Hawkins v Price & Anor
[2004] WASCA 95
•13 MAY 2004
HAWKINS -v- PRICE & ANOR [2004] WASCA 95
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2004] WASCA 95 | |
| 13/05/2004 | |||
| Case No: | SJA:1015/2004 | 19 APRIL 2004 | |
| Coram: | SIMMONDS J | 19/04/04 | |
| 6 | Judgment Part: | 1 of 1 | |
| Result: | Remitted for rehearing | ||
| B | |||
| PDF Version |
| Parties: | BRUCE MICHAEL HAWKINS COLIN PRICE DIANA MARGARET PRICE |
Catchwords: | Consumer protection Unfair practices Pyramid selling schemes Definition of "promotion" Definition of "promotes" |
Legislation: | Fair Trading Act 1987 (WA), s 24(4), s 24(6) Interpretation Act 1984 (WA), s 19 Justices Act 1902 (WA), s 199 (1) |
Case References: | Nil Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Appellant
AND
COLIN PRICE
First Respondent
DIANA MARGARET PRICE
Second Respondent
Catchwords:
Consumer protection - Unfair practices - Pyramid selling schemes - Definition of "promotion" - Definition of "promotes"
Legislation:
Fair Trading Act 1987 (WA), s 24(4), s 24(6)
Interpretation Act 1984 (WA), s 19
Justices Act 1902 (WA), s 199 (1)
(Page 2)
Result:
Remitted for rehearing
Category: B
Representation:
Counsel:
Appellant : Mr R M J Lombardi
First Respondent : In person
Second Respondent : In person
Solicitors:
Appellant : Department of Consumer & Employment Protection
First Respondent : In person
Second Respondent : In person
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
Nil
(Page 3)
1 SIMMONDS J: This matter is an appeal from the decision of the learned Stipendiary Magistrate that the respondents in this case, Mr and Mrs Price, had no case to answer on a prosecution under s 24(4) of the Fair Trading Act 1987 (WA).
2 The appeal, as it was submitted to me by the appellant, came to me on a fairly compact and well-defined problem of statutory interpretation and was the subject of leave to appeal having been granted by McKechnie J earlier. The facts of this case are not, however, fully developed and so can only be stated on the basis of the prosecution case and, as will become evident, that case may well be qualified by subsequent developments.
3 The prosecution case was that there was a scheme called Abundance involving the recruitment of persons to make gifts to others who were themselves already participants. Donors could, through these arrangements, eventually become recipients themselves. The scheme involved a set of records being maintained by some one or more persons collectively at a number of points called the board master, a usage I will retain.
4 The records enabled participants to keep track of their status in their particular board. The respondents had, as far as emerges from the prosecution case, taken on the job of board master from a predecessor and had used a system involving email to and from participants that involved considerable traffic.
5 There was no direct evidence that the respondents had profited from any of this. There was no direct evidence that they themselves introduced the scheme to Perth, recruited people to it or informed anyone of the possibility of joining it or themselves participated in it as donors or recipients, but there was evidence that they had "introduced" some "two or three people" to the scheme, although there is no direct evidence that they or anyone else had signed up those persons.
6 The respondents at the close of the prosecution case submitted there was no case for them to answer. The learned Stipendiary Magistrate accepted this. He did so on the basis that there was no evidence before him that the respondents had ever introduced any new participants or informed anyone of the possibility of becoming a participant or attended a meeting or anything of the sort, as well as for a further reason I shall reach in a moment.
(Page 4)
7 Pausing at this point, it is hard for me to conclude, in light of the unqualified evidence as to "introduced" that I have previously referred to, that the learned Stipendiary Magistrate was correct in this view. One of the two grounds of appeal was that this was an error in a key fact. I agree and I would remit the matter to the Stipendiary Magistrate to permit the respondents the opportunity to raise whatever matters could properly be raised before him to qualify that evidence and to address its legal relevance.
8 The matter of its legal relevance goes to the learned Stipendiary Magistrate's analysis of the remaining evidence before him as to the role of the respondents as board master. This goes to the other ground of appeal of the construction of s 24 (4) of the Act used by the learned Stipendiary Magistrate.
9 The learned Stipendiary Magistrate saw his constructional task in terms of how to define "promotion" and "promotes" as well as the word "promoter". None of these words is defined in the Act except in a circular way in s 24(6) and only the first two terms, "promotion" and "promotes", are used in s 24(4) itself.
10 The learned Stipendiary Magistrate believed that all of the quoted terms should be given their ordinary, everyday meanings. The learned Stipendiary Magistrate referred to two sets of dictionary definitions, those in the Oxford English Dictionary and the Macquarie Dictionary. He was of the view that the Oxford English Dictionary's definition of "promotion" in terms of "to further anything" was, at least at first glance, wide enough to catch the board master activity in the prosecution's case.
11 However, he also noted the Macquarie definitions included, apart from a furtherance part, "activity designed to increase public awareness of, and hence the sale of, a product". He went on to consider authority on the understanding of "promoter" in corporate law, which he appears to have concluded offered some support for the view that the terms I have quoted in the Fair Trading Act meant "encouragement" of the scheme "in the sense of drawing in participants".
12 This, in his view, meant a merely "reactionary role" of the sort he identified with that of board master was not included. I should note that it would not be so straightforward to exclude the evidence as to introduction, understood at this preliminary stage as favourably to the prosecution as a submission of no case to answer requires.
(Page 5)
13 I consider that the learned Stipendiary Magistrate's construction of "promotion" and its related terms was too narrow, however. The authorities on corporate law understandings, discussed briefly in Ford HAJ, et al, Ford's Principles of Corporations Law, 11th ed (2003), [5,270], indicate that taking an active and substantial part in the organisation of the venture, including a non-corporate one, is sufficient for these purposes.
14 Here there is reason to take an even wider view. It is that s 24(4) refers to "promotes or takes part in the promotion of" a scheme. The original complaints are framed in terms of the latter phrase. The additional words "takes part in the promotion" seem to me to suggest that more is intended to be caught than the corporate law concept of being a promoter.
15 It thus seems to me that the statutory context does not appear to require the restriction of the promotion or take part in the promotion idea to advertising or similar activity. This is because of the broader meanings the dictionary sources use, the approach adopted to "promoter" in corporate law, and the apparent purpose of s 24(4) which was stressed by the appellant. That purpose appears to be to stamp out pyramid trading schemes. Reaching them before advertising has begun or participants have been recruited would seem to me to be part of this.
16 On this basis, however, the question then becomes where to draw the line, which appears to be important to the further proceedings in this matter including factual development both in respect of the board master and introduction aspects I have referred to. In my view, assistance can be drawn in this respect from the corporate law authorities particularly.
17 The line should fall short of those more ministerial or advisory acts which in ordinary language would not be called "promotion" or "taking part in promotion". Various examples were discussed in argument. One was the simple anonymous recording of details and mailing of details to participants without any meaningful role in the design or origination of the recording system or the mail-out or any responsibility for a meaningful part of scheme activity that might be represented by such recording system of mail-out. Another was introducing persons to the scheme so they could advise on the scheme's lawfulness.
18 Whether or not, for example, the board master activity is accurately to be described in the recording and mail-out terms I have used or the introduction instances in terms of the information for advice terms that I
(Page 6)
- have also used awaits further analysis against the backdrop of whatever factual development is properly made on the further hearing of this case.
19 I should add that my analysis of the meaning of "promoter" or "take part in promotion" in s 24(4) has had to be conducted without the benefit of any relevant authorities on this provision or its counterparts elsewhere in this country or overseas, or extrinsic material on the provision of the sort the Interpretation Act 1984 (WA) s 19 allows. I am not aware of any such material and counsel for the appellant informed me that their research had not turned up any.
20 The analysis that I believe now needs to take place should, I have determined, take place following a remission of the matter to the learned Stipendiary Magistrate who ruled on the initial no case to answer for rehearing in accordance with my judgment, under the Justices Act 1902 (WA) s 199 (1)(d).
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