[30] Bennett v Carruthers [2010] WASCA 131 [39].
The contention advanced by the respondent's notice was not that the magistrate had failed to make a necessary finding of fact. Section 14(3) was not engaged.
Paragraphs (a) and (b) of ground 1 should be upheld.
Ground 2
Ground 2, in our opinion, is without merit. The appellant pressed the considerations discussed in the Bet365 case[31] before the primary judge. Her Honour said that the question must be determined according to the factual context of the particular case before her and other cases which turn on their factual circumstances are not directly applicable.[32]
[31] Australian Competition and Consumer Commission v Hillside (Australia New Media) Pty Ltd trading as Bet365 [2015] FCA 1007.
[32] Primary reasons [243].
With respect, her Honour was correct in her statement about the use of other cases on what is, essentially, a question of fact.
Having regard to the findings on ground 1, there is nothing to be gained by further considering whether the matters specified in ground 2 were irrelevant. Her Honour was considering the appellant's liability on the basis of the prosecution case advanced in the notice of contention. It was not open to the primary judge to find the appellant liable on that basis.
Ground 3
Similarly, the findings of fact that are challenged in ground 3 are related to a case which, for reasons set out above, was not open. The ground falls away when ground 1 is upheld.
Conclusion
We would grant leave on ground 1 and allow the appeal on that ground. Leave to appeal on grounds 2 and 3 is refused.
The proper course is to set aside this conviction and enter a judgment of acquittal. The magistrate's findings, based on the case which the respondent advanced at the trial, are not sustainable. As we have mentioned, the primary judge held that the magistrate had made a number of material errors in her fact-finding process. The primary judge's decision in that respect was not challenged in the appeal to this court. Further, the prosecution notice was defective in that it included more than one offence in the charge for the offence under s 151 of the Australian Consumer Law. It would be unjust, in the circumstances, to order that there be a new trial of the appellant in the Magistrates Court on the charge in question.
The parties should be heard as to the precise terms of the orders including the appropriate orders as to costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
KL
Associate to the Honourable Justice Buss9 APRIL 2019
3
7
4