John Cranston Thompson v Mastertouch TV Service Pty Ltd

[1977] FCA 42

i

T ~ a d e Practices Act 13'74-1971;, S. 59 -

f a l se s t a t emen t cmceming profitabll: t:r - wbether

?redict ion can he a fa lse sta-ce:r~cnt - belisf of z?rson

making f o r e c a s t o r p red ic t ion - whether w r d s o f eect;.on

T a n be...carri,?d on a t a personts -31-cc3 01 rC-:2Clunctl1

satisfied by s t a t e x e x "Can be TUC f r cv h m 2 . . . 11 -

xhether	t la t l t	:nc:udcs	l l f r u m t t -	cazs t ruc t lon ~f	p o n d
oectlons.

John Cranston	Tkompson
V.

Mastertouch T.V. Servlcc k?y.	'xn.,tecl
G. No. 19 of 1577

!

Before Franki J.

Sydney 23 JuJ.;: 1977

!

I

l

I .

The defendant Kastertouch T.V. S e r x cf3 H;-. L . ~ ~ 5 t e ? ,

1 s charged wlth an offence l.m$er s.79 of t%;e Trade Practice.;

Act 1974-1376 (" the Act1*) , par t lc i l las ised In the mforh.axion

as fo l lows I t . ..being a ccrocra t ion d l d , An rracie cr ccmcrce ,

make a f a l se s t a t emen t t o one irls Beryl Crnwe concerning the

i p r o f i t a b i l i t y cf a business act i l r i ty descr ihsd as a dealer:.irl3

and sole !,holesale agency C J ~ " s r e c i a i g l f t i m e s which t h e s a i d

Nastertouch T.V. Service P t y . Limited had reprcsenwd as a

bus iness ac t iv i ty thaz can be cars led on a t a person*: pia:;.

I

of residence dated 13 March 1976 it d i d s t a t e i n t h a t i n a? a3.vertisement in the Canberra T x i z s

'Should carn $40:: p e r week

minimum. Can Le run f rom hsme as n9 sel l lng lnvoived. * l 1

The charge is based on a cr~ntraven7,ion of S. 59 ol the

Act which a-c the re levent da te read: -

"A corporat lon shli :lot, KI t r ade m- coxrmerce, nake a 13i:,v

or misleadlcg szate:?ent, cnncernirq :he prof1tabil : tv m- i-is';

or any other rneterla? rspect of m y - >us ices s ac t iv ; t \ r t ha t t he

corpora t ior ;:as rqxvsr-qterl a s 011.2 :-!:a~ car LA, or C~:I be I a L-

conslderablt extent, c2l-rx.d	or.	a';	a	c e r s o l r * s p k c r	??
residence. I*

The charge was h s c d only m L~TI acivr.i.t:sc:nemlt , r ~ l ? > i - - .:-.ed

!

i n tne Canb2vr.a Tines of 13 !..,arch i97r-. ?hls -2Lc;;<,7-k; : - a q ~ ; - , k

I

2.

had been placed i n the Canberra Tines by th? defendent by

telephone and it appeared i n the “dus iness f o r Salett SeCtlOn, but

the evldence d id no t e s t ab l l sh p rec l se ly how It came t o be

i n tha t s ec t lon . The advertisement read:-

llOPTORTLIWITY

Dealership and sole wholesale agency o f specLal

g i f t l i n e s , c o v e r i n g ACT and. surrounding districts.

Should earn 6400 per week xinmum. Car. be rlrn I r o n

home a s no sel l ing involved. F i? l l p r l c e 5;3,900.

Some f i n a n c e t o approved buyer. Phone Sydnev G2,’

5605971. I’

A Mrs. Crowe, who lived In Canberra a-c tha t t rme,

i jotired the advertisement and commvcicatec‘ with a f r i e n a .

Mrs. Plaschke, about it. As a resul t of the t i iscuss13n, tne

31’ other of these ladies te lephoned the phone I :U~DEI- z??cmmg

i n t h e adTrertisement on the following Nonday morning an? spoke

t o a Mr. Van Vogt and it was arranged that they woul~l vi s i t

t h e Companyts o f f i c e a t 303 Stanmore %oad, P e t e r s k n , i n

Sydney, on the following Saturday, 20 March 1976. A t t h a t t ? n e

Mrs. Crowe was employed as a s a l e s l a d y . a t t h e r e t a i l s t c r e of

David Jones in Canberra. She had conslderable experience 2s

a shop assistant, as she put 1t,l1On and o f f , Z i f f e ren t shops,

i f o r 20 years. I have managed shops.ll In th i s per iud she had

spent two years with David Jones, f3ur years In ?larwln, w h ~ e

she had inanaged a shop ca l led “Tour i? t Yays‘’, asd her

emplzyme!lt included that o f shop asslr-tan+, wizh :il:o;.worths bnd

hiy~1-s i n lvielbourne.

Mrs. Plaschke also had about 20 years eger? .epce 3s a

..

shop a s s i s t a n t including tna t o f e suyer f o r J.?. ;?u::g, 2T;

Jamiescn ill the Aus t ra l jan Caoi ta l T E ’ r l t o r y , w:i<’r.: she hzd

bmght rnater la ls for cur tams, manchester and dresz rnzter:s?r.

. .

J .

She hhd	a l so been promoted from	tha t o f	buyer	t o departmental
head.

On Saturday 20 March 1976, Mrs. Crowe and Ibirs . Plaschke

went t o the defendant 's premises e t Petersham and met a

Mr. Colomy who cmducted the discusslon on behalf of the

defendant. The oppor tuni ty re fer red to In the advertlscment

tu rned out to be ,broadly , an oppor tuni ty to acqui re the r igh ts

t o c a r r y on an activiby In the Australian Capital Te r r l t o ry

and s u r r o u n u x g d i s t r i c t s , i n r e l a t i o n t o t h e s e r m c i n g o f

l r e t a i i o u t l e t s where or6ers could be p laced for -che sup3ly o f

framer1 o i l ps ln t lngs pa in ted by an a r t i s t f rom a phoTograph.

The defendant had arrznged far photographs o f , f o r example,

a person's wlfe, husbdnd, o r ch i ld , accompanled by de t a i l ed

instruci ions concerning the approprlate colour and o ther

r e l evan t ma t t e r s , t o be s e n t t o Korea where a pain t ing w m l d

be prepared by an a r t l s t and re turced to the defendant which

would then arrange f o r the framing of the picture . It was

prcposd tha t about a dozen r e t a i l o u t l e t s , f o r example.

pharmacis ts , photographc s tudios , o r l i ke sma l l r e t a i l

businesses would advertise the servlce of supplylng an o i l

pa in t ing from a photograph and dlr-play an exarnple of t h e wnck.

The dea lersh ip and sole whoiesale agency referred to in the

advert isement involved the puxhesers regular ly vls i t ing the

r e t a i l o u t l e t s and co l l ec t ing any o r d e r s t h a t had been recei-led

and sending them t o the detendant.

A t t h e rneetlng of 20 ISIarcir 1975, it was esplainec! by

!*IT. Cclory t+!at f o r each orc!er the defendant would requi re

$45 f o ~ . i t s vmrk inclu$.xg +,'le re rhnera t lon o f the art ist ,

the framing 3f the na ln t ing . It uras Droposed t h a t t h e

prchasc- rs would r.ecei.ve f o r tknlr work and the r e t a i l

stnre >:hick, had dleDlaye3 to,? ad\--c~%isln:~ mnter la l and

i n j t l a l l y t a k e n t h e ordc:- w g u i l receive 350 i n r e s p e c t of each

nrde:. Mr. Ccrlomy sa id tnz t the Cefecdants would start the

plirchaPe!'s o f f wi th 12 ?ha.;? anc introduce them t o t h r shop

.b .

owners. Mr. Colomy noted on a piece of pauer the Droposed

pr i ce and t h e way t h e money received would be d i s t r i b u t e d

and, on the basis of one s a l e p e r week from 12 shops, he wrote

down 12 per week X 45 = $540

Average $400 per week

He a l so no ted d l r ec t s a l e $95. This arose out o f a suggestion

by Mrs. Crowe that the purchasers might arrange some d i r e c t s a l ? s .

Mr. Colomy also agreed tha t Yce purchse r s cou ld e s t ab l i sh

m y f w t h e r r e t a j i ou t l e t s t ney mlght require. Mrs. Crowe p a d

a depos i t o f th i r teen hundre.6. dol lars about 22 ;iIarch 1976.

The d e i a i l s of this conversa t ion cannot , in my opin lon , a f fec t

the cons t ruc t ion of tne e3\rertisement and it i s upon t h a t

edvertiscment t n a t zhese proczedlngs are brought. idevertheles?

I cons id r r t ha t it i s nscessary to consider the background

aga ins t whlch the advertisement rr,ust be examlned i n ordel. t o

declde whether an offence h a s oeen co.mit ted.

After the meet1r.g on 20 iviarch 1976 I4rs. Crowe and

Mrs. 21aschke returned home end discussed the croposed D U ~ C ~ S P

w i t h t h e i r defendant sent respective husbands. On 1 k p - i l 1976 t h e

a c s n t r a c t t c Mrs. Crowe wlth a c o v e r m g l e t t e -

ar.d it a lso sen t a copy t o Krs. Plaschke.

Some three weeks h t e r on 24 April 1976, I k s . Croae

and Mrs. Plaschke again s2.w XT. Colomy a t t he de fendan t ’ s

pren ises . A l s o p r e s e n t a t t h i s conversation was a Niss Seea!.

who had spent some two days in the Canberra, Queanbeyan and

Yass areas arranging f x a tioren r e t a l l shops t o d i s p l a y

adver t i semtnts for the pa ln tmps i n r e t u r n f o r a commission o f

$50 jn respec t cf each order placed. Mrs. Crowe and

Mrs. Piaschke were n o t mtroduced + ,J the shopkeepers b u t WC’-€

lcf’t tr, In1 roduce ?-:~emsel.vcs, beczuse It was sa id by k I r . C o l o ~ : ~

5.

t h a t nobody was available t o carry out the mtroduct ions.

Miss Segal at the meetlng Drovided the names and addresses

and some d e t a i l s of the 12 r e t a l l o u t l e t s and IIrs. Crowe oald

the balance reimbursed Mrs. of $2:600 of the purchase money. Mrs. Plaschke

Crowe in rcs r ,ec t of one half of +he purchase

money.

In evidence, both Ivir?. Crows and Xrs. PI Zschke agrecd

i

tha t t hey had ample opportunity t o ge t any advlce wh?.ck, t;iey

might think apnrQprlate ta seek before siFnlnE thc cortl-zct .

Mrs. Crowe, in c ross -exami~at i on , sa l r i t h a t a s a rosuir: o f be78

own judgment, she "as ex-citsd abwit the sr( .snocts when S ? . '

! looked a t t h e p o r t r a i t s b e c a u s e s r e t h o ~ ~ g h t m a t t h e y we;-e i ~ k e l y

t o be good a t t h a t t i m e , s h e Eel le rs In the Canberra area. She elso s i 6 t h a t ,

d l d n o t t h n k t h e n r l s e of d p o r t r a i t baE i o s

high and tha t she was qu i t e hagny w i t 1 1 thz q01aI.ity of t h e p l - d u c t .

Mrs. Plaschke said that t h e p o r t r a i t s were y z i t c r e l l

presented. TkLe following pessagcs appear in her cross-exanination.

Q. "And you were mpressed by t h e s c por t ra l t s? I l . A. l l - f ~ s " .

Q. "And, a s a woman wit'n exverlence as a bc.yer and departmental

head, you be l ieved tha t these p o r t r a i t s wowM s e l l well. i n t h e

Canberra area, i s t h a t r i g h t ? t t A. T h a t i s r igh t " .

Nine of the proprietors from the 12 r e t a i l c u t l e t s

were ca l l ed by the inf0rrnm.t t o givz evieec-e. Yevoral o f l h t - s e

proprietors said that they cqnslderec! ihat tke prospect r , i se3.irng

t h e p o r t r a i t s was one wi th cons iderable poten t ia l , a i lhourh

in assess ing the i r ev id?nce , it 1 s npressary t o beer i r l rz:~!

that they each stood to gain a v e r y s l g n i f i c a n t c m m s s j o n

without themselves risking sny 1:oney. There was no evidence

t h a t any of t hese cailcrl C O ~ : F C ~ P ) - O C : '1:~. nrosnccts small-.

I s e t o u t s o 1 1 of the eVldeT?Ce in crose-examnation of these

wltnesses. The fo-l.lowlrs paczages are from me crcss-examnazlon

of t he p ropr i e to r of a photo,!raphic ?tudlo.

6.

Q. IlShe showed you a product and explained what was lnv?lved?"

A . !!Yes, and a s I sa id I was most impressed. with the whole

presenta t ion .

I

Q. I1I suppose onc never knows with a new idea , bu t d id you

b e l i e v e t h a t t h e	produc-t and	its	s e l l j n g might have very good
potent ia l?I1

A . "1 th ink there i s s t l l l and the re was then a very good.

market :or this s v ' c of product."

The following passages ere taken f rom the cross-exammation 37

a pharnaclst fron Yass.

G . l l Y ~ ~ zgrced t o display these jn your s tore?"

A .	I1Yes1'
Q.	#!And I take it from t h a t , t h a t as an experiences busmeesmcn
and	having seen tne por t ra i t , you be l l eved tha t t he re was a

p o t e n t i e l	f o r	t h e s e p r o d u c t s a t t k a t	tlme'?Il
1,. 11Yes18

The foJloring passages are from the cross-examination of a

! pharsac is t from Goulburn.

Q. !!I suggest you thought it had good p o t e n t l a l a t t h e t i m e

you were speaking t o her a ? d the t ime you were considering

t h e agreement?!I

A. "Could have. I wouid say iimited. po-cential. The p r i ce

would be the biggest

Q. "DCd you nzy a n y t h i n g t o t h e t e f f e c t o r i s it t h e r e s u l t

of your l a t e r experience?!!

A. "1 would say as a r e s u l t c f l a t e r experlence.Il

L. "It j s easy i n t h e l l g h t d 3 disoppointment t o r a t ionRl i se

y m r a t t l t u i e z t the tune. I suggest you thought it was a

E X J ~ product with good prospects st -,he time you took It 0'1

a?d ~ ' J U were l a t e r 31sappclnted?11

k . ''That 1s ialr w:mel;t."

7 .

The followlng passages are from the cross-exammation of the

proprietor of a camera s t o r e a t Canberra.

Q. "It i s hard to judge market demand?It

A. ttRie;httt

Q. "You were s u f f i c i e n t l y i n t e r e s t e d j n the product t o d l s n l e y

it i n your s tore?"

J	A. tlRightll
I
1	The foliowing passages are taken from tha cross-exanlnatl.oll c:'
the nanager of a photographlc busmess in Gueanbcyan.
Q. t t~bu ld . it, be t r u e t o s a y t h a t your or1F;ina-L expzctac;cns
were dlsappointed?tl
A. TJo, not exact ly . You do n o t h a v e e x p c t a t i m s wl-th a ne:\.
product in that par t icu lar sense . it 1s D new t h i g e wku".ll c h has
never' been introduced to tne s to re be fo re . The re fc re ,
expectations a r e j u s t somethmg you cannot re ly or:. It ha5
io be t r i a l and e r ro r . It
Q. "But I suppose you have t o make some busmess Zudznlex, ynu
will not put into your s tore every procuct that s o w sr_lesl.lan
comes and asks you to dlsplay, because your d i sp lay apace i s
tco valuable to you?t1
A. ttYesft
Q. "And you want t o assure yourself the product i s a repbtabie
one?!!
A. "That a. "And one, i n your estimation, i s r i g h t .

whizh has a good c h a r e cf

saccceding?"

A. "Tnat Q. "And you made this judgment i s cor rec t . It

abovt t h i s pr.3dLxt7"

A. ttYestt The fol1o;:ing passcges are f rom the r.r-ss-e::mm?t?on of +:le

proprietor- of a photographic centre in Canberra.

2 . "1 svp:,ose it was i n t h a t c o n t e x t t h a t you r?z?ta m

assessment of t h i s p roduc t t ha t was PUT lnto pour store?It

8.

A. rlYeslr

Q. "You ca lcu la t ed tha t it had poten t ia l ' ?"

A. "It seemed t o me t o be qu i t e a reasonable proposl tmn

when they first brought it around with the saxplea, yes."

! Q. "And the idea of it impressed you?rr

A. I I I thought it had some meri t , yes , the i3ea of taking

pa in t ings o f t photographs.r1

?

The purchasers commenced t 3 carry or1 t h e i r x t l - J l t i e s

a t t h e end of April 1976,. Althau$l ivks. crow^ inovcd t o

Richmond, neer Syciney, a t the ecd of d-uly, bezause of a change

i n tine loca t ion of her husband I s exployalefit and Xrs. FlaschXe

became unweli about August 1975, I am s a t ] sfieci that i o t h

Nrs. Crowe and Nrs. Plaschke carried out their task 1~ +he w ~ y

i n which it had Deen presen-ced tm: them e t t h e t m e 7f the

in t e rv i ew in March 1976.

Unfortunately zhe purchasers ho?es that the verltmu

would prove successful vere c o t r ea l i s ed . In November 1976

they ceascd to perform any funct lon In re t a t l o r l t o the -;cnt:lre.

In the pe r iod from Apr i l t o November 1976. ape r t from The

purchase o f cne p a n t i n g each by P:??,. C r o m an6 14rs. Plaschke,

only one s a l e had Seen made, and tha t was a t Yass. The

explanation suggested by Xrs. Cros;e i n cross-examirbation was

that people thought the price was t o o high. No e f f o r t was

made by Mrs. Crowe o r Xrs. Plaschkc- t o e f f e c t any d i r e c t s a l e s

by, f o r example, reducing the price. In August 1976

a

I	Mrs. Crowe commmicated wi th M r . Coiomy and asked w.suld >e buy
the business back but he said thz l she oughz t9 t r y a d 563-1
4	the busmess .
I

1 I pass now t o consider t3e r,vestlor?s of law involved.

The defencl.arLt d i d nnt go :nto ovlr;nce, but smce tnese a-?

crlmlnal praceedmgs, tile 111larn~11t must ?rove each lnzred ~i:lt

9.

of the offence t o be considercd i s whether beyond reasonable doubt. The first quest ion

i the wcrds in the adver t i sement

"Should earn $400 per week minimurr,tl cons t i tu ted a f a l s e

s ta tement concerning the prof i tabi l i ty of a b u s m e s s a c t l v j t y .

The informant made the fo l lowing f ive a l t e rna t ive

submissions.

(1 1 That it i s p o s s l b i e t o heve a f a l s e s t a t e r e n t a b m t

future eqents . The sec t ion req i l i . rod nothlng more than that

I

the sta:emnt should m o r e t o bc incorrect. Smcc the business

I had not ezrnefi $4083 per week, It had been establi-shed that a

false ztatement hsd been nadc ccncermjng t h e p r o f i t a b i l l t y of

a bus iness sc t iv i ty . Tbe aoproxh should not be inh lbb te? tv

common law rules. The concept of p r c f i t a b i l i t y was one

o i rec ted to the futclre.

(2) The statement was f a l s e i n t h a t it a l leged an ex is tmg

busnes:;, which, in the abseace cf sme oompletely unforese6n

f a c t o r a r i s i n g , anc! i f conducted i n accordance with the

in s t ruc t lons o f the vendor, wmlr! y o b a h l y e w n o r y ie ld s'O3

per week z t l e a s t .

( 3 ) The s ta teneni . was f a i s e i n tht , even If it d i d not alis.!e

i

an exis t ing bdsiness , it was a z ta te lnent that , in the absence

of some completely unfontseen f a c t o r s r l s i n g , i f t3e _ourchase:,

conducted a bus iness ac t iv i ty in accordance w i t h the instruct!ons

of	t he vendor , t ha t ac t iv i ty	wou?d	earn	o r yxcld	(!L90	per we).,
a t	l e a s t .

( 4 ) The statement was f s i c a i? t n a t it represented a

bus iness ac t iv i ty as one which thc X-endors knew, w l t h t h e m

D e c d i c r kncjwledge of it, bhoula earn ,$f+OO per week.

(5) The statemenr. ''Should earn $/LOG per week mlnmum" w ~ s

a stat-ment which rcs resented t n e opmlon of the defendant an:

i t YIZS S false stetelrenL >,,:tur c h r s t - c t l o n , m i e s s tae

defenaznt. believed a t ttle tine o€ the advert isement , that the

s!ntement was t rue .

10.

The defendant submtted that a predlctLon was not

a fa lse s ta tement because It proved t o be wrong and, tha-c

any statement made i n the advertisement was n o t t h a t t h e r e was

an ex is t ing bus iness for sa le . It also sabmit ted that , khether

o r not the words of t he sec t ion would be s a t i s f l e d i f 2

predic t ion had been made about the future which the defendant

d id not be l ieve would cone t rue, the informant had. f a i l e d t?

prove tha t the defendant	d l d not be1iel.e	the pred ic t ion	ma2e	In
the Pdvest isenent .

Sect ion 14(1) o f the United Kingdom Trade Descrlc4tlonz

Act i5sa i s somewhat s imi l a r t o S. 59 of ~11% Act. Zecti ;n

1&(1) has been considered by t h e Eouse of Lords i n Brlt:s;:

- Aiways Board v. Taylor 1976 1 W.L.X. 17 and b-q t h e Co71r.t cf

..

Appeal in keglna v. Sunair Hollda-{c. L t d . 1C.73 1 ;,.,>.X. llfj:),

and by a Divlsional Court in Reckett. v . Cohen - 1 ?!.:.X.

3.593. The ma te r i a l pa r t s of s.14(1) cons ldere i by t h e Xoclse o t

Lo?.ds i n B r i t i s h Airways 3oard v. Tavlor read BE IGilzws

'!(l) It s h a l l be an of fence for any person I n t h e c:arsp

t rade or hus iness- (a ) t o make a statement whlcil he knows

f a l s e ; o r (b ) reckless ly t 3 make a statement winch ' S f a

as t o any of the fol lowing matters , that 1s t o say , -(l) t n e

provis jon i n the course of any t r ade o r business of any

services, accommodatlon o r f a c i l i t i a s ; .... (iii) thc? tlmc a t

which, manner i n which o r persons by whom any s e n l s e s ,

acconunodation o r f a c i l i t i e s a r e s o provided;!! The r e l e w n t

f a c t s i r ; t ha t ca se were t h a t a passcneer ;l2eL vcscr?ed a seal,

for a p a r t i c u l a r f l i g h t on a pa r t i cu lp r da t e a m aT a

par t icu lar t ime and he had recelved a le t te r cnnf i rmjnb the

reszrvatLon. A t the t lme the le t tc , . was w:.it:.el a zept. g;;.".?

a x i l a b i e f o r t!:c passenger, but t k c 31r.llnc '?a12 a Llol lcy 3i

over booking, and, on the day beforr he was due t o mhke '2.e

? l igh t he was informed t h a t he waz mt booked

OL	t h e	s p e c i f i c	f l i g h t .	A t page	17	Lord	* , i lberforcc re fer red
11.

t o t h e d l s t l n c t l o n between a promise a s t o fu ture ac t lon

which may o r may not be broken and a statement as t o eXiSi:lng

I	fact and said:-
''My L o r d s , t h e d l s t i n c t l o n i n law between a promise a s t o
I
fu ture ac t lon , which may be broken or kept , and a stateinem
as t o e x l s t i n g f a c t , whlch may be t r u e o r f a l s e , i s c l e a r
enough. There statement 2s t o a f a c t , and may be inhe ren t In a promise sn implied

where t k a i s rea l ly the Lase , the

cour t can a t tach qpropr ia te consquences to any f a i s i b j m ,

c r r eck le s sness In the making o f , t h d t s th t sxent . :Zve.r:Tone

is f ami l i a r with the propcs j t lon tha t a sxatenent af ini entlor.

may i t s e l f be a statement of fac t m-d so capablc 05 3eing v u e

o r f a l s e . But this prouosit lon should not be uscc2 38 a

gene ra l s c lven t t o t r ans fo rm the me type of assurance with

i another : the d ls t inc t lon is a r e a l oye an6 r e q u i r e s t o 02

r e spec ted , pa r t i cu la r ly where t h e e f f e c t of treatillg an

assurance a s a statement is ta attract crlmznal consequences,

a s i n the p re sen t ca se . As Lord .vidgery C . J . s?id in

Beckett v. Cohen 1972 1 W.L.R. 1533, 1596, it -,vas r:ever

intended xngt tne Act of I508 shouid be used so a s 76 nake a

c r imina l s ta tenent ou t of wkLat i s r e a l l y a breacn o f warrarlty. I'

Lord Edmund-Davies a t page 23 said:-

IlTlje a p p e a l i t s e l f r a l s e s j n a neat form the d i f f e r e y e

be tween an dsser t ion of ens t lng fac t m 6 a prowlse a s t o

L

future condu2t. Section 1 4 of the Act of 13C.9 re!a=es orAy

t o the former, and L w c ! 'ijidger-r C.2. v,as undoubtedly carxcx

in say ing i n Secketr, -- v. Co!len 1972 1 7i.L.R. 1593, 1596 t n a t

' . . . s ec t inn 14 ( l ) ... has no app l i ca t l an f o statements which

amount t o a promlse w1-h ?'~~;::r-d tr~ +he f >tt:pe, arid w;lcn

therefore a'; +.he tm? w;-le1t thev 21-e cannot I1a-e :;he

character of being eizher t rue 0.1' i a l s e . '

J.L.

But t h e f a c t s of t h i s c a s e i l l u s t r a t e y e t a z a l n t h 3 t an

l a s se r t lon of e x i s t i n g f a c t and a promise of future conduct

may both be found i n one and t h e same statement. A s

McKenna j. sald in the course o f h l s adq i r ab le Judglrlent ir.

Reg. v. Suna1r Holldavs L t d . 1.373 1 ;;.i,.A. i135, li09:

I A promise or forecas t may contain by m c l l c a t i o n E staternen-’;

of p re sen t f ac t . The person who makes the p ro r i se may be

irnglying tha t h i s p re sen t i n t en t ion i s +o tcee], it o r kha t h?

has a t p r e s e n t t h e power t o perform It. The person who m , d i ~ s

t he fo recas t may be inp ly ing tha t he now be l ieves that b i s

pred ic t lon wlll come t r u e o r that he has tne means of hr;Eg?q?

it 1.0 pass. Such implled statemen-cs cf present intcn-cjon,

Eeans cr b e l l e f , when they are made, may well be wi.thin s ? c t i m

14 of the Act of 1968 and t h e r e f o r e p u n i s h ~ b l e if ‘‘in?:. -&ere

f a l s e and were made knowlngly o r r eck le s s ly . S l i t , ~i +.hey ?.re

puninhablo, the offence i s not the breaking of a promis: o r

t h e f a i l u r e t o make a predlct lon cane t rue. I t i s t h e m x ~ n g

of a fa l se s ta tement of an exls t in: fact . sornebociy’5 3r?s~e,lt

s t a t e of mind o r present means.’”

A? page 27 Lord Fraser of 5ullybe-ton also :-eferred

T

with aporoval to the passape frm tile 5Ltdg’;lent of AcV,;c-nna ”. ,

i n Hegina v. Sunair liolida-rs Ltd . 1973 1 Y.L.H. 1105 t h a t hsd

been c i t e d by Lord hdmund-Davles and Lord Fraser c5 teg a

f w t h e r passage from t h a t 2udgment a t 1109 % h x h read:-

“The sectlcrn deals wlth ‘statements: of wnicll I+ can b.- szic?

that they were, a t the t lme when they ?;?re EaCe, l jclse.

1

‘This ma-r be the case with a s t a t e m n t qf f z c t . \:h.:tlNcr 1 j 3 y t

prcsent . A s ta tement tha t a f a c t c x i s t s now, on t h a t i t

sx l s i ed ii; t he pas t , 1 s e l t h e r t r u e a: f s l s e a t t h e tFme \ * i ; ~ x

i: i s m a x . But it is not t b r cast -,,;h r7 n m r n L E $ ~ 0:- 2

! predict ion about the future . A p red ic t ion nlav co~de t;r:trs =r

it may not . A promise t o do somethm& In the future may be kc-t

o r it may be broken. But ne i the r t he predlct2.on nor the

promise can be s a i d t o have been t rue o r f a l s e a t t h e t l m e v,hen

it was made. ?$e conclude t h a t s e c t i o n 14 of the Trade

Descr lpt ions Act 1968 does not deal with forecasts o r pmmjses as

such. We pu t i n the qua l i fy ing words 'as sucht €or this reascn. . . I t

I consider that the approach adopted In B r l t l ? ? Alva-:s

b a r d v. Taylor i s a p p l i c a b l e t o a cons idera t lcn of s.59. I

cons ider tha t a pred lc t ion o r s ta tement as t o t he fu tu re 1s 110:

f a l se wi th in the words of t h a t s e c t l o n if it prove? t o be

incor rec t un less it is a f a l s e s t a t e w n t as t p an exisc,;lng c%:-

p a s t f a c t which may inc lude the s t a t e of mind fJf $he ';#erson

maki35 the statement o r of a person whose s t a t s of nix! m y b?

irnput.ed to the person making the statement. See a l r o 1:he

construct ion placed on the words l l w i l f ~ ~ l l y f a l s e promsot l i n

R.v.Harrison 1957 V.K. 117 a t 120-121.

There fo re , i n o rde r t o e s t ab l i sh tha t t he words IIShouiri

I

earn $400 per week minlmumtt cons t i tu ted a f a l s e s t a t e m m t

concern ing the nrof i tab l l l ty o f a business acz1v1.t:~ 1 t J s

necessary for the informant to prove tha t the deferlciant d i d not

be l i eve tha t t he fo recas t o r p red lc t lon v:m)uld be ssr;?.sfir:d o r bc:?

recklessly indifferent concerning the forecast r3r p e d l s t i o n .

I consider that the informant has not es tab l i shed t h l s r e q u i r z x n t .

There is no evidence before me that the defcndaxt hed c r had r x c

any b a s i s f o r m k i n g t h e f o r e c a s t , bu t I have been im;.essec! by

the evidence of Mrs. Crowe and Mrs. Placchkr? and of sone gf the

shopkeepers i n >:)hose pren ises the adver t i smonis v e r e ,?isplayed-.

I also corsuier that the use of the word tlshouldt' assists t o

show t h a t t h e words i n the advertisement can best be d c s ~ r i r e d

a s a forecas t 01- p reg ic t ion . I add t\:-?, 1-f' r e2e*rwt , I ?.o YIZ!

conside- that t b e advertisement contejns my f?lsc S' aTclncnt

that the uuslness was an e x ~ s t ~ n ~ busmess.

14.

The next argument lmon which tP.e defendant placed w s t

re l lance was that the advert lsement d i d no t represent the

business as one tha t can be car r led on ax a person ' s p lace of

res idence but as one which "Can Se run from home as no selli1lg

involved".	The	defendant drew t h e d l s t i n c t i o n	between l ' fromll
and It a t ,

I cons ider tha t the words "Can be run from home as no

sel l ing mvolved ' ' convcy +h? irlpression t h a t t h e d e a l e r s m p 2nd

I

s o l e wha2lesale agency r e fe r r ed TQ could be run frm hone

however smal l tha t hone might be. The statement "no s e l l i n g

involv5d" is a l s o an ine ica t ion tha-c no pa r t l cu la r t ype o f

J 1

p r e m s e s would. be required. The wor .6~ i n s.59 It... can be, or

can be t o a considerable exter , t , carr ied on a t a Delson's

place of res idence, '# sugcpcst a businer.s whlch can be, o r car.

be t o a considerable extont , carried on wi th in a person 's piace

c f residence. I consider7 +hat there 1 s a d i s t i n c t l o n be-cweErl

car ry icp or? a b u s i n e s s a t home anc! runnmg a business f r o m

h o x . A business could be run f r o ? home even i f t h e home

const i tute6 but a s ing le room, whereas ~f a business i s tc

be ca r r i ed on o r car r ied on t o a considerable extent a t h o m ,

t h e s i z e o f t h e home and the fac i . l i+ , les ava i lab le there a re a

very mater ia l cunsiderat loc. I vas re fer re? t o Klrkwood .v. -

CaM 19;O A.C. L22. T h l s ?asp howmen was a spec la l case t ~ v h ~ h

ti.:rneS uc3n th:e construct lon 3f ti sec t ton m the Tlt-ney-Lenders

Act. Some of the meaninp c:lted f o r the word "from1' i n The

Shorter Oxford Dlctionary , 3 r d Fd: tim, are "denoting derJartw-e

or moving away; i nd lc s t ing a place OP obzect which 1s l e f t a t a

dist .=me, benind, c r on one slde, by XI ObJeCt whlch wlthdraws

or t u rns ev,?y; indica-cing the place, cuar ter , e tc . whence

soFething cmes o r i S brought 01' fe:-ched. It Some of t h e Teanu-; S

c i t ed f w :lie worc ''at11 .n thet dictionary are I l local posiuon;

15.

express ing pr imar i ly the re la t ion of the th ing t? a goin t PC

space which it touches.!! See a l s o I".eares J. In F*ll v.

CouEhlan & Ors. (1970) 91 k'.ri. 856 as to the cons t ruc t lon of

t h e words "at t ha t pe r son ' s u sua l p l ace of abode." In cogstruinL

s.59 it must be remembered t h a t it is 4 sec t ion whlch has penal

consea_lences,and i n t h e c a s e of a coronrate defer.dant, a f7ne

of up t o '$50,000 nay be jnposed. The Dro-,cr anproach t o the

construct ion of a penal section has been the svb,>ect o f a .;-?at

deai of consieerat ion. In The Kins v . .kd.̂ :?s - 53 C.J, .R. 56:; C?

567-568 m a j o l n t .ludgrnent, Rich, Dlxm, (as he then was) X m T ?

and McTicrnan JJ., sa id : -

"No daubt, in determlning ivhether an offence has been crca??:'

or pniarged, the Court must be guided, as In c thc r question:, o f

I

In t e rp re t a t lon , by the f a i r nean ing of the l.?,nk,vmp nf t h e

enzctment, but when that lanpuage 1s capable of !mr€ than one

meaninz, o r 1s vague o r cloudy so t l l a t 1 % ~ denotdl.on is uncert.2.x

and no sure conclusion can be reached by a cons ld*ra t l sn o f t h e

l

provis ions and subjec t mat te r of th? legislation, tben I L %1rht.

not t o be construed as extending any :)mal cateror;). 'I

Gibbs J. i n Beckwith v. R 1 2 A.L.R. 73: a t 339 said:-

'The ru?.? f o r m e r l y a c c e p t e d , t h a t s t a t a t ~ s c r e s t ? n g offence$; ?Te

t o be s%r ic t ly cons t rued , has lo s t much of i t s lvportance 11,

ncclerr. t i res . In de te rmining the me?iing o f 3 ?ensi s t a t u t ?

the ord inarv ru les o f conFtruction must he a w J i e d , hut i f t?.e

language of the statute remalns ambiguous o r doilbtfu? the ar~Llg1.~~:

o r C!oub+, may be resolved in favour of the su'i7ect by r e f u z k l [ t o

extend thc category of crlminal offenccs: st? -- 1: ' I . A2cians 19;; 53

C.L.R. 553 at 567-8; Craies on C'tazuze Law 7 t h e ? , p~ 52944 .

The r u l e i s cerhaps one of l a s t re:ort.Il

i I n Ex parte Zlptsch: t7e CralP: ----- and. Pnor. 4 4 S.R. ?(>l?, 2

- ..--l

cdse to w h l A both parc les reielm?d I T ! ~ , Jor,:ali #:.L. , I . L ~ : '

&c',b,mr-nt Davldson and S t r e e t JJ . , concurrerl a t 3s5 s s id : -

I c 16.

"In Tuck & Sons v. F r i e s t e r ( I 9 Q.S.D. 629 a t 6 4 5 ) , reference

was made t o ' t h e w e l l s e t t l e d ru1.e that the Court wlll not

ho ld tha t a penalty has been incurred, unless the language of

the clause which is said t o impuse it is s o c l e a r t h a t t h e c a s e

must necessar i ly be wl th in I t , ' and it was s a l d ( a t 639) t h a t

'If the re a re two reasonable construct lons we mist glve the inore

lenient one ' . The Regulations m ques t ion a re h ighly pena l , smce

they subject persons vho disobey their prohibi t ions t o t he rxsk

of belng imprlsolled f o r En unlimited Tcr lcd and t o a f l n e of

unlimited anouat. I n my opinion, t o adopt the words of bar con Z.

i n Ingharn v. Hie Lee (15 C.L.R. 267 a t 2'71) i s c l e e r thel. the

phrase In quest ion i s open t o more i rL te rp re t z t l sns th?-i, one; and

i n construlng a ~ e n a l provision we a r e holmd to remember that WE

ought not t o ac',opt a constructlon adverse t-S afl ac:.l~ced perc,m

unless he is brought c lear ly within the words of t 5 e Act."'

Applying the propcr r u l e s o f c m s t r u c t i o n of a Fe??>.

s e c t i o n t o s.59, I consider t'.?az the sect ion does m t e:rter.d t o

a s ta tement tha t a business ac-civl-cy can be xun from a p e r s w ' s

l

I place of res idence but o n l y t o a staternent cuncer1:lng a busmess

a c t i v i t y t h a t c a n be o? can be t o a cons iderable ex tsn t , car r led

4	on	a t a	person's place of residence.
The defendant ralsed a number of other ~ G S I J C S , jnc;liiin&!

the question of whether ths exprFssior, IIShould earn $LOO p e r

i week minimumtt was a statement concerning the prufitabl11.ty of a

bus iness ac t iv i ty o r merely one concerning the g r o s s t z l c i n ~ s .

It becomes unnecessary to cm?i?er a:1 thr s::Sn;issjons

which were made by t h e defendan-c ir. mew or' the cancl lxlons J

have reached concernirg	trle two me.jot. po in ts wI?lc!l	3rcse jn th7.s
case.

I fir-: t'nat the lnfcrmant h a s failed. t o p,rovc the of fence

charged and I 5j CTYSS -he I ~ ? O T X : ~ T - ' ~ m.