Healy v Commissioner for Consumer Protection - [2010] WASC 177

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: HEALY -v- COMMISSIONER FOR CONSUMER PROTECTION [2010] WASC 177

CORAM: EM HEENAN J

HEARD: 18 JUNE 2010

DELIVERED : 22 JULY 2010

FILE NO/S: SJA 1001 of 2010

MATTER :Criminal Appeals Act 2004 (WA), pt 2

BETWEEN: ALWYN ROBERT HEALY
Appellant
AND
COMMISSIONER FOR CONSUMER PROTECTION
Defendant

ON APPEAL FROM:
Jurisdiction              :  MAGISTRATES COURT OF WESTERN AUSTRALIA
Coram  :MAGISTRATE W TARR
File No  :PE 22584 of 2009, PE 22585 of 2009

Catchwords:

Consumer protection - Application for leave to appeal - Appeal - Representation as to future matter - Lack of reasonable grounds for truth of representation - Fair Trading Act 1987 (WA), s 12(1)(e)

Legislation:

Fair Trading Act 1987 (WA), s 9, s 12(1)(e)
Sentencing Act 1995 (WA), s 39, s 45

Result:

Application for leave to appeal against convictions on proposed grounds 1 and 2 refused
Leave to appeal against convictions on proposed ground 3 granted
Appeal against convictions dismissed
Application for leave to appeal against sentence granted
Appeal against sentence dismissed

Category: B

Representation:

Counsel:

Appellant: In person
Defendant: Mr J L Derby

Solicitors:

Appellant: In person
Defendant: Department of Commerce

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

Samuels v The State of Western Australia [2005] WASCA 193; (2005) 30 WAR 473

EM HEENAN J: On 15 and 16 October 2009 his Honour Magistrate Tarr presided over a trial of the appellant on three charges alleging offences against s 12(1)(e) of the Fair Trading Act 1987 (WA). These alleged that the appellant had, in trade or commerce, and in connection with the supply of an air conditioning system to each of the three customers, represented that the air conditioners had a use that it did not have, namely that it could be used for heating. The events giving rise to the charges occurred in the period September 2007 to February 2008. The charges were respectively numbers PE 22584 of 2009; PE 22585 of 2009; and PE 22586 of 2009. For reasons delivered by his Honour on 6 November 2009 charge number PE 22586 of 2009 was dismissed, but the appellant was convicted on the remaining two charges. Further proceedings were then adjourned to 7 December 2009 and on that date, after hearing further submissions in relation to penalty, the learned magistrate imposed a global penalty for both charges consisting of a fine of $4,000 and ordered the appellant to pay costs of $7,029. In doing so his Honour also refused to make spent conviction orders as sought by the appellant.
By notice dated 4 January 2010 the appellant seeks leave to appeal against these two convictions and against the sentence imposed.
On 28 April 2010 Jenkins J gave leave to the appellant to amend the notice of appeal to include a ground of appeal against sentence in relation to the refusal to grant spent conviction orders, and also to amend the notice by substituting new grounds of appeal. Her Honour directed that the application for leave to appeal should be heard at the same time as the appeal.
The proposed grounds of appeal as amended are:
(i)The Magistrate erred in fact in concluding that, at the time the appellant represented to the complainants that a dual cycled system would be installed that the appellant knew that the system would be installed without a heating capacity.
Particulars
(a)The appellant gave un‑contradicted evidence that at the time of installation of the complainant Ferguson's system there was [were] solar fans available in Perth and they were installed on similar contracts just prior and just afterwards. A further 20 solar fans were in Melbourne ready for despatch to Perth. The appellant's supplier did not have a fan available on the day of the Ferguson installation and the customer was notified by the contractor of that on the day of installation. The two contracts the subject of the convictions were identical contracts and installations to that of the complainant Ferguson. The appellant knew that 20 solar fans were in stock in Melbourne to satisfy the contracts at the time of their formation. Due to cash flow difficulties, just prior to the installation dates the fans were not available on the date of installation. The appellant notified the contractor, Total action, on the installation schedules faxed the night before the installation dates, the same way as he did for the complainant Ferguson. Both complainants, Snowden and Crabb asked about the heating on the day of installation. On the basis of the evidence, the response from the contractor was vague. The contract with the contractor was to install and commission the cooling and heating systems and demonstrate both systems to the customers. Any short supply, as with Ferguson, had to be reported to the customer by the contractor. The contractor was not called to give evidence and the evidence from the customers was insufficient to conclude if they were aware of the short supply on the day of installation.
(b)There was no reason to distinguish in fact and law between the representations made to Ferguson, which was found not be incorrect, and the representations made to the other two complainants.
(c)The Magistrate gave no or insufficient reasons for not accepting the appellant's evidence about his belief at the he made the relevant representations.
(ii)The Magistrate erred in finding that the appellant had said that he was unaware of the installations not being complete and then using the findings to discredit him as a reason to distinguish between the cases of Ferguson on the one hand and Crabb and Snowden on the other.
(iii)The Magistrate erred in finding that a problem of supply was a basis for making representations relating to use.
(iv)The Magistrate erred in failing to grant spent conviction orders.

Background

At the material times the appellant was a sales executive for a firm trading under the name Aircon Factory Direct. Until April 2007 that was the business name recorded for Skye Blue Pty Ltd, the sole director and shareholder of which was Sandra Ann Healy, the wife of the appellant. That company acted as a trustee for the Skye Blue Family Trust. However, certified extracts from the records of the Department of Commerce tendered in evidence showed that Skye Blue Pty Ltd had been deregistered on 26 August 2007 and that the business name was deregistered on 9 April 2007. Nevertheless, the business name Aircon Factory Direct was re‑registered on 15 October 2007 with the appellant being the sole proprietor and the person carrying on the business, which was noted to be that of domestic air conditioning.
According to a statement made by the appellant to investigators from the Department of Commerce on 30 April 2009, the appellant was employed by Skye Blue Pty Ltd as a sales executive between 30 September 2007 and 17 February 2008. During that period Aircon Factory Direct advertised in The Sunday Times Magazine on a regular basis offering the installation of air conditioning systems and, in particular, two distinct varieties of systems, one being entirely a cooling system and another being a combined heating and cooling system. As advertised the heating and cooling system consisted of a cooling unit (evaporative cooler) and a heating unit (Solectair Patented Solar Heating unit), which deliver either cool air or heated air through a series of ducts and fittings connected to all occupied rooms of the home where installed. The appellant informed the investigators that over the eight years preceding April 2009 he had been directly and indirectly involved in the sale of approximately 2,800 ducted heating and cooling systems as he has described. He did not dispute that he was the sales executive who negotiated and agreed upon the contracts for the installation of the air conditioning/heating systems in the three cases which were the subject of the prosecutions and each of these involved the supply and installation of a combined heating and cooling system.
The procedure followed by the appellant as sales executive for Aircon Factory Direct was substantially the same in each of these three instances. A homeowner or customer would contact Aircon Factory Direct, presumably in response to the advertisement, and inquire about the supply and installation of an air conditioning and/or heating system for his or her home. The appellant would then visit the person making the inquiry at the home, discuss the products, inspect the premises, and give a written quotation for the proposed works taking into account the individual requirements of that customer. Usually the customer would ask for some time to consider the quotation and then, if deciding to proceed, would contact the appellant with instructions to proceed. Then a formal contract known as a purchase contract for the supply of the selected equipment at the cost agreed would be prepared and agreed. This specified the particular equipment or units required, their capacity, the cost and an exact or sometimes an approximate installation date and would refer to the quotation which had preceded the contract. Often, but not invariably, a 50% deposit would be paid by the customer at that point.
However, Aircon Factory Direct did not manufacture or hold in stock for sale the air conditioner or heating units advertised. Nor did it actually install them. When such a contract was agreed upon, the appellant on behalf of Aircon Factory Direct, would order the particular unit or units and other necessary equipment and ducting from other suppliers and when these orders became available would engage subcontractors to carry out the installation at the customer's home. Aircon Factory Direct was, therefore, dependent upon the timely supply of the particular equipment from external sources in order to meet its obligations to install the equipment at the customer's home. Then, as already indicated, the installation would not be done by Aircon Factory Direct or any of its staff but by subcontractors whom it engaged for this purpose. From this, it is apparent that the appellant and Aircon Factory Direct were, despite the legal obligations assumed under the contract with the customer for the supply and installation of the machinery, not involved in the actual physical delivery of the unit, associated equipment and ducting or in their installation.
In relation to the combined air conditioning/heating systems involved in each of these cases, the heating system was dependent upon the presence and operation of a circular rotating fan which would convey heated air from the heating unit into the roof space of the home where the system was installed. The heat generated by the warm air in that air space would then be transmitted into the interior of the home and take effect as required. Without the rotating fan to circulate the heated air the heating function of the combined unit would not operate. The associated, but separate cooling system, could operate but the heating unit could only be brought into effective operation by the supply and installation of the rotating fan.
In each of the three cases, the subject of these prosecutions, the problem encountered was that circular fans of the proper dimensions for the heating units were not available nor did they become available by the time of installation. This was not immediately made known to the customers.
Each of the three orders for the installation of the combined air conditioning/heating systems in those cases were placed by the customer during the summer months. However, in none of the three instances was the necessary circular fan for the heating unit installed and, accordingly, the heating component, as distinct from the cooling component, could not function. It seems that the appellant believed that the absence of a heating component in the dual system was unlikely to be an inconvenience at that time of year when installation of the three sets of combined systems went ahead on or shortly after the agreed installation dates. One assumes that the intention of Aircon Factory Direct was that, as soon as possible, the necessary circular fans would be obtained and installed so that within a relatively short time, that is, before the onset of the cold weather, the system would be fully operational and have the desired dual cooling and heating functions.
As matters turned out, however, this did not occur and despite the subsequent availability of circular rotational fans of the correct dimensions for the heating units, these were not procured, delivered or installed.
Time passed; the customers became dissatisfied; inquiries by them were made of Aircon Factory Direct but neither the appellant nor anyone else on behalf of the business took steps to remedy the situation. Eventually, the customers complained to the Department of Commerce; an inquiry was instituted; the appellant was interviewed; and was eventually charged with these alleged offences.
In each case, the charge was laid under s 12(1)(e) of the Fair Trading Act which provides:
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 ‑
…
(e)represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have;
The provisions of this section must be read and applied in conjunction with the provisions of s 9 which provide:
9. Interpretation (TPA s. 51A)
(1)For the purposes of this Part [Part 2, which includes s 13], where a person makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the person does not have reasonable grounds for making the representation, the representation shall be taken to be misleading.
(2)The onus of establishing that a person had reasonable grounds for making a representation referred to in subsection (1) is on the person.
(3)Subsection (1) shall not be taken to limit by implication the meaning of a reference in this Part to a misleading representation, a representation that is misleading in a material particular or conduct that is misleading or is likely or liable to mislead.
Accordingly, the focus of the three charges against the appellant was that by entering into the contracts for the supply and installation of a combined cooling and heating air conditioning system Aircon Factory Direct, by the appellant, represented that the system as installed would have the performance characteristics described in the quotation and in the contract, including suitability for use as a cooling and as a heating system. The prosecution set out to establish that, when installed, none of the three combined units had an operating heating system and that there had, therefore, been a false representation as to the performance characteristics, uses or benefits of the system. Insofar as the representation constituted a representation as to any future matter, in this case, the future installation of an operational combined cooling and heating system, the prosecution alleged that the appellant did not have reasonable grounds for making the representation that the system ordered by each customer would have that dual function from the date of installation onwards. The effect of s 9(1) and (2) in this situation is that unless the appellant established that he had reasonable grounds for making the alleged representation as to the future effect of the system when installed, his representation as to the combined cooling and heating functions of the systems to be supplied would be taken to be misleading.
It is, therefore, immediately apparent that the question of whether or not there was any false representation as alleged, including, in relation to any future matter, whether or not reasonable grounds were held by the maker of the representation for making it, needs to be considered at some ascertained point or period. Equally obviously, that time will be when the representation or representations were made. In some cases, however, representations which are made will have, and will be intended to have, a continuing effect. The case of a representation concerning goods or services to be supplied in the future, whether about the characteristics and functions of an air conditioning/heating system or the capacities of a motor vehicle, some other piece of machinery or commodity to be delivered in the future, it will, as here, usually be the case that the representation, having initially been made, will continue to have effect until the delivery or installation of the item or commodity concerned and even after then until there has been sufficient opportunity to ascertain whether or not it conforms to the representations made.
In cases where there is a representation made about the performance or characteristics of some item or commodity to be delivered in the future, it may be that the representor has reasonable grounds for making the representation at the time when it is first made but, before the time of delivery or performance arrives, circumstances change rendering it impossible to satisfy the representation either entirely or partly. In such instances, the accepted approach is that the representor should, as soon as practicable after the change in circumstances, advise the representee that the representation can no longer be met or fully met and, in those changed circumstances, for the parties to consider what, if any, adjustments need to be made to their mutual arrangements. This is on the assumption that the representor did have reasonable grounds at the time of making the original representation because, if he did not, subsequent intervening events would not affect the falsity of the original representation.
These considerations make it important, in any prosecution such as these, to identify the representation or representations alleged to have been made; to specify when or approximately when they were made; and, in the case of continuing representations, if there is alleged to be a failure to advise the representee of material changes in circumstances, to specify the period during which the representations continued to have effect and when any corrective action should have been taken because of an intervening change in circumstances.
In these three cases, comparatively little attention was given to these temporal issues. This has made this review of the cases rather more difficult than might otherwise have been the case, but it is still sufficiently clear what has been alleged and when were the periods during which the question of the falsity of the alleged representations made must be considered.

The three charges

The order of the charges as laid is not chronological. Because of the significance of timing and because of the factors just mentioned concerning the timing and duration of alleged representations, I have, in these reasons, reordered the sequence of charges and have put them in chronological order. They are, therefore:
(1)Number 22586 of 2009
Between 30 September 2007 and 10 November 2007 at Wattle Grove, Alwyn Robert Healy, in trade or commerce, in connection with the supply of an air conditioner to Casey Louise Ferguson, represented that the air conditioner had a use that it did not have, namely that it could be used for heating, contrary to s 12(1)(e) of the Fair Trading Act [the Ferguson charge];
(2)Number 22584 of 2009
Between 31 December 2007 and 13 February 2008 at Marangaroo and elsewhere Alwyn Robert Healy, in trade or commerce, in connection with the supply of an air conditioner to Noelene Georgina Snowden, represented that the air conditioner had a use that it did not have, namely that it could be used for heating, contrary to s 12(1)(e) of the Fair Trading Act [the Snowden charge];
(3)Number 22585 of 2009
Between 31 December 2007 and 17 February 2008 at Bayswater Alwyn Robert Healy, in trade or commerce, in connection with the supply of an air conditioner to Sally Louise Crabb, represented that the air conditioner had a use that it did not have, namely that it could be used for heating, contrary to s 12(1)(e) of the Fair Trading Act [the Crabb charge].

It was the first in time of these charges, namely, the Ferguson charge, which the learned magistrate dismissed.
The learned magistrate found, and it is not now contested, that notwithstanding that Mrs Healy was recorded as the sole director and shareholder of Skye Blue Pty Ltd, the appellant was responsible for advertising, quoting, completing contracts, setting prices, programming the supply and installation, ordering of supplies and arranging of subcontractors to do the installing of any air conditioning units sold.
In his reasons for decision the learned magistrate made findings about how the air conditioning systems were ordered by each of the three customers and the subsequent installations. His Honour's findings in these respects were:
All three chose the Dual Cycle System with an expectation they would have installed a system that included heating and cooling.
They each paid the deposit of 50% of the total cost on the day they signed their respective contract and agreed to pay the balance on the day installation was completed.
The Celair Dual Cycle System is a Celair Evaporative (Cooling) System with an added option incorporating a fan fitted in the existing ducting, electronic sensors and a transfer station which then has the capacity to provide solar heating. The cost of the added heating option, according to the accused, was $550.
It is the evidence of all three complainants that Celair Evaporative (Cooling) Systems were installed in their respective premises but because, as they have since found out, components which were required to provide a heating capacity were not installed, their systems do not provide a heating cycle. In fact, the required components have still not been installed and their systems only provide cooling.
Noelene Snowden, the complainant in the first charge [the second charge in the order set out above], gave evidence of accepting the accused's quote for the Dual Cycle system after having been given a quote for all three types. Her expectation, based on what the accused had told her, was that the air conditioning system to be installed would provide cooling and heating. She paid $3100 deposit on the 7.02.08, and the balance of $3100 on the day of installation. She asked the installers about heating and they referred her to the operating manual.
She said it was in the winter that she realised the system had no heating. She attempted to discuss the problem with the accused but he was never available and never responded to messages left with his receptionist. The system still has no heating capacity.
Sally Crabb is the complainant in the second charge [third charge in the order set out above]. Her evidence was similar to Noelene Snowden's. She contracted with the accused to have a Dual Cycle system installed and was expecting a system which provided cooling and heating. After installation of the system she asked an installer how the system worked and was told he was not sure about the heating and she would have to ask the accused. She had paid the 50% deposit to the accused and the balance on 15.02.08, the day the system was installed. It was in May of 2008 when she tried to engage the heating cycle and found the system would not heat. She made many attempts to contact the accused without success and finally, in her words, 'gave up'. The heating components have still not been installed.
Both Sally Crabb and Noelene Snowden believed they had ordered and paid for a system which would provide cooling and heating when installed and had no idea until they wanted to use the heating cycle some months later that there was a problem.
Casey Ferguson, the complainant in the third charge [the first charge in the order set out above] gave similar evidence as the other two complainants. She paid a deposit on the 25.10.07 and the system was installed on the 8.11.07. Unlike the others, she asked the installers about the heating cycle and was told that some of the heating components were out of stock and they would come back in a fortnight to install them. They deducted an amount of $575 from the payment due. That amount was to be paid after the heating components were installed. To date they have not been installed, despite many attempts to contact the accused and a successful court action.
His Honour then went on to identify what he took to be the essential issues in the prosecutions and, with respect, in my view, was correct in doing so, saying:
It is fundamental to the accused's defence that at the time of entering into the contracts with the three complainants that he had an expectation that he would be supplying the systems they agreed to buy and have installed. He claimed he was not aware at the time of installation that the air conditioning systems did not have the components for heating. Nor was he aware there was a problem with supply of those components. He blames the contractors for not advising the complainants and with at least two of them not asking them to withhold $550 from the final payment.
My assessment of the accused from the video record of interview and his conduct in Court is that he is no fool. My view is that he had total control of the activities of the business and would have known exactly what was and should have been ordered for each customer. I find it difficult to accept he didn't know whether final payments were made or how much each was.
I also don't accept that at the time of contracting with at least Noelene Snowden and Sally Crabb that he could have had a genuine or honest and reasonable belief that all the components for the heating cycle of their systems would be available. I come to that conclusion because the problem of supply was apparent with the Ferguson contract on 8 November 2007 and that problem had not been resolved at the time of negotiating with Snowden and Crabb. In fact, it was months after that the components became available and even to date have not been installed.
For the accused to say he was unaware of the installations not being complete is not credible.
In relation to the charge where Casey Ferguson is the complainant and where an amount was held back because the heating components were not available on the date of installation, I can not be satisfied to the required standard that there was knowledge at the time of contracting with her that the accused was aware that there would be a supply problem. In any event, the problem was identified on the day of installation, although it has not been rectified some 2 years later. For these reasons, that charge must be dismissed.
Dealing with the other two, I have no hesitation in finding that both complainants entered into their contracts expecting that when the systems were installed they would be the dual cycle systems and would provide both cooling and heating. I accept that neither was shown the brochure Exhibit H2 which explained the heating method. Their expectation was based on representations made by the accused. He made those representations with the knowledge there were supply problems and there is an irresistible inference that he knew the systems were going to be installed without a heating capacity. He accepted the full payment from them both with that knowledge and has done little since to rectify the problems despite numerous frustrating attempts by the complainants to contact the accused. The accused was competent to make the representations during negotiations and at the time of completing the contracts and was a person subject to the provisions of s 12 of the Act. It was then that he made those representations and did nothing to qualify those representations before or soon after the systems were installed and paid for.
I find the accused did represent that the air conditioners supplied to the remaining two complainants had a use that they did not have and that the charges are proven.
These passages clearly demonstrate that his Honour correctly identified the critical representations as being to the effect that the air conditioning systems as ordered and as to be installed would have a dual cooling and heating effect. It is equally apparent that his Honour correctly identified the representations as having been made at or shortly before the time when each of the three contracts was entered into by the three customers and the initial 50% deposits paid. His Honour also, again correctly in my respectful view, has treated the representations as having continuing effect up to the respective dates of installation and, thereafter, until the customers were able to discover that the heating functions were not operational. His Honour has expressly found that, in the case of the Snowden and Crabb charges, nothing was done to alert the customers to the problems which had already been experienced in the earlier Ferguson case of obtaining the components for the heating operation either at the time that the contracts were entered into or at any other time. In each of those instances, the customer was not aware of the non‑operational heating function until months after the installation and each had paid the full contract price without deduction.
The distinguishing feature about the Ferguson charge was that it was the first contract in time, of these three, when problems in obtaining the circular fan for the heating system were experienced; that Mrs Ferguson herself became aware that the heating in the system was not operating at the time of installation but, nevertheless, accepted the installation on a basis of a reduction in the payment then due until eventual installation of the heating componentry, all discussed with the installer. His Honour, very properly conscious of the high standard of proof, was not prepared to infer that there was an absence of reasonable grounds for the appellant to believe at the time that the Ferguson representation was made and continued until installation, that he would be able to arrange for the delivery and installation of a fully functional dual system. However, his Honour expressly found that by the time of the Snowden and Crabb contracts, and certainly by the time for the installation of the systems for those two customers, the appellant was aware of supply problems of the componentry for the heating function of the combined systems, and that he was also aware that both those customers had paid the final 50% of the full contract price on the day of installation without deduction for the absence of an operative heating function in their respective systems. He positively disbelieved the appellant's evidence that he was unaware of the installations not being complete at those times.
The learned magistrate did not provide written reasons for his decision on the penalty imposed. However, his Honour did address the issue of penalty in detail and his Honour's observations are recorded in the transcript of the original proceedings. At page 8 of the transcript of 6 November 2009 his Honour mentioned that one of the reasons for adjourning the sentencing was to allow the complainant the opportunity of attempting to remedy the still existing defects before the imposition of any penalty if that were possible because doing so may be a significant demonstration of remorse or of activity which might compensate the customers. There was uncertainty as to whether or not the customers would be willing to allow the appellant to attempt such remedial activity but his Honour adjourned the proceedings for a further month to allow any such possibilities to be investigated.
The hearing resumed for sentencing on 7 December 2009. By then none of the remedial work had been done but counsel for the appellant informed the court that arrangements had been made for the appellant to carry out the remedial work within the next few weeks and that, for various reasons, the rectifications had not been possible before the sentencing date. His Honour was informed that the Department of Commerce had further proceedings pending against the appellant in this court, the Supreme Court of Western Australia, arising from his conduct in relation to these particular matters and that these proceedings involved potential adverse consequences for the appellant. Submissions were made on the appellant's behalf by counsel in mitigation and, in view of his previous good character, counsel submitted that a spent conviction order under s 45 of the Sentencing Act 1995 (WA) should be made.
His Honour then gave reasons for the sentence which he imposed (transcript of 7 December 2009, page 6) and these observations included the following:
These units were installed towards the end of 2007 or early 2008, and I'm told today that nearly two years later the problems with the installation have still not been rectified ‑ and as I was about to say, that it seemed, from what I heard in evidence, that the accused was not following up these installations, as a reasonable supplier of air conditioning equipment would normally do ‑ I would have thought, or I would expect they would do. The customers left numerous messages with the accused's secretary, and he didn't get back to them.
In relation to the spent conviction order, I think there's ‑ it's in the public interest that where there is a charge involving consumer protection legislation that a spent conviction order is not appropriate. Just stand up, Mr Healy. What I propose to do ‑ there's a global penalty of $6000. You'll be fined $4000 by way of a global penalty. I'll make an order that you pay costs of $7029 ‑ and in relation to the one on which you were successful, there'll be an order under the Official Prosecutions (Accused's Costs) Act in the sum of $2500.
Read in context of the submissions made, it is evident that his Honour was not satisfied that there was any real demonstration of remorse by the appellant because of the long time which had elapsed during which the remedial work had not been undertaken. His Honour also considered that, having regard to the nature and public policy underlying the Fair Trading Act, a conviction for such an offence would not usually be suitable for a spent conviction order to be imposed. There is no application for leave to appeal from the imposition of the $4,000 fine. Rather, the application is only in respect of the refusal of the spent conviction order.

Application for leave to appeal

By virtue of s 9(2) of the Criminal Appeals Act 2004 (WA) this court must not grant leave to appeal in respect of any proposed ground of appeal unless there is a reasonable prospect of that ground succeeding. This requirement was examined by the Court of Appeal in Samuels v The State of Western Australia [2005] WASCA 193 [56]; (2005) 30 WAR 473, 487 where it was held that to satisfy the requirements of s 9(2) there must be a rational and logical prospect of the proposed ground of appeal succeeding, that is, leave to appeal should not be granted on a ground that is irrational, fanciful or absurd.
Counsel for the respondent has submitted that there is no rational or logical prospect of success on proposed grounds of appeal numbers 1 or 2 and, for that reason, that leave to appeal on those grounds ought not be granted. Counsel for the respondent, however, did not oppose a grant of leave to appeal in respect of proposed grounds 3 and 4 of the amended notice of appeal but, nevertheless, submitted that if leave were given an appeal on those grounds ought be dismissed.
For reasons which follow, I would refuse to grant leave to appeal on proposed grounds 1 and 2 but give leave to appeal on proposed grounds 3 and 4.

Ground 1

In relation to the first proposed ground of appeal, it is clear that his Honour was satisfied and concluded that there were no reasonable grounds for any belief by the appellant of being able to supply a fully functioning cooling and heating system for the Snowden or Crabb contracts. This finding did not depend on what was the appellant's actual state of knowledge but, instead, what a reasonable belief in those circumstances would have been. His Honour was right to identify and apply this objective test. That was a finding which was fully justified by the difficulty already experienced in obtaining components for the heating system on the earlier Ferguson contract. The onus of establishing reasonable grounds for a belief justifying the representation rested upon the appellant, and his own evidence on this was rejected by his Honour as not being credible. There had been no evidence adduced of any attempts made by the appellant at the time the Snowden and Crabb contracts were entered into and the respective dates of installation of the air conditioning/heating systems required by those contracts to ensure that the essential circular fans would be readily available or might be obtained from other sources in time for the installation dates.
The learned magistrate was left with a situation in which a representation as to the availability of certain equipment had been made, more in hope than in justification, and where nothing had been done to overcome the supply problems experienced on an earlier job of a similar nature. The representation had been made by the appellant. The failure of his subcontractors to mention the problems to the customers at the time of installation did not relieve him from the consequences of having made the original representations without reasonable cause.
These two charges involving the Snowden and Crabb contracts were distinguishable from the events which had transpired with the Ferguson contract. The representations made in these two contracts were made after the problems of obtaining the componentry for the heating system had been experienced on the Ferguson contract and in circumstances where his Honour was satisfied that the problems in procuring the heating componentry must have been known to the appellant because of the reduction in the payment of the balance of the purchase price negotiated between Mrs Ferguson and the installers. His Honour was satisfied that this must have come to the knowledge of the appellant.
Furthermore, in relation to the Snowden and Crabb contracts, the evidence was that the appellant had not received any supply of heating components from one of his two suppliers, Hearth House, since about 22 November 2007 (transcript of 15 October 2009, pages 46 and 48) and that a 415 mm diameter fan was required for both jobs, and at the time of the Snowden and Crabb contracts the appellant's firm had not received any such fan for approval, let alone supply or installation (transcript page 55). His Honour made express reference to 'supply problems' in his reasons and the appellant's own evidence about these matters supported that conclusion.
In relation to the proposed particular that his Honour did not give sufficient reasons for rejecting the appellant's evidence about his belief at the time that he made the relevant representations, there is no substance in this contention. There was no doubt that problems in obtaining essential supplies for the heating componentry had occurred on the prior Ferguson contract and his Honour was satisfied, from his review of the management arrangements of the business of Aircon Factory Direct, that this reduction in payment had come to the knowledge of the appellant. Again, the onus of establishing a basis for a reasonable belief for the representation as to future matter made by the appellant rested upon him. His Honour's reasons clearly reveal that the appellant did not discharge this. There were, therefore, ample reasons given for his Honour's conclusion on this aspect of the case.

Ground 2

In relation to the second proposed ground of appeal, it is obvious that this fails to address any relevant issue. The point of importance is whether, at the time the representations were made in respect of the Snowden and Crabb contracts, there were reasonable grounds in existence for the appellant to believe that he could install a dual functioning cooling/heating system at each residence as at the due dates of installation. As already explained, the problems in achieving supply of the heating componentry for the Ferguson contract had, by then, occurred and they were the supply problems which the appellant himself acknowledged. The appellant appears to be labouring under the unjustified belief that his attempted communications with the subcontractors on the eve of the Snowden and Crabb installations, communications which were not conveyed to the customers, somehow relieved him from the responsibility of making the representations at the times when those contracts were made without reasonable grounds.

Ground 3

I turn now to ground 3 of the appeal in respect of which the respondent acknowledges that leave to appeal should be granted. This asserts that his Honour erred in finding that a problem of supply was a basis for making representations relating to use. It is difficult to understand how, in the circumstances of this case, this ground could be expected to succeed.
The supply and installation of a dual cooling and heating air conditioning system as agreed by the appellant with Mrs Snowden and Mrs Crabb, involved the sourcing of all the components by the appellant's firm from elsewhere. The business conducted by Aircon Factory Direct did not involve that contractor having any stock on hand. As explained, the business system was that, upon obtaining a contract for the supply of designated equipment, an order would be placed with a supplier for the despatch of the components, which would then be installed by subcontractors. The contractual obligations could not be met unless the suppliers were in a position to deliver the necessary componentry and to do so in time for the agreed installation date.
In his written submissions, when addressing this ground, the appellant contended that s 12(1)(e) of the Act relates to representations made that goods have uses they do not have, namely heating, and he then submits that the case against him was the appellant had made representations that the systems to be supplied to Crabb and Snowden had a heating function which they did not have. That is not the way in which the prosecution case was conducted or the trial proceeded. The allegation was that, at or before the time of the contract, the appellant had made a representation to both these customers that the selected system when installed would have a heating and cooling function and that, having regard to previous supply problems, there was no reasonable ground for him to contend that he would be able to supply a system with a heating function at that time. The appellant's written submissions in this respect proceed to assert:
The representation made by the appellant was that on install of the three items, the system would both heat and cool the complainant's home. On the install day a part (Solar fan) was unavailable from the supplier. The balance of the Solar Heating system, including electronics and air transfer, were installed. The Magistrate has concluded that the appellant made representations with the knowledge there was supply problems and there is an irresistible inference that he knew the systems were going to be installed without a heating capacity. This inference has no credibility as major parts of the solar system were installed waiting for the solar fans to be delivered from the suppliers. The Magistrate erred by concluding that the appellant had complete control of the availability of all the parts that make up the total system. All Airconditioning Retailers, including the appellant do not carry stock of product. They rely on suppliers to carry sufficient stock to supply on request. 12(1)(e) relates to uses not supply.
These submissions failed to address the point of the case against the appellant and also failed to recognise the combined effect of s 12(1)(e) read with s 9 of the Fair Trading Act. If, as in these two instances, representations are made to install an air conditioning system which has both heating and cooling functions on a due date, then the representation conveys the meaning that the system when installed will have that dual cooling and heating use and, importantly, that the representor has reasonable grounds for believing, as at the date of the representation, that he will be able to supply and install such a system on the due date. There is no basis for the distinction asserted by the appellant in the submissions and this ground of appeal must be dismissed.
In further written submissions which, however, do not address this ground specifically but which attempt to raise a general argument on behalf of the appellant, there are further attempts to assert that the appellant could not be liable in respect of delays or failure to install a dual cooling and heating system if those delays or failures were due to supply problems because he had, for a long period, adopted a policy of withholding moneys against short supply of parts. This submission is just another example of the appellant failing to appreciate that the representations which he made by entering into the contracts with these customers were not only to the effect that, when properly installed, the air conditioning system would have both cooling and heating functions, but that he had reasonable grounds for representing that such a dual functioning system would be available and would be installed at the time of the agreed installation date. There was nothing in his dealings with either Mrs Snowden or Mrs Crabb, or in the contracts which the appellant negotiated with them on behalf of Aircon Factory Direct, which made the obligation to deliver and install the agreed system conditional upon the availability of parts or any other factor.

Ground 4

The applicable provisions relating to spent conviction orders are found in s 39(2)(a), (b), (c) and (d) and s 45 of the Sentencing Act. The criteria for the availability of such an order are specifically identified by the statute. Section 45 provides:
45. Spent conviction order: making and effect of
(1)Under section 39(2), a court sentencing an offender is not to make a spent conviction order unless ‑
(a)it considers that the offender is unlikely to commit such an offence again; and
(b)having regard to ‑
(i)the fact that the offence is trivial; or
(ii)the previous good character of the offender,
it considers the offender should be relieved immediately of the adverse effect that the conviction might have on the offender.
The requirement of s 45(1)(a) must be present and one or both of the factors identified in s 45(1)(b) must lead the court to consider that the offender should be relieved immediately of the adverse effect that the conviction might have.
These offences could not in any way be regarded as trivial. They were misrepresentations which occurred in trade and commerce in the course of commercial contracts of some significance for any householder. The disruption and inconvenience suffered by the customers is evident by the long periods which have elapsed without the desired heating functions of the systems being provided. The appellant, as found by the learned magistrate, paid little regard to the complaints repeatedly made by these customers and, from the manner in which the proceedings were defended, and by the submissions advanced on this appeal, it is evident that he has little real appreciation of the obligations of a supplier of equipment in trade or commerce under the Fair Trading Act.
Accordingly, the policy which this legislation reflects and the protection of the public which it is designed to achieve require that these obligations be demonstrated unequivocally to the appellant and to the public at large as part of the function of personal and general deterrence. There may be some uncertainty as to whether or not this offender is unlikely to commit such an offence again, although I shall proceed on the footing that this should be assumed because of his previous good character. On that approach, it would be open to impose a spent conviction order but only if the court considers that the appellant should be relieved immediately of the adverse effect of the conviction. His Honour did not think that this was an occasion for such leniency, and it would seem that his Honour's reasons for that approach were his general view of the role of the appellant and his disregard for the legitimate interests of his customers, together with the importance of the deterrent aspects which I have already mentioned. I see no basis whatever to conclude that his Honour was in error or in any way mistaken in the exercise of his discretionary power to grant or refuse a spent conviction order and, accordingly, I would also dismiss the appeal against sentence in this respect.

Conclusion

The result, therefore, is that the application for leave to appeal against the two convictions on proposed grounds of appeal 1 and 2 is refused. Leave to appeal against the convictions on proposed ground 3 is granted but the appeal against both convictions on that ground is dismissed. The application for leave to appeal against sentence by refusing a spent conviction order is granted but the appeal dismissed.