Guthrie, T.J. v Robertson, M.

[1986] FCA 501

TRADE PRACTICES - Consumer Protection - False or misleading

representation corcerninq nature of land - Bait advertising -

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Course of conduct involving multiple and serious breaches - ..

Deterrent nature of penalty.

Trade Practices Act 1974 (Cth.) ss.53A, 5 6 ( 1 ) , 79.

Dawson v. World Travel Headquarters	Pty. Ltd. (1981) 53	F.L.R.
455.

I

l	I	( a ) TERENCE JAMES GUTHRIE v. MICHAEL ROBERTSON
I	(b) TERENCE JAMES GUTHRIE V. TARGJmRI N0.12 PTY-LTD.

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SPENDER J.

BRISBANE

12 NOVEMBER, 1986.

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I	IN THE FEDERAL COURT OF AUSTRALIA	)
1

i	QUEXENSLAND DISTRICT	REGISTRY	)	QLD. (a) G54, G55, G57,
l

) G58, (369, G70,

I	GENERFL DIVISION	)	G71, G73, G73, G74, G75, G76,
G97, G99, G100,
G101, G105,
G107, G110, I '
G111 and G114 of 1986

(b) G98, G102,

G103, G104, G106, G108, G109, G112, and

G113 of 1986

BETEEN :

(a) TEREMCE JAMES GUTHPIE

(b) TERENCE JAMES GUTHRIE

Appllcant

AND :	I \
P '

(b) MICHAEL ROBERTSON	I . .
( b ) TARFWRRI N0.12 PTY.LTD.	! -

Respondent I .

DATE JUDGMENT DELIVERED: 12 NOVEMBER, 1986

COUNSEL :

. for the applicant

M.G. Morley Q.C. with Mr.

Q.C. Lanyon-Owen instructed

by Director of Publlc

Prosecutions

for the respondent	Mr. A.J. Glynn instructed	by
Messrs. Baker & Loel

LEANNE WISEMAN

ASSOCIATE TO SPENDER J.

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IN THE FEDEPAL COURT OF AUSTPALIA	)
)

QUEENSLAND DISTRICT REGISTRY ) QLD. (a) G54, G55, G57.

1 G58, G69, G70,

DIVISION GENERAL ) G71, G72. G73,

G74,	G75,	G76,
G97,	G99,	G100.

I G 1 0 1 - G105 ~

~

G107, G110;

G 1 1 1 and	G114
of 1986

(b) G98, G102, i i

G103,	G104,	! I
G106,	G108,

G109, G112, and

G113 of 1986

B m E N :

(a) TERENCE JAMES GUTHP.IE (b) TERENCE JAMES GUTHRIE

Applicant

mm :

(b) MICHAEL ROBERTSON

(b) TARWARRI N0.12 PTY.LTD.

,.

Respondent

MINUTES OF ORDER

JUDGE MAKING ORDER:	SPENDER J.
DATE OF ORDER:	1 2 NOVEMBER, 1986
WHERE MADE:	BRISBANE

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THE COURT ORDERS:	1- i
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It having been directed that the G54 matter be heard and

determined together with matters G 5 5 , 57 , 58, 69-76 (both

inclusive), G97-114 (both inclusive),

1.	Order that the respondent in	each	of the abovementioned
matters be convicted.

2. Further order that the respondent Tarwarri No.12 Pty. Ltd. in

matters G98, 102, 103, 104, 106, 108, 1 0 9 , 112 and 113 be

fined $20,000, the total of the fines, namely $180,000, to be

paid to the District Registrar at Brisbane forthwith.

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3 . Fcwther order that the respondent Mlchael Robertson in

respect of each of the following matters, namely G54, 55, 56,

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l 5 8 , 69-76 (both inclusive!, 97, 9 9 , 100. 101, 105, 107, 110,

i 111 and 114 be fined $l,QOO, the total of the said tines,

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l namely $21,000, to be paid to the Dlstrict Registrar at

Brisbane forthwith.

4. Further order that the respondents pay the prosecutor's costs

of and Incidental to all of the foregoing matters to be

taxed, such costs to be limited to all matters of things

incurred and prior to and on 22 October, 1986.

.-.

5. Direct that exhibits 44, 45, 46, 47, 52, 5 3 , 56, and exhibit

C for identification herein be returned to the witness : .

L P

Vanderstaay called herein on 23rd October, 1986.

m:	Settlement and entry of orders	1 s dealt with in Order	36
of the Federal Court Rules

IN THE FEOERAL COURT OF AUSTRALIA	)
1 L

QUEENSLANLl DISTRICT REGISTRY ) QLD. (a) G54, G55, G57,

1 G70, G69, G58, !

DIVISIO	GENERAL	1	G73,	G72,	G71,
G74, G75, G76. i j

!,

G97, G99, G100,	r .
G101. G105.	I -
?

BETMEEN :

(a) TERENCE JAMES GUTHRIE

(11) TERENCE JAMES GUTHRIE

..

Applicant	_ .
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AND:

. .

(b) MICHAEL ROBERTSON

(b) TARWARRI N0.12 PTY.LTD.

Respondent

SPENDER J.

BRISBANE	, '
12 NOVEMBER, 1986.	i

REMONS FOR JUDGMENT I

These proceedings deal with a total of 29 contraventions

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of provisions of Part V of the Trade Practices Act 1974. Those	! >
contraventions are of ss.53A and 56(1) of the Trade Practices Act	l.

1974. There are 21 informations laid against Michael Robertson and nine informations against Tarwarri No.12 Pty. Ltd.

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They arise out of 11 advertisements advertising land for

sale on Eussell Island. The first advertisement appeared in the F

"Morthern Star" on 5 June 1985, and then on 14 June in that

publication, and then on 22 June. The next advertisement was on

22 June in the "Courier Mail" and on 23 June in the "Sunday

Mail". The next advertisement was in the "Morthern Star" on 28

June 1985, and the next in the "Courier Mail" on 22 August; there

was a further advertisement on 18 October 1985 in the "Daily

Sun", in that same publication on 19 October, and again In the

"Daily Sun" on 15 November, and the last advertisement with which

these proceedings deal was on	6	December, again in the "Daily
Sun".

The advertisements were not identical on each occasion

and, in fact, related to a number of different blocks on Russell

Island, and the advertisements indicated different matters whxh

were to be sold with the properties advertised.	. L
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The first advertisement in the name of East Coast Island

Sales gives omething of the flavour of the remainmg

advertisements. The name "East Coast Island Sales" is followed

by the statement:-

"The trusted name on the Moreton Bay Islands and

the Redlands.

BLUE RIBBON INVESTMENT SEASIDE COTTAGE $9900

OWNER SACRIFICING PROPmTY, DUE TO IMPENDING

ASSETS TEST.

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FIRST TIME OFFERED - Located on BAYBREEZE ISLAND.

- In Brisbane's ovm sunny Moreton Bay. We are

very fortunate to offer thls exceptional property

for sale. This outstanding cyclone-proof dwelling

consists of almost everything for a pleasant

seaside holiday or semi-permanent living,

including concrete slab, plenty of furniture, I.

beds, fridge, stove, generator, power, phone, plus : - ,

a host of other features, making it quite t

comfortable for the largest of happy families.

This solidly built cottage stands proudly high on

a hill, resting on a large leafy green couch

covered freehold allotment. Boasting picturebook

Moreton Bay, neighbouring islands and mainland

views. (This is definitely a postcard property).

Unbelievably the owner has also disappointedly

sacrificed her 12 ft. alumin. fishlng boat, motor

and trailer, 1973 Ford Falcon sedan (registered)

and her lOOcc Suzulr.1 Trallbike. All in good

running order. This property is absolutely

outstanding and is understandably valued at

thousands more.

An immediste inspection in our courtesy boat is

strongly advlsable.

NO MISPRINT. $9900 FULL PRICE"

And then certain phone numbers are given.

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Mr. Robertson admits that that advertisement relates to

a block of land on Russell Island at 443 Centre Road. The

reality is that no such cottage exists, nor was it ever intended

that those matters be available for sale.

On 443 Centre Road is a galvanlzed iron-clad shed with a

tilt-a-door front. The Inside is unlined and the photographs of

the interior of that shed (admittedly taken in June 1986) show

that it is	a poorly built structure, and could not properly	be	)1
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called a habitable dwelling.

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The object of the exercise was simply to entice persons

to the island, where their attention would be switched to other

blocks, and the sale, if any, would take place of that block.

The other advertisements are of a similar kind.

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The properties that re covered by the 11th

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advertlsement include 68 Lelani Avenue, Russell Island. That was

admitted by Mr. Robertson to be also the sublect of the second,

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third,	fourth,	fifth	and	sixth	advertisement.	The	second	1
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advertlsement was in similar terms to the first but, in

conversatlons with officers of the Trade Practices Commission,

Mr. Robertson said that this advertisement and the advertisements

which are third, fourth, fifth and sixth, in time, relate to 68

Lelani Avenue. There is no building of any sort on that block.

The third advertisement was not in the same terms as the

first two. It spoke of the building as being a family beach

house. It says:

“Only 2 more weeks is needed (at the vendor’s

expense) to complete this well presented, larger

than average 2 birm. high-set family holiday house

in the popular Blue Haters Estate. ”

It spoke of tiled floors, timber wood-grain interior, huge

outdoor pergola, colourbond all-weather roof, a rain water tank,

power and phone. On this advertlsement. a 72 Ford station van, a

14 foot runabout fishing boat and a 150 Yamaha trailbike were

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referred to, and the price was $12,990.

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5.

The fourth advertisement was in similar terms. There

were some slight variations in the advertisement in the fifth and

sixth advertisements.

The seventh advertisement was in similar terms to the

fifth and sixth. It was said that this related to a property at

29 James Street, which is located on the north-eastern end of

Russell	Island. That allotment in fact has no buildinq on it,
and has	an electrlclty pole located on the block, and is sublect

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to an electricity easement. At no stage has there ever been a

building of the kind advertlsed on it.

The eighth advertisement was in these terms:-

" PIONEERS

BEACH

COTPAGE

OUTSTANDING PROPERTY

$10,900

LOCATED ON THE AVOCADO ISLAND OF SOUTH EAST QISEENSLAND'S BEAUTIFUL MORETON BAY. WHMTHER BUYING

TO RESELL OR FOR OUTSTANDING RFTURN SEMI PERMANENT

LIVING HOLIDAY RENTALS - WHATEVER, NOT ONLY DOES

THIS PROPERTY BOAST FEATURES EOUIVALENT TO THOSE ~~~~~~~~~~~

ONLY FOUND IN THE ISLANDS OF -NORTH QUEENSLAND' S

LWITSUNDZIY PASSAGE, BUT INVESTMENT POTENTIAL,

WHICH COULD IMMEDIATELY MAKE YOU THOUSANDS OF

DOLLARS

THIS IMMACULATE PROFESSIOfiJALLY BUILT CONTEMPORARY

HOLIDAY COTTAGE IS FULLY FWRNISHED AND HAS

LITERALLY EVERYTHING, 2 HUGE FAMILY SIZED

BEDROOMS (WITH B.IN WARDROBES) LONG CORRIDORS

LEADING INTO SEP-ARATE LOUNGE AND DINING AREAS, A

KITCHEN THE SIZE OF NORMAL SUBUFIBAN HOME, COMPLElTE

WITH FRIDGE, STOVE, O V E N , KITCHEN APPLIANCES AND

CROCKERY. A FAMILY SIZE BATHROOM WITH SHOWER AND

TOILET, HOT WATER UNIT LAUNDRY FACILITIES WITH

WASHING MACHINE AND DRYER, FULLY FLYSCREENED WITH

MULTITUDE OF SLIDING GLASS WINDOWS AND DOORS,

LEADING O N T O A HUGE COLONIAL STYLE VRANDAH. FULLY

CARPETED, P. POINTS, LIGHT FITTINGS, AIR

CONDITIONED PLUS A HOST MORE. RESTING ON A

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BEAUTIFULLY PRESENTED LARGER THAN AVERAGE

I ALLOTMENT. ONLY MALKING DISTANCE BEACH TO AIJD

DEEP	bJATEX AXCHORAGE.	INCREIjIBLY THE	O C a L4S	, - ,
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ALSU INULJtED H I 3 1974 FOFE STATION SEDAN I N GOOD

PUNNING ORDER, SURF BOARDS, FISHING EQUIPMENT AND

bJET SUITS. I STRONGLY 1JRC.E ANYONE W O I S A W E OF ._

THE CURRENT BAY ISLAND L>-! BOOM DUE TO THE STATE

GOWRNMENT ANNOUNCEMENT O BUILD A COLOSSAL BRIDGE

L I N K I N G THIS ISLAND TO THE BRISBANE MAINLAND AND

STRADBROKE ISLAND TO INSPECT THIS EXCEPTIONAL

PROPERTY	AT	ONLY	$10,900	FULL PRICE	N O MISPRINT
RING

EAST COAST ISLAND SALES"

The block in fact referred to does not have a home as

described on it. In a photograph taken in mid-l985 there is a

mobile home located on the block. The home is still on wheels.

There is none of the fixtures referred to in the advertisement, and the home itself, so far as the dimensions can be gauged, is . .1

approximately 20 to	25 foot long and 8 to	10 foot wide. In the	1 ;
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photographs taken of that block on 12 June 1986, there is a small

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transportable building of approximately 16 feet by 8 located on . , ..

that block. Yet again, it has no resemblance to the advertised

features.

The ninth advertisement refers to the same land.

I The tenth advertlsement speaks of a piece of rei1 estate

priced at $10,650:-

"...Trao large airy bedrooms, a massive kitchen,

dining and lounge area, shower, toilet, ensuite,

colonial balcony. Long corridors, ... ..."

and so on. It is said to be a rare waterfront allotment. There

are photographs which show a view of the waterways surrounding or

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,	'	adjoining Russell Island.	This is said by	Mr. Robertson to
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relate to 164 Jingella Street. A block, Lot 2, on the Boulevarde

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is also referred to. Photographs taken on 12 June 1986 show that

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land as being very low lying and with no dwelling on the land.

The eleventh advertisement shows four technicolour

photographs. The first block of land referred to there is said

to be Lot 32 Coollbah Street. It is described in the

advertisement in these terms:-

^ .

A BLUTIFUL MANICURED ALLOTMENT I .

GOLD COAST MOUNTAIN VIEWS l ' .

$7,500

... ...

The second is an allotment which is shown as a waterside

block and is headed:-

IF A PIC'ITRE PAINTS A THOUSAND WORDS,

YOU COULDN'T POSSIBLY HESITATE AT ONLY

$8,990

... ...

Mr. Robertson says that that representation relates to Lot 2 on

The Boulevarde. The third part of the advertisement:-

"A SUPERB ISLAND COTTAGE

AN ABSOLUTE GIVE-AWAY"

refers to l64 Jingella Street.

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Froln R record of interview conducted between officers of

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the Trade Practices Commission and Mr. Robertson on 19 Dpcember	i
1985, it is clear that "East Coast Island Sales" was a registered

business name which originally was registered in the name of one

Robert Williams. This was a pseudonym for Michael Robertson.

That reglstration continued untll the end of the financial year	_.
ending June l985 when the business name East Coast Island Sales

was registered in the name of Tarwarri No.12 Pty. Ltd..

The directors of that company at that time were Paul

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Hobertson, t.he twln brother of Michael Robertson, and Michael

Robertson's father, John Robertson. These persons were not

resident in Queensland and had no day-to-day connection with the

operation of East Coast Island Sales. While Michael Robertson

was not a director of that company, he managed it and, in fact,

was, as I find, in effective control of East Coast Island Sales

and of Tarwarri No.12 Pty. Ltd. at all relevant times.

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In February 1986, John Robertson resigned as director

and Mlchael Robertson joined his twin brother as directors	of
Tarwarri No.17. Pty. Ltd.

In that record of interview, Mr. Robertson admitted that

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neither his father nor his twin brother was concerned with the i:

day-to-day running of East Coast Island Sales, but they were

informed by him	of	events concerning the company from time to
time.

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As to the operation of East Coast Island Sales, the

respondent, Michael Robertson. admitted that he wrote a l l of the

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advertisements for that firm; that he looked after sales as they .. ,

were made; and that he was not himself concerned with selling.

Some reference has to be made to the circumstances which

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occurred in May of 1985 when, in response to an advertisement I n

the "Northern Star" which circulates In northern New South Wales,

a Mr. Oliver came to Brisbane where he met Mr. Robertson and a

Mr. Walters, and that he went with Mr. Robertson to Russell

Island. He was taken to a property whlch had been advertised on

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25 May 1985 after he had been shown other allotments available

for sale. He was taken to the tin shed at 443 Centre Road, and . .

it was represented to him by Mr. Robertson that that was the

property which had been advertised. Robertson told Oliver that

he had not seen the advertisement which had appeared, and that he

agreed that the advertisement was misleading and that he would

take the matter up with the company when	he	got back to the
mainland.

Two affidavits have been sworn by former salesmen of

East Coast Island Sales; one by James Patterson Mackay Parnell

and another by Colin David Mark Walters.	Each of them also gave
oral evidence and was cross-examined.

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Michael Robertson admits a number of the paragraphs

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contained in those affidavits. So far as Mr. Parnell is

concerned, he agrees that Mr. Parnell commenced with East Coast I .

Island Sales In early September 1985; that he was trained by

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! .	Michael Robertson as to the telephone technlque and	the "Island	I
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!	run" to be followed by him. Parnell swears that Robertson

explained that he was to turn prospective purchasers off buylng

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I	the advertised blocks, known as "advertlsers", but	If anyone
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really wanted to buy the advertiser, "I 67as told by Robertson

that it was his prerogative as vendor whether he wanted to sell

the block." He swears, and Robertson agrees, that Robertson

would have taken hlm to Russell Island about five times, some of

which were his weekly stock runs. He swears in paragraph 4 of

his affidavit, again with which Mr. Robertson agrees, that:-

"Robertson Instructed me to pre-book messages for

my pager wher.ever I took prospective purchasers to

the island. These messages would say that the

advertiser had been placed under contract. This

was part of the set routine where I was to show

prospective purchasers perhaps 5 or 6 blocks

before showmg them the advertiser. Robertson

also instructed me to pick out one block before I

took anyone to Russell Island, because this would

be the m e I would genuinely attempt to make a . . ,

sale on. "

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Mr. Parnell resigned from East Coast Island Sales on	26 December
1985.

Similarly, Mr. Robertson agrees with identified

paragraphs of Mr. Flalters's affidavit. In particular, Mr.

Robertson agrees that, during the period that Walters worked for	t "
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Michael Robertson, he personally directed the business of East	r.

Coast Island Sales. He says, - and with this Mr. Robertson

agrees : -

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"The sales technique was to show the prospective purchaser was shown the advertlsed block. The

purchaser the island and point out the spots where

land was sold at and show thcm what was happening

on the island.

purchaser was to be pursuaded	(sic) not to buy the
advertised block.

From about August 1985 if a purchaser insisted

upon buying an advertised block, a pager was used.

The salesman was to receive a phone call advising

him from the office that the block of land was

placed under contract vhilst the salesman had been

showing	the	prospective	purchasers	over	the	, .:
block.	"
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It was sworn by Walters and denied by Robertson that

salesmen were told that, If an advertised block was sold, it

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would result in termination of employment.	I am not prepared to	i
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accept the contention of Mr. Walters in this aspect, nor am I

prepared to accept that the reason for his termination was, as he

claims in his affidavit, that he sold an advertised block in

Coolibah Street, Russell Island.	t -
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I do accept that the technique that 67as put into effect

at the lnstigation of Mlchael Robertson and in which he

instructed the salesmen was that a pre-programmed message was set

into the pager and, if a prospective purchaser indicated any

possibility of purchasing the advertised block, that pager was

activated and the information conveyed to the purchaser that the

block had been placed under contract.

The fact that on some occasions, and those occasions

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seem to be considerably after the relevant periods with which we

are concerned, blocks which have been identified as some of the

"advertiser" blocks were in fact sold, does not alter my view

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that the reality of the situation and the course of conduct

engaged in by East Coast Island Sales ~7as as I have indicated.

The object of the advertisement was to persuade

purchasers to attend on Russell Island for the purpose of viewing

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the advertised blocks and, once there, it was the intention of

Robertson, who inserted the advertisements, that they be switched

into purchasinq another block from East Coast Island Sales. i

Section 53A (l)(b) of the Trade Practices Act 1974

provides:-

“A corporation shall not, in trade or commerce, in

connesion with the sale or grant, or the possible

sale or grant, of an interest in land or in

conneslon with the promotion by any means of the

sale or grant of an interest in land	-
...

(b) make a false or mlsleading representation

concerning the nature of the interest in the

land, the price payable for the land, the

I	location of the land, the characteristics of
the land, the use to which the land is capable
of being put or may lawfully be put or the
existence or availability of facilities
associated with the land;”

Section 56(1) provides that:-

“A corporation shall not, in trade or commerce,

advertise for supply at a specified price, goods or services if there are reasonable grounds, of which the corporation is aware or ought reasonably

to be aware, for believing that the corporation

will not be able to offer for supply those goods

or services at that price for a period that is,

and in quantities that are, reasonable having

regard to the nature of the market in which the

corporation carries on business and the nature of

the advertisement. ”

13.

In respect of each of the first ten advertisements,

charges were laid under both s.53A(l)(b) and under s.56(1). They

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are quite different offences and o not call for the approach to

which s .79 (2 ) of the Act 1s directed. Realistically, what has to

be viewed is the whole course of conduct rather than to deal

seriatim with each of the 30 informations.

Each of the respondents pleaded guilty to each of the

informations involving him or it, and the matter adjourned so as

to enable matters in dispute as to penalty and other matters

relevant to the appropriateness of penalty to be put before the

court.

Shortly put, the course of advertising in these

proceedings involved gross and blatant lles which were inserted ln a cynical and deliberate endeavour to tap the greed of the gullible for an unbelievable bargaln. It would be fair to say

the facts in these proceedings demonstrate convincingly that it

is almost impossible to overestimate the gullibility of some

members of the consuming public.

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These proceedings also reflect the philosophy	of Mr.	I. .
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Robertson that, if lies were to be told, it was preferable to

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tell big ones.

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The advertising carried on over this perlod was of such

a kind that it is unlikely that one could formulate

advertisements with less connexion	with reality than those which
appeared.

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! Bait advertising, it ought to be understood, is a

species of fraud. The acivertiser engages in deceit by causing

the prospective purchaser, on reading the advertisement, to seek

a bargain, so glowingly referred to in that advertisement, which

bargain does not exist.

Persons who pursue the advertised bargain are truly the

victims of a gross, deliberate confidence trick. Those people

are put to inconvenlence and expense in responding to the bait. Competitors of a person who engages in the bait advertising are also affected by that dishonesty.

Misleading advertising referred to in s.53A also has a

very wide public significance.

If people for profit engage in commercial activities,

the Parliament has decreed standards of commercial morality.

Those standards cannot accommodate conduct which defrauds

consumers. That that conduct, both in respect of bait

advertising and as respects truth in advertising, is viewed very

seriously by the Parliament, is revealed by	s.79	of the Trade
Practices Act 1974.

Sub-section (1) of that section provides:-

"A person who -

(a) contravenes;

(b) aids, abets, counsels or procures a person

to contravene;

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(c) induces, or attempts to induce, a person

whether by threats or promises or otherwlse,

to contravene;

(d) is in any way, directly or indirectly,

knowingly concerned in, or party to, the

contravention by a person f: or

(e) conspires with others to contravene,

a provision of Part V other than section 52, 52A,

65Q or 65R or sub-section 65F(9) is guilty of an offence punishable on conviction -

(f) in the case of a person not being a body

corporate - by a fine not exceeding	$10,000;
or

(g) in the case of a person being a body

corporate - by a fine not exceedlng .-

$50,000. " ! .

Viewed simply arithmetically, the corporate respondent

is exposed to fines totalling $450,000 and the personal

respondent exposed to fines totalling $210,000.

As I earlier indicated, the proper approach, however, is

not to view the matter by taking each information by itself but

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to view the matter as a course of conduct of a serious kind

,,.

extending over a not inconsidereable period, and to have regard	I .
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t o the global effect of that conduct and fashion penalties	whlch	!
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properly reflect the view that that conduct deserves to be very

seriously punished.

It is appropriate to point out that the penalty which

should properly be imposed by a court when it is faced with

conduct of this kind is such as not only to deter the particular

offender from engaging in that conduct again but, perhaps at

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least as importantly, that others may know that they cannot

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engage in that conduct prohibited by the Trade Practlces Act 1974

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of a similar klnd to that engaged in in this particular case,

without exposing themselves to heavy penalties.

I This paiticular case demonstrates de r ne d the o

I those who wish to engage in conduct in contravention of ss.53A or

56(1l. F '

In Dawson v. World Travel Headquarters Pty. Ltd. (1981)

53 F.L.R. 455, Fisher J. had regard to a number of matters whlch

he enumerated at page 477. He referred to:-

"(a) The ob~ectives of the legislation and in

particular Its policy of consumer protection."

object of Parliament to punish those who engage in this conduct. In that regard it is important to bear in mind that it is not the engaging in that conduct.

He then referred to:-

"(b) The absence of fraudulent or dishonest intent and of deliberation on the part of the defendant. (c) The degree of negligence in its conduct. (d)

The extent of the carelessness and wilfulness of

its conduct. (e) The extent to which its conduct has or is likely to have prejudiced consumers. (f)

The efforts which it has made to correct the

situation. (g) The deterrent effect of the

conviction and fines."

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It is also important to note, however, that the fines

must not be oppressive in any particular case.

That is a matter of some concern in this case because

I

this case highlights the sentencing dilemma. On the one hand, I

am quite satisfied that the conduct engaged in was callous and

serious wrongdoing extending over a period of time, which was

engaged in solely for the purpose of profit. On the other hand,

the financlal resources of both of the respondents are meagre.

In the case of Michael Robertson, he is now 22 years

old. At the time of his involvement in these conLraventlons, he was then quite young and inexperienced in business. It is fair to say that he was seduced into the conduct engaged In by his

involvement with others in the real estate business wh re, so his I'

evidence suggests, conduct in which	he engaged was	a common
place.

He swore an affidavit deposing and exhibiting ten

advertisements similar in kind to the eleven with which these

proceedings are concerned, and there was tendered a further 70

advertisements covering a period of time which stops only a few days before the day of the hearing, and those advertisements, it

has to be said, are of the same character as those the sub~ ct of

these proceedings. While I accept that his youth and experience

are factors that really have to be taken into account, and while

I 18.

l I it is t-rw to say that the material of this kin' d th, at he eshih its

demonstrates that he is not alone in engaging in the conduct

proscribed by the Act, that material highlights the need for

deterrence.

l I

I

Because the financial resources of the corporate I

respondent are shown to be small, there is an element of

symbolism in the fines that I impose on that entity, but their

purpose is to demonstrate that the court views with very real	!
!.

seriousness, and will meet conduct which contravenes the consumer

protection provisions of the Trade Practices Act 1974 with

condign punlshment if needs be.

i

So far as the corporate respondent is concerned, in

respect of each of the nine informations laid against it and in

respect of which pleas of guilty have been entered and which I

accept, I impose a fine of $20,000. That means that the total of

the fines imposed on the company is $180,000.

So far as Michael Robertson is concerned, he, so the

i

* I

material shows, has little by way of assets. His only source of i

income at the moment is sickness benefits. I take into account

what has been said on his behalf by his counsel; in particular,

I have regard to the reports by Dr. Peter Mulholland, a

consulting psychiatrist. In his first report, dated 19 August

i

1986, Dr. Mulholland says that	in his view:-	I
L -

19.

"...Mr. Robertson has been suffering from a

depressive illness probably from about the ime in

the middle of December, 1985 when the charges were

first laid. He described feeling depressed,

gloomy, easily upset, withdracm, and frustrated

most of the time. (However later, when I informed

him that I thought he was suffering from a

depressive illness, he then chose to deny that he

L '

was depressed). "

. _

,

He referred to the fact that he was taking qulte excessive

dosages of various drugs, and in his report he later said:-

I

I ... 8 .

FThilst I am unfamiliar wlth the exacr: nature of I '

the charges laid agalnst him I do notlce that he i

went through a phase of disbelief and denlal when ! -

these charges were flrst laid. Slnce then he

would seem to be In a (sic) exerclse of projection

(i.e. blamlng) all manner of people for his l .

predicament various such as licitors,

accountants, management consultants, previous

employers, and previous employees. I am not in a

position to judge the correctness or otherwise of i

his blaming behaviour, however hls blaming of

others does seem to be excessive to me and It

enables him to avoid taking full responsibility for his actions. Of course this blaming of

others, i.e. projection, is not being totally

successful for him and indeed one would not expect

it to be so. At a subconscious or unconscious

level he is turning some of the psychic energy

back into himself by a process of retroflection

and this is why he is depressed. ..."

S.

I In his later report he refers the vi w to Mr. f I .

l Robertson that his mood will improve when the case is finished.

Dr. Mulholland also anticipates that that will be the case. He

!

later said:-	i
I
l

...

In my opinion, at the present time Mr. Robertson I.

is still suffering from an anvietyldepression ! '

neurosis of significant degree which one can

mostly conceptualise as a post traumatic stress

reaction or as an adjustment disorder as a

i '

presen his reaction to predicament.

Unfortunately this has become complicated by

sedative drug dependence."

He then views with some concern the fact that it may be some time before he will be able to get back to work.

The subjective features which apply in Mr. Robertson's

circumstances are weighty, but they have to be viewed against

conduct which I regard as very serious indeed. In respect of the

2 1 charges, the informations to which he has pleaded guilty and

I

which pleas I accept, I think an appropriate figure is to order that he be fined $1,000 on each charge. I do that in that sense

that a global figure of $21,000 has regard to the subjective

features of Mr. Robertson, while imposing a penalty of sufflclent

gravity to mark the court's disapproval of his conduct. But for

his youth, his inexperience, and his other difficulties,	he
would, in my view, have been quite properly exposed to fines

certainly greater than $5,000 on each charge.

The conduct was cynical, serious, deliberate, and

motivated by profit. It will be punished seriously in those

cases where it is demonstrated to have occurred.

I propose to order, subject to what counsel say, that

the respondents pay the taxed costs	of the informants, those
costs to be limited to ne-day.

I.

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