Hollis, Lee Stephanie v Clark, Robert William Lewis

[1981] FCA 189

Re: LEE STEPHANIE HOLLIS
And: ROBERT WILLIAM LEWIS CLARK
Nos. G13-G16 of 1981
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Fox J.

CATCHWORDS

Trade Practices - Misleading Conduct - Prosecution Concerning Advertisement for Powerbeam TV Projector - Pleas of Guilty - Quantum of Penalties - Power to Order Imprisonment in Default of Payment of Fines.

Trade Practices Act, 1974 (Cth) s.55 and s.79

Judiciary Act, 1903 (Cth) s.79

Crimes Act, 1914 (Cth) S.18A

Justices Act 1886-1980 (Qld) s.161 and s.174

HEARING

BRISBANE

#DATE 29:10:1981

ORDER

1. The charges in G15 and G16 are to be dismissed.

2. In relation to the charges in each of the proceedings G13 and G14 pleas of guilty are to be recorded.

3. In relation to each of the said charges in G13 and G14 the defendant is to be fined $1,250, the said amounts to be paid to the District Registrar of the Court within 14 days from this date.

4. In relation to the convictions in each of the proceedings G13 and G14 in default of payment as aforesaid, the defendant to be imprisoned for six weeks.

5. In relation to the proceedings in G13 and G14 the defendant to pay the prosecutor's costs, the costs in default of agreement to be taxed.

JUDGE1

These matters stand in the list for judgment. In matters numbers G15 and G16 instituted by Lee Stephanie Hollis against the defendant Robert William Lewis Clark no evidence was offered by the prosecution and both charges will be dismissed.

Two other charges, in matters G13 and G14, were at the same time instituted by the same prosecutor against the same defendant, and to these the defendant has pleaded guilty. The charges were for offences under s.55 of the Trade Practices Act, 1974 and relate to the same advertisement published on 11 May 1980 in the Sunday Independent, a newspaper published in Western Australia with a widespread circulation of about 100,000 people per issue. The advertisement occupied a full page. It was for what was called a powerbeam TV projector.

The idea was that with the aid of a fairly simple and distinctly cheap apparatus, which the defendant offered for sale in the advertisement, a picture showing normally on a TV screen could be projected on to a nearby wall or other suitable surface so as to enlarge the image to life-size or greater. The image thus projected, so the advertisement emphasized and reiterated, was to be sharp and clear and most lifelike.

The information in matter G13 relies upon one statement in the advertisement, namely that the projector contained an "optical-quality spherical concave projections lens", - and charges that "the said goods did not have that characteristic". Expert evidence was called which established that the lens was (a) not of optical quality; (b) was not spherical; and (c) was more convex than concave. In practical terms, it was useless for the advertised purpose. The crude framework supplied did not even hold the lens securely.

The information in matter G14 charges a false representation that the articles "were suitable for the purpose of projecting 7 foot (diagonal measurement) 'super sharp bright clear and brilliant' television images". The fact is that any images projected were necessarily very indistinct, and were upside down - unless the television set were itself upturned, an event not provided for in the instructions, or a technician were called in to make an adaption to the set. The instructions were prepared for a different model, apparently one supplied in the USA, and could not be adapted for the installation of the particular article. References to brightness and clarity appear repeatedly in the advertisement.

The defendant lives in Queensland where he owns a motel. He also from time to time carries on mail order activities as a seller and the subject advertisement had a mail order tear-off portion. The orders were to be addressed to Atro Enterprises in care of Sunday Independent at a post office box in Bentley, Western Australia. The arrangement was that the defendant would pay for the advertisement by allowing the newspaper proprietor to retain half the price, the price being $39.95 for one projector and $75 for two. The defendant was using the name Atro Enterprises and received for himself the other half of the purchase price. The cost to him was about $12 each, including import duty. About 30 customers paid their money in response to the advertisement, and the defendant received about $700.

The defendant is 45 years old, married with three children. He has a prior conviction in 1973 for an offence of a similar nature under Queensland law, when he was fined $150. I am told that when complaints came in in the present case, as they did, from purchasers of the apparatus he was selling, he did something, but I do not know what, to placate them. It is, I think, a substantial matter of mitigation that the advertisement he used was an exact copy of one which had been supplied by the USA manufacturer - except that for a pictorial representation of a grid-iron football team in action, there was substituted an action representation of a game of cricket, with a slip fieldsman moving to take a catch. It would seem unlikely that any thoughtful person could expect much for the outlay of $39.95 (plus $3 for postage and packing), but the advertisement was very fullsome, if highly repetitive, in its praise of the article, and short references from people identified by initials only were included in it.

Counsel for the prosecutor has aptly described the apparatus as junk. Of the advertisement, he has said that its outstanding feature is its sheer effrontery: I agree. It is difficult to see how a person with any qualms of conscience could have presented it to the public as being in the least representative of what was being offered for sale. He must have known how misleading the advertisement was or, on the other hand, been recklessly indifferent as to whether it was misleading or not. In saying this, I bear in mind, of course, that the defendant is only to be penalized in relation to the two particular charges.

The maximum penalty for each offence is $10,000 and, having in mind the operation in the present case of s.79(2), that is also the maximum for both offences. Apart from sub-section (2) of s.79, I would be obliged to take into account the fact that both offences relate to the same advertisement and to closely allied parts of it. I bear in mind that s.55 is enacted for the benefit of the public, which is seen to have the need of protection against predatory activities of which the present is a gross example. Fortunately, its adverse impact seems to have been slight.

The plea of guilty is to be taken into account, but this was intimated at a very late stage, and I do not think that in all the circumstances any significant weight can be given to it.

I fine the defendant $1,250 on each charge, and allow 14 days to pay. I will hear counsel as to that period, if he wishes to say anything. In arriving at that figure, I am mindful of the fact that there will be an order for costs against the defendant, and that those costs may well run into at least several thousand dollars.

I have been asked by senior counsel for the informant to make an order for imprisonment in default of payment of the fines, and the making of such an order has not been opposed. The basis for the authority to do so is to be found in s.18A of the Crimes Act, 1914 (Commonwealth). As the conviction takes place in Queensland, the laws of that state "with respect to the enforcement of fines ordered to be paid by offenders, including laws making provision for or in relation to - (a) the awarding of imprisonment in default of payment of fines,.." are invoked and become applicable. It may be that both s.79 of the Judiciary Act 1903 and s.18A, which is in substance a more direct and specific application of s.79, were intended to have their main operation in relation to state courts exercising federal jurisdiction, and in those cases the operation of the sections is more straightforward. However, the application of s.79 to federal courts is established, and the need for some limited adaptation of the local law has been discussed and accepted (see John Robertson & Co. Ltd. v Philips Industries Pty. Ltd. (1973) 1 ALR 21). I think there is authority for what I might describe as a broad approach so as to give effect to the purpose of such a provision.

Although this hearing is before a superior court, the proceedings are summary in nature. It is therefore appropriate to look to the Justices Act 1886-1980 of the State of Queensland. The principal sections of the topic are s.161 and s.174. Although there is language in those sections which is inappropriate and inapplicable to the exercise of jurisdiction by this court, they provide, in substance, that in relation to each charge a period of imprisonment in default of payment shall be ordered (as one alternative) and shall be "such period as in the opinion of the (court) will satisfy the justice of the case, but not exceeding in any case, (when the fine)...exceeds $500, a period of 6 months".

I apply the decision on this aspect of Smithers J in the closely analogous case of Wilde v Menville Pty. Ltd. (1981) ATPR 40-195 to hold that there is power in the court to order imprisonment in default of payment and in this case the period is to be arrived at in accordance with the passage just quoted.

In relation to each conviction, I order that in default of payment within 14 days the defendant is to be imprisoned for six weeks. The orders of the court are therefore:

1. The charges in G15 and G16 are to be dismissed.

2. In relation to the charges in each of the proceedings G13 and G14, pleas of guilty are to be recorded.

3. In relation to each of the said charges in proceedings G13 and G14, the defendant is to be fined $1,250, the said amounts to be paid to the District Registrar of the court within 14 days from this date.

4. In relation to each of the convictions in proceedings G13 and G14, in default of payment as aforesaid, the defendant to be imprisoned for six weeks.

5. In relation to the proceedings in G13 and G14, the defendant to pay the prosecutor's costs, the costs in default of agreement to be taxed.