Bayeux Investments P/L v Wellington Chambers P/L & Christopher Jessop Fox - [2008] SADC 102

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
BAYEUX INVESTMENTS P/L v WELLINGTON CHAMBERS P/L & CHRISTOPHER JESSOP FOX
[2008] SADC 102
Judgment of His Honour Judge Soulio
15 August 2008
CONTRACTS - PARTICULAR PARTIES - VENDOR AND PURCHASER
TRADE AND COMMERCE - TRADE PRACTICES ACT 1974 (CTH) AND RELATED LEGISLATION
Contract for sale of land - misleading or deceptive conduct - purchaser induced to pay amount for GST at settlement - induced to claim input tax credit - first defendant in breach of s52 of Trade Practices Act - second defendant knowingly involved in breach - second defendant in breach of s56 of Fair Trading Act - both defendants liable - consequential loss.
Fair Trading Act 1987 s54, s56, s84; Trade Practices Act 1974 (Cth) s52, s82; A New Tax System (Goods and Services Tax) Act 1999 (Cth) s9-5; A New Tax System (Australian Business Number) Act 1999 s23, referred to.
Spangaro v Corporate Investments Australia Funds Management Ltd (2003) 47 ACSR 285; Hornsby Building Information Centre v Sydney Building Information Centre (1978) 140 CLR 216; Yorke & Anor v Lucas (1985) 158 CLR 661; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191; Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177; Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 79 ALR 83; Wardley Australia Limited v WA (1992) ATPR 40,565; Como Investments Pty Ltd (in Liq) v Yenald Nominees (1997) ATPR 43,617; San Sebastian Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 (1986) 162 CLR 340; I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109; Dominelli Ford (Hurstville) Pty Ltd v Karmot Auto Spares Pty Ltd (1992) 38 FCR 471; Yorke v Lucas (1983) 46 ALR 319; Marks & Anor v GIO Australia Holdings Ltd & Anor (1998) 196 CLR 494; South Australia v Johnson (1982) 42 ALR 161, considered.

BAYEUX INVESTMENTS P/L v WELLINGTON CHAMBERS P/L & CHRISTOPHER JESSOP FOX
[2008] SADC 102
Introduction

The plaintiff, Bayeux, acted as trustee for the Bayeux Investment Trust in respect of the purchase of premises at 56-60 Wellington Square North Adelaide, long known as Wellington Chambers, from the first defendant, Wellington, pursuant to a contract dated 20 October 2004.
The second defendant, Mr Fox, was the sole director and secretary, and indirectly, the sole shareholder of Wellington.
The agreed sale price was $1,310,000 plus GST of $131,000. The total sum of $1,441,000 was paid over at settlement on 30 November 2004. The balance of the settlement proceeds, after discharge of a mortgage over the premises and payment of fees, was paid into a personal account of Mr Fox.
After settlement Bayeux sought to claim an input tax credit in respect of the GST amount. On 31 October 2005 that claim was rejected by the Australian Taxation Office (ATO) and a substantial administrative penalty was imposed by the ATO for the inappropriate claim. Bayeux’s external accountant was ultimately able to have the penalty set aside.
By letter of 7 December 2005 Bayeux sought reimbursement of the amount of $131,000 from Wellington. Wellington refused to pay. However, at the conclusion of the plaintiff’s case at trial the first defendant tendered the GST amount together with interest. The plaintiff accepted the tender, but not in full satisfaction of the claim. The claims for consequential loss by way of professional fees of $9210, and costs, remain outstanding.
I am still required to canvass the issues. The defendants did not call evidence and ultimately many issues in dispute were the subject of admissions or uncontroverted evidence. As a consequence my reasons are able to be somewhat less detailed than might otherwise be the case.
The Proceedings
Bayeux issued proceedings against Wellington and Mr Fox claiming the sum of $131,000 in addition to professional fees of $9210 incurred in setting aside the penalty plus interest and costs. Bayeux alleged that the GST amount had been paid over in reliance on a series of misrepresentations made by Wellington and Mr Fox as to whether the GST was required to be paid. The claim was made on the following bases:
·Restitution on the basis of a claim for money had and received which, due to a total failure of consideration, had led to the unjust enrichment of Wellington and/or Mr Fox,
·Damages against Wellington pursuant to s82 of the Trade Practices Act 1974 (Cth) (TPA) for contravention of s52 of that Act,
·Damages against Mr Fox pursuant to s82 of the TPA on the basis of his knowing involvement in Wellington’s contravention of s52 of the TPA,
·Damages against Mr Fox pursuant to s84 of the Fair Trading Act 1987 (FTA) for contravention of s56 of the FTA.
The Defence
The defendants, by their initial plea, denied that the purchase price contained a severable component specifically in respect of GST. They asserted that they had never represented that the sale of the land was a taxable supply. Further, they said that neither of the defendants ever held the view that an amount equal to the GST amount would be remitted by Wellington to the ATO and never made representations to the plaintiff to that effect. The defendants pleaded that Mr Fox acted only as agent of Wellington, and any monies received by him were received on trust for Wellington.
The defendants further asserted that the plaintiff had suffered no loss as it had paid the sum of $1,414,000 for a property which at all material times was worth an amount equal to or in excess of that amount; and that any professional fees incurred by the plaintiff were not incurred in reliance upon any representations made by the defendants, but were incurred solely in reliance on the knowledge and experience of its director and the advice of its professional advisors.
The Hearing
The plaintiff called Mr Anderson, an employee who negotiated the contract; Ms Schultz, a registered conveyancer who acted for the plaintiff; and Mr Brooks, an accountant who performed work setting aside the administrative penalty imposed on Bayeux by the ATO. In addition the plaintiff tendered a significant number of documents to which I will refer as necessary.
The Late Development
As I have previously indicated, after the conclusion of the evidence I was informed that Wellington had tendered payment of $150,246.23 to Bayeux. That payment represented the GST amount of $131,000 together with interest from the date of settlement to the date payment was tendered.
Wellington accepted that payment as an unconditional payment. Wellington no longer pressed its entitlement to restitution against Mr Fox, although it submitted that such a claim was still open. I do not, at present, need to determine that issue. However, given that the issue of costs will ultimately need to be determined, it may be necessary to give further consideration to whether the claim against Mr Fox for money had and received would have been made out.[1]
[1] In order to establish an entitlement to restitutionary relief the plaintiff here need only demonstrate that Mr Fox was enriched, that the enrichment was at the plaintiff’s expense, that the enrichment was unjust and that the defendant has not established any defence (Spangaro v Corporate Investments Australia Funds Management (2003) 47 ACSR 285).
Issues Remaining
The payment by the first defendant does not relieve me of the necessity to determine the following issues:
1.Whether Wellington contravened s52 of the Trade Practices Act,
2.Whether Mr Fox was knowingly involved in such contravention,
3.Whether Mr Fox contravened s56 of the Fair Trading Act,
4.Whether Bayeux is entitled pursuant to s82 of the Trade Practices Act or s 84 of the Fair Trading Act to recover the sum of $9210 plus interest, being the professional fees incurred in setting aside the administrative penalty imposed by the ATO.
Findings
I find that Bayeux was the trustee of the Bayeux Investment Trust and acted in that capacity in relation to the matters which are the subject of these proceedings. Bayeux negotiated with Wellington in relation to the sale of the premises in the period leading up to the signing of the contract on 20 October 2004. Pursuant to the terms of the contract, settlement was to take place on 30 November 2004.
I find that Mr Fox negotiated, agreed to, and executed the contract. Thereafter he was involved in the preparation and exchange of settlement documents including the memorandum of transfer and the vendor settlement statement which were prepared on the premise that GST was payable.
I find that Mr Moriarty, Wellington’s conveyancer, acted with the actual authority of Wellington and Mr Fox in relation to his actions in relation to the settlement. I accept the evidence of Ms Schultz that she requested that Mr Moriarty provide a tax invoice in respect of the sale of the property at settlement. I find that the tax invoice provided at settlement by Mr Moriarty was prepared by or at the direction of Mr Fox.
The tax invoice was addressed to the plaintiff and purports on its face to be a tax invoice issued by Wellington Chambers Pty Ltd citing an ABN 38261937984. It sets out Wellington’s address and contact information. The tax invoice records that the amount payable for the property was $1,310,000 and that the GST amount was $131,000.
It is admitted by the defendants that the ABN which appears on the tax invoice is not the ABN of Wellington. The ABN was that of an entity which had ceased to exist prior to the transaction which is the subject of these proceedings.
The tax invoice was not a complying tax invoice in accordance with requirements of the A New Tax System (Goods and Services Tax) Act 1999 (Cth) (GST Act) in that it was undated, did not set out the ABN of Wellington, and wrongly stated the ABN of another entity.
I find on the basis of documents tendered by the plaintiff, and admissions made by the defendants, that on the day of settlement Mr Fox received the amount of $303,083.59, being the balance of settlement proceeds after the discharge of a mortgage over the premises and payment of fees, into his personal bank account. There is no evidence that Mr Fox received the money on trust for Wellington and no evidence as to what happened to the money. On the state of the evidence I can only find that Mr Fox received the money to his own benefit.
The plaintiff, as trustee for the Bayeux Investment Trust, sought to claim an input tax credit of $131,000 in respect of the GST amount paid to Wellington at settlement. The claim for input tax credit was disallowed on the basis that the sale of the property was not a “taxable supply” and the GST amount was not payable. On that basis the ATO imposed an administrative penalty of $32,750.
Claim for Damages Pursuant to s82 of the TPA for Breach of s52
Section 52(1) of the TPA provides:
(1)A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
A breach of s52, which is in Part V of the Act, gives rise to a right to recover the amount of loss or damage under s 82 of the Act which provides:
(1) Subject to subsection (1AAA), a person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part IV, IVB or V or section 51AC may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.
In order to establish a breach of s52 of the TPA Bayeux need not establish that Wellington’s conduct was intended to mislead or deceive. It is only necessary to establish that in fact the conduct was misleading or deceptive or likely to be so.[2]
[2] Hornsby Building Information Centre v Sydney Building Information Centre (1978) 140 CLR 216 at 213; Yorke & Anor v Lucas (1985) 158 CLR 661 at 675-6.
Conduct may be misleading and deceptive where it has led the plaintiff into error, and whether conduct can be so characterised is an objective question of fact to be decided in all the circumstances of the case.[3]
[3] Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 198.
In considering whether the conduct of Wellington was misleading and deceptive, I bear in mind that the conduct must convey, in the circumstances of the case, a misrepresentation.[4] It is necessary to examine the conduct whether representational in character or not and determine whether the conduct by its nature constitutes misleading or deceptive conduct.[5]
[4] Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 202.
[5] Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 79 ALR 83.
It is necessary for the plaintiff to establish that the plaintiff relied upon the representation in relation to liability for the GST amount[6] but it is not necessary to show that the representation was the sole inducement for, in the present case, the payment over of the GST amount and the making of the claim for an input tax credit.[7]
[6] Wardley Australia Limited v WA (1992) ATPR 40,565 (41-189).
[7] Como Investments Pty Ltd (in Liq) v Yenald Nominees (1997) ATPR 43,617 (41-550); San Sebastian Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 (1986) 162 CLR 340 at 366.
Consistent with the lack of a requirement that there be an intention to mislead or deceive, there is no provision enabling the plaintiff’s entitlement to loss or damage to be reduced on the basis that the plaintiff has contributed to the contravention.[8]
[8] I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109.
I find that Wellington represented to the plaintiff by the execution of the contract containing a separate amount for GST, and by the provision of the tax invoice I have described:
·that Wellington was an entity registered for GST (and not merely liable to be registered given the quoted ABN);
·that the ABN was the ABN of Wellington;
·that Wellington was not unlawfully quoting the ABN of another entity;
·that the tax invoice was a complying tax invoice;
·that the sale of the premises was a “taxable supply” within the meaning of the A New Tax System (Goods & Services Tax) Act 1999 (Cth);
·and that Wellington would remit an amount equal to the GST amount, or otherwise account for the GST amount, to the ATO.
Counsel for the plaintiff suggested that part of the conduct by Wellington through Mr Fox consisted of Mr Fox’s silence about or failure to correct an obvious assumption as to the basis upon which the parties were dealing, namely that Wellington was registered for GST. Counsel for the defendants said that no claim on that basis had been specifically pleaded. However, I do not consider that it is necessary for the plaintiff to establish any representation by omission or by silence, given that the plaintiff has pleaded that “by providing the plaintiff with a tax invoice at settlement Wellington represented to the plaintiff that Wellington was an entity registered for GST.”
The issuing of the tax invoice on Wellington letterhead quoting an ABN is in my view an express, and if not an express an implied representation that Wellington was registered for GST. It is a representation that Wellington was entitled to collect GST, and indeed a representation that Wellington would act properly and remit or account for the GST amount.
I find that the representations were misleading and deceptive. I find that the defendants held the positive view that GST was not payable. There is no evidence to the contrary. I find that neither Wellington nor Mr Fox on Wellington’s behalf ever remitted to the ATO, or accounted to the ATO for the GST sum.
I reject the submission that it was only when the ATO ruling was handed down, that the defendants had knowledge that GST was not payable. That is inconsistent with the admission that at no stage did Mr Fox ever take steps to account for the GST amount. In my view the fact that the defendants did not ever remit or account for the GST amount negates the suggestion that the first notice of any irregularity received by the defendants was the ATO’s determination on 31 October 2005 that GST was not payable in respect of the transaction.
Counsel for the plaintiff submitted that where Mr Fox had provided the tax invoice when he knew the tax invoice to be irregular, and the tax invoice was provided to induce payment at settlement, there is a presumption of reliance.[9]
[9] Dominelli Ford (Hurstville) Pty Ltd v Karmot Auto Spares Pty Ltd (1992) 38 FCR 471.
I find that the plaintiff relied on the representations made by Wellington in agreeing to pay the GST amount. I accept the evidence of Ms Schultz that it was highly unlikely that she would have proceeded with settlement had the tax invoice not been provided. I accept the evidence of Mr Anderson who said that any query in relation to settlement proceeding in the absence of a tax invoice would have been referred to him, and he would not have proceeded to settlement.
It was put to Ms Schultz in cross-examination that rather than obtaining a tax invoice, she could have obtained an undertaking to provide an invoice. I do not consider either that proposition, or her answers, to be of any assistance, particularly in circumstances where the tax invoice was in fact provided.[10]
[10] Ibid.
The defendants submitted that if the representations were made, which it denied, the claiming of an input tax credit by the plaintiff was not done in reliance upon any representation made by the defendants. I reject that contention.
The representation made by Wellington induced the plaintiff into payment of the GST amount, and induced the plaintiff into the belief that it would be entitled to claim an input tax credit in respect of the GST amount, on the basis that Wellington was liable to remit or account for the GST amount to the ATO.
The plaintiff relied on those representations, both in tendering payment in respect of the GST amount, and in seeking subsequently to claim an input tax credit.
The representations made by Wellington were false, and I find that Wellington engaged in misleading and deceptive conduct contrary to s52 of the TPA in respect of those representations.
I find that the contract for a total price of $1,441,000 including GST would not have been entered into, the GST amount would not have been paid and the claim for an input tax credit would not have been made, had the misleading and deceptive conduct not occurred.
Was Mr Fox Knowingly Involved in the Contravention by Wellington
The plaintiff contends that the second defendant, a natural person, is jointly liable with Wellington, on the basis that he was a person involved in the contravention.
Section 75B of the TPA provides:
(1)A reference in this Part to a person involved in a contravention of a provision of Part IV, IVA, IVB, V or VC, or of section 75AU, 75AYA or 95 AZN, shall be read as a reference to a person who:
(a)     has aided, abetted, counselled or procured the contravention;
(b)     has induced, whether by threats or promises or otherwise, the contravention;
(c)     has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or
(d)     has conspired with others to effect the contravention.
Whilst s52 does not involve questions of intent on the part of the corporate offender, before Mr Fox could be said to have been “involved in the contravention” it must be shown that he was aware of the relevant facts, that is, that he was knowingly complicit in the contravention.[11]
[11] Yorke v Lucas (1983) 46 ALR 319 at 322 - (affirmed Yorke v Lucas (1985) 158 CLR 661).

The plaintiff has alleged and the defendants have admitted that at all relevant times Mr Fox was the sole director and secretary and indirectly the sole shareholder of Wellington and the directing mind and will of Wellington and was a party to all relevant dealings of Wellington including the execution of the contract, the execution of the memorandum of transfer, and the provision of instructions to Wellington’s conveyancers.
On that basis, the plaintiff asserts that the conduct and knowledge of Wellington and Mr Fox are to be treated as the same, that is that Mr Fox was the legal alter ego of Wellington.
In considering the knowledge of Mr Fox I find that Mr Fox signed a commercial agency agreement confirming that he had sought and obtained professional advice in relation to the GST and tax implications of the sale; that he signed the memorandum of transfer; that he signed the contract for sale; that he was provided with a copy of the vendor’s settlement statement; and that he prepared or directed the preparation of the tax invoice. He knew that Wellington was not registered. He knew the sale was not a taxable supply and that therefore GST was not payable. The inevitable conclusion is that he was fully cognizant of the GST implications of the sale, and of all communications between the parties as to the treatment of the GST amount.
I make the following findings:
·Mr Fox knew that the contract for sale attributed a severable component to GST,
·Mr Fox knew that Wellington was not registered for GST,
·Mr Fox knew that as a consequence Wellington could not collect GST,
·Mr Fox knew that the sale of the land was not a taxable supply,
·Mr Fox knew that Wellington could not render a tax invoice,
·Mr Fox did not believe that GST was payable on the sale of the land,
·Mr Fox did not intend to remit or account for the GST amount.
I find that Mr Fox was knowingly involved in and party to Wellington’s contravention of s52 of the TPA and is jointly liable pursuant to s82 of the TPA.
Claim for Damages Pursuant to s84 of the FTA for Breach of s56 by the Second Defendant
Section 56 of the FTA provides:
(1)A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
Section 56 is contained in part 10 of the Act. The section establishes a standard of conduct, a breach of which provides a remedy in damages under s 84 of the Act, which in turn provides:
(1)A person who suffers loss or damage by conduct of another in contravention of a provision of Part 10 (other than section 57) may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.
The provisions of the FTA are in relevantly identical terms to sections 52 and 82 of the TPA. My findings in respect of the claims pursuant to the TPA apply in respect of this claim.
The plaintiff points to a number of specific representations made by Mr Fox which I accept were made.
The first representation alleged to have been made is that Wellington was registered. Pursuant to s9-5 of the GST Act, a taxable supply is not made if the supplier is not registered (or required to be registered). The representation was misleading and deceptive as Wellington was not registered and Mr Fox knew that.
The second representation alleged by the plaintiff is that GST was payable. I find that representation was made and was misleading and deceptive on the basis that Mr Fox believed that, and the fact was that GST was not payable. The sale was not a taxable supply and GST was not payable. The GST should not have been collected given that Wellington was not registered and no steps were taken to register Wellington.
The third representation pointed to by the plaintiff, and which I find was made, is that Mr Fox would account to the ATO in respect of the amount paid on account of GST. That is the only basis upon which Wellington could justify collection of the GST amount. Mr Fox did not account to the ATO for the amount paid on account of GST and given that he had not done so for the period in excess of 12 months prior to the demand made on 7 December 2005, it is clear that he did not intend to do so. That is a representation as to a future matter which is to be taken as misleading and deceptive unless Mr Fox had a reasonable basis for making it. I find that representation was misleading and deceptive given that Mr Fox knew Wellington was not registered, believed that GST was not payable, and for reasons previously canvassed had never intended to account to the ATO for the amount collected on account of GST.
The fourth representation relied upon by the plaintiff is that the tax invoice complied with the GST Act and that Mr Fox was not causing Wellington to recite the ABN of another entity.[12] As I have already said, I accept Ms Schultz’s evidence and that of Mr Anderson, that the plaintiff wished to obtain an input tax credit and for that purpose required the provision of a complying tax invoice. I accept the submission that the tax invoice constituted an explicit representation that the ABN 38261937984 was the ABN of Wellington, and that that representation was false. Mr Fox must have known that Wellington had never been registered for GST. In those circumstances he should not have provided a tax invoice which he knew was required for the purposes of the GST Act. It is open to me to infer, in the absence of any evidence to the contrary, that the provision of that tax invoice was designed to induce Bayeux to pay over the sum of $131,000 on account of GST.
[12] Which would be contrary to s23 of the ABN Act.
I find that the plaintiff relied upon the representations flowing from the conduct of Mr Fox (in negotiating, agreeing to and executing the contract, and preparing and exchanging settlement documents including the memorandum of transfer, the vendor settlement statement and the tax invoice); in both entering into the contract and paying over the sum of $131,000 on account of GST at settlement. I accept that the settlement cheques were paid over only after the provision of a tax invoice, and accept that the plaintiff would not have proceeded to settlement in the event that a tax invoice was not provided.
The second defendant, in trade or commerce, engaged in misleading or deceptive conduct which induced the plaintiff to enter into the contract at the total price of $1,441,000 inclusive of GST, and to pay over at settlement the GST amount, and to make a claim for input tax credit. As a result of that conduct Bayeux suffered loss and damage within the meaning of s84(1) of the FTA and is entitled to recover that sum from the second defendant.
Matters Which May be Relevant to Costs
Counsel for the plaintiff urged a finding that the conduct of Mr Fox “was part of a fraudulent scheme”.
The defendants received the total sum of $1,441,000, of which $131,000 was the GST amount. They were prepared to accept and keep that amount as a windfall. Mr Fox took steps to encourage a determination that no GST was payable by providing information to the ATO regarding the nature of the premises. Mr Fox wrote, by letter dated 20 October 2005, to the ATO in response to a request for information in relation to the property.
His letter was somewhat disingenuous. It enclosed a floor plan. It should be borne in mind that the premises had previously been used as commercial offices including by Wellington. The floor plan was not able to be produced in evidence, but Mr Fox described the premises in his letter, and I assume that description was consistent with the plan.
He said:
Wellington Square is a mid-Victorian mansion of some 12 rooms, including up to six bedrooms and with two galley kitchens, two ensuite bathroom showers and three toilets ... A condition was also placed on the eventual sale contract that it was the responsibility of ourselves to seek Adelaide City Council approval for the use of the premises as an office. This task was done at our expense.
On 31 October 2005 the ATO rejected Wellington’s claim for an input tax credit taking into account various matters including that; the premises were residential, the vendor of the property was not registered for GST and the ABN stated on the tax invoice belonged to an entity other than the vendor. The ATO determined that GST was not payable.
Despite a written demand for reimbursement of the GST amount once the ATO determined that no GST was payable, the defendants refused to pay over the amount and maintained the position that they were entitled to keep that amount which, they said, formed a non-severable part of the total purchase price.
It appears that Mr Fox knowingly received an amount in respect of GST from the plaintiff when he knew that he was not entitled to that amount, and where he intended to personally benefit from the receipt of that amount as a windfall, with no intention of remitting or accounting for that amount to the ATO.
In my view the behaviour of Mr Fox on his own behalf and behalf of Wellington was at best opportunistic. I do not need, for present purposes, to determine the issue pressed by the plaintiff, that Mr Fox’s conduct “was part of a fraudulent scheme.”
Plaintiff’s Losses
The assessment of damages under the relevant provisions of the TPA and the FTA was considered in Marks & Anor v GIO Australia Holdings Ltd & Anor where the Court said:[13]
It can be seen, therefore, that both ss 82 and 87 require examination of whether a person has suffered (or, in the case of s 87, is likely to suffer) loss or damage "by conduct of another person" that was engaged in the contravention of one of the identified provisions of the Act. That inquiry is one that seeks to identify a causal connection between the loss or damage that it is alleged has been or is likely to be suffered and the contravening conduct. But once that causal connection is established, there is nothing in s 82 or s 87 (or elsewhere in the Act) which suggests either that the amount that may be recovered under s 82(1), or that the orders that may be made under s 87, should be limited by drawing some analogy with the law of contract, tort or equitable remedies. Indeed, the very fact that ss 82 and 87 may be applied to widely differing contraventions of the Act, some of which can be seen as inviting analogies with torts such as deceit (eg, s 52) or with equity (eg, s 51AA) but others of which find no ready analogies in the common law or equity, shows that it is wrong to limit the apparently clear words of the Act by reference to one or other of these analogies.
[13] (1998) 196 CLR 494 at 510 per McHugh, Hayne and Callinan JJ.
The GST Amount
Had repayment of the GST amount and interest not been made by Wellington I would have found the defendants liable for those amounts pursuant to s82 of the TPA and s84 of the FTA.
The Professional Fees
I do not consider it necessary to determine whether the consequential loss was reasonably foreseeable. The consequential loss amounting to $9,210 by way of accountant’s fees, was a direct consequence of the conduct of the defendants and is recoverable.[14] In any event, were it necessary to do so I would find that the consequential loss was in fact reasonably foreseeable. Mr Fox must have known that the request for a tax invoice was for the purposes of enabling a claim to be made for input tax credit. Given that the claim for an input tax credit would have to be made on the basis of an irregular and non-complying tax invoice, the possibility that a penalty would be imposed upon the plaintiff once the irregularity was discovered could not, in my view, be regarded as anything other than foreseeable. I find that the amount expended in setting aside the very substantial penalty imposed, was reasonably incurred, and was incurred by the plaintiff.
[14] South Australia v Johnson (1982) 42 ALR 161.
It is accepted that those fees were paid on 16 March 2006. The plaintiff is entitled to the sum of $9,210 together with interest which I fix in the sum of $1,440, a total of $10,650. Such sum is the appropriate measure of damages whether pursuant to s 82 of the TPA against both defendants, or pursuant to s84 of the FTA against Mr Fox.
Orders
There will be judgment for the plaintiff against both defendants in the sum of $10,650.
I will hear the parties as to any consequential orders and as to costs.