Green, A v Ford, J.A

[1985] FCA 345

Re: ALAN GREEN
And: JOHN ANTHONY FORD
Nos. G15 to G28 and G48 of 1984
Trade Practices

COURT

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

CATCHWORDS

TRADE PRACTICES - consumer protection - publisher authorised to print magazine and solicit and charge for advertising - termination of authority - copy of magazine subsequently produced - whether magazine was representation of sponsorship within s. 53(c) Trade Practices Act - whether magazine and invoices for advertising were representation of approval under s. 53(d) Trade Practices Act.

TRADE PRACTICES - prosecution - defences - whether conduct involved the use of postal services - whether informations were laid within statutory period - whether publication was due to reasonable mistake.

HEARING

SYDNEY
#DATE 25:7:1985

ORDER

1. The defendant is found not guilty and is discharged in respect of charges G15 of 1984, G16 of 1984, G17 of 1984 and G18 of 1984.

2. The defendant is found guilty in respect of charges G19 of 1984, G20 of 1984, G21 of 1984, G22 of 1984, G23 of 1984, G24 of 1984, G25 of 1984, G26 of 1984, G27 of 1984, G28 of 1984 and G48 of 1984 and these matters are stood over to a date to be fixed for argument on the question of penalty.
   
   Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

The prosecutor alleges the commission by the defendant of 15 offences under s. 79 of the Trade Practices Act 1974 ("the Act") constituted in 8 cases by contraventions of s. 53(c) of that Act, and in 7 related cases by contraventions of s. 53(d) of the Act. The opening words of the section, and the two paragraphs mentioned are as follows:

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

. . .

(c) represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have;

(d) represent that the corporation has a sponsorship, approval or affiliation it does not have."

The prosecutions arise out of the publication by the defendant, trading (as a partner) as Barford Printing and Publishing ("Barfords"), of a magazine called "Waves" which was designed to be of interest to boat owners and people in the small boat industry. The proposal that there be such a publication, to be produced periodically, initiated with the New South Wales Squadron of the Australian Volunteer Coast Guard Association Incorporated ("the Squadron"). The magazine was to be distributed free of cost to Squadron members. It was planned that about one half would consist of advertising material and one half of newsworthy and instructive matter, - called the editorial part of the publication.

The Squadron entered into an agreement with Barfords for the publication, in the first place, of a number of issues, to be published quarterly. The matters in question arise out of the publication of what has been called the fourth issue, and the issue of invoices in connection therewith.

The magazines bore the indorsement on the front cover: "Magazine of the New South Wales Squadron Australian Volunteer Coast Guard Association", and at the foot of the back cover "Barford Printing and Publishing - Telephone 55-1201". The front cover also bore the distinctive emblem, or logo, of the Coastguard, inset in which were the words "Australian Volunteer Coast Guard". The invoices (sent out by Barfords to advertisers) carried the head-line "WAVES Magazine of the Australian Volunteer Coast Guard Association N.S.W. Squadron", and, immediately under that the by-line "Publishers: Barford Printing and Publishing". Under that was a statement that cheques were payable to Barfords.

The informations, two of which I will later set out, are in pairs, except for G48/84. The first in each pair charge the offence under para. (c) of s. 53, i.e. of sponsorship of goods or services, while the second in each pair charges the offence under para. (d), i.e. of approval the firm had. The particulars in relation to the first-mentioned charges refer only to the magazines, but those respecting the second charges refer also to the invoices.

No separate question has been raised as to whether the documents evidenced the requisite consent or approval (vide s. 53), as the case required. It seems to me to have been an unnecessary and undesirable exercise to have charged two offences, in relation to virtually the same matter, but I do not think any practical problem arises. So far as concerns the "fourth" issue, the magazine provides evidence of the Squadron's sponsorship of it and also of the approval of the Squadron to its publication by Barfords. The invoice brings the name of Barfords more prominently into display but I do not think it adds significantly to the representation made by the magazine. In all cases, except, charges G24/84 and G26/84, concerning Dr Vargassoff and Mr Westphal respectively, there was an invoice which, as to time and posting, was in the same position as the magazine. There is evidence in respect of these two charges that an invoice was received, separately, after the magazine. In that case, the absence of proof of a particular (that the magazine was sent "together with" the invoice) does not affect the result.

Two general matters arise. They constitute principal defences. One derives from the fact that Barfords is not a corporation and it is whether it has been found that the copies in question went by post, so that the provisions of ss. 6(3) of the Act become applicable. That sub-section is as follows:

"(3). In addition to the effect that this Act, other that Part X, has as provided by sub-section (2), Division 1 of Part V has, by force of this sub-section, the effect it would have if -

(a) that Division (other than section 55) were, by express provision, confined in its operation to engaging in conduct to the extent to which the conduct involves the use of postal, telegraphic or telephonic services or takes place in a radio or television broadcast;

(b) in section 60 the words "cause or permit a servant or agent of the corporation to" were omitted; and

(c) subject to paragraph (b), a reference in that Division to a corporation included a reference to a person not being a corporation."

Section 53 is in Division 1 of Part V of the Act.

The second matter is whether the prosecutions have been brought in each case within the period of one year after the commission of the respective offences, this being the time allowed by para. 21(1) (c) of the Crimes Act 1914. The informations were all filed on 27 January 1984, with the exception of that in G48/84 which was filed on 6 February 1984. This argument is not pursued in respect of the charges concerning Dr Vargassoff, Mr Westphal and Mr Wood (Nos. G23 and G24; G25, G26 and G48; and G27 and G28 respectively).

It is convenient to examine these matters when considering the particular cases. Before turning to that task I should however mention some other general matters.

The agreement between the Squadron and Barfords comprised several terms of importance for present purposes:

(a) None of Barford's staff was in any circumstances to represent himself or herself as a member of the Squadron.

(b) Invoices for advertising, which were to be sent out by Barfords, could use the name of the Squadron, but the Squadron's emblem, or logo, was not to appear on the invoices and it was to be plain that the invoices were those of Barfords, and not the Squadron.

(c) Barfords was to be responsible for getting all advertising, and to charge therefor, no charge being made to the Squadron for the production and printing of the magazine.

(d) Distribution was to be effected by the Squadron.

(e) Advertising was only to be solicited from advertisers in the area of the Squadron, which went to the Queensland border in the north, but only to Stanwell Park in the south.

It is not necessary to decide whether the agreement provided for four issues, in the first instance, but I will assume in favour of the respondent that it did. The existence of sponsorship or approval depends upon the subsistence of the agreement, and these matters do not require separate consideration. In the prosecution case under para. 53(d) reliance is placed on the invoices as well as on the magazines.

The first issue, of 4,000 copies, was delivered to the Squadron's headquarters on 16 March 1982. Of these about 2,300 were sent by post to members, and about 1,700 were sent or delivered to branches. The evidence is not precise on the matter, but a number were apparently sent (by Barfords or the Squadron) to advertisers, whether or not they were members.

The source of the advertising material (see (e) above) soon became a matter of serious concern to the Squadron. There were found to be advertisements in the first issue which came from Queensland, and Miss Lowe, the editor of "Waves", protested on behalf of the Squadron. On 14 April 1982 the Squadron wrote to Barfords as follows:

"Dear Sir,
Further to the first issue of WAVES magazine published by you for our Association we confirm our conditions for continued publication as follows:

1. All advertising for WAVES is to be solicited in N.S.W. within the area between Stanwell Park in the south and the Queensland border. Advertisements procured outside that area and interstate will be accepted only from manufacturers marketing their product within N.S.W.

2. We reserve the right to veto inclusion in the magazine any advertising content not consistent with the above requirement or considered by us to be prejudicial to our Association's objectives, or incompatible with Coast Guard activities.

3. Our Association is to be kept notified of advertising rates applied to WAVES and all increases in those rates.

4. Use of the Australian Volunteer Coast Guard emblem is restricted to WAVES magazine itself and shall not appear on letterheads, statements of account or any stationery used by Barford Printing & Publishing.

5. Our Association to approve all stationery used by Barford Printing & Publishing bearing the Association's name or the name WAVES.

6. Employees or representatives of your company canvassing advertising for WAVES must not purport themselves to be members of our Association or any similar organisation.

We also advise that, further to discussion with Mr. Don Lee regarding an increase in quantity to 5,000 copies, we agree to publication of the June '82 issue as a 56-page magazine, the 8-page increase to consist of 4 pages of advertising and 4 pages of editorial supplied by our Association. Allowing for this negotiation we accept your conditions for publications as notified in your letter of the 2 February, 1982.

The inaugural issue of WAVES has been well received by the N.S.W. Squadron and we look forward to our continued association with you for future production of the magazine.

Yours faithfully,

CHRISTINE LOWE
SQUADRON VICE CAPTAIN
for the N.S.W. Squadron Board"

Miss Lowe saw the layout for the June issue, and again there was forbidden advertising material, but after some delay, and again with protest, it was allowed to remain. There were 5000 copies of this issue.

On 2 August 1982 the Squadron wrote to Barfords in the following terms:

"Dear Sir,
The N.S.W. Squadron Board has noted with concern the appearance in WAVES' June 1982 issue of advertisements obtained in Queensland, which do not meet our conditions for publication of the magazine.

We attach a copy of our letter dated 14 April, 1982, outlining our terms, as agreed to verbally by your company on that date. The conditions given therein remain our terms for publication with clarification.

(a) that condition 3 of your letter of the 2 February, 1982, we agree to only in terms of our condition 1 which places clear geographic limitations on your procurement of advertising.

(b) that the number of copies will now be five thousand (5,000), any increase in quantity to be discussed by both parties.

(c) that the journal will now consist of twenty-eight (28) pages of editorial to be supplied by the Association plus thirty-one (31) pages of advertising (including covers). Any increase in size again to be discussed by both parties.

Development of WAVES as a national magazine of the Association is not envisaged until 1983 and, until such time, the journal will continue as the magazine of the N.S.W. Squadron as clearly shown and originally intended. Accordingly, we request your written agreement to our conditions for its publication. Regrettably, should you be unable to comply, we will be forced to seek alternative publishers.

Your prompt resolution of this matter would be appreciated.

Yours faithfully,

CHRISTINE LOWE
Editor - Waves
for the N.S.W. Squadron Board"

There was no response and a further letter was written on 1 September 1982.

"Dear Sir,
We refer to our letter of the 2 August, 1982 regarding continued publication of WAVES and note that no reply has been received.
Again we seek your prompt attention to this matter so that publication of the magazine may proceed.

Yours faithfully,

CHRISTINE LOWE
Editor-WAVES
for the N.S.W. Squadron Board"

On 6 October 1982 a meeting took place, at which, among other things, Miss Lowe requested a written agreement. Her evidence of the outcome of the meeting is as follows:

"I believe it was Mr Ford saying that, We will go ahead with the September issue then and you discuss - you discuss matters with your committee and get back to us after that and let us know what you are doing.

You parted company on that basis, did you? - - - Yes."

There was no further communication before November, when the Coastguard decided to seek another publisher. On 3 December 1982 Miss Lowe, who had acted throughout as the Squadron's representative, communicated the decision by telephone to Mr Pooley, who occupied a senior position with Barfords, and had been acting on its behalf. On 7 December 1982 Miss Lowe sent a letter by registered post to Barfords as follows:

"Dear Sir,

Further to discussion with your General Manager Mr. Tom Pooley on the 3 December, 1982, we formally confirm that our Association wil not be continuing publication of WAVES magazine with Barford Printing & Publishing.

This step follows your failure to provide written agreement to our conditions for continued publication as notified in our letters of 14/4/82, the 2/8/82 and the 1/9/82. In order to fulfil respective obligations to advertisers and readers it was agreed at a meeting on the 6 October to proceed with publication of the September issue, which we received on the 3 November. You were advised at that meeting that we would not be proceeding with subsequent issues without the requested agreement; also that your company's capacity to produce no more than 10,000 copies per issue (as disclosed by you on that occasion) would not meet the A.V.C.G.A.'s future circulation requirements for WAVES.

As a result of your continued refusal to agree in writing to our terms, or in fact comply with them in the procurement of advertisements for WAVES, we have negotiated suitable terms with an alternative publisher, as previously foreshadowed.

With regard to the production standard of the magazine we terminate our association with Barford Printing and Publishing with regret. Further to that, I would appreciate my personal thanks being passed on to Messrs. Charlie Miller, Wally Perko and all involved in printing WAVES for their efforts and assistance.

Yours faithfully,

CHRISTINE LOWE
Editor-WAVES
for the N.S.W. Squadron Board"

No reply was received to this letter.

The September issue (5000 copies) had been delivered to the Squadron in early November 1982.

At the time of termination of the agreement, Barfords had on hand some orders for advertising in the magazine which it had not fulfilled. Based on the earlier conversations, it had produced copies (in colour) of the covers for 4 issues. In the circumstances, and claiming that the agreement was still on foot, it decided to produce another issue. It did this without any reference to, or specific authority from, the Squadron. The latter first learnt about the issue some time after publication, in late December 1982 or early January 1983. The editorial matter was exactly the same as that which appeared in the September issue, but the advertising matter was different. Some requests for advertisements, additional to those on hand at the time of the termination, were obtained after that date. One or two of the earlier advertisements were reprinted, seemingly without any specific request from advertisers.

The issue has been described in these proceedings as the fourth issue, and in a practical sense it can be so regarded. However, the front cover bore the same identifying indorsement as the third, or September, issue and was prominently dated "September 1982".

Without reference to the Squadron or seeking its assistance, Barfords distributed the fourth issue itself, leaving bundles in selected places, such as Barfords' offices, and some clubs, and by sending (or delivering) copies to advertisers and some other individuals.

One general defence, on the matter of sponsorship or approval, is that the contract granting authority was still on foot. Assuming an agreement was otherwise subsisting it was one requiring mutual performance, and had in my view been brought to an end. The authority had been terminated. In any event, the fourth issue was not (as it could not be) in compliance with the agreement. It was a radical departure therefrom.

It is necessary now to look at each case in turn. The informations in G15/84 and G16/84 are, so far as concerns the substance of the offences, in the same terms as the other charges (except for G48/84) and I set them out:

No. G15 of 1984

" . . . that between 31 January 1983 and 25 February 1983 at Sydney in the State of New South Wales JOHN ANTHONY FORD . . . in the said State did commit an offence within the meaning of section 79 of the Trade Practices Act 1974 by contravening section 53(c) of the said Act, in that the said JOHN ANTHONY FORD trading as 'Barford Printing & Publishing' did, in trade or commerce and by the use of postal services, in connexion with the supply of goods, represent that the said goods had sponsorship they did not have.

The particulars of the offence are:

1. the said goods were a publication titled 'Waves', Magazine of the New South Wales Squadron Australian Volunteer Coast Guard Association, Vol. 1 No. 3 September 1982;

2. between 31 January 1983 and 25 February 1983 a copy of the said publication was received through the post by JOHN MICHAEL BULLOCK at Shop 3/38 Green Street, Brookvale in the State of New South Wales;

3. printed on the cover of the said publication was the emblem of the Australian Volunteer Coast Guard Association incorporated and the words:

'Magazine of the New South Wales Squadron
Australian Volunteer Coast Guard Association';

4. printed on page 1 of the said publication were the words:

'Published quarterly by the New South Wales Squadron Australian Volunteer Coast Guard Association';

5. the said publication was not published by or with the sponsorship or authority of the Australian Volunteer Coast Guard Association Incorporated or the New South Wales Squadron of the said Association."
No. G16 of 1984

" . . . that between 31 January 1983 and 25 February 1983 at Sydney in the State of New South Wales JOHN ANTHONY FORD . . . in the said State did commit an offence within the meaning of section 79 of the Trade Practices Act 1974 by contravening section 53(d) of the said Act, in that the said JOHN ANTHONY FORD trading as 'Barford Printing & Publishing' did, in trade or commerce and by the use of postal services, in connexion with the supply of goods, represent that he, trading as 'Barford Printing & Publishing' had an approval he did not have.

The particulars of the offence are:

1. the said goods were a publication titled 'Waves', Magazine of the New South Wales Squadron Australian Volunteer Coast Guard Association, Vol. 1 No. 3 September 1982;

2. between 31 January 1983 and 25 February 1983 a copy of the said publication together with a statement of account was received through the post by JOHN MICHAEL BULLOCK at Shop 3/38 Green Street, Brookvale in the State of New South Wales;

3. printed on the cover of the said publication was the emblem of the Australian Volunteer Coast Guard Association incorporated and the words:

'Magazine of the New South Wales Squadron
Australian Volunteer Coast Guard Association';

4. printed on page 1 of the said publication were the words:

'Published quarterly by the New South Wales Squadron Australian Volunteer Coast Guard Association';

5. printed on the back cover of the said publication were the words:

'BARFORD PRINTING & PUBLISHING -
Telephone: 55-1201';

6. the said statement of account was headed:

'WAVES MAGAZINE OF THE AUSTRALIAN
VOLUNTEER COAST GUARD ASSOCIATION
N.S.W. SQUADRON
Publishers: Barford Printing & Publishing'

7. the said publication was not published by or with the approval of the Australian Volunteer Coast Guard Association Incorporated or the New South Wales Squadron of the said Association."

Mr Bullock received an invoice for the "fourth" issue and he then asked for and received a copy of the magazine which was accompanied by another invoice. The invoice (as with other invoices) was endorsed -

"WAVES, magazine of the Australian Volunteer Coast Guard Association N.S.W. Squadron Publishers: Barford Printing and Publishing."

Mr Bullock said in evidence that he received the magazine (by post) at the "beginning of 1983", but does not say when he received the invoice. He says he paid the amount of the invoice in January or February 1983, after he had received the magazine.

The "representations" to which paras. (c) and (d) of s. 53 relate are those to the recipient, and do not occur simply upon the printing of the material, without distribution. If posting is proved, nothing turns in this case on whether the time of posting or of receipt is the relevant time. Sub-section 6(3) relates to "conduct (which) involves the use of postal . . . services".

In relation to dates (as well as posting) the prosecutor relies in part upon documentary proof, constituted by "daily sales sheets" kept by Barfords, in relation to the Waves magazine. These were tendered, explicitly in reliance upon s. 7B of the Evidence Act 1905 (Cth), without objection.

Mr Bullock owned a business called Tradewind Sail Boats at Brookvale, in the Sydney metropolitan area. The sales sheet provides evidence that the advertisement (as published) was "sent" to him on 2 February 1983. It also shows that he paid the invoiced amount on 25 February 1983. As the reference to the advertisement being sent appears, in common with many others, as a rubber stamp imprint: "Advt. Sent", the term "sent" may be less indicative of actual posting than would otherwise be the case. The reference is to the magazine in which the advertisement appeared, i.e. a copy of Waves. Mr Ford (the defendant) gave some unsatisfactory evidence about the accuracy of the dates appearing in conjunction with the stamp "Advt. Sent" but it is a proper conclusion from the evidence as a whole that the dates shown were accurate to within a day or so. I am satisfied in this case (beyond reasonable doubt) that the information was taken out within twelve months of the sending of the magazine.

A matter which is more troublesome is whether the magazine was sent by post. Mr Bullock said he received the magazine by mail, through the post. He repeated this evidence in cross-examination, but admitted that he could not remember actually seeing the particular article on its arrival in his office, and eventually said that he was not "100 per cent sure" that it came through the mail. The reason for his uncertainty, minimal though it may be, was not made apparent. The phrase is I think a vernacular one, not leading to metaphysical questions of degree of proof. That there was some possibility that it may have been hand delivered appears from the evidence of Mr Finley, who is a sales representative employed by Barfords in connection with obtaining advertisements and payment therefor, that some, if not most, copies of magazines published by Barfords were hand delivered by agents to advertisers, together with invoices for the advertisements. This obviously depended on convenience of location, and transport, but in relation to Collaroy Plateau, where Mr Bullock lived, and Brookvale, where he had his office, it seems to me that there was at least some possibility that the magazine for him was hand delivered. I should say in this connexion that although no map has been tendered, counsel have given me their own accounts of where some relevant places are, and how accessible they are, and have assumed that I will otherwise take notice of similar matters for myself, so far as I can.

I am of the opinion that the charges respecting Mr. Bullock fail.

The charges in respect of the magazine sent to Mr Cottle (G17/84 and G18/84) have the same basic ingredients, and the proof follows the same lines. He is a director of Barrier Consolidated Industries Pty. Limited, which has its address at Rozelle. The sales sheet shows the date upon which the advertisement was sent as 2 February 1983. Apparently the magazine arrived with an invoice. Mr Cottle is not able to say when he received these documents but having in mind the evidence as a whole, including the entry in the sales sheet, I would not doubt that it was within twelve months before the information was sworn. On the question of method of sending, however, Mr Cottle expresses uncertainty, and I do not think the charges relating to him can succeed.

The next matters (G19/84 and G20/84) relate to advertisements charged to Mr Darnell. He conducts the business of a boat builder under the name of Southern Boat Building in Narooma, which the evidence says is 250 miles south of Sydney. Mr Darnell is uncertain as to when he received the relevant documents, but, piecing together bits of his evidence, it would seem to have been no earlier than about mid-January 1983. I think the notation on the form is evidence that they were received in early February. Mr Darnell is quite clear that he received them by post, and his evidence on this matter is convincing. It follows from what I have already said that the charges relating to the sending to him of the magazine (and invoice) are made out.

Matters G21/84 and G22/84 concern a magazine sent to Stacer Alloycraft Pty. Ltd., of which Judith Dyke was an employee. The Company has its office in Altona, Victoria, and that is where Mrs Dyke lives. It was among her duties to collect the mail. The sales sheet shows the magazine as having been sent on 2 February 1983. Mrs Dyke says that she received an invoice in late December of 1982 or early January of 1983. She wrote out a cheque for the amount of the invoice in February, but it was not drawn until March. After receipt of the first invoice, she received a second invoice, with the magazine. She does not give dates, beyond saying that she destroyed the second invoice because she was "about to pay" the original. She was closely cross-examined on the matter of dates, and agreed that she had no means of telling the exact date of receipt. I do not, however, have any doubt that she received the magazine (and second invoice) in early February.

I am left in no doubt that the magazine was sent and received by post.

Charges G23/84 and G24/84 relate to the magazine sent to Dr Vargassoff, a medical practitioner in practice at Wisemans Ferry, New South Wales who is shown in the sales sheet as having the business name "A.E. Houseboats". The defendant does not dispute that the representations were made within the twelve month period. Dr Vargassoff is "completely certain" of having received the magazine by post. The last two and a half miles of the carriage of mail to his home is done by a lady who "contracts privately to deliver it". It has not been argued that this makes any difference, and in my opinion it does not do so. I am satisfied that both the ingredients challenged have been made out. Following what I have already said, I am of the view that these charges succeed.

The next charges I will discuss are the three related to Mr Westphal, Nos. G25, G26 and G48. He is managing director of Olner Pty. Limited, which has its office at his home in Seaforth. He says that he received the magazine on 8 February 1983 by mail. There may have been an invoice with it, but of this he is not sure. There is no dispute that the magazine and invoice were received within the relevant period, and I accept Mr Westphal's evidence that the manner of receiving these documents was by post. I have no doubt that the charges G25 and G26 are made out.

The information in G48 charges that the advertisement in the magazine for Olner Pty. Limited was not authorised by it (para. 53(c)). Mr Westphal says it was not. He says that in November 1982 someone telephoned him, saying he was "from the Coastguard", and was handling the advertising for the Waves magazine. Mr. Westphal had no prior acquaintance with that publication. He said he did not wish to advertise in it. Thereafter (and long before receipt of the magazine) he received an invoice for an advertisement in Waves, which he regarded as made in error and he put it aside.

It was the duty of a Mr Crystal, when he was employed by Barfords, to check information on the (partially completed) sales sheets, by ringing persons shown as having authorised each advertisement to ensure that advertisements, as shown, were authorised. This scheme was principally associated with the entitlement of agents to commission. As each entry was checked, Mr Crystal placed his initials beside it. In this way, he is able to swear that he spoke to someone at Olner Pty. Limited (presumably Mr Westphal) and received the necessary corroboration from him. The alleged salesman in this case was Mr Tassaker. Mr Crystal says that he spoke, apparently with Mr Westphal (it is not suggested on either side that it may have been someone else) on or about 14 December, this being the date on the sales sheet. Mr Crystal made such a notation, in red ink, at the time. The entries were not fully explained, but the left hand column, bearing the heading "Advt. to Printer" carries a red stamp "SEP 2" alongside most of the entries. Mr Crystal said he did not know of the breach with the Squadron which had occurred earlier in the month, when he was speaking to Mr Westphal, and did not pass on to him any knowledge with regard to that matter.

Mr Tassaker gave evidence. He says that he sold the advertising space to Olner on or about 14 December 1982. He had not been told not to sell it, nor about the decisions of the Squadron notified earlier in the month. He has no independent recollection of selling the advertising space, or who he spoke to, or when it was, but drew his conclusions in relation to those matters from the entries on the sales sheet. He says that most of the writing on those sheets was his. He believes that the actual advertisement, as it appeared, was taken from another publication, possibly "Boating News". and possibly the issue of November 1982. There was not any elucidation about the meaning or significance of the stamp showing "SEP 2".

Mr Finley was a collector of moneys owing to Barfords, principally, or solely, for the purpose of collecting commission on advertisements. On dates about which he was completely uncertain, but one may have been in March 1983, he says he went to Mr Westphal's premises at Seaforth to deliver a magazine and invoices. Mr Westphal recalled the delivery of an invoice, but this occurred after he received the magazine by post. Mr Finley did not obtain payment on the spot for an advertisement. One invoice, which is in evidence, is of interest. It is made out to Mr Westphal, Olner Pty. Ltd., Seaforth, but is undated. The name of Barfords, as payee, is crossed through, but there is no evidence as to when this happened. The document bears the indorsement "Waves/182", the figures being the same as the number on the relevant sales sheet. The body of the document reads as follows:

"To advertising authority Mr. Westphal in September, 1982 - $295.00"

The invoice bears the date stamp (inside the name of Olner) 11 MAR 1983. No advertisement from Olner appeared in the September issue (i.e. the third).

In the circumstances, I feel myself unable to place any reliance on the evidence of Mr Crystal or that of Mr Tassaker. I am satisfied that when Mr Westphal said in evidence that he had not authorised the advertisement for which he was charged or any advertisement in Waves, and had not, indeed, been asked for his authority, he was speaking the truth. Just what went on within the Barford organisation is a matter of speculation, and I forbear from discussing the possibilities.

There is however a further matter, relevant to the present discussion, with which I should deal. On the case presented by Barfords, which is correct so far as concerns some advertisers, it was seeking advertisements after the authority of the Squadron had been withdrawn. It charged for advertisements carried over from the September issue, and the others it eventually published. The view was taken that, as between the Squadron and Barfords, this was permissible. I have already dealt with that subject. So far as concerns the advertisers, it can readily be inferred that the Squadron sponsorship was important to them. More important, it is virtually certain that they expected that the advertising material in the so-called fourth issue would be accompanied by current topical editorial matter. Certainly those who did not offer to pay for space in the third (September) issue, because they were too late or otherwise, and those who came to know that their advertisements did not get into that issue, did not expect, or desire, that there would be a re-publication in December, of an issue dated September. This is not what they were paying for. They were interested in a new, fourth, issue of the magazine. Perhaps the greatest deviation from what an advertiser would expect lies in the distribution. Instead of being distributed to members of the Squadron, as an advertiser was entitled to expect, the issues were mainly left with hotels and clubs.

It is difficult to escape the conclusion that counsel for the prosecutor does not overstate matters when he says that by their actions Barfords were committing a fraud on most, if not all, their advertisers.

I am of the view that the charges G25, G26 and G48 are made out.

The remaining charges are G27 and G28, which relate to advertisements charged to Hydramatic Engineering Pty. Limited, of Redhead, New South Wales, of which Mr Wood was managing director. One counsel said that Redhead was south of Newcastle. The entry respecting Mr Wood's company shows that it appears not to have paid for any issue of Waves. In fact, there are two entries relating to Hydramatic Engineering Pty. Limited in the sales sheets: one of them has been crossed out, but the other has the stamp showing "Advt. Sent" and the date of 2.2.83 inserted in handwriting. It is not disputed that Mr Wood received a copy of the magazine within twelve months of the information being filed. While he gives evidence that it was received by mail, and could not have come any other way, he explained, under cross-examination, that his secretary opened his mail. The effect of his evidence is that she had a duty to lay it before him. I do not think that this fact necessarily affects the admissibility or weight to be given to his evidence. No suggestion was put to him in cross-examination as to how otherwise the magazine might have reached him. It is open to the Court to accept his evidence, and I do so. It carries conviction.

As was the case with other witnesses, the evidence of Mr Wood that the magazine arrived by mail was given without objection. This meant that the prosecution was not required to go through the steps which would enable a court to form that conclusion for itself. The fact that he states the conclusion, does not in the circumstances make his evidence on this point valueless. Taken in conjunction with the answers in cross-examination, he is expressing, emphatically, the nature and result of a practice, and that the practice was observed in the present case. In any event, the question whether the post was used is one of inference. Even if the magazine had been handed over by someone appearing to be a postal employee, in a stamped and addressed envelope, an inference would have to be drawn as to how the magazine was transmitted. In such cases, it would be seldom indeed that there could be any reasonable hypothesis other than that the postal services were used. It then becomes a matter of looking at all the circumstances, and applying the usual tests.

The respondent has also pleaded para. 85(1) (a) of the Act.

"85.(1) . . .

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

The submissions in support of this defence have turned on belief in the continuance of sponsorship and approval under the agreement. As I have already indicated, there could be no reasonable belief that the agreement, even if assumed to be of continuing operation, authorised what was done. The so-called fourth issue was patently quite outside the scope of the agreement.

I therefore find proved the offences charged in G19/84, G20/84, G21/84, G22/84, G23/84, G24/84, G25/84, G26/84, G27/84, G28/84 and G48/84 and enter findings of guilty in respect thereof. I find the charges G15/84 and G16/84, G17/84, G18/84 not proved and enter findings of not guilty in respect of them.

I stand the first-mentioned matters over to deal with the matter of penalties. The defendant is discharged in respect of the other matters.