Interim Advance Corporation Pty Ltd v Fazio
[2008] WASCA 140
•16 JULY 2008
INTERIM ADVANCE CORPORATION PTY LTD -v- FAZIO [2008] WASCA 140
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2008] WASCA 140 | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACR:67/2007 | 14 MARCH 2008 | |
| Coram: | BUSS JA MILLER JA NEWNES AJA | 16/07/08 | |
| 40 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed | ||
| B | |||
| PDF Version |
| Parties: | INTERIM ADVANCE CORPORATION PTY LTD OLIVER GEORGE DOUGLAS MICHAEL LAWRENCE FAZIO |
Catchwords: | Criminal law Debt Collectors Licensing Act 1964 (WA) Proper construction of 'debt collector' as defined in s 3 of the Act Proper construction of 'the functions of a debt collector' for the purposes of s 5(1) of the Act Proper construction of 'any gain, fee or reward whatever' within the definition of 'debt collector' in s 3 of the Act Interaction between the offence created by s 5 of the Act and the offence created by s 123 of the Legal Practice Act 2003 (WA) Criminal law Defences Section 22 of the Criminal Code (WA) Elements of the defence of honest claim of right Evidentiary onus of the accused Legal burden on the prosecution to negative the defence where the evidentiary onus is satisfied Availability of the defence where the accused has been charged with an offence under s 5 of the Debt Collectors Licensing Act Whether the appellants satisfied the evidentiary onus |
Legislation: | Criminal Code (WA), s 22, s 36 Debt Collectors Licensing Act 1964 (WA), s 3, s 4, s 5, s 13 Legal Practice Act 2003 (WA), s 4, s 123 |
Case References: | Australian Oil Refining Pty Ltd v Cooper (1987) 11 NSWLR 277 Clarkson v Aspinall; Ex parte Aspinall [1950] St R Qd 79 Olsen v The Grain Sorghum Marketing Board; Ex parte Olsen [1962] Qd R 580 R v Bernhard [1938] 2 KB 264 R v Pollard [1962] QWN 13 R v Waine [2005] QCA 312; [2006] 1 Qd R 458 Walden v Hensler (1987) 163 CLR 561 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : INTERIM ADVANCE CORPORATION PTY LTD v FAZIO [2008] WASCA 140 CORAM : BUSS JA
- MILLER JA
NEWNES AJA
- First Appellant
OLIVER GEORGE DOUGLAS
Second Appellant
AND
MICHAEL LAWRENCE FAZIO
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : HASLUCK J
Citation : FAZIO -v- INTERIM ADVANCE CORPORATION PTY LTD & ANOR [2007] WASC 108
File No : SJA 1128 of 2005
(Page 2)
Catchwords:
Criminal law - Debt Collectors Licensing Act 1964 (WA) - Proper construction of 'debt collector' as defined in s 3 of the Act - Proper construction of 'the functions of a debt collector' for the purposes of s 5(1) of the Act - Proper construction of 'any gain, fee or reward whatever' within the definition of 'debt collector' in s 3 of the Act - Interaction between the offence created by s 5 of the Act and the offence created by s 123 of the Legal Practice Act 2003 (WA)
Criminal law - Defences - Section 22 of the Criminal Code (WA) - Elements of the defence of honest claim of right - Evidentiary onus of the accused - Legal burden on the prosecution to negative the defence where the evidentiary onus is satisfied - Availability of the defence where the accused has been charged with an offence under s 5 of the Debt Collectors Licensing Act - Whether the appellants satisfied the evidentiary onus
Legislation:
Criminal Code (WA), s 22, s 36
Debt Collectors Licensing Act 1964 (WA), s 3, s 4, s 5, s 13
Legal Practice Act 2003 (WA), s 4, s 123
Result:
Appeal allowed
Category: B
Representation:
Counsel:
First Appellant : Mr E M Corboy SC
Second Appellant : Mr E M Corboy SC
Respondent : Ms J C Pritchard
Solicitors:
First Appellant : Melvyn Levitan
Second Appellant : Melvyn Levitan
Respondent : State Solicitor for Western Australia
Case(s) referred to in judgment(s):
Australian Oil Refining Pty Ltd v Cooper (1987) 11 NSWLR 277
Clarkson v Aspinall; Ex parte Aspinall [1950] St R Qd 79
Olsen v The Grain Sorghum Marketing Board; Ex parte Olsen [1962] Qd R 580
R v Bernhard [1938] 2 KB 264
R v Pollard [1962] QWN 13
R v Waine [2005] QCA 312; [2006] 1 Qd R 458
Walden v Hensler (1987) 163 CLR 561
(Page 4)
1 BUSS JA: On 28 April 2005, each of the first appellant (Interim Advance) and the second appellant (Mr Douglas) was charged on a complaint made by the respondent, a police officer, with offences under the Debt Collectors Licensing Act 1964 (WA) (the Act). Interim Advance and Mr Douglas pleaded not guilty.
2 On 21 and 22 November 2005, the charges were tried before Magistrate McIntyre in the Magistrates Court at Perth. On 29 November 2005, the learned magistrate dismissed the charges.
3 The respondent appealed to the Supreme Court. Hasluck J heard and allowed the appeal. His Honour ordered, relevantly, that the matter be remitted to the Magistrates Court for 'a further hearing and determination according to law'.
4 Interim Advance and Mr Douglas have now appealed to this court.
The charges
5 The complaint against Interim Advance alleged six offences, each of which was said to have occurred on or about 30 April 2004. The first charge reads:
On or about 30 April 2004 at Tuart Hill, INTERIM ADVANCE CORPORATION PTY LTD (ACN 094 743 843) exercised a function of a debt collector, when Interim Advance Corporation Pty Ltd was not the holder of a licence under the Debt Collectors Licensing Act 1964; contrary to section 5 of the Debt Collectors Licensing Act 1964.
Particulars
On or about 30 April 2004, employees or agents acting for Interim Advance Corporation Pty Ltd prepared, signed and sent to Susan Macdonald and Malcolm Macdonald a Local Court summons dated 30 April 2004 naming Interim Advance Corporation Pty Ltd as plaintiff and naming Michael Kenneth Clark as defendant and claiming, in part, on behalf of Susan Macdonald and Malcolm Macdonald, what was a debt owing to others, namely Susan Macdonald and Malcolm Macdonald trading as Aussie Cash Northam, in the expectation of gain.
- The first charge is representative of the other charges. It is unnecessary to reproduce them.
6 At all material times, Mr Douglas was the sole director of Interim Advance. The complaint against him also alleged six offences. Those offences correlated with the offences alleged against Interim Advance. The first charge against Mr Douglas reads:
(Page 5)
- On or about 30 April 2004 OLIVER GEORGE DOUGLAS was a director of Interim Advance Corporation Pty Ltd (ACN 094 743 843) when that Corporation committed an offence against the Debt Collectors Licensing Act 1964; contrary to sections 5 and 23 of the Debt Collectors Licensing Act 1964.
Particulars of Offence committed by Corporation
On or about 30 April 2004 at Tuart Hill Interim Advance Corporation Pty Ltd exercised a function of a debt collector, when Interim Advance Corporation Pty Ltd was not the holder of a licence under the Debt Collectors Licensing Act 1964; contrary to section 5 of the Debt Collectors Licensing Act 1964.
Further Particulars
On or about 30 April 2004 employees or agents acting for Interim Advance Corporation Pty Ltd prepared, signed, filed [sic] and sent to Susan Macdonald and Malcolm Macdonald a Local Court summons dated 30 April 2004 naming Interim Advance Corporation Pty Ltd as plaintiff and naming Michael Kenneth Clark as defendant and claiming, in part, on behalf of Susan Macdonald and Malcolm Macdonald, what was a debt owing to others, namely Susan Macdonald and Malcolm Macdonald trading as Aussie Cash Northam, in the expectation of gain.
- The first charge is representative of the other charges. It is unnecessary to reproduce them.
The relevant provisions of the Act
7 The long title to the Act states that it is an Act to provide for the licensing of debt collectors, and for incidental and other purposes.
8 Section 3 contains various definitions which apply in the Act unless the contrary intention appears. Relevantly, for present purposes, the definitions include:
'debt collector' means a person (whether or not he carries on any other business) who on behalf of any other person and for or in expectation of any gain, fee or reward whatever, by whomsoever paid or payable and either on his own account or in conjunction with another, carries on the business of collecting requesting or demanding payment of debts or who advertises or notifies that he carries on that business;
'licence' means a valid and current licence issued under this Act authorising the holder thereof to act as a debt collector;
'licensee' means the holder of a licence;
(Page 6)
- 'money' includes any instrument for the payment of money in any case where the instrument may be paid into an account with a bank;
9 Section 4(a) provides that the provisions of the Act do not apply to a certificated practitioner, within the meaning of the Legal Practice Act 2003 (WA).
10 By s 5:
(1) After the expiration of 3 months after the coming into operation of this Act a person shall not -
(a) exercise or carry on;
(b) advertise, notify or state that he carries on or is willing to exercise or carry on; or
(c) in any way hold himself out to the public as ready to exercise or carry on,
the business or any of the functions of a debt collector, unless he is the holder of a licence under this Act.
(2) A person who contravenes or fails to comply with any of the provisions of subsection (1) is guilty of an offence.
Penalty: For an individual, $200.
For a body corporate, $400.
11 Section 13(1) provides, relevantly:
Subject to this Act, a person is not entitled to sue for or recover or retain any commission, fees, charges, reward or other remuneration for or in respect of any service done by him as a debt collector, unless -
(a) he was a licensee at the time of the doing of that service;
12 By s 23:
Where an offence against this Act is committed by a corporation any person who at the time of the commission of the offence was a director or manager of the corporation is liable to the penalty or punishment provided by this Act for the offence, unless he proves that the offence was committed without his knowledge or that he used all due diligence to prevent the commission of the offence.
Overview of the respondent's case at trial
13 At all material times, Interim Advance carried on business under the name Aussie Cash. Its business included making short-term cash
(Page 7)
- advances of between $100 and $1,000 to its clients. The term of each advance did not exceed 3 months. The daily rate of interest was 2.14% calculated on the amount advanced; that is, 781.10% per annum.
14 Interim Advance's business also included operations as a franchisor. It entered into arrangements with numerous persons and entities under which it granted franchises to those persons and entities to operate independent businesses under the Aussie Cash name. Pursuant to the agreement made between Interim Advance and each franchisee, Interim Advance was entitled to 20% of all interest actually paid or collected on cash advances made by the franchisee to its clients and repaid to the franchisee.
15 Interim Advance entered into a franchise agreement with Susan Macdonald and Malcolm Macdonald. It authorised them to carry on business under the name Aussie Cash Northam. Mr and Mrs Macdonald are referred to in the particulars to each of the charges alleged against Interim Advance and Mr Douglas. Each charge relates to a short-term loan made by Aussie Cash Northam to a client.
16 The essential features of the respondent's case at trial against Interim Advance and Mr Douglas may be summarised as follows:
(a) Aussie Cash Northam made short-term cash advances to their clients from their own money. In particular, no money was made available by Interim Advance to Aussie Cash Northam for this purpose.
(b) Potential clients would make an application to Aussie Cash Northam for a cash advance. If the application was successful, Aussie Cash Northam would make available the cash advance against delivery of a promissory note signed by the client. By the note, the client promised to pay to the order of Aussie Cash Northam a specified amount, being the aggregate of the cash advance and interest.
(c) If a client defaulted in his or her repayment obligations, Aussie Cash Northam would instruct Interim Advance to recover the indebtedness on Aussie Cash Northam's behalf in consideration of the payment by Aussie Cash Northam of fees in accordance with the franchise agreement.
(d) If Interim Advance recovered any amounts from a defaulting client, it was entitled to deduct and retain its collection charges
- and 20% of any interest recovered. It would remit the balance to Aussie Cash Northam.
- (e) On or about 30 April 2004, Interim Advance, in the course of recovering indebtedness from defaulting clients of Aussie Cash Northam, prepared and signed six Local Court summonses. The respondent alleged that this conduct involved claiming 'in part' indebtedness owing to Aussie Cash Northam. The significance of the words 'in part' was that at all material times Interim Advance was entitled, under the franchise agreement with Aussie Cash Northam, to deduct and retain its collection charges and 20% of any interest recovered, with the balance being remitted to Aussie Cash Northam. As only part of the total amount recovered from the defaulting clients would be remitted to Aussie Cash Northam, the amount claimed in the six Local Court summonses was properly described in each charge against Interim Advance as a claim 'in part' for a debt owing to Mr and Mrs Macdonald.
(f) Interim Advance, by its employees, sent the six Local Court summonses to Aussie Cash Northam, together with a cheque for the court filing fees. Aussie Cash Northam then arranged for the summonses to be filed and served.
(g) Pursuant to the franchise agreement, and at the request of Aussie Cash Northam, Interim Advance prepared, signed and sent the six Local Court summonses to Aussie Cash Northam in the expectation of a 'fee' of $75. At the relevant time, the Local Court at Northam charged about $51 to accept each summons for filing. Accordingly, on the respondent's case, Interim Advance expected to receive a net 'fee' of about $24 per summons less postage.
(h) The six Local Court summonses claimed indebtedness owing to Aussie Cash Northam, notwithstanding that Interim Advance was entitled to deduct and retain its collection costs and 20% of any interest recovered. After making a notional allowance for the deduction of those amounts, it was proper to describe Interim Advance's claim as part of a debt due to another.
(i) At all material times, Mr Douglas, as the sole director of Interim Advance, developed and supervised the implementation of systems and procedures under which indebtedness owing to its franchisees would be collected by Interim Advance on their behalf and in the expectation of reward. The onus was on Mr Douglas to prove, on the balance of probabilities, one or other of the statutory defences under s 23 of the Act; that is, either the offences were
- committed without his knowledge or he used all due diligence to prevent their commission.
The evidence of the respondent's witnesses
17 At trial, the respondent called evidence from Vaughan Jeffrey Anderson and Mr Macdonald.
18 In late May 2003, Mr Anderson commenced employment with Interim Advance as a process server. In November 2003, he was promoted to the position of collections manager. He ceased employment with Interim Advance in May 2004.
19 Mr Anderson's evidence-in-chief was, relevantly, as follows:
(a) As collections manager, he was responsible for recovering indebtedness owing by defaulting clients of Interim Advance or any of its franchisees (ts 15 - 16).
(b) The recovery procedure involved contacting the defaulting clients by telephone, sending letters of demand and issuing Local Court summonses and, on occasions, judgment summonses (ts 16 - 17).
(c) The court documents would be prepared by Interim Advance and would usually be sent to the court with a cheque, apparently for filing fees (ts 17).
(d) During his employment with Interim Advance he worked at the head office in Tuart Hill (ts 17).
(e) Mr Douglas was 'in charge of the whole operation' (ts 17).
(f) Hasluck J summarised Mr Anderson's evidence in relation to documents concerning the franchise relationship between Interim Advance and Aussie Cash Northam, and the issuing of the summonses the subject of the complaints in question:
Mr Anderson was taken to documents reflecting exchanges with Mr Malcolm Macdonald who was the owner of a franchise at Northam. These documents had a bearing upon the franchise relationship in that they showed the way in which the franchisee made a request for services of the franchisor and was charged for those services. Aussie Cash Northam was to be invoiced for the costs of issuing a summons. It was in this context that Mr Anderson described the preparation of the subject summonses and the sending of them to Mr Macdonald in Northam. Mr Anderson's practice was to prepare a standard form request to collect debt and have that signed by the franchisee as happened in the present case [38].
(Page 10)
- (g) Mr Anderson explained the fees charged by Interim Advance to franchisees (including Aussie Cash Northam) for its collection services:
Well, basically, there was no set amount for telephone calls and those kind of things, but the letter of demand cost which was for $10, the summons and that which was initially 75, but I think up to 85, and then the judgment summons, if they went to that stage, which is about 110 (ts 27).
(h) After he was appointed to the position of collections manager in November 2003, his direct supervisor was Mr Douglas. That was still the case in April 2004 (ts 27).
(i) In the course of his employment he liaised quite often with Mr Douglas. He always sought Mr Douglas's permission to pursue a defaulting client. He always sought Mr Douglas's permission because Interim Advance was 'his company' (ts 28).
(j) Interim Advance wrote cheques on its own account in payment of the court fees payable on filing summonses (ts 28). Between about December 2003 and April 2004 he was authorised to sign those cheques (ts 28 - 29).
20 Mr Anderson said, in cross-examination, that:
(a) When a summons was issued in relation to indebtedness owing by a defaulting client to a franchisee (including Aussie Cash Northam) he would speak to the franchisee in connection with the recovery (ts 29 - 30).
(b) He prepared the summonses (ts 31).
(c) The fee of $75, later increased to $85, charged by Interim Advance to its franchisees, was imposed to cover the filing fee of $44.20 which was later increased to $51.20 (ts 32 - 33).
(d) The cost of a letter of demand before issuing the summons (that is, $10) was in addition to the fee of $75 (later $85) charged in connection with the summons (ts 31 - 32).
(e) The fee of $75 (later $85) was charged for the summons itself (ts 32).
(f) He did not 'really take too much interest' in the terms of the franchise agreement between Interim Advance and Aussie Cash Northam (ts 32 - 33).
(Page 11)
21 Mr Anderson said in re-examination that the fee of $75 (later $85) was a 'fixed cost'. He was told by a superior at Interim Advance, probably Steven Pucard, that $75 (later $85) was the amount to charge (ts 33).
22 Mr Macdonald said, in evidence-in-chief, relevantly:
(a) He and his wife entered into a franchise agreement with Interim Advance as a result of responding to a newspaper advertisement (ts 34).
(b) He produced a franchise agreement dated 9 August 2003 between Interim Advance as franchisor and himself and his wife as franchisee. He also produced a franchise disclosure document. The franchise agreement and the disclosure document were tendered in evidence.
(c) The business of Aussie Cash Northam commenced on 11 November 2003. He and his wife continued to trade under that name until 11 August 2004.
(d) He described the procedure by which potential clients would make an application to Aussie Cash Northam for a cash advance and, if the application was successful, the manner in which Aussie Cash Northam would make available the cash advance against delivery of a promissory note signed by the client.
(e) He described the events relating to the issuing of the six Local Court summonses, the subject of the complaint against Interim Advance, in respect of defaulting clients of Aussie Cash Northam. In particular, he requested Interim Advance to issue a letter of demand and, later, he received a Local Court summons from Interim Advance which named the defaulting client as the defendant. He filed the summons at the court and he paid the filing fee with a cheque sent to him by Interim Advance.
(f) He said, in substance, that Interim Advance charged Aussie Cash Northam a fee of $10 for the letter of demand and a fee of $75 for the Local Court summons. In April 2004, the fee for the summons was $85.
Overview of Interim Advance's and Mr Douglas's case at trial
23 Interim Advance's and Mr Douglas's case at trial may be summarised as follows. First, the preparation, signing and sending of the six Local Court summonses was not a function of a debt collector. Rather, the performance of those acts are, in general, functions of a legal practitioner.
(Page 12)
- Secondly, in any event, the summonses were not issued on behalf of Aussie Cash Northam. They were issued in the name of Interim Advance. It is not a function of a debt collector to issue summonses in the debt collector's name as distinct from the name of the debt collector's client. Thirdly, the word 'gain' in the definition of 'debt collector' in s 3 of the Act connotes some profit motive. The fee of $75 (later $85) was a reimbursement of costs incurred by Interim Advance. It was not a charge made in expectation of any gain. Fourthly, s 22 of the Criminal Code (WA) conferred a defence on Interim Advance and, in consequence, Mr Douglas. Mr Douglas and, through him, Interim Advance, held an honest belief at all material times that, by virtue of a power of attorney granted by each franchisee to Interim Advance pursuant to cl 10 of each franchise agreement, Interim Advance became the holder in due course of the promissory notes the subject of the complaint. Although, as a matter of law, there was no substance in or validity to the belief that Interim Advance was the holder in due course of each promissory note, that was not of any significance. It was sufficient that there was an honest belief and that belief was the foundation for the claims made by Interim Advance in the six Local Court summonses. Finally, in relation to Mr Douglas, reliance was placed on s 23 of the Act. It was contended that s 23 was concerned with a director's actual knowledge and that Mr Douglas had established, on the balance of probabilities, that he did not have actual knowledge of the acts of Interim Advance relied on by the respondent.
24 After making an unsuccessful submission of no case to answer at the close of the respondent's case, counsel for Interim Advance and Mr Douglas called evidence from Mr Douglas. No other witnesses were called. I will refer to aspects of Mr Douglas's evidence later in these reasons.
The statutory franchise disclosure document
25 The respondent tendered in evidence a statutory franchise disclosure document between Interim Advance and Aussie Cash Northam. The document was marked as exhibit J. The relevant provisions of the document are these:
(a) Ongoing fees and costs payable by Aussie Cash Northam to Interim Advance were listed in annexure B to the document.
(b) Interim Advance would make available debt collection services to Aussie Cash Northam.
(Page 13)
- (c) Annexure B provided for the payment to Interim Advance of 20% of 'interest collected' on each short-term advance made by Aussie Cash Northam to its clients. The amount was payable on 'collection and payment' by the client of 'any instalment'. Annexure B also provided for the payment to Interim Advance of $75 for each summons issued.
The franchise agreement
26 The respondent also tendered in evidence the franchise agreement between Interim Advance and Aussie Cash Northam. The document was marked as exhibit K. The relevant provisions of the agreement are these:
(a) By cl 4.19(c), Aussie Cash Northam agreed to pay to Interim Advance:
the fees, costs, charges and expenses incurred by [Interim Advance] in performing [Interim Advance's] services to [Aussie Cash Northam] under this Agreement, as set out in the First Schedule.
(b) By cl 10.1:
[Aussie Cash Northam] does in addition to any other appointments set out in this Agreement, irrevocably appoint [Interim Advance] and [Interim Advance's] officers jointly and severally as the true and lawful attorneys of [Aussie Cash Northam] and authorise and empower [Interim Advance], in the name of [Aussie Cash Northam], to execute all documents (including but not limited to instruments, assumptions, agreements, leases, contracts, forms and other documents) and give all assurances and do all acts, deeds and things as [Interim Advance] will deem necessary for the due performance and observance on the part of [Aussie Cash Northam] of all the terms and conditions of this Agreement for the purpose of giving effect to the provisions of the Agreement as fully and effectually as [Aussie Cash Northam] could do and [Aussie Cash Northam] agrees to ratify all that the attorneys may lawfully do or cause to be done in or about or by virtue of this Agreement, and [Aussie Cash Northam] declares that the power of attorney granted in this clause may be exercised during any subsequent legal incapacity on its part.
(c) The First Schedule provided, relevantly, for the payment of amounts described as 'Franchisee Turnover Royalty Fees and Costs Reimbursements'. These were stated to be as at 9 August 2003. They included, relevantly, payment of '20% of interest collected' on each short term advance. The amount was payable on 'collection and payment' by Aussie Cash Northam's client of 'any instalment'. Also, Interim Advance was to be paid $75 for each 'summons issued'.
(Page 14)
The learned magistrate's reasons for decision
27 The learned magistrate construed the definition of 'debt collector' in s 3 of the Act and held that Interim Advance, in preparing, signing and sending the summonses to Aussie Cash Northam, was not exercising a function of a debt collector in that Interim Advance had not received a tangible financial gain for the provision of those services. His Honour said:
In my view the definition is not sufficiently wide to cover a situation such as existed between [Interim Advance] and its franchisees, that is, the provision of a service involving the preparation and possible service of a summons for little or no reward, perhaps at a loss, in circumstances where such a service could be regarded simply as a means by which [Interim Advance] seeks to ingratiate itself with its franchisees.
In making these comments I refer again to the fact that this legislation – that is the debt collectors legislation – was enacted in 1964, a time when the legislature could not possibly have anticipated the emergence and proliferation of lending organisations such as [Interim Advance trading as] Aussie Cash and their ilk.
For the sake of completeness, I should say that if the prosecution could prove that [Interim Advance] charged its franchisees not only for court fees, service fees, staff time, stationery, telephone calls, use of motor vehicles and so on, and then, on top of that, levied a fee of 75 or $85, the case would, of course, bear a different complexion.
I find on the evidence that [Interim Advance] in preparing, signing and sending the summonses to [Aussie Cash Northam] was not exercising a function of a debt collector. I accept it is, in a sense, a gratuitous service (ts 7 - 8).
28 The learned magistrate then examined s 23 of the Act and its application, in the circumstances of the case, to Mr Douglas. He found that if the respondent had made out its case against Interim Advance then Mr Douglas would also have been guilty as charged:
Finally, I should deal with section 23, so far as those provisions apply to Oliver Douglas. I've already referred, in detail, to the provisions of section 23 and I do not accept for a moment that Douglas has proven, even on a balance of probabilities, that he can avail himself of this provision. [Interim Advance] was a small organisation, whose collections manager, Vaughan Anderson, reported directly to Mr Douglas and on issues related to summonses, other legal proceedings, I find that the accused knew exactly what was going on, that he did nothing to stop it and if charges against [Interim Advance] had been made out, Douglas would also have been guilty (ts 8).
(Page 15)
29 The learned magistrate therefore dismissed the charges against Interim Advance and Mr Douglas. He decided that it was unnecessary to consider s 22 of the Criminal Code.
The respondent's grounds of appeal before Hasluck J
30 The respondent's grounds of appeal before Hasluck J, without the supporting particulars, were these:
1. The learned Magistrate erred in fact in determining that Aussie Cash Northam ('ACN') was charged $75 in relation to each summons, when the evidence established that the amount payable was $85.
2. The learned Magistrate erred in fact and law in determining that the amount payable (of $85) in relation to each summons could not be regarded as a 'fee', 'gain' or 'reward' within the meaning of the definition of 'debt collector' in s3 of the Debt Collectors Licensing Act 1964 (WA) ('Act').
3. The learned Magistrate erred in law in determining that a 'gain' or 'reward' for the purposes of the definition of 'debt collector' in s3 of the Act had to be tangible and consist of a payment of money (or perhaps a payment in kind) to [Interim Advance].
4. The learned Magistrate erred in fact and in law in failing to find that [Interim Advance] did the acts alleged of preparing, signing and sending the summonses for or in expectation of a 'fee', 'gain' or 'reward'.
5. The learned Magistrate erred in law in determining that any action which was within the scope of 'legal practice' as defined in the Legal Practice Act 2003 (WA) ('LP Act') would be excluded from 'collecting' within the meaning of the definition of 'debt collector' in s3 of the Act.
6. The learned Magistrate erred in fact and law in not convicting [Mr Douglas].
Interim Advance's and Mr Douglas's notice of contention before Hasluck J
31 Interim Advance and Mr Douglas filed a notice of contention in the appeal before Hasluck J. The amended notice asserted that the learned magistrate's decision should be affirmed upon the following additional grounds:
1. the conduct of [Interim Advance and Mr Douglas] in the preparation, signing, filing and sending of Local Court Summonses was not a function of, nor part of the business of, a 'debt collector'
- for the purpose of section 5 of the Debt Collectors Licensing Act 1964(WA) having regard to the terms of the Legal Practice Act 2003(WA) (particularly sections 4 and 123), further or alternatively having regard to the proper construction of sections 3 and 5 of the Debt Collectors Licensing Act 1964 (WA) and in particular, the meaning of 'collecting requesting or demanding payment of debts', and the learned Magistrate should have so found;
- 2. the defence of Honest Claim of Right under s22 of the Criminal Code was established, it having been raised by [Interim Advance and Mr Douglas] but not negatived by [the respondent] and the learned Magistrate should have so found.
Hasluck J's observations in relation to the issues before him
32 Hasluck J summarised the findings of the learned magistrate which were apparent from his reasons for decision:
1. that Aussie Cash Northam was charged $75 in relation to each summons;
2. that the amount which was charged by Interim Advance could not be regarded as a 'fee' (or 'gain' or 'reward');
3. that it was relevant, in that respect, to consider what costs would be incurred by Interim Advance in providing that service (including the costs of serving the summons);
4. that it was necessary to identify a 'profit margin', over and above such costs, before an amount charged could be a 'fee' (or 'gain' or 'reward');
5. that in the absence of such an identifiable 'profit margin' the service was provided 'gratuitously' and not for a 'fee' (or 'gain' or 'reward');
6. that a 'gain, fee or reward' had to be tangible and consist of a payment of money (or perhaps in kind) to Interim Advance [75].
33 After reviewing the provisions of the franchise agreement and the evidence at trial relating to that agreement, Hasluck J concluded:
In my view, it follows from this review of the franchise agreement and related evidence that the subject matter of the recovery action reflected in the Clark summons was a debt due to Aussie Cash Northam. Quite clearly, the recovery of the debt depended on action being taken by Interim Advance in response to a request for action by Aussie Cash Northam. The objective was to apply pressure to the debtor with a view to obtaining payment of an amount outstanding. The steps taken might be confined to a letter of demand but could, and in the Clark case in fact did, extend to the preparation and issuing of a summons. It can be inferred from the terms of
(Page 17)
- the summons and nature of the collection process that the expectation of the parties was that payment of the amount claimed in the summons would be made to Interim Advance and distributed by the franchisor to the franchisees, after deduction of the Interim Advance entitlement [111].
- His Honour held that activities of the kind he had described clearly fell within that part of the definition of 'debt collector' which refers to collecting, requesting or demanding payment of debts on behalf of any other person [112].
34 Hasluck J then gave consideration to whether the activities of Interim Advance which he had characterised as collecting debts on behalf of Aussie Cash Northam constituted carrying on the business of collecting 'in the expectation of any gain' by whomsoever paid or payable. In particular, his Honour considered whether the work performed by Interim Advance was 'in expectation of gain' within the definition of 'debt collector'. His Honour concluded:
As to this issue, I am of the view that the arrangements for collection whereby, as Mr Douglas put it (AB 122), the franchisees plugged into the existing framework for collection, meant that Interim Advance stood to gain from the collection activities. By providing the framework or service it preserved and fostered its relationship with the franchisee. By doing so, in respect of those debts due to the franchisee which might otherwise have been lost (unless the collecting was undertaken) Interim Advance aimed to secure certain income by way of the agreed percentage on debts received that might otherwise have not come to it.
I give weight to the authorities relied upon by counsel for the appellant that the word "gain" is apt to describe anything of value to the recipient; that is, anything thought to be worth having which was not previously available to the recipient. The word "gain" has a broader scope than that described by the word "fee", in particular the words do not describe a situation which necessarily involves the receipt of a monetary sum. See Re Arthur Average Association for British Foreign & Colonial Ships (1875) LR 10 Ch App 542; Re Riverton Sheep Dip [1943] SASR 344 at 347; Re Commonwealth Homes & Investment Co Ltd [1943] SASR 211 at 228; South Australian Commissioner for Prices & Consumer Affairs v Charles Moore (Aust) Ltd (1977) 51 ALJR 715 at 723 [115] - [116].
35 Hasluck J went on to hold that, further and in any event, it was unnecessary for the respondent to establish the existence of a profit margin for a service in order for that service to be described as being undertaken for a fee. The fee which a person is charged for a service is what he or she is required to pay or provide in order for the service to be performed. A fee is not the sum notionally remaining after the service provider has paid third parties and covered its own costs. His Honour was
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- of the view that the same observation could be made in relation to an expectation of any gain. Recompense of any kind will be sufficient [117].
36 Hasluck J therefore concluded that, in circumstances where the amount payable by Aussie Cash Northam (initially $75 and later $85) exceeded the court filing fees and other outgoings, as it clearly did, Interim Advance was performing services for or in the expectation of gain, even though its overall recompense for those services might have been small [118].
37 Hasluck J decided that, on the evidence before the learned magistrate, Interim Advance was exercising the functions of a debt collector in the manner alleged in the complaint, contrary to s 5 of the Act. Accordingly, on the face of it, the learned magistrate erred in finding Interim Advance not guilty of the charges in the complaint.
38 Hasluck J then turned his attention to the charges against Mr Douglas. His Honour noted that Mr Douglas's acquittal depended, in essence, on the absence of any finding of fault against Interim Advance [120]. However, as a result of his Honour's adverse finding in relation to Interim Advance, it was necessary for him to consider the defence under s 23 of the Act which Mr Douglas had raised. His Honour was not satisfied that Mr Douglas had discharged the burden of proving that the offences in question were committed without his knowledge or that he had used all due diligence to prevent their commission [121] - [123].
39 It followed, in Hasluck J's view, that, on the face of it, the learned magistrate erred in finding Mr Douglas not guilty. There was sufficient evidence to warrant his conviction [124].
40 Hasluck J noted that he had merely concluded that 'on the face of it' the learned magistrate had erred in acquitting Interim Advance and Mr Douglas because a final conclusion could not be arrived at until he had dealt with the issues raised by the amended notice of contention.
41 The first ground in the amended notice of contention overlapped with several issues which Hasluck J had already considered in the context of the appeal generally. The only new issue of any significance was the proposition that the Legal Practice Act (in particular, s 4 and s 123) prevented any criminal liability attaching to Interim Advance and Mr Douglas. His Honour decided that s 4 of the Act made it clear that the provisions of the Act do not apply to a certificated legal practitioner and various other persons. Section 4 recognises that there may be an overlap in the operation of the Act and the Legal Practice Act. In other words,
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- various activities undertaken by a legal practitioner could arguably fall within the concept of debt collection, with the result that an immunity from the operation of the Act had to be provided to certificated legal practitioners. According to his Honour, it follows that a person who engages in the preparation of court documents as an incident of debt collection may be subject to the provisions of both statutes. His Honour concluded that the statutes operate concurrently and the acquittal of Interim Advance and Mr Douglas could not be justified on the first ground of the amended notice of contention [131] - [132].
42 Hasluck J held, in relation to ground 2 of the amended notice of contention concerning s 22 of the Criminal Code, that s 5 of the Act attaches liability to the carrying out of a debt collecting function for gain without a licence and the relevant property, for the purposes of s 22 of the Criminal Code, must be the 'chose in action' which is 'a debt owned by some other person' [141]. His Honour then reasoned as follows:
In this context there was only one right which could operate to excuse the relevant act of pressing for payment of the Clark debt at the time of the offence, namely, an actually held belief on the part of Mr Douglas in Interim Advance's ownership of the subject Aussie Cash Northam debt, bearing in mind that the Magistrate found that Mr Douglas knew exactly what was going on in relation to debt recovery. I have held in earlier discussion that Mr Douglas can be characterised as representing the will of the company.
… in my view, there is insufficient evidence to support a finding that Mr Douglas believed that Interim Advance had a legal entitlement as owner of the Clark debt at the time the debt collecting acts were done.
… there is no documentary evidence of any assignment of the subject debt to Interim Advance or that it was the holder in due course of a bill of exchange. As I have indicated, upon a close analysis of Mr Douglas' evidence it emerges that he was not truly asserting a claim of ownership to the subject debt but, at best, held the belief that pursuant to the power of attorney he was able to enforce payment of the debt by using the name of Interim Advance as plaintiff, and as the apparent creditor. Nonetheless, the surrounding evidence leads to a conclusion that he knew, and thus the company knew, that it was claiming the debt at the request and on behalf of another party that it knew to be the true owner of the debt, namely, Aussie Cash Northam [142] - [144].
43 It followed, in Hasluck J's view, that, on the evidence, the learned magistrate was bound to find that the respondent had negatived the defence of honest claim of right under s 22 of the Criminal Code because 'there was insufficient evidence before the Court that [Interim Advance
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- and Mr Douglas] had asserted an honest claim of right to the Clark debt and the other subject debts at the time the offences were committed' [145].
Hasluck J's decision and reasoning in relation to ground 1 of the appeal
44 Hasluck J accepted that the learned magistrate erred in fact in determining that Aussie Cash Northam was charged $75 in relation to each summons.
45 Hasluck J held that by February 2004 the amount being charged had in fact been increased to $85.
46 According to Hasluck J, the error was immaterial in that the respondent's case would have been made out in any event because recompense in the amount of $75 or $85 would have been sufficient to establish that Interim Advance was acting in the expectation of gain. His Honour held that ground 1 had been made out.
Hasluck J's decision and reasoning in relation to ground 2 of the appeal
47 Hasluck J held that the learned magistrate erred in determining that the amount payable in relation to each summons could not be regarded as a fee or gain within the definition of 'debt collector'.
48 According to Hasluck J, having regard to the manner in which particulars of the complaint were presented, the issue to be addressed was whether Interim Advance had acted in expectation of a gain. In his Honour's view, there was evidence before the learned magistrate sufficient to justify a finding that Interim Advance had acted on that basis. It was unnecessary for the respondent to prove an identifiable profit margin in respect of the services provided by Interim Advance. His Honour held that ground 2 had been made out.
Hasluck J's decision and reasoning in relation to ground 3 of the appeal
49 Hasluck J held that a 'gain' within the definition of 'debt collector' can include intangible benefits; for example, the fostering of a relationship with a franchisee. His Honour held that ground 3 had been made out.
Hasluck J's decision and reasoning in relation to ground 4 of the appeal
50 Hasluck J held, on the basis of his general observations including his observations as to the binding effect of the relevant particulars, that ground 4 had been made out.
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Hasluck J's decision and reasoning in relation to ground 5 of the appeal
51 Hasluck J held that the learned magistrate erred in law in determining that any action which was within the scope of legal practice as defined in the Legal Practice Act would be excluded from collecting within the definition of 'debt collector'. The Act operates concurrently with the Legal Practice Act in relation to any matters which may be within the scope of legal practice as defined in the Legal Practice Act. His Honour held that ground 5 had been made out.
Hasluck J's decision and reasoning in relation to ground 6 of the appeal
52 Hasluck J held that, in circumstances where his Honour had found it was open to the learned magistrate to convict Interim Advance, it was then also open to him to convict Mr Douglas, subject to consideration of the defence conferred by s 23 of the Act. However, for the reasons Hasluck J had set out earlier in his reasons, his Honour considered it was not open to the learned magistrate, on the evidence, to excuse Mr Douglas pursuant to s 23. His Honour held that ground 6 had been made out.
Hasluck J's disposition of the appeal
53 Hasluck J allowed the appeal. His Honour said, in relation to the appropriate form of relief:
I am provisionally of the view that the proper course is to remit the matter to the primary court for a further hearing. I will hear from the parties as to the form of any orders and directions that are to be made [165].
54 When Hasluck J published his reasons, counsel for the parties submitted, relevantly, that his Honour should order that 'the matter be remitted to the primary court for hearing and determination according to law' (ts 66). His Honour made an order in those terms.
Interim Advance's and Mr Douglas's grounds of appeal before this court
55 Interim Advance's and Mr Douglas's original grounds of appeal before this court were as follows:
1. The learned judge erred in law in finding at paragraphs [132] and [161] of his Reasons that, notwithstanding the prohibitions imposed by sections 4 and 123 of the Legal Practice Act 2003 (WA), the business or functions of a debt collector for the purpose of the Debt Collectors Licensing Act 1964 could include preparing and signing a Local Court summons and sending that summons to another person to arrange for its filing in the Court.
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- 2. The learned Judge erred in fact and in law in finding at paragraph [145] of his Reasons that it was incumbent upon the Magistrate at the hearing of the complaints against the appellants to hold that the respondent had negatived or ruled out the honest claim of right defence raised under s 22 Criminal Code because there was insufficient evidence before the Court that the appellants had asserted an honest claim of right to the debts the subject of the complaints.
3. The learned judge erred in fact and in law in finding at paragraphs [102] and [103] of his Reasons and at paragraph [143] that in his evidence the second appellant was referring, in relation to the power of attorney and to the debts particularised in the complaints, to the capacity or power to act on behalf of another rather than asserting a claim to ownership of the item of property in question (the rights associated with the promissory notes including the right to enforce the notes) and that the function being performed was the collection of a debt on behalf of another.
4. The learned judge erred in law in finding that the first appellant had an 'expectation of gain' within the meaning and for the purposes of the definition of 'debt collector' in s 3 of the Debt Collectors Licensing Act 1964 by reason of the fees that were payable to it.
5. The learned judge erred in law in finding that it was open to the respondent to contend by ground 3 of his notice of appeal that the term 'gain' when used in the definition of 'debt collector' in s 3 of the Debt Collectors Licensing Act 1964 could include intangible benefits.
6. The learned judge erred in finding, in effect, that it was open to the respondent to contend by ground 4 of its notice of appeal that the first appellant had prepared, signed and sent the Local Court summonses for a fee or gain or reward or in the expectation of a fee or reward.
7. The learned judge erred in fact and in law in allowing ground 6 of the respondent's notice of appeal. The learned judge ought to have dismissed the appeal in its entirety and held that the Magistrate was right to have dismissed each of the complaints sworn against the appellants.
56 At the commencement of the hearing, counsel for Interim Advance and Mr Douglas moved for leave to amend the original grounds by the addition of a new ground 3A. The proposed new ground, without the supporting particulars, reads:
The learned judge erred in fact and in law in finding at paragraphs [122] and [123] of his Reasons that at all material times the second appellant
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- knew that the function being performed was the collection of a debt belonging to a third party franchisee, Aussie Cash Northam, and that the uncorroborated evidence of the second appellant that he had received legal advice about the matter and believed he was proceeding lawfully was outweighed by the matters referred to in paragraph [122] of the Reasons.
- Leave to amend was granted.
57 On 6 August 2007, Wheeler JA granted leave to appeal on grounds 1, 2, 3 and 5, and ordered that the application for leave to appeal on grounds 4, 6 and 7 be heard together with the appeal.
Ground 1 of the appeal
58 Each charge alleged, relevantly, that Interim Advance exercised a function of a debt collector in that it prepared, signed and sent to Aussie Cash Northam a Local Court summons naming Interim Advance as plaintiff and a client of Aussie Cash Northam as defendant and claiming, in part, on behalf of Aussie Cash Northam, what was a debt owing to Aussie Cash Northam, in the expectation of gain.
59 The Act was enacted in 1964 and came into operation on 1 May 1965. The Parliament of Western Australia had not previously legislated in relation to the business of debt collecting. The Act therefore imposed a new system of regulation.
60 The critical concepts in the Act, for present purposes, are the definition of'debt collector' in s 3 and the prohibition in s 5(1). Neither of those provisions has been amended since the Act came into operation.
61 The term 'debt collector' has a broad connotation. It means:
(a) a person (whether or not he carries on any other business);
(b) who, on behalf of any other person;
(c) for or in expectation of any gain, fee or reward whatever, by whomsoever paid or payable;
(d) either on his own account or in conjunction with another;
(e) carries on the business of collecting, requesting or demanding payment of debts or advertises or notifies that he carries on that business.
62 The prohibition in s 5(1) also has a wide ambit. It provides, relevantly, that a person shall not:
(a) exercise or carry on;
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- (b) advertise, notify or state that he carries on or is willing to exercise or carry on; or
(c) in any way hold himself out to the public as ready to exercise or carry on,
the business or any of the functions of a debt collector, unless he is the holder of a licence under the Act. By s 5(2), a person who contravenes or fails to comply with any of the provisions of s 5(1) is guilty of an offence.
63 Counsel for Interim Advance and Mr Douglas submitted to this court that 'the functions of a debt collector', for the purposes of s 5(1) of the Act, must refer to functions that can lawfully be performed by a person who is a licensed debt collector. According to counsel, 'the functions of a debt collector' do not include any conduct which would be unlawful under another written law. In particular, the functions of a debt collector do not include engaging in legal practice (including, relevantly, preparing and signing a Local Court summons) contrary to the prohibition in s 123 of the Legal Practice Act (read with s 4 of that Act). It was submitted that the conduct relied on by the respondent was carried out by Interim Advance in breach of s 123 of the Legal Practice Act and, accordingly, that conduct was not within the scope of 'debt collecting' as described in the definition of 'debt collector'.
64 In my opinion, Hasluck J did not err in finding that, notwithstanding the prohibition in s 123 of the Legal Practice Act (read with s 4 of that Act), the business or functions of a debt collector, for the purposes of the prohibition in s 5(1) of the Act, could include preparing and signing a Local Court summons and sending that summons to another person to arrange for its filing in the court.
65 Parliament may prohibit identical conduct under two separate enactments, and the identical conduct may be an offence under each statute. See Australian Oil Refining Pty Ltd v Cooper (1987) 11 NSWLR 277, 282. The Parliament of Western Australia has regulated the conduct of legal practitioners, and has prohibited persons who are not certificated practitioners from engaging in legal business, since (and, indeed, before) the introduction of the Legal Practitioners Act1893 (WA). When Parliament enacted the Act, it recognised that there would be some overlap between the operation of the Act and the operation of the Legal Practitioners Act. It therefore provided in s 4(a), that the provisions of the Act do not apply to a certificated practitioner (within the meaning of the Legal Practitioners Act). This exemption was amended subsequently to refer to the Legal Practice Act.
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66 The ordinary and natural meaning of the words 'the business of collecting, requesting or demanding payment of debts' in the definition of 'debt collector' in s 3 of the Act encompasses preparing and signing a Local Court summons for the recovery of a debt and making arrangements for its filing and service. If those activities were not within the words 'the business of collecting, requesting or demanding payment of debts', it would have been unnecessary to have exempted certificated legal practitioners from the provisions of the Act.
67 The respective objects and provisions of the Act and the Legal Practice Act are capable of concurrent implementation and operation. There is no proper basis for confining the ambit of the definition of 'debt collector' or the functions of a debt collector so as to exclude the conduct relied on by the respondent in the present case. Any such construction would be contrary to the plain intention of the Parliament as discerned from the unambiguous language of the definition and s 5(1) in the context of the Act as a whole.
68 Ground 1 fails.
Grounds 2, 3 and 3A of the appeal
69 It is convenient to consider grounds 2, 3 and 3A together. There is substantial overlap between them.
70 The particulars of grounds 2, 3 and 3A are, to a significant extent, argumentative.
71 The particulars to ground 2 allege that Hasluck J ought to have found that the respondent had not 'disproved beyond reasonable doubt that [Interim Advance] had prepared, signed and sent the Local Court summonses in the exercise of an honest claim of right in respect of the debts the subject of the summonses'. The particulars further allege that there was evidence of a claim of right that required consideration by the learned magistrate and that the question to be determined was whether the respondent had negatived that claim beyond reasonable doubt, and not, in effect, whether there was sufficient evidence to establish that Interim Advance had asserted an honest claim of right.
72 The particulars to ground 3 allege that Hasluck J ought to have found that Mr Douglas gave unchallenged evidence of a belief that Interim Advance was the holder in due course of the promissory notes pursuant to the power of attorney and that, as such, Interim Advance was entitled, in its own right and not on behalf of any other party, to take steps to enforce
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- the notes and that it was for this reason that the Local Court summonses were prepared and signed in the name of Interim Advance.
73 Interim Advance and Mr Douglas provided detailed particulars of ground 3A. The particulars allege:
(1) The issue to be determined under s 22(1) of the Criminal Code was the subjective belief of the second appellant (which his Honour found was the mind of the first appellant); the issue was the 'claim' and not the existence of the right.
(2) The findings made by his Honour at paragraphs [122] and [123] were against the weight of the evidence having regard to:
(a) the matters referred to in the particulars to ground 3 above;
(b) the fact that the summonses the subject of the charges were not only drawn with the first appellant as plaintiff but in the Particulars of Claim it was alleged that the amount claimed was the balance due and owing by the defendants to the first appellant 'being the holder of a dishonoured promissory note issued by' the defendants;
(c) the second appellant's evidence that he understood that the first appellant could issue the summonses as the holder of the promissory notes in due course, an understanding that [was] based on his knowledge of the Bills of Exchange Act and legal advice (at AB 191.B-F);
(d) the fact that the second appellant was not cross-examined on the evidence referred to in paragraphs (a) to (c) above;
(e) the meaning of a holder in due course of a bill of exchange;
(f) the fact that the second appellant denied in cross-examination that the first appellant executed the summonses on behalf of Aussie Cash Northam in issuing the summonses (at AB312.D-E) and that denial was not further challenged and in particular, it was not put to the second appellant that he knew that [the] first appellant was collecting a debt belonging to Aussie Cash Northam by reference to the matters identified by the learned judge or at all.
(3) Further, the facts that the summonses were prepared at the request of Aussie Cash Northam and that the first appellant had a procedure for acting on such requests do not, by themselves, support an inference that the appellants knew that the debts belonged to Aussie Cash Northam and that the first appellant had
- no right to sue for recovery of the debts on its own behalf given the second appellant's evidence as to his understanding of the effect of the power of attorney. The second appellant's evidence as to his belief as to the effect of the power of attorney and the sources of that belief were not challenged (apart from at AB212.D-E).
74 Section 22 of the Criminal Code provides:
Ignorance of the law does not afford any excuse for an act or omission which would otherwise constitute an offence, unless knowledge of the law by an offender is expressly declared to be an element of the offence.
But a person is not criminally responsible, as for an offence relating to property, for an act done or omitted to be done by him with respect to any property in the exercise of an honest claim of right and without intention to defraud.
- In s 1(1), the term 'property' is defined to include real and personal property and everything, animate or inanimate, capable of being the subject of ownership.
75 By s 36 of the Criminal Code, the provisions of Chapter V of the Code, which deals with criminal responsibility and includes s 22, apply to all persons charged with any offence against the statute law of Western Australia.
76 The second paragraph of s 22 qualifies the principle embodied in the first paragraph. By the first paragraph, ignorance of the law affords no excuse for an act or omission unless knowledge of the law is expressly declared to be an element of the offence in question. An honest claim of right within the second paragraph of s 22 must be an honest claim by the accused to an entitlement in, or with respect to, property. See Walden v Hensler (1987) 163 CLR 561, 568 - 569 (Brennan J), 580 - 581 (Deane J), 592 (Dawson J), 600 - 601 (Toohey J); R v Waine [2005] QCA 312; [2006] 1 Qd R 458 [23] (Keane JA, with whom McMurdo P and Wilson J agreed).
77 The determination of whether an honest belief of an entitlement to act in a particular manner with respect to property constitutes a defence under s 22 must be ascertained by reference to the elements of the alleged offence. A defence of honest claim of right will not be available unless what is claimed or believed would, if it were the fact, have negatived an element of the alleged offence or constituted a defence to it. See Walden (581) (Deane J).
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78 In Waine, Keane JA said, in relation to the Queensland counterpart of the second paragraph of s 22:
It has been said that the clearest example of the operation of s. 22(2) of the Criminal Code is the case where a person does an act with respect to property in the honest but mistaken belief that he or she is the owner of the property (R v Walsh [1984] 2 Qd R 407). But it is also clearly established on the authorities that an honest claim of right may be made, not only as a claim to a proprietary or possessory right in property, but also as a claim to be entitled to act in respect of property. What is important is the honest belief that one is legally entitled to do to the property that which one is doing. That belief as to entitlement may come equally from the consent of the owner, or from a person believed to be the owner, as well as from a mistaken belief as to one's own title (Mitchell v Norman, Ex parte Norman [1965] Qd R 587 at 594 - 595; Walden v Hensler (1987) 163 CLR 561 at 568; R v Williams [1988] 1 Qd R 289 at 295; R v Jeffrey & Daley [2002] QCA 429 at [21] - [23]; (2002) 136 A Crim R 7 at 12 - 13) [25].
79 A claim of right within s 22 must be honest, but it need not be reasonable. See Clarkson v Aspinall; Ex parte Aspinall [1950] St R Qd 79, 89; Walden (600) (Toohey J). Further, an honest claim of right within s 22 may be made out 'even though it may be unfounded in law or in fact': R v Bernhard [1938] 2 KB 264, 270. Also see R v Pollard [1962] QWN 13, 29; Walden (568 - 569) (Brennan J), (600) (Toohey J); Waine [23].
80 A defence of honest claim of right is only available where the person charged introduces evidence of an honest claim of right within s 22. Where material supporting the defence is adduced by the person charged, the burden of negativing against the defence rests upon the prosecution. See Olsen v The Grain Sorghum Marketing Board; Ex parte Olsen [1962] Qd R 580, where Mansfield CJ said:
The onus of proving the offence charged lies upon the prosecution (in other words to prove criminal responsibility in the person charged) and if there is any evidence of an honest claim of right within the meaning of s 22, it is for the prosecution to negative the application of the section (Cf Loveday v Ayre and Ayre, Ex parte Ayre and Ayre [1955] St R Qd 264, at pp 268, 271) (584).
81 In the present case, the parties ran the case at trial and the appeals before Hasluck J and this court on the basis that s 22 applies to the offences with which Interim Advance and Mr Douglas were charged. Also, Hasluck J proceeded on the basis that s 22 applied to the offences in question. Section 5(1) of the Act creates an offence, relevantly, if a person exercises or carries on the business or any of the functions of a
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- debt collector without holding a licence under the Act. That offence relates to property in that it involves collecting, requesting or demanding payment of debts owing to another person. It would be a defence to establish that the collecting, requesting or demanding was undertaken in respect of debts owing to the person charged. It follows that an honest claim of right in respect of the property in question (that is, the debt) will afford a good defence. This was common ground between the parties.
82 Counsel for Interim Advance and Mr Douglas submitted that, contrary to the finding made by Hasluck J at [102], [103] and [143], the right honestly claimed by Interim Advance was not the right to prepare and sign the Local Court summonses on behalf of Aussie Cash Northam without being a licensed debt collector. Rather, the right honestly claimed was the right of Interim Advance to collect its own debt; that is, to deal with its own property (a chose in action) by suing for recovery of the amounts owing as the holder of the promissory notes.
83 It was submitted on behalf of Interim Advance and Mr Douglas that there was clear and largely uncontested evidence at trial raising honest claim of right and that the claim was the right of Interim Advance to deal with its own property, namely, its debt. The summonses were prepared with Interim Advance (and not Aussie Cash Northam) as plaintiff, and the summonses were endorsed with a claim that the defendants were indebted to Interim Advance.
84 The focus of the respondent's case before Hasluck J, and in the appeal to this court, was that Interim Advance did not satisfy the evidentiary onus of establishing that it had an honest claim of right to recover the debt owing to Aussie Cash Northam. Counsel for the respondent submitted to this court that the elements of the offence in s 5 of the Act are the acts which are part of the function of 'debt collection'; that is, carrying on the business of collecting, requesting or demanding payment of debts of another person, in circumstances where a licence is not held by the person committing those acts. It was submitted that Interim Advance had failed to discharge the evidentiary onus of establishing an honest claim of right which would, had the right in fact existed, have negatived an element of the offences. The only claim of right which would have operated to excuse Interim Advance (and, consequentially, Mr Douglas) from criminal responsibility was an honestly held belief that Interim Advance in fact owned the debts in question.
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85 At trial, during the examination-in-chief of Mr Macdonald, counsel for Interim Advance and Mr Douglas made a concession, as follows:
MR GILMOUR: So, the concession, your Honour, is that in terms of the physical location of the document, we concede that it was held by Aussie Cash Northam at all material times and as a matter of law, that is to say, speaking as lawyers, we concede that the promissory note was at all times the property of, if I put it loosely, Aussie Cash Northam (ts 41).
86 Mr Douglas's evidence-in-chief in relation to the alleged defence of honest claim of right was this:
(a) 'Now, did you have any understanding as to the capacity of Interim Advance Corporation Pty Ltd to issue legal proceedings in its own name to recover moneys the subject of promissory notes - -?---Yes.
- - between - - and I'm referring particularly to Aussie Cash Northam - -?---Yes.
- - and any of its customers, although the question is asked generally, you understand?---Yes.
Can you tell his Honour what understanding you have as to the capacity of Interim Advance Corporation in that respect?---Our understanding is that any legal work that we did by the issuing of summonses was pursuant to this power of attorney - - that we were able to do that under this power of attorney.
And how did you come to that understanding?---Well, in my discussions with the two solicitors that were involved in the preparation as [sic] franchise agreement, the - - the explanation of debt collection and the actual system, etcetera, was explained to them and I was advised that this power of attorney would cover that situation as per the functions as set out in the statutory disclosure document then on our - - on our - - on our obligations as - - as the franchisor managing the business (ts 81).
(b) On what basis did you consider that Interim Advance Corporation was entitled to issue summonses in its name - - ?---Yes.
- - - even though the promissory note was held in the name of a franchisee and its customer?---Yes. We only issued summonses as upon request of Aussie Cash Northam - - Mr and Mrs Macdonald. We didn't do so for every debt that they had to collect. When they did so, we assumed the role of holder in - - in due course under the power of attorney and - - and therefore, we became the holder in due course of that promissory note in order to collect it under the power of attorney.
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- And where did you get that understanding?---From my own knowledge of the - - the Bills of Exchange Act and from my discussions with the two solicitors that prepared the statutory - - sorry, they prepared the franchise agreement and reviewed the statutory disclosure document (ts 82).
(c) MR GILMOUR: Now, you've said that you considered that the company was entitled by reference to the power of attorney provisions and the franchise agreement, exhibit K - - ?---Yes.
- - to pursue recovery proceedings as though it were the holder of the promissory note - - ?---Yes.
- - and to do so in the name of the company?---Yes.
And you said you discussed that matter broadly with solicitors?---Yes.
Was that a view that you held honestly?---Yes. Definitely (ts 88).
87 The only cross-examination of Mr Douglas which had any bearing on the alleged defence of honest claim of right was the following:
It's your evidence, is it not, that each of the summonses were executed by Interim Advance as attorney or as donee of power of attorney of Aussie Cash Northam?---Yeah. We - - we became the holder in due course under this power of attorney in order to collect the promissory note.
Well, I won't take any - - I won't be discussing holder, because there's been concessions made about that, but is it the case that each of the summonses were executed by Interim Advance on behalf of Aussie Cash Northam?---No. They were executed by Interim Advance as holder in due course. The - - the first thing that has to happen under the power of attorney, we become the holder in due course in order to collect a bill of exchange. Unless you are the holder in due course of a bill of exchange, you can't collect it.
But if you execute a document on somebody else's behalf, that is that person's document, the donor of the power of attorney, but - - ?---We - -
- - I won't take - - ?---We - -
- - that any further?---We - - yeah.
That's a legal submission. I'll take that further in submissions (ts 103 - 104).
88 At trial, counsel for Interim Advance and Mr Douglas, in his closing submissions to the learned magistrate, said in relation to s 22 of the Criminal Code and its application to the case before his Honour:
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- Finally, in relation to the charges against the corporation, your Honour will be aware that we have relied upon section 22 of the Criminal Code as to what is often described as an honest claim of right. That's an honest claim of right as to property. The term 'property' as defined in section 1 of the Criminal Code includes real and personal property and everything animate or inanimate capable of being the subject of ownership. The view of Mr Douglas and through him, the belief or the honest claim of the corporation was that by virtue of the power of attorney provisions in clause 10 of the franchise agreement, the corporation became the holder in due course of the promissory notes [in] question in relation to the matters the subject of the six summonses.
Now, my friend asked Mr Douglas about clause 10 in the franchise agreement and the power of attorney provision and he'd given evidence in-chief and he repeated that evidence that that was the basis and on top of that, the company had received legal advice that it was entitled to consider itself the holder in due course of a promissory note and upon that basis, in each case, as your Honour will see, the summonses proceeded in the name of Interim Advance Corporation Pty Ltd as plaintiff by reason of being holders in due course of a named promissory note.
Now, it's true, your Honour, we don't resile from it, that we conceded that as a matter of law, there was no basis in law for proceedings to issue by the plaintiff as though it were [sic] as being the holder in due course of the promissory note in each case, but that's not the question in relation to section 22 of the Criminal Code. It is whether or not there was an honest claim held by the company. …
My friend may have misunderstood the concession, but the concession's clear that we don't dispute that as a matter of law the corporation did not become holder in due course of the promissory notes. Section 22 of the Criminal Code and the cases upon section 22 of the Criminal Code have pointedly demonstrated that the question is not what is the relevant law. In fact, it's the whole basis for the defence of honest claim of right that usually it's not the law, that the claim to the right to the property is in fact baseless in law …
… if he had an honest belief that he was entitled to take it or if the jury had a reasonable doubt whether he had such a belief, he should have been acquitted. However wrong his belief may have been and however tenuous and unconvincing a ground for it may seem to a judge, the onus of establishing that the honest claim of right did not exist is upon the prosecution. At the very least, one would expect in these circumstances, it's for the prosecutor to put as a proposition of fact to Mr Douglas that he had no such claim or no such honest claim or the company had no such honest claim through him, but that wasn't done and in our respectful submission, that's a glaring omission in the way that that defence and the onus of negativing the defence has been dealt with in this case (ts 127 - 128).
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89 At trial, counsel for the respondent made these closing submissions to the learned magistrate in relation to s 22 and the concession made by counsel for Interim Advance and Mr Douglas:
MR MURPHY: Yes. Just briefly, your Honour will recall at the beginning of this hearing there was some discussion about who was the holder of the promissory notes. A concession was made and it was clarified in which aspect was I referring to, legal, proprietary. I said every aspect. A concession was made the holder was Aussie Cash Northam and I acted on the basis of that concession and didn't lead a wealth of evidence from Malcolm Macdonald about the conversations he'd had with Oliver Douglas about [the] promissory note, whose it was, who held it, all of those sorts of things. So, we say that we've been put at a great disadvantage here and that that concession precludes any submission based on who is the holder of the promissory note or anyone's belief as to who was the holder of the promissory note. There was a wealth of evidence there and it simply wasn't led for that reason. That's all I have to say (ts 129).
90 In my opinion, Mr Douglas gave evidence, relevantly, to the following effect:
(a) he believed that when Aussie Cash Northam requested Interim Advance to 'issue' a Local Court summons, the power of attorney in cl 10 of the franchise agreement had the effect of constituting Interim Advance the holder in due course of the promissory note in question and, as a result, Interim Advance was entitled to sue the maker of the promissory note for the face value of the note;
(b) by virtue of Interim Advance becoming the holder in due course of the promissory note upon Aussie Cash Northam requesting it to 'issue' a summons, Interim Advance became the person entitled to sue on the note before the summons was prepared;
(c) the Local Court summonses in question were not prepared and signed by Interim Advance on behalf of Aussie Cash Northam, but in its own right;
(d) his belief was based on discussions he had had with solicitors and on his understanding of the Bills of Exchange Act 1909 (Cth); and
(e) he honestly held the belief.
91 Mr Douglas's alleged belief was not challenged in cross-examination. No doubt, this failure occurred as a result of a misunderstanding by counsel for the respondent at trial as to the nature and effect of the concession made by counsel for Interim Advance and Mr Douglas.
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92 Mr Douglas's alleged belief was corroborated, in part, by the terms of the six Local Court summonses. Each summons named Interim Advance as the plaintiff and the maker of the promissory note as the defendant. Interim Advance's claim, as indorsed on the summons, was for payment of the balance due and owing by the maker of the note to Interim Advance, who was described as being 'the holder of a dishonoured promissory note issued by the Defendant pursuant to a discount facility agreement between the parties'. There was, of course, no 'discount facility agreement' between Interim Advance and the maker of the promissory note, any such agreement being between Aussie Cash Northam and the maker. Mr Douglas did not explain, and was not asked to explain, in the course of his evidence, this aspect of Interim Advance's claim.
93 In my opinion, Mr Douglas's evidence was sufficient properly to raise the defence of honest claim of right under the second paragraph of s 22. As I have mentioned, the learned magistrate failed to deal with the issue. He thought it was unnecessary in consequence of his finding that Interim Advance, in preparing, signing and sending the Local Court summonses to Aussie Cash Northam for filing, was not exercising a function of a debt collector, but was providing a gratuitous service. For reasons which I will explain in the context of considering grounds 4, 5 and 6 of the appeal to this court, the learned magistrate's finding was in error and, in the circumstances, it was necessary for him to consider the s 22 defence.
94 I consider that Hasluck J was in error, with respect, in deciding that, on the evidence, the learned magistrate was bound to find that the respondent had negatived the defence of honest claim of right. First, his Honour's observations that the evidence did not include 'any document that could arguably be regarded as an assignment of the subject debts' [108] or that 'the promissory notes themselves did not suggest that this was intended, or that Interim Advance was to be characterised as a holder in due course' [108] related, principally, to whether the right existed or not as a matter of law. These observations do not address the initial question in relation to s 22, namely, whether Interim Advance, through Mr Douglas, had satisfied the evidential onus by adducing evidence of an honest claim of right. Secondly, his Honour's observations that 'there was insufficient evidence before the [learned magistrate] that [Interim Advance and Mr Douglas] had asserted an honest claim of right to [the debts in question] at the time the offences were committed' [145] does not distinguish between whether Interim Advance had satisfied the evidential onus by introducing evidence of an honest claim of right, on the one hand, and whether the respondent had discharged the burden of negativing
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- against the defence, on the other. Once Interim Advance had satisfied the evidential onus, it was necessary to determine whether the respondent had negatived the defence beyond reasonable doubt and not merely to determine whether Interim Advance had adduced 'sufficient evidence' of its 'assertion' of the claim. Thirdly, upon it being concluded (as, in my opinion, it should have been) that Interim Advance had satisfied the evidential onus, the learned magistrate's failure to make any relevant findings on the s 22 defence became important in evaluating whether it was open to an appellate court, in those circumstances, to be satisfied beyond reasonable doubt that the defence had been negatived. In my opinion, it was not open for Hasluck J (and it is not open for this court) to make a finding as to whether Mr Douglas's alleged belief was honestly held or not. Mr Douglas's evidence as to his belief was not challenged, and the learned magistrate did not make any relevant findings. His Honour did not make adverse findings in relation to Mr Douglas's credit generally. It is true that his Honour preferred the evidence of Mr Macdonald to the evidence of Mr Douglas on one disputed issue of fact, but that issue did not bear upon the honest claim of right defence.
95 I would grant leave to appeal on ground 3A. Grounds 2, 3 and 3A have been made out.
Grounds 4, 5 and 6
96 It is convenient to consider grounds 4, 5 and 6 together. There is some overlap between them.
97 Counsel for Interim Advance and Mr Douglas submitted to this court that the charges, as particularised in the complaints, were that Interim Advance engaged in the conduct referred to in the particulars to the charges 'in the expectation of gain'. The definition of 'debt collector' in s 3 of the Act refers to a person who acts 'for or in expectation of any gain, fee or reward whatever'. According to counsel, the terms 'gain', 'fee' and 'reward' in the definition are not used interchangeably. Further, the definition draws a distinction between 'for' and 'in expectation of'. Each of the terms, 'gain', 'fee' and 'reward' was intended to have a different connotation. The expression 'for or in expectation of any gain, fee or reward' is not to be construed as a single, composite expression. The question at trial was therefore whether Interim Advance undertook the matters alleged in the particulars to the charges 'in the expectation of gain'.
98 Counsel for Interim Advance and Mr Douglas referred to Mr Douglas's evidence at trial to the effect that Interim Advance was
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- providing a service to its franchisees by issuing Local Court summonses. Counsel emphasised, however, that that was not the respondent's case as particularised or as conducted at trial. The respondent's case at trial was opened on the basis that 'Aussie Cash Northam instructed the accused corporation to collect the debts on their behalf in return for specified fees pursuant to the terms of the franchise agreement' (ts 7) and that 'an effective fee of $24.00 per summons less postage was to be charged in respect of each of the six offending summonses and that's what we say was expected in respect of each of the summonses' (ts 8). Accordingly, Mr Douglas was cross-examined about the fees payable by Aussie Cash Northam, and the closing submissions of counsel for the respondent at the trial focused on whether the fees payable by Aussie Cash Northam to Interim Advance established the expectation of gain.
99 Counsel for Interim Advance and Mr Douglas submitted that, in the circumstances, it was not open to the respondent to contend at the appeal before Hasluck J that the expectation of gain referred to in the particulars to the charges could be established by evidence of an intangible benefit and, in consequence, his Honour erred in allowing ground 3 of the respondent's appeal.
100 As to the allegation that Interim Advance acted 'in the expectation of gain', counsel for Interim Advance and Mr Douglas submitted to this court:
(a) An expectation 'of gain' suggests that there was no prior agreement between the person providing the service and the person receiving the benefit of the service. That is to be contrasted with 'for gain'.
(b) The respondent's case at trial did not distinguish between a fee 'for' gain and an expectation 'of' gain, notwithstanding the particulars to the charges. The prosecutor sought to prove that Interim Advance had rendered accounts - settlement vouchers - for which it charged a fee. These accounts were not paid because of a dispute between Aussie Cash Northam and Interim Advance. There was also reference to the franchise royalty fee that was payable on all money received by the franchisee.
(c) On a proper construction of the definition of 'debt collector', the terms 'fee', 'reward' and 'gain' denote different matters, as do 'for' and 'in expectation of'.
(d) A fee clearly refers to a payment of money. That is what the respondent actually sought to prove at trial: that Interim Advance
- expected to receive fees (which may or may not have covered the cost of the services provided).
- (e) A fee not only suggests a prior agreement as to the fact of payment, but also as to the amount to be charged. Gain, on the other hand, connotes that the person providing the service will be better off, but not by any agreed or certain amount.
(f) The respondent sought to prove at trial that Interim Advance would receive agreed amounts as fees. Consequently, the respondent did not prove a 'gain'.
(g) An 'expectation of gain' connotes an expectation of being better off as a result of undertaking the activity of debt collecting. Further, 'expectation' of gain focuses on the state of mind of the debt collector. What the charges, as particularised, required the respondent to prove was that the purpose of Interim Advance in undertaking the activities alleged was an expectation of gain.
(h) The uncontested evidence of Mr Douglas was that Interim Advance had no expectation of making a gain from the issue of the Local Court summonses. Rather, Interim Advance was providing a service for its franchisee. According to the uncontested evidence of Mr Douglas, the amount to be received by Interim Advance did not cover court fees and the costs incurred with service of the Local Court summonses. Further, Mr Douglas gave evidence that he had no expectation of making a profit in relation to the issue of legal proceedings as 'the - - there was certainly no - - no money to be made out of it. It was basically a rescue situation for a promissory note that had in fact was - - worthless, because the franchisee had already attempted to collect as best they could and couldn't do so and then turned to the franchisee to take further - - further steps. So, in fact, I considered that the promissory note was pretty much worthless' (ts 87). Accordingly, the only expectation that Interim Advance had in undertaking the activities alleged in the particulars to the charges was an expectation of making a loss. Mr Douglas was not cross-examined to suggest that he anticipated that Interim Advance would make a profit.
101 It was therefore submitted, on behalf of Interim Advance and Mr Douglas, that Interim Advance did not have an expectation of gain; that is, of deriving an advantage or making a profit. That was the finding made by the learned magistrate, and Hasluck J erred in overturning the finding. At most, the evidence disclosed that Interim Advance was to
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- receive fees (that is, it was acting 'for fees') or had an expectation of receiving fees, but not of making gains.
102 In my opinion, Interim Advance's and Mr Douglas's submissions are without merit.
103 The words 'gain, fee or reward whatever' in the definition of 'debt collector' in s 3 of the Act are used for the purpose of distinguishing between debt collecting which is not gratuitous and arises in the context of a commercial relationship, on the one hand, and debt collecting which is gratuitous and arises in the context of a non-commercial relationship, on the other. The words 'gain, fee or reward whatever' describe the element of commercial advantage in the context of the business of debt collecting which the Parliament was concerned to regulate.
104 The word 'gain' connotes anything of value to the recipient, the word 'fee' connotes a charge for services performed at the request or direction of another, and the word 'reward' connotes recompense for services performed at the request or direction of another. The word 'gain', in the context of the definition of 'debt collector', is not circumscribed by any notion of profit. For example, where a person receives a thing of value in exchange for the performance of debt collecting services, the thing will be a 'gain', within the definition, even though the value of the gain is less than the cost to the recipient of performing the services. Plainly, there is some overlap between the words 'gain', 'fee' and 'reward'. The Parliament used a proliferation of words out of an abundance of caution to ensure that a person engaging in debt collection for any form of economic advantage would be subject to the regulatory scheme. The Parliament's intention in this respect is also apparent from the language of s 13(1) which provides, relevantly, that a person is not entitled to sue for, or recover, or retain 'any commission, fees, charges, reward or other remuneration for or in respect of any service done by him as a debt collector' unless he was a licensee at the time of the doing of that service. The essential concept conveyed by the words 'gain, fee or reward whatever' is the derivation of a 'commercial advantage' in its broadest sense.
105 The words 'for or in expectation of', within the definition of 'debt collector' in s 3, must be construed in conjunction with the words 'gain, fee or reward whatever'. The words 'in expectation' are not confined to the receipt of a gain, fee or reward pursuant to a prior agreement. A person who provides debt collecting services may, depending on the particular circumstances, have an expectation of a gain, fee or reward which is based on a prior agreement, arrangement or understanding
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- (whether legally enforceable or not) or may merely anticipate the receipt of a gain, fee or reward.
106 The allegation that Interim Advance had an 'expectation of gain' did not require the respondent to prove that Interim Advance made a profit from preparing, signing and sending the six Local Court summonses to Aussie Cash Northam to arrange for filing. In my respectful opinion, Hasluck J was correct in holding that where a person provides debt collection services and receives agreed recompense of any kind for those services, the person will have acted in expectation of gain, within the definition of 'debt collector', even if the agreed recompense is insufficient to cover the person's costs in providing the services. Hasluck J was therefore, with respect, correct in concluding that, in circumstances where the amount payable by Aussie Cash Northam (initially $75 and later $85) exceeded the court filing fees and other outgoings, Interim Advance was performing services for or in the expectation of gain, even though its overall recompense for those services might have been small [118]. Although there may have been other potential gains on which the respondent could have relied in its prosecution of Interim Advance and Mr Douglas, it chose to rely on the amount of $75 or $85 payable by Aussie Cash Northam as the relevant 'expectation of gain'. The respondent made out that aspect of its case at trial.
107 In my opinion, whether or not there was a gain or an expectation of gain must be assessed by the court, on an objective basis, having regard to all of the facts and circumstances of the particular case. The question is not to be resolved by reference to the subjective belief of the person who is alleged to have contravened s 5(1) of the Act by engaging in proscribed conduct in expectation of gain.
108 It is true that Hasluck J held that a 'gain' within the definition of 'debt collector' can include intangible benefits; for example, the fostering of a relationship with a franchisee. His Honour expressed that opinion in the course of considering ground 3 of the respondent's grounds of appeal from the learned magistrate's decision. It was not open to the respondent, either before the learned magistrate or before Hasluck J, to resile from the particulars of the charges against Interim Advance and Mr Douglas and the respondent's opening at trial which, relevantly, confined the expectation of gain to the amount of $75 or $85. Hasluck J dealt with the question of the expectation of gain based on the $75 or $85 payment and, as I have mentioned, found, correctly, that the payment in question constituted an expectation of gain. His Honour's opinion in relation to intangible benefits was not essential to his decision and is properly to be
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- regarded as part of his Honour's review of the nature and scope of commercial advantages which may, in particular circumstances, answer the description of 'any gain, fee or reward whatever'.
109 I would grant leave to appeal on grounds 4 and 6. Grounds 4, 5 and 6 have not, however, been made out.
Ground 7 of the appeal
110 It is unnecessary, in the circumstances, to deal with ground 7. I would refuse leave to appeal in relation to it.
Conclusion
111 I would grant leave to appeal on grounds 3A, 4 and 6, but refuse leave on ground 7. Grounds 2, 3 and 3A have been made out. I would allow the appeal on those grounds. The other grounds fail.
112 The orders made by Hasluck J on 11 May 2007 should be set aside and, instead, orders should be made to the following effect:
(a) the appeal be allowed;
(b) the decisions of the learned magistrate made 29 November 2005 to:
(i) acquit Interim Advance and Mr Douglas of each of the charges; and
(ii) award Interim Advance and Mr Douglas a certificate under the Official Prosecutions (Accused's Costs) Act 1973 (WA) in the amount of $5,750,
be set aside;
(c) the complaints against Interim Advance and Mr Douglas be remitted to the Magistrates Court for a re-trial and determination according to law.
Counsel should be heard as to the precise form of the orders, including orders as to costs.
113 MILLER JA: I agree with Buss JA.
114 NEWNES AJA: I agree with Buss JA.
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