Department of Consumer and Employment Protection v Bayswater Car Rental Pty Ltd - [2007] WASC 76

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: DEPARTMENT OF CONSUMER AND EMPLOYMENT PROTECTION -v- BAYSWATER CAR RENTAL PTY LTD [2007] WASC 76

CORAM: JOHNSON J

HEARD: 28 AUGUST 2006

DELIVERED : 28 MARCH 2007

FILE NO/S: SJA 1024 of 2006

BETWEEN: DEPARTMENT OF CONSUMER AND EMPLOYMENT PROTECTION
Appellant
AND
BAYSWATER CAR RENTAL PTY LTD (ACN 008 711 608)
Respondent

ON APPEAL FROM:
Jurisdiction              :  MAGISTRATES' COURT OF WESTERN AUSTRALIA
Coram  :MAGISTRATE W G TARR
File No  :PE 27791 of 2005, PE 27792 of 2005, PE 27793 of 2005, PE 27794 of 2005, PE 27795 of 2005, PE 27796 of 2005, PE 27797 of 2005, PE 27798 of 2005, PE 27799 of 2005, PE 27800 of 2205, PE 27801 of 2005, PE 27802 of 2005, PE 27803 of 2005, PE 27804 of 2005, PE 27805 of 2005, PE 27806 of 2005, PE 27807 of 2005, PE 27808 of 2005

Catchwords:

No case to answer

Legislation:

Criminal Procedure Act 2004 (WA), s 40, s 65, s 108
Fair Trading Act 1987 (WA), s 12, s 13, s 69

Result:

Appeal allowed

Category: B

Representation:

Counsel:

Appellant: Mr P J Urquhart & Mr S L Dworcan
Respondent: Mr M J McCusker QC & Mr C P Stokes

Solicitors:

Appellant: Department of Consumer & Employment Protection
Respondent: C Stokes & Associates

Case(s) referred to in judgment(s):

Cox v Salt (1994) 12 WAR 12
Haw Tua Tau v Public Prosecutor [1981] 3 WLR 395
May v O'Sullivan (1955) 92 CLR 654
Morrison v Kiwi Electrix Pty Ltd (1998) 19 WAR 482
R v Bilick (1984) 36 SASR 321
St Lukes Health Insurance v Medical Benefits Fund of Australia Ltd (1995) ATPR 41-428
Trade Practices Commission v Optus Communications Pty Ltd (1996) 64 FCR 326
Turner v Hughes [2000] WASCA 276

JOHNSON J: The respondent, Bayswater Car Rental Pty Ltd ("Bayswater Cars"), was charged with 18 counts of contravening s 12(1)(g) of the Fair Trading Act 1987 (WA) ("the Act") by making a false representation concerning the price of goods or services. On 8 March 2006 in the Magistrate's Court at Perth, the Magistrate found that the respondent had no case to answer and dismissed the charges.
The appellant appeals against the finding on the following grounds:
"1.The Learned Magistrate erred in law in finding that there was no case to answer.
2.The Learned Magistrate misapplied the test applicable to determining a 'no case to answer' submission.
Particulars
(a)By failing to give application to the test required of him by, and enunciated in, Morrison v Kiwi Electrix Pty Ltd and another (1998) 19 WAR 482; and
(b)By holding that the prosecution had the onus of proof to the standard of beyond a reasonable doubt.
3.The Learned Magistrate's finding that one of the conditions falling within the 'conditions apply' disclaimer would have been that the advertised '7 day special' rates were not available over the Easter period was so against the evidence as to demonstrate a fundamental failure in understanding the prosecution case.
Particulars
(a)The evidence of Chad Prout was that he had previously spoken to Mr Kluck (the Managing Director of the respondent) and branch managers of the respondent and had been told that the 'conditions apply' disclaimer which appeared in advertisements such as the ones the subject of the charges did not include the condition that the advertised '7 day special' rates were unavailable over certain periods.
(b)The evidence of Mr Prout was substantiated by the tendering of similar newspaper advertisements placed by the respondent before and after the advertisements the subject of the charges which all had a 'conditions apply' disclaimer and an additional disclaimer that specifically stipulated that the '7 day special' rates were unavailable during certain peak periods; and
(c)The observations by the Learned Magistrate that he 'could almost take judicial notice of the fact that businesses do not usually give special deals at peak periods when there is a demand on their services' ignored the evidence that some branches of the respondent (being branches which were not the subject matter of the charges) were actually offering the '7 day special' rates over the Easter period."
The respondent filed a Notice of Contention ("Notice") which challenges the Magistrate's finding on the no case to answer submission that there was an irresistible inference that the respondent was responsible for the advertisements. The Court has been unable to locate the Notice, however, it is apparent from the transcript of the hearing and also from the hearing of this appeal that the respondent's contention is that the evidence before the Magistrate, which was, it was submitted, no more than the terms of the advertisements themselves, was an insufficient basis to make such a finding.

The evidence

The respondent, at all material times, operated a car hire business. The 18 charges relate to six "Bayswater car rental" advertisements that appeared in The West Australian newspaper on 17, 18, 21, 22, 23 and 24 March 2005, being prior to Easter where 24 March 2005 was Holy Thursday and Friday 25 March 2005 was Good Friday and 28 March 2005, the following Monday, was the last day of the Easter break. An identical advertisement was used on each of the six occasions.
Each advertisement refers to a "7 day special" for either "Unlimited km within a 500km radius" or "City Use incl. 100km day". The price of hire is also set out at certain daily rates for three different cars: a 1‑year‑old Corolla Hatch, a new automatic Corolla Hatch and a new automatic Corolla Sedan. The prices vary between $165 and $256 per week (inclusive of compulsory insurance of $8 per day and stamp duty of $4 per contract), depending on the age and model of the car, and whether it was hired on the basis of the unlimited kilometres rate or the limited kilometres rate known as the "city use" rate. Three charges arose in relation to each advertisement: one charge for each of the three cars that were advertised. Each charge alleged that the advertised price of hiring the particular car for seven days was a false representation.
At the base of the advertisement there appears the suburb, address and phone number of the various offices: Fremantle, West Perth/Subiaco, Perth, "Near airport, Bayswater" and Sydney.
The appellant's case at trial relied on the evidence of two officers authorised to undertake investigations for the purposes of the Act ("compliance officers"). The compliance officers, Mr Prout and Ms Eversden, had each telephoned the four Western Australian branches of Bayswater Cars pretending to be potential customers. Mr Prout made the telephone calls on 17 March 2005 and Ms Eversden on 22 March 2005. During some of the calls Mr Prout mentioned the advertisement. Ms Eversden referred to the advertisement in every phone call. On each occasion the compliance officers inquired as to the price of hiring a car for a seven day period commencing Thursday 24 March 2005 (being a period coinciding with the Easter break). In several of the eight communications between the compliance officers and the Bayswater Cars branches, the price quoted for the hire of a car for the seven day period commencing 24 March 2005 was consistent with the prices in the advertisement. However, in four of those communications, the quoted price exceeded prices in the advertisement.
On 17 March 2005, Mr Prout was quoted, by the branch manager of the Perth branch, a price of $298 for the hire of a vehicle for a period of seven days from 24 March 2005. This price exceeded all prices in the advertisement. Mr Prout told the branch manager that he was sourcing prices from the newspaper, although he did not specifically refer to the advertisement or the "seven day specials". It is, therefore, theoretically possible that the quote was for a vehicle other than one of the three vehicles in the advertisement. However, at trial, Mr Prout's evidence was that he believed that the respondent company's fleet consisted of the type of vehicles in the advertisement, being Corolla vehicles and that, to his knowledge, no other vehicles were available from the respondent company. This was the sole evidence adduced at trial to establish that the only cars available from the respondent company were those listed in the advertisement. However, on Mr Prout's evidence, the inquiries into Bayswater Cars had covered a certain period of time and he had interviewed Mr Kluck, the respondent's director, and other branch managers in December 2004. It is apparent then that the "certain period" to which Mr Prout refers is a period of over a year and that the investigation involved discussions at the highest level. These matters certainly lend weight to Mr Prout's evidence of the types of vehicles utilised by the respondent.
Later on the day of 17 March 2005, Mr Prout was advised by a female person at the Bayswater Cars branch that the cost to hire a car for seven days over the Easter break was $270 and that the "7 day special rates" were not available at Easter. The price quoted on that occasion exceeded the total price for hire of a vehicle in the advertisement, that total price being $256 (allowing for compulsory insurance of $8 per day and stamp duty of $4 per contract).
On 22 March 2005, Ms Eversden was advised by a male person at the West Perth/Subiaco branch that only the one rate applied for every car over the Easter break, that rate being $228 for seven days, and was also advised that there were no "city rates" available over Easter. Whilst the flat rate for hire was consistent with some of the advertised prices, it exceeded the advertised "city rate" for all three cars and the advertised "unlimited rate" for one of the cars.
Also later that day, Ms Eversden was advised by a female person at the Perth branch that a standard rate of $256 applied to all car hire over Easter and that the "city rates" were not available for Easter, December or January as "these are the peak periods". This rate exceeded the advertised "city rate" for all three cars and the advertised "unlimited rate" for two of the three cars.
The statement "conditions apply" appeared at the bottom left corner of the advertisement, but nowhere in the advertisement was it expressly stated that the advertised prices were not available over the Easter period. This is in contrast to the Bayswater Cars advertisements appearing in The West Australian immediately before the Easter break in 2003 and in February 2004, which stated "Conditions Apply" in the bottom left corner and "'Specials' N/A Dec ‑ Jan & Easter" in the bottom right. It is also in contrast to advertisements in The West Australian in August, September and October 2005 that included the statements "Conditions Apply" and "'Specials' N/A peak periods". Copies of these advertisements were tendered into evidence through Mr Prout.
The evidence of the telephone conversations that each of the compliance officers had with the respondent's employees were not challenged under cross‑examination. However, both of the compliance officers were cross‑examined on their understanding of the term "conditions apply". Mr Prout indicated that in his experience the term referred to contractual conditions such as being a licensed driver and the age of the driver. Mr Prout was asked whether he stated his age before obtaining the quote. He said that he did not and that neither was he asked. Presumably the proposition at which this question was directed was that the quote may have been for a driver under 25 years. However, it is highly implausible to suggest that any business interested in attracting customers would adopt a practice of quoting the higher rate for a young driver without first ascertaining the age of the customer. Mr Prout was asked whether he asked what the term "conditions apply" meant and he said that he did not. He rejected the proposition that it meant that the rates were not available at all times because, as he said, he knew that it referred to other things because he had previously clarified the issue with the respondent. Mr Prout was asked by counsel for the respondent when it was that he had clarified with Bayswater Cars the meaning of the term "Conditions Apply". Mr Prout said that it was during the course of his inquiries into Bayswater Cars that a number of issues were raised. According to Mr Prout's evidence, his knowledge of the conditions came either from records or during an interview with Mr Kluck and other branch managers in December 2004.
At the hearing of the appeal counsel for the appellant submitted that what Mr Prout actually said was that his knowledge came from records of interview with Mr Kluck. That interpretation would not explain the use of the word "either" as one would then expect another source to be identified which was not the case. However, transcripts often contain errors and witnesses often use a word appropriate to what they intend to say but they then say something different. Without reviewing the tape it is not possible to resolve this issue. In my view it is unnecessary to do so in any event. The evidence has similar force irrespective of whether it was based on records or an interview with Mr Kluck.
Mr Prout stated that there would be records of interview, tapes and transcripts in his working files. According to the company extract from the Department of Consumer and Employment Protection, all four of the directors of the respondent company have the surname Kluck and, therefore, the person to whom Mr Prout spoke was a director of the company. It is apparent from Mr Prout's evidence that it was either because of the conversation with Mr Kluck or from other records he had seen, that he was aware that the term "conditions apply" did not include the matters being put to him such as unavailability of vehicles or the special rates not being available at all times. In re‑examination, Mr Prout added to the conditions of which he was aware the possibility of it including the hirer's driving history. He also noted that stamp duty was an incurred cost for each contract.
In cross-examination, Ms Eversden was asked about her understanding of what "conditions apply" meant. She said that it could mean paying additional amounts of money for windscreen protection and wheel protection. She added that there was a range of things that hire car companies charge on top of the prices. Ms Eversden was asked whether she understood that, being close to Easter, the car she wanted was not available. Her response was to ask why the company would place an advertisement two days before the Thursday she rang saying those rates were available, and they were seven day specials, if they did not have vehicles. She disputed that she was told that certain vehicles were not available, maintaining that she was told the city rates were not available, not the vehicles. Ms Eversden said that she did not ask what the term "conditions apply" meant and neither was she offered that information. The same proposition about the prices given being for drivers under 25 years was put to Ms Eversden. She said she did not ask whether the prices would differ according to whether she was under 25 years because she was not under 25 years of age.

Magistrate's reasons for decision

The Magistrate commenced his reasons by setting out the basis of the submission made on behalf of the accused and identifying the burden of proof. He said:
"The defence has made a no case submission on the basis that there is no evidence that the accused was responsible for the advertisements and that the advertisement stated that 'Conditions apply'. There is no doubt that these are criminal prosecutions. Even the charges claim the accused is 'guilty of a crime'. It is therefore the prosecution which has the onus of proof to the standard of beyond reasonable doubt."
On the issue of the adequacy of the evidence of the respondent's responsibility for the advertisements, the Magistrate stated that it was clear that the accused was in the car rental business and any objective assessment of the advertisement would lead to the belief that they were made on behalf of the accused and its car rental business. There is no evidence to suggest that they were inserted by someone other than the accused and the evidence suggests that the four branches were aware of the advertisements and quoted in some cases the rate advertised for the vehicle advertised. The Magistrate concluded that there was an irresistible inference that the accused was responsible for the advertisement.
The second issue raised on the no case submission was said by the Magistrate to be the meaning of the term "conditions apply". It is immediately apparent that the Magistrate did not apply the correct test because the meaning of the term was not the issue which he was required to resolve. That issue was whether, taking the prosecution evidence at its highest, the tribunal of fact could determine that it was false to advertise, prior to Easter, seven day prices which were not available during that period.
In addressing the issue, the Magistrate referred to the evidence of the compliance officers in cross-examination where they were asked about matters which, in their opinion, fell within the term "conditions apply". As I have noted, conditions such as the driver being aged under 25 years, the requirement for a driver's licence, stamp duty and windscreen protection were mentioned by the witnesses. It was noted by the Magistrate that neither witness gave evidence that they specifically asked what conditions applied.
The Magistrate referred to the fact that earlier advertisements placed by the respondent promoting seven day specials, one in April 2003 and another in February 2004 included alongside the reference to "Conditions apply" the phrase "Special not applicable December, January and Easter". He also referred to advertisements placed in August, September and October 2005 where the phrase "Specials not available peak periods" was included. The Magistrate said that in those advertisements "at least the peak period condition was stated". He then observed that the advertisements the subject of the charges were not unconditional and noted that on the evidence at least one branch was fully booked over Easter and another only had one vehicle available.
The next observations made by the Magistrate was that he could almost take judicial notice of the fact that businesses do not usually give special deals at peak periods when there is a demand on their services. He expressed the view that he would have thought that even without the qualification in earlier and later advertisements any interested consumer would be put on notice that conditions applied. The Magistrate commented that there was no suggestion that the rates would not have applied for any seven day period after Easter and until December and January and it would not be uncommon for people planning to hire a motor vehicle for a seven day period to do so in advance.
Finally, the Magistrate referred to and distinguished the decision of the Federal Court in Trade Practices Commission v Optus Communications Pty Ltd (1996) 64 FCR 326 ("TPC v Optus") on the basis that the qualification was in fine print, before concluding that any objective assessment of the advertisements would conclude that the rates advertised were subject to unspecified conditions and not unconditional. The Magistrate then expressed his finding as follows:
"In my view the information provided in the advertisements was not false, could not deceive or was not materially inaccurate. It was subject to conditions. I find therefore that the prosecution has not made out a prima facie case and the charges will be dismissed."

Legal framework

Section 12(1)(g) of the Act is expressed in the following terms:
"12. False representations and other misleading or offensive conduct (TPA s 53 and s 53A)
(1)A person shall not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services -
…
(g)make a false or misleading representation concerning the price of goods or services."

In order to prove its case, the prosecution was required to prove the following elements of the offence:
(1)That the appellant placed the advertisement;
(2)That it did so in trade or commerce, in connection with the supply of goods, in this case the hire of motor vehicles;
(3)That the advertisement falsely represented the price of hiring the vehicles for seven days.
Section 13 of the Act defines false representations and relevantly provides:
"(1)For the purposes of this Act, and without limiting the generality of section 12, a statement shall be taken to be a false representation if -
(a)it is false, or deceives, or if it or any information thereby provided is materially inaccurate and that statement is intended or is apparently intended -
(i)to promote the supply of any goods or services … ;
(ii)to induce any other person to make use, on payment of a price, of any goods or services … ; or
(iii)to relate to any business activity … referred to in an advertisement containing that statement
…
(2)For the purposes of this Act, 'materially inaccurate', in relation to any information, means -
(a)inaccurate; or
(b)misleading or likely to mislead,
in a material respect and to a material degree by reason of anything contained or omitted from the statement."
Under s 69, a person who contravenes a provision of the Act is guilty of a crime. However, s 69 provides a summary conviction penalty and, therefore, the matter may be heard summarily. Division 6 of Pt 3 of the Criminal Procedure Act 2004 (WA) ("the CP Act") sets out the procedure to be applied when an indictable offence is heard in the Magistrate's Court: see s 40. Section 65(4)(d) of the CP Act states that the procedure to be followed in a court of summary jurisdiction in relation to a submission of no case to answer is the same as followed in a criminal trial in the Supreme Court. Section 108(1)(a) of the CP Act provides that if at any time after the close of the prosecutor's case the judge is satisfied that the accused has no case to answer on the charge, the judge may find the accused not guilty of the charge.
It is apparent, merely from the terms of the section, that on a charge heard summarily all that is required is for the Magistrate to be "satisfied". Further, on a submission of no case to answer, the prosecution is not required to prove the elements of the offence beyond a reasonable doubt. The question to be answered on a "no case" submission is whether the evidence adduced by the prosecution, taken at its highest, is capable of sustaining a verdict of guilty by proof beyond reasonable doubt: Morrison v Kiwi Electrix Pty Ltd (1998) 19 WAR 482 per Malcolm CJ at 490. In determining that such was the test to be applied, Malcolm CJ followed the decision of the South Australian Court of Appeal in R v Bilick (1984) 36 SASR 321. In R v Bilick (supra) the court was called on to consider the test in the context of a circumstantial evidence case. King CJ (with whom Mohr J agreed, with Johnston J reserving his opinion on the issue) commenced his analysis by referring to the High Court's statement of the general principle in May v O'Sullivan (1955) 92 CLR 654 at 658 per Dixon CJ, Webb, Fullagar, Kitto and Taylor JJ and quoted the following passage:
"When, at the close of the case for the prosecution, a submission is made that there is 'no case to answer', the question to be decided is not whether on the evidence as it stands the defendant ought to be convicted, but whether on the evidence as it stands he could lawfully be convicted."
King CJ also referred to and relied on the decision in Haw Tua Tau v Public Prosecutor [1981] 3 WLR 395 where the Privy Council stated (at 403):
"It is well established that in a jury trial at the conclusion of the prosecution's case it is the judge's function to decide for himself whether evidence has been adduced which, if it were to be accepted by the jury as accurate, would establish each essential element in the alleged offence …"
Having considered these and other relevant authorities, King CJ concluded that the question to be answered by the trial judge in deciding a submission of no case to answer is whether there is evidence with respect to every element of the offence charged which, if accepted, could prove that element beyond reasonable doubt: at 337. To my mind, the words emphasised are the key to understanding the test to be applied and how it differs from the test to be applied when determining the charges.
King CJ further held that the same test is to be applied in a case depending upon circumstantial evidence. His Honour stated (at 337):
"Where the case is a circumstantial or partly circumstantial case and therefore depends on inferences, the question may be expanded so that it becomes: On the assumption that all the evidence of primary fact considered at its strongest from the point of view of the case for the prosecution, is accurate and on the further assumption that all inferences most favourable to the prosecution which are reasonably open, are drawn, is the evidence capable of producing in the mind of a reasonable person satisfaction, beyond reasonable doubt, of the guilt of the accused?"
I have referred to the test in the context of a circumstantial or partly circumstantial case because the issue the subject of the Notice is one where the available evidence is circumstantial and involves drawing inferences from facts established by the evidence.
More recently, this Court has considered the test to be applied on a no case to answer submission in Cox v Salt (1994) 12 WAR 12 where Ipp J expressed the following view on the approach which should be taken in considering whether an accused could lawfully be convicted (at 15):
"Subject to certain exceptions, when adjudicating upon the evidence whether a defendant could lawfully be convicted, the magistrate is required to proceed on the assumption that all the evidence of primary facts, considered at its strongest from the point of view of the case for the prosecution, is accurate: see R v Bilick (1984) 36 SASR 321 at 337; Myers v Claudianos (1990) 100 FLR 362 at 369".
See also Turner v Hughes [2000] WASCA 276 per Miller J at [4]
Two other issues arise in this case: the approach to be taken in determining that a statement is "misleading" and the adequacy of the qualification "conditions apply".
In TPC v Optus (supra) Tamberlin J of the Federal Court considered an advertisement which included the words "conditions apply" and which was alleged to be misleading or deceptive, contrary to s 52 of the Trade Practices Act 1974 (Cth). It is apparent from his Honour's reasons that, as a matter of law, which the determination of a no case to answer submission is, an advertisement of this type, that is, advertising a product or service with the qualification "conditions apply" could mislead for the purposes of s 52, that is, could, legally breach that section.
In TPC v Optus (supra) the respondents advertised on television a marketing plan for mobile telephones in which weekend local calls were represented as being free up to a limit of $52 per month. Oral answers to inquiries about the plan were given by the respondents to the same effect. In fact all calls from mobile phones to other mobile phones were not free. The offer only included free calls on the weekend from a mobile to a fixed service. The Trade Practices Commission sought a declaration that the respondents had contravened s 52 and s 53(c) and s 53(g) of the Trade Practices Act 1974 (Cth).
The transcript of the television advertisements revealed a reference to the fact that purchasers of the new digital Freestyle phone from Optus were entitled to one hour of free local calls on weekends. During the advertisement there were two other references to "free local calls on weekends". During the advertisement there appeared for four seconds at the bottom of the screen a super‑inscription, in small print, which read: "Only Optus Freestyle Plan has free weekend calls (up to $52 per month). Some exclusions apply." Tamberlin J held that it was necessary to consider what the likely target audience was reasonably likely to understand by the expression "local calls" and said (at 336):
"In order to determine whether a statement is misleading, regard must be had to the sense in which a reasonable person would understand it on a fair viewing … The Court will have regard to the overall impression generated by the advertisement and will examine it to see whether it conveys a false impression …".
This was described by Tamberlin J as essentially an objective test.
The next question which was said to arise was whether, in viewing the statement in its entire context, the representation could be said to be misleading. Tamberlin J considered the entire context to include surrounding circumstances, documents, conversations, and sequence of events, in which the advertisement was broadcast up to the point of sale. His Honour held that this exercise also involved, inter alia, a consideration of the effect of the references to exclusions in the advertisement itself and information provided by Optus: at 338. Attention was also given to what Tamberlin J described as the "statement in small unclear print" which was "on the screen for only a few seconds", a period which he considered to be barely sufficient for an attentive viewer to register.
Having considered all such matters, Tamberlin J concluded that the reference to "some exclusions" on the screen was inadequate to alert a reasonable viewer to the fact that mobile to mobile calls are not included or to lead a viewer to investigate such conditions and exclusions. His Honour stated (at 338):
"The 'disclaimer' in the advertisement, does not refer to any specific qualification to the offer of 'free local calls' to suggest that it may not cover mobile to mobile calls. The viewer is left with the clear and dominant impression that the advertisement means what it says, namely that up to $52 worth of 'local calls' made on weekends will be without charge."
Tamberlin J held (at 339):
"There is no real opportunity to review it, even if it is realised in the short time available, that there was something of significance being stated: cf the observations of Sheppard J in Pacific Dunlop Ltd v Hogan (1989) 23 FCR 553 at 569. I doubt whether a reasonable viewer would appreciate that there was any significant exclusion which flew in the face of the dominant representation of free local calls."

Appeal against the finding of no case to answer

The appellant submitted that the Magistrate misapplied the test to determine a submission of no case to answer. It is said that nowhere in his reasons did the Magistrate specify that he was to ask himself whether the prosecution evidence, taken at its highest, was capable of establishing guilt beyond reasonable doubt. Nor did the Magistrate proceed, as was required, on the assumption that all the evidence of primary facts, considered at its strongest from the point of view of the case for the prosecution, was accurate, and, on the further assumption that all inferences which were reasonably open, were drawn.
Counsel for the appellant suggested that the submissions of Senior Counsel for the respondent may have inadvertently misled the Magistrate into considering the ultimate question of whether the charges were proved beyond reasonable doubt. The following statement was part of the submissions made on the no case to answer application:
"[T]his is a criminal charge, as my learned friend has rightly pointed out, where the onus of proof from beginning to end is on the prosecution and it must prove beyond reasonable doubt that the representation was made by the defendant as well as it being false or misleading."
The respondent's Senior Counsel also drew the Magistrate's attention to the fact that the standard of proof was beyond reasonable doubt, not on the balance of probability.
Senior Counsel for the respondent explained, although no explanation was required, that the point he was making was that the matter was a criminal prosecution and the magistrate had to be satisfied that there was sufficient evidence, putting the evidence at its highest on which the defendant could be convicted on the standard of beyond reasonable doubt. In my view, it is entirely unnecessary to attempt to establish why it is that the Magistrate fell into error. The only relevant issue is whether he did in fact do so.
The appellant further submitted that the Magistrate's finding was so clearly against the evidence as to demonstrate a fundamental failure to understand the prosecution case. The Court's attention was drawn to the fact that no mention was made of Mr Prout's evidence of his conversation with the respondent's managing director as to the meaning of the term "conditions apply". It is said that this evidence was simply disregarded which the Magistrate was not entitled to do because his obligation was to proceed on the basis that the evidence was accurate. Complaint was also made by the appellant of the Magistrate's reference to the fact that he "could almost take judicial notice of the fact that businesses do not usually give special deals at peak periods". Counsel for the appellant correctly pointed out that there was uncontroverted evidence that some of the respondent's branches did exactly that. I accept that the direct evidence of the availability of the special prices at some branches during the Easter break is in stark contrast to the proposition on which the Magistrate based his finding that there was no case to answer. The Magistrate observed:
"It seems to me that I could almost take judicial notice of the fact that businesses do not usually give special deals at peak periods when there is a demand on their services … In this case there was a run of advertisements offering 7 day specials with conditions applying and I would have thought even without the qualification in earlier and later advertisements any interested consumer would be put on notice."
It is apparent then that the Magistrate, in reaching his decision, placed reliance on the "fact" that businesses does not usually give special deals at peak periods, in the face of evidence inconsistent with that very fact.
It is stating the obvious to say that it is not appropriate to take judicial notice of such a matter which no doubt is why the Magistrate phrased his comment in the way that he did. However, when consideration is given to the other remarks made by him I believe it is clearly the case that the Magistrate's subjective attitude to this issue infected his decision.
Counsel for the respondent relied on a number of factors said to arise from the evidence in maintaining that the Magistrate had not fallen into error as alleged or at all. It was noted that Mr Prout's conversation with Mr Kluck was in 2004 and clearly did not relate to the relevant advertisements. Further, it was submitted that what was subjectively intended by the respondent and what was understood by Mr Prout was not the issue to be determined; the issue for determination was whether the advertisement was misleading. The Magistrate, it is said, took the correct approach in objectively looking at the advertisement and concluding that it was not misleading because of the words "conditions apply".
In my opinion, the respondent's submission overlooks the fact that, in making his decision on the application, the Magistrate was obliged to accept Mr Prout's evidence and the most favourable inferences which arise from it, in combination with all the other evidence. A consideration of the Magistrate's reasoning reveals that not only did he reject or ignore all the prosecution evidence on the meaning of the term "conditions apply" but in stating his view that he "could almost take judicial notice of the fact that businesses do not usually give special deals at peak periods", he was not looking objectively at the qualifying words, he was, in my view, substituting a personal and subjective view of the meaning in the relevant context of the words "conditions apply"
The respondent pointed to a number of factors of which, it was submitted, a prospective customer would be aware and would expect to affect whether the price would be offered. The age of the driver and the availability of vehicles were two such factors. I accept, as did Mr Prout and, on his evidence, the respondent's director, that the age of the driver is a condition which the average person would consider relevant to the hire of a vehicle and which might reasonably impact on whether the special rates were made available. I do not see the availability of vehicles as a condition of the agreement to hire a vehicle at the special rates. Availability of vehicles is a factor affecting whether the respondent is in a position to contract at all. It is not a condition on the granting of a special price rather than the usual price.
Counsel for the respondent further submitted that the advertisements do not state that a vehicle will be available at the special rates for seven days from 24 March 2005, which was the date from which the compliance officers indicated to each of the branch offices that they required a vehicle. However, not one of the persons spoken to by the compliance officers made a comment about the commencement date being the reason why a lesser price or the special rate did not apply. Counsel for the respondent also relied on the fact that the people to whom the compliance officers spoke did not in all cases indicate the type of vehicle to which the quote related. That observation has no impact on a no case submission because the evidence of Mr Prout, which must be accepted for that purpose, was that the only vehicles in the respondent's fleet were Corolla vehicles. Each of these matters raised by the respondent potentially affect the meaning of the response given to the compliance officers' inquiries. As such they would be relevant to the ultimate issue but on a no case submission the court is required to take the prosecution evidence at its highest and to draw all favourable inferences.
In fact, the use to which the Magistrate put this category of evidence was as examples of conditions which applied to the availability of the special price. The Magistrate's reasoning was that once it is accepted that the term "conditions apply" is sufficient to alert a reasonable person that conditions such as those referred to above may mean that the special rates may not apply, then it follows that the term "conditions apply" is enough to alert a reasonable person to the possibility that over certain periods, peak periods, the rates may not apply. Counsel for the respondent conceded that this was the approach taken by the Magistrate in his reasons for decision. In my opinion, it is clearly flawed reasoning to suggest that if it is understood that a particular condition applies to an offer then it must be understood that any condition applies. That approach clearly did not address the key issue.
Despite the matters to which I have already referred, the respondent disputed that the Magistrate approached the exercise relying on the wrong test. It was said that the test he applied was "could I" be satisfied beyond a reasonable doubt, not "am I" satisfied. Counsel for the respondent further submitted that all the Magistrate did, and did correctly, was look objectively at the advertisement itself and conclude that it was not misleading because of the inclusion of the words "conditions apply". I am unable to accept that submission.
I believe it is apparent from the outset of the Magistrate's consideration of the no case submission that the Magistrate was not applying the correct test. The Magistrate said: "The second question is the meaning of 'Conditions apply' in the advertisement". It is clear from the authorities outlined above that the issue for resolution was whether the accused could be lawfully convicted of falsely representing the price of hiring for seven days the stated vehicles. However, it is the case that the only matter of dispute, apart from the issue of whether the respondent placed the advertisement, was whether, in all the circumstances, the term "conditions apply" could reasonably have been understood to cover the situation where the prices stated did not apply over the Easter break. On that basis, the question for resolution on a no case to answer submission was whether, on the prosecution case taken at its highest and after drawing all inferences that are reasonably open, the use of the term "conditions apply" was adequate to alert a reasonable consumer reading the advertisement to the fact that there was a significant exclusion on the offer of a special rate for seven days hire which may affect the availability of the special rate.

The Magistrate next referred to the evidence of the compliance officers of the meaning of the term "conditions apply" and noted that they gave different examples. He referred to Ms Eversden's evidence that the term could have referred to wheel protection or windscreen protection. In relation to the evidence of Mr Prout, rather than taking that evidence at its highest, as he was required to do, he simply said that Mr Prout "mentioned" being under 25 years and in re‑examination referred to the need for a WA driver's licence and stamp duty. There was no reference to the balance of Mr Prout's evidence, in particular, that he considered that the term did not include unavailability during the Easter holiday and that he had actual knowledge of the meaning of the term as used by the respondent.
I accept the submission of counsel for the respondent that the relevant issue was not the respondent's or the compliance officers' understanding of the term "conditions apply". As I have noted, it is the understanding of a reasonable person reading the advertisement which is relevant. Nevertheless, the evidence is uncontroverted evidence of the meaning of the term by the representative of the organisation that placed the advertisement and of a person who had been investigating the activities of a company of that type for some years and would have some weight in determining what a reasonable person who hires cars would consider was covered by that term in an advertisement for seven day hire prices just prior to the Easter break. That evidence should have been considered in tandem with the other evidence, including the evidence that on other occasions the term "conditions apply" was not considered adequate to alert a reasonable reader to the fact that the special prices did not apply during holiday periods. The Magistrate did make reference to the advertisements which expressly limited the special rates to periods outside holiday periods such as Easter but without making any reference to the inference that could be drawn from them.
The Magistrate's reasons indicate that the inclusion of the term "conditions apply" was relied upon by the Magistrate as evidence that the special prices were not unconditional. He noted that, even without that qualification, an interested consumer would be put on notice that conditions applied and a prudent consumer would have asked what they were. However the decision of Northrop J in St Lukes Health Insurance v Medical Benefits Fund of Australia Ltd (1995) ATPR 41-428 at 40,823 makes it clear that later advising those who inquire of the correct position does not alter the misleading nature of a statement. In my view, it is neither relevant nor appropriate to suggest that inquiries could or should be made when considering an offence of this nature.
The Magistrate also observed that it would be a nonsense to suggest that the advertisement falsely represented the price of hiring when the rates did not apply in circumstances such as where a driver is under 25 years. In my view, these observations are more consistent with deciding whether the special price was unconditional than with a determination of a no case submission of the nature I have referred to above. This view is reinforced by the conclusion drawn by the Magistrate which was as follows:
"It is my view that any objective assessment of the advertisements, the subject of these charges, would conclude that the rates advertised were subject to unspecified conditions and not unconditional … In my view, the information provided in the advertisement was not false, could not deceive or was not materially inaccurate."
Not only has the Magistrate applied the wrong test, he has answered the wrong question.
Counsel for the appellant further submitted that the Magistrate failed to give proper consideration to s 13 of the Act and to the extended definition of a false representation. It is the case that the Magistrate made only a cursory reference to an abridged definition of a false representation. However, I do not consider that this omission contributed to the error which I have already identified. After referring to s 13, the Magistrate stated his conclusion that the information in the advertisement was not false. I have already indicated that I consider the Magistrate did not apply the correct test or ask himself the correct question.
The Magistrate also noted that there was no evidence in relation to the advertisements on 23 and 24 March 2005. The Magistrate seemed to consider that, because no phone calls were made to the branches after 22 March 2005, therefore there was no evidence in relation to those six complaints relating to the advertisements placed in the two days following that date. However, the enquiry was made with respect to the Easter period so the evidence did apply to those advertisements as well.
I am also of the view that the Magistrate did not understand the effect of the decision in TPC v Optus (supra) and hence its relevance to the decision he was required to make. It was certainly a factor in the Federal Court's determination that the words "some exclusions apply" appeared only in small print and dissolved almost immediately after they could be read. However, it is also the case that the adequacy of that phrase was an equally significant factor. It is not apparent that the Magistrate actually appreciated that, irrespective of the size of the print, a disclaimer of that type was still found to be inadequate for the purposes of alerting the target audience to a significant factor affecting advertised product. I believe that if the Magistrate had properly understood the evidence available on a no case submission as well as the real significance of the decision in TPC v Optus (supra), he may have understood that he was required to consider whether in circumstances where the respondent was offering vehicles for hire for seven days at a special rate where, from the date of the advertisement part of the Easter period would have been included in those seven days, it was necessary to do more than state "conditions apply" to alert prospective customers to the fact that the special rate was not available for the next seven days.
I also accept the appellant's submission that the Magistrate, in making the decision that he did, failed to understand the nature and import of the evidence before him. In my view, there was a body of direct evidence, and evidence from which relevant inferences could be drawn, which supported the prosecution case that the advertisements were false. There was, before the Magistrate, uncontroverted evidence that three branches of the respondent on four occasions quoted prices for the seven day hire of a motor vehicle that were in excess of the prices set out in the advertisement. There was also evidence of the meaning of the term "conditions apply" and, as I have noted above, the evidence of Mr Prout on this issue is based on access to records or on discussions with the respondent's managing director in the course of an investigation covering a period of more than a year from which or during which he clarified the meaning of the term "conditions apply". It is apparent from that evidence that a prohibition on special prices during the Easter period was not considered to come within the term "conditions apply" and was evidence of how even people in the industry or with knowledge of it do not expect the term to cover that situation.
Further, the advertisements placed at other times, both before and after the relevant advertisements, and which were tendered into evidence, included in addition to "Conditions Apply" the further qualification "'Special' N/A peak periods" or "'Specials' N/A Dec ‑ Jan & Easter". Therefore, it was open to infer from those advertisements that, where it was intended that the rates would not apply during peak periods such as Easter, the advertisement would include a specific statement to that effect. In my view, the fact that the organisation placing the advertisement considered that the term "conditions apply" was not adequate to alert consumers to the fact that the special rates did not cover a holiday period supports the conclusion that a person reading the advertisement just prior to Easter, who wished to hire a car, would hold a similar view.
The evidence of the compliance officers was that certain branches did quote the special prices. On the basis that the evidence also reveals that there are a number of standard requirements, such as the hirer having a valid driver's licence and not being under 25 years, which apply to a car hire agreement, there would still be a need to include in any advertisement applying to those branches reference to the fact that "conditions apply". The inference which may be drawn from these circumstances is that the term "conditions apply" would still have meaning even if it did not cover and was not intended to cover the unavailability of the special prices over the Easter break.
The evidence of the timing of the advertisements is also significant in view of the fact that the special rates applied to a seven day hire. Advertisements placed in a daily newspaper cannot reasonably be expected to be viewed for more than a day or so. Therefore, a newspaper advertisement for a special rate that does not have a specific commencement date can reasonably be expected by the consumer to apply from the date it appeared in the newspaper and to extend for a reasonable time depending on the nature of the product or service being advertised. On that basis, in relation to the advertisement which appeared on 17 March 2005, the last day of the hire would have been the Thursday before Easter which is part of the religious calendar but is not part of the secular holiday period. However, the seven day period following the date of every other advertisement would include some or all of the Easter break. Therefore the respondent was advertising at a time when the seven day hire special rate would necessarily encroach on some part of the Easter break. In such circumstances, in the absence of a specific commencement date of the offer outside the dates of the Easter period, it is unlikely that any reasonable person would consider that the rates did not apply to Easter, irrespective of the inclusion of the words "conditions apply".
For all these reasons I have formed the view that the appeal is made out. It remains, then, to deal with the issue raised in the Notice.

Notice of contention

The submission of the respondent was that the evidence that the respondent was responsible for the advertisements was insufficient, even if accepted, to establish responsibility for the advertisements to the criminal standard. Despite the fact that I have concluded that the Magistrate applied an incorrect test to the resolution of this issue, I believe he was correct in his conclusion. The Magistrate considered that the evidence of the advertisement itself (although there was, in fact, more than one), coupled with the fact that representatives of the branches were aware of the advertisement, provided the basis for an irresistible inference that the respondent had lodged them. I also share that view. In my opinion, the content and number of the advertisements constitute prima facie evidence that they were advertisements of the respondent. There is a possibility, however remote, that another person for an unknown purpose might lodge an advertisement in a newspaper in the name of Bayswater Cars. However, another person lodging an advertisement on six occasions over eight days without some action being taken to withdraw the advertisements, particularly where the content of the advertisement is to bind the respondent to a lower than usual price for the hire of its vehicles, is so highly unlikely that, in my view, it would overcome any reasonable doubt. Even if I am wrong that this evidence would be sufficient to justify making a finding to that effect on the criminal standard, there is additional evidence on which the Magistrate was entitled to rely.
During some of the calls Mr Prout mentioned the advertisement. Ms Eversden referred to the advertisement in every phone call. On no occasion did any of the respondent's representatives indicate that they were unaware of the advertisements or that they had been lodged by someone other than the respondent. On a number of occasions, the representatives were familiar with the advertisement and aware of the special rates even though it was maintained in some instances that the special rates did not apply. Even where the advertisement was not specifically referred to, the price quoted for the hire of a car for the seven day period was consistent with the prices in the advertisement. The company extract from the Department of Consumer and Employment Protection, which was tendered in evidence, indicates that Bayswater Car Rental Pty Ltd is registered in Western Australia and its principal place of business is at 381 Guildford Road, Bayswater, the address in the advertisement of the Bayswater Cars branch of the company which was contacted on eight occasions by the compliance officers. It was apparent from a number of these contacts that the Bayswater Cars office was well aware of the advertisements and the special rates, even if they were not being offered over the Easter period. The directors of the company listed in the extract are Arnoldus Kluck, Arnold Kluck Benjamin Kluck and Dirk Kluck. The Mr Kluck to whom Mr Prout spoke in relation to earlier advertisements by the company of an almost identical nature was a director of the respondent.
In my opinion, even if, individually, these pieces of evidence could not support a finding that the respondent was responsible for the advertisements, collectively, they could. In circumstances where the evidence is accepted as accurate and all available inferences must be drawn in favour of the prosecution, there was, I believe, evidence capable of producing in the mind of a reasonable person satisfaction beyond reasonable doubt that the respondent was responsible for the advertisements. Consequently, I believe the Magistrate did not err in making a finding to that effect.

Conclusion

As there was evidence with respect to each of the disputed elements of the charges capable of meeting the test that applies on a submission of no case to answer, the charges ought not to have been dismissed and the appeal is allowed. As I have determined that the Magistrate actually decided the ultimate issue in one respect, this matter should be returned to the Magistrates Court for re‑hearing before another Magistrate.