Miller, Frederick John v Sullivan Sprinklers Pty Ltd

[1984] FCA 130

IN THE FEDERAL COURT OF AUSTRALIA_	1 1
SOUTH AUSTRALIA DISTRICT REGISTRY	) No. SAG 38 of 1983
)
GENERAL- jlJ!J-ISJDN	1
BETWEEN :

FHEPENJIj:- JOHN- M-ILLEH

P r o s e c u t o r

D e f e n d s n t

18 A p r i l , 1984 KEELY J.

S u l l l v s n S p r i n P - l e r s P t y . L i m i t e d ( t h e c o m p a n y ) h a s

h e e n c h a r g e d w l t h f l v e o f f e n c e s a g 3 i n s t S . 59(2) of t h e TrCde

p p g c t l f e + - f i c $ ( t h e Act) . Nobert Brlar l Sulllvan, t h e n13nsglng

d l r e c t o r o f t h e company a t t h e material times, h a s h e e n

c h a r g e d u n d e r S . 5 of t h e ~r~.me,s-Act 1914 w i t h h c i n g

"k,nowirrgly concerned in t h e commission of" e a c h o f t h e f i v e

o f f e n c e s . T h e t e n c h a r g e s ($ere h e a r d t o g e t h e r w l t h o u t

o b J e c t i o n .

M r . P e r r y , R.C., appeared u i t h Hr. T.P. t:av3nagh

f o r t h e p r o s e c u t o r . A t t h e coooencement of the h e a r i n g Hr.

i

2 .

K e n d e l a a r s a p p e a r e d o n b e h a l f of t h e l i q u i d a t o r t h e f

company t o seek. sn o p p o r t u n i t y t o a d d r e s s o n t h e q u e s t i o n o f

p e n a l t y in t h e e v e n t of t h e company be ing conv ic t ed bu t ha5

t s k e n n o a c t i v e p a r t i n t h e h e a r i n g . H e h a d n o i n s t r u c t l o n s

as .to a plea by t h e company and acco rd ing ly a p l e a o f n o t

g u i l t y bias e n t e r e d as to each of t h e f i v e c h a r g e s . Hr. M.

W r i g h t a p p e a r e d f o r Mr. S l s l l i v a n o n l y f o r t h e p u r p o s e of

s e e l ~ i n g leave t o w i t h d r a u , h a v i n g a p p e a r e d f o r him when t h e

c h a r g e s were p r e v i o u s l y b e f o r e the Court. Mr. S u l l l v a n

a p p e a r e d in p e r s o n , p l e a d e d n o t g u i l t y t o t h e f i v e c h a r g e s

a n d c o n d u c t e d h i s our1 d e f e n c e .

S e c t l o n 5 9 ( 2 ) of t h e Act p r o v i d e s a s f o l l o w s :-

"Where a c o r p o r a t i o n , r a d e i n or

comnlerce, i n v i t e s , whether bY t

s d v e r t l s e o e n t or o t h e r w i s e , p e r s o n s t o

e n g a g e or p a r t i c i p a t e , o r t o f f e r or

a p p l y e n g a g e t o or p s r t i c i p s t e , i n s

b u s i n e s s a c t i v i t y rnvestnlent of r e q u i r i n g t h e

moneys by t h e p r s o n s

c o n c e r n e d a n d t h e p e r f o r m a n c e b y then1 of

work a s s o c i a t e d w i t h t h e r n v e s t m e n t , t h e

c o r p o r a t i o n s h a l l n o t mak.e, w i t h respect

t o t h e p r o t i B 2 R i l i t y or r i s k or any o t h e r

m a t e r l x l a s p e c t o f t h e b u s r n e s c 3 c t i v l t y v

a s t a t e m e n t t h a t is f a l s e o r l i i s l e a d l n g

lrl x msterisl particular.' l

Each of t h e five charges a g a i n s t t h e company

a l l e g e s t h a t i t I n v i t e d a named p e r s o n ( t h e f r a n c h i s e e ) ' t o

engsge in a b u s i n e s s a c t i v i t y n a m e l y t h e s s l e and

i n s t a l l a t i o n of i r r iga t icsn and s p r i n k l e r s y s t e m s rcqul r lng

3.

t h e lnvestment of moneys by him and t h e p e r f o r m a n c e by h im o f

uork a s s o c i a t e d u i t h t h e i n v e s t m e n t , a n d wade w i t h respect t o

t h e p r o f i t a b i l i t y of t h e bIJSiIWSS a c t i v i t y a s t a t e m e n t t h a t

was m i s l e a d i n g i n a material p a r t i c u l a r . " P a r t i c u l a r s were

i n c l u d e d in r e s p e c t o f e a c h c h s r g e .

I t is c o n v e n i e n t ta d e a l f i r s t w i t h t h e second a n d

t h i r d c h a r g e s w h i c h , exce@5 3s t o t h e d a t e s of t h e a l l e g e d

o f f e n c e s a n d t h e nariIes of t h e f r a n c h i s e e s , are i d e n t i c a l .

The p a r t i c u l a r s were i d e n t i c a l , s a v e for t h e name of t h e

f r a n c h i s e e se t o u t In p a r a g r a p h (c ) , and were i n t h e

f o l l o w i n g terms :-

' P a r t i c u l a r s

The Statement. was made in an u n d a t e d

l e t t e r on t h e l e t t e r h e a d o f S u l l i v 2 n

S p r l n k . l e r s , P t y . L i m i t e d e n t i t l e d ' T o

whom i t may c o n c e r n - T h i s l e t t e r is

i n f o r m t o y o u of p r o j e c t e d ssles

volume and earnings Cor a f r a n c h i s e e

S u l l i v a n w l t h S p r i n k l e r s P t y .

L i m i t e d o v e r t h e f i r s t 12 months ' .

The statement forecast B g r o s s

n l o n t h l y r s n g i n g p r o f i t from

42,000.00 in t h e f i r s t month t o

43,000.00 i n t h e t w e l f t h month w i t h

3 n e t p r o f i t of $29,500.00.

T h e 5316 l e t t e r U ~ S d e l i v e r e d t o t h e

s a i d J o h n Cameron try R o b e r t H r ~ a n

S u l l l v a n . " ( I n t h e c h a r g e r e l a t i n g

t o Mr. O p i e t h e name of John Bes l ey

O p i e a p p e a r e d i n p a r a g r a p h ( c ) In

p l a c e o f t h e name John Cameron) .

T h e l e t te r r e f e r r e d t o i n p a r a g r a p h s ( a ) and ( c ) t r i l l be

4 .

r e f e r r e d t o	as t h e let ter	as t o projected	sales volume	and
earnings.

The le t ter was d e l i v e r e d by Mr. S ~ ~ l l i v m t o

i4r. Cameron in November 1482 and t o Hr. Opie in March 1983

snd in e a c h case was in t h e f o l l o c ~ i n g terms :-

"To whom it may conce rn .

T h i s le t ter is ( s i c ) inform you of

pro.jected ssles v o l u m e a n d e a r n i n g s f o r a

f r a n c h i s e e w i t h S u l l i v a n S p r i n k l e r s Pty.

L t d . o v e r T h i s p r o j e c t i o n t h e f i r s t I2 months.

is bssed upon a 40 hour

working week.

We h s v e a l s o assessed t h i s income

based upon our e x p e r i e n c e and

p o t e n t i a l

knowledge s i n c e November 1976.

The l e t t e r t h e n s e t OWL., under- the h e a d i n g "Volurrle", a s e r i e s

of f i g u r e s commencing at 34,000-00 for t h e f i r s t month and

r i s i n g , b y four- amounts each of $500-00, t o $6,000-00 in t h e

f i f t h month. I t a l so c o n t a i n e d a column headed 'Gross

P r o f i t " , c o n t a i n i n g f igures which were exac t ly one-ha l f o f

t h e f i g u r e s f o r 'Volume", connencing a t 02,000-00 f o r t h e

2 i r s t month and r i s i n g , by Pour amounts each of 0250-00, to

33,000-00 i n the f i f t h month. For t h e s i x t h to t h e t w e l f t h

o o n t h s t h e f i g u r e s r e n a i r r e d u n a l t e r e d a t $G,,OOO-00 s n d

33,000-00	r e s p e c t i v e l y .
T h e p r o s e c u t i o n c o n t e r c d e d t h a t t h e ststeeent in t h e

5.

l e t t e r conveyed t h e m e a n i n g t h a t t h e f r a n c h i s e e w o u l d e a r n

t h e f i g u r e s t h e r e set OUE b e c a u s e t h o s e f i g u r e s r e p r e s e n t e d

t h e c o m p a n y ' s e e p e r i e n c e s i n c e November 1976. Al though t h e

m a t t e r is n o t f ree f rom doub t I have come t o t h e c o n c l u s i o n

t h a t I s h o u l d n o t u p h o l d t h a t s u b m i s s i o n . As a matter of

c o n t r u c t i o n it must be n o t e d t h a t t h e l e t te r e x p r e s s l y u s e d

t h e word " p o t e n t i a l ' i n t h e sentence i m m e d i a t e l y b e f o r e t h e

c o l u m n s 04 figures h e r e it re i ' e~~ed t o " t h i s income

p o t e n t i a l " .

In cons ide r ing r rhe the r t he mean ing conveyed try t h e

s t a t e m e n t i n t h e le t ter was m i s l e a d i n g , t h e r e s p o n d e n t s a r e

e n t i t l e d t o t h e b e n e f i t 04 o t h e r s t a t e o e n t s wade t o or g i v e n

to t h e f r a n c h i s e e at t h e material t i n e t r h i c h r e n d e r e d i t less

Eik.ely t h a t t h e s t a t e m e n t w o u l d b e m l s l e a d i n g . In t h l s

eonnex ion it is relevant t h a t t h e a d v e r t i s e m e n t , t o w h i c h

Mr. Cameron had responded, a l so r e f e r r e d to "potential"

income, u s i n g t h e words "Very h igh income p o t e n t i a l " .

i

E l J r the r , Mr. Camerorr was g i v e n a l e t te r ( e x h i b i t Z), s l g n e d

by Hr. S u l l i v a n , w h i c h s t r e s s e d t h e i m p o r t a n c e o f t h e

compsny's ' t ra ining s G s s i o n s " a n d s a i d t h a t it wss most

i m p o r t a n t 'for new c o n t r a c t o r s t o l e a r n " t h a t t h e y 'must

a t t e n d t h e m t o learn hou to nake a 3ood p r o f i t " . T h a t l e t t e r

also s a i d . & h a t a l l rteu c o n t r a c t o r s 'must find -some w o r k " f o r

themselves, s t r e s s e d t h e i m p o r t a n c e of s a l e s p r e s e n t a t i o n a n d

, c o n c l u d e d :

6 .

O I t b o i l s down t o t h i s : i f y o u a t t e n d

and s p p l y t h e t r a i n i n g s e s s i o n s 3 r d i f

y o u are p r e p a r e d t o f o r 40 h o u r s per

week y o u will make a t l e a s t $20,000 in

your f i r s t 15 months bus iness . o f We

w i l l do our b i t and U@ g u a r a n t e e you t h a t

i f you d o y o u r s t h e n you will s u c c e e d . "

In my c o n s t r u c t i o n of o p i n i o n t h a t l e t tm is n o t c o n s i s t e n t w i t h t h e

t h e 1@tte~ as to t h e p r o j e c t e d sa les volume

a n d e a r n i n g s f o r which Mr. P e r r y c o n t e n d s - upon which l e t t e r

t h e p r o s e c u t i o n bases t h e charge r e l a t i n g t o Mr. Cgmeron.

The ssme c o n s i d e r a t i o n s or s u b s t a n t i a l l y s i m i l a r

o n e s a p p l y t o t h e charge r e l a t i n g t o Hr- Opie which is based

upon t h e s a n e l e t te r as t o p r o j e c t e d sales volume a n d

earnings. H i s v i s i t to t h e company a l s o was i n r e s p o n s e t o

an a d v e r t i s e m e n t w h i c h referred to " p o t e n t i a l i n c o m e ' . A t

t h e company's o f f ice he had been g iven a document headed 'How

b e l n g a f r a n c h i s e e w i t h S u l l i v a n S p r i n k l e r s can b r i n g YOU

s e c u r i t y a n d p r o s p e r i b y " m That document referred t o t h e

company o f f e r i n g art o p p o r t u n i t y "To a l l o w you t o b u i l d a

b u s i n e s s w h i c h will be as p r o f i t a b l e as t h e e f f o r t you a r e

w l l l i n g t o p u t i n t o it t o make it grou". I t stressed t h a t it

p l a c e d 'great i n ~ p o r t a r r c e t o n a i n i n g ' i n c l u d i n g S a l e 5

t r a i n i n g , a n d t h a t t h e company 'don't s i m p l y want any per son

t o h e 3 f r a n c h i s e e w i t h i n o u r b u s i n e s s ; . GJe want t h e p e r s o n

t o b e t e a c h a b l e ... p r e s e n t a b l e ( a n d ) p r e p a r e d t o work

5 u f f i c i e n t l y t o be s a t i s f i e d u i t h t h e b u s i n e s s o p p o r t u n i t y

( i n s t e a d of) w a i t i n g for t h i n g s to happen for them. They

7 "

must come i n p r e p a r e d t o uork..". In my o p i n i o n t h a t l e t t e r

is n o t t h e p ro jec ted c o n s i s t e n t w i t h t h e c o n s t r u c t i o n of the le t te r a s t o

sales v o l u m e a n d e a r n i n g s f o r u h i c h Mr. P e r r y

c o n t e n d s - upon rlhich le t ter t h e p r o s e c u t i o n bases t h e c h a r g e

r e l a t i n g t o M r . Opie.

In a d d i t i o n Nr, S u P l i v s n made a n o f f e r t o Mr. Ople

t h a t t h e company would refund 75% o f t h e f r 3 n c h i s e money p a i d

by Mr. Opie i f h e d i d n o t e a r n 840,000 in ~ I J O y e a r s . A

c l a u s e wa5 i n s e r t e d i n h i s c o n t r a c t t a t h a t effect . Mr.

P e r r y s t t e n l p t e d t o r e c o n c i l e t h a t o f f e r a f a r e f u n d w l t h t h e

p r o s e c u t i o n ' s c o n t e n t i o n t h a t t h e l e t te r a s ta p r o j e c t e d

s a l e s volunle and earrainss (referred t o t h e i n c h s r g e )

c o n v e y e d t h e m e a n l n g t h a t h e f r a n c h i s e e w o u l d earn *29,500

in t h e f i r s t t u e l v e months. Horlever, in rdy o p i n i o n t h e y a r e

n o t r e c o n c i l s b l e a n d t h e f i g u r e s set o u t I n t h e l e t t e r 3 s t o

p r o j e c t e d e a r n i n g s u e r e o n l y ' p o t e n t i a l ' e a r n i n g s w h i c h a

f r a n c h i s e e o c a u l d ' e a r n d e p e n d i n g o n a number of f s c t o r s

i n c l u d i n g h o u h a r d h e worked, how u e l l be s p p l i e d h i m s e l f t o

t h e t r a i n i n g s e s s i o n s a n d hoGJ s u c c e s s f u l he was i n l e s r n i n g

t h e s r t o f s a l e s n m n s h l p .

As t o t h e c h a r g e s g e n e r a l l y it was s u b m i t t e d b y Mr.

P e r r y t h a t t h e p r o s e c u t i o n c o u l d r e l y u p o n t h e " c o n t e x t "

i n c l u d i n g a n O r a l s t a t e m e n t r l h i c h , o n Mr. Caweran ' s ev ldence ,

cla5 made by iir- S u l l i v a n as t o t h e s o u r c e of t h e f i g u r e s se t

O I J ~ in the le t ter . H m e v e r , t h e p a r t i c u l a r s in t h e

i

8 .

i n f o r m a t i o n o n l y refer t o t h e s t a t e m e n t i n t h e l e t te r and do

n o t refer t o a n y o t h e r s t a t e n e n t as t o t h e s o u r c e of t h o s e

f i g u r e s . i ls . Perry did n o t c i t e a n y a u t h o r i t y i n s u p p o r t o f

hls s u b a i s s i o n t h a t t h e p r o s e c u t i o n c o u l d r e l y upon t h e oral

5taternent n o t r e f e r r e d to in t h e p a r t i c u l a r s ; he h a d a l r e a d y

conceded in h i s o p e n i n g address t h a t t h e p r o s e c u t i o n was

bound	b y	its	p a r t i c u l a r s a n d n o a p p l i c a t i o n	wss	made	t o amend
theml .

B e f o r e c o n s i d e r i n g w h e t h e r t h e e v i d e n c e e s t a h l i s h e s

b e y o n d r e a s o n s h l e d o u b t t h a t Plr. S u l l i v a n d i d n o t b e l i e v e t h e

writ ten s t a t e m e n t g i v e n by him t o iiessrs. Cameron and Ople,

i t is c o n v e n i e n t t o c o n s i d e r p a r a g r a p h (b) o f t h e p a r t i c u l a r s

nf e a c h of a n d Etevan srhich in each case refers to a n t h e Chree c h a r g e s r e l a t i n g to Hessrs . Edge, Hansen

a l l e g e d o r a l

s t a t e m e n t by i2r- S u l l i v s n .

As t o Mr. Edge it uas a l l e g e d t h a t Hr. S u l l l v a n

o r a l l y f o r e c a s t 3rt income of $130,000.00 3 y e s r " . I n h l s

e v i d e n c e Hr. Edge i n i t i a l l y said that fir. S u l l i v a n "indicated

t o me t h a t I rmuld be able to a c h i e v e a n income of a b o u t

$30,000 a y e a r " . &sk.ed w h a t h e meant by t h e word

" i n d i c a t e d " h e s a i d " P e r h a p s I shou ld have b en a b l t

c learer . I wanted to a c h i e v e a n i n c o m e of a b o u t $30,000 a

y e s r a n d t h a t e a s i l y ' " . r e a l l y u h a t h e said to we Has, 'Yes, you will IJO

His wife, Mrs. E d g e , g a v e v i d e n c e t h a t Mr.

S u l l l v a n s a i d Othat cre would be a b l e t o e a r n a mininlum of

9.

G30,000	a y e x	and	t h a t would	g r ~ w , h o p e f u l l y ,	o v e r	t h e
y e a r s ' .

Mr. E d g e a d m i t t e d t h a t i n a t e l e p h o n e c o n v e r s a t l o n

h e h a d h i s e v i d e n c e r e f e r r e d t o a figclre of 020,000 p e r year. P u r t h e r ,

as t o t h e time t a k e n t o p e r f o r m t h e work of both

g i v i n g q u o t a t i o n s for jabs .and of i n s t a l l i n g s p r i n k l e r

s y s t e m s uas so d i f f e r e n t from t h e v i d e n c e o f a number of

o t h e r w i t n e s s e s t h a t I am f o r c e d t o t h e c o n c l u s i o n t h a t

e l t h e r h e is rtlistal*.en in h i s e v i d e n c e as t o t h e time r e q u i r e d

or worked he a t a c o n s i d e r a b l y s l o r l e r r a t e t h a n o t h e r

f r a n c h i s e e s . N o t w i t h s t a n d i n g t h o s e tuo matters, I r e g a r d hlm

a n d a l s o p o s s i b l e Hrs. Edge as t r u t h f u l w i t n e s s e s a n d it is q u l t e

t h a t Mr. S u l l i v a n used e i t h e r t h e rmrds a t t r i b u t e d

t o hlm by fir. Edge or t h o s e a t t r i b u t e d to him by Mrs. Edge or

words c o n v e y i n g s u b s t a n t i a l l y t h e same meaning. If t h l s were

a c i v i l p r o c e e d i n g it might v e r y (Jell b e h e l d t h a t t h e

e v i d e n c e s a t i s f i e d t h e c i v i l o n u s of proof . Mouever , t h e s e

a re cr iminal p r e c i s e l y u h a t p r o c e e d i n g s a n d t h e p o s s i b i l i t y of mistaLe as t o

was sa id by Mr. S u l l i v a n 1s s u c h t h a t I am n o t

s a t i s f i e d b e y o n d r e a s o n a b l e d o u b t t h a t t h o s e w o r d s were used

r a t h e r t h a n words t h a t a b o u t $30,000 " c o u l d " be e a r n e d .

Mr. S u l l i v a n said i n h i s e v i d e n c e i n ch ief :-

" I would 1 i k . e to c l a r i f y t h e p o i n t o f

income t h a t I t h i n k I s t a r t ed t o do a t

one s t a g e . I d o n o t b e l i e v e I ever s a i d

t o anyone': YOU will earn it; Y O U are

I

10.

d e f i n i t e l y g o i n g t o e a r n X anlount of

money. I made t h e p o i n t a l u a y s t h s t It

C J ~ S p o s s i b l e , a n d I d w e l t o n t h e f a c t

t h a t if YOU were mot iva t ed enough and

s t r o n g e n o u g h a n d your d e s i r e is t h e r e

you c m a c h i e v e c e r t a i n t h i n g s ; it is

p o s ~ l b l e . ~

No c r o s s - e x a m i n a t i o n was d i r e c t e d to t h a t e v i d e n c e .

Mr. Edge was g i v e n a n d r e a d a copy of t h e docunlent

( e x h i b i t E) headed 'Hotj b e i n g a f r a n c h i s e e w i t h S u l l i v s n

SprinP.1ers can b r i n g you securi ty a n d p r o s p e r i t y ' - 3

d o c u m e n t a l s o g i v e n t o W. Opie. The connerr t s made e a r l i e r

in these r e a s o n s a s Eo t h a t document are e q u a l l y re levant

here , e . g . t h e stress it p l a c e d upon s e l f - m o t i v a t i o n , u p o n

t r3 in ing i n sales t e c h n i q u e s a n d its e x p r e s s r e f e r e n c e t o t h e

o p p o r t u n i t y "To a l l o t r ~ C W J to b u i l d a b u s i n e s s u h i c h t r i l l be

as p r u f i t a b l e a5 t h e eflort YOU are u i l l i n g t o p ~ i n t o it t o t

maP.e 1% grow". In c o n s i d e r i n g uhat s t a t e m e n t ( J ~ S made by M r .

S u l l i v a n I have h a d r e g a r d to t h a t d o c u n e n t , t o Mr.

Sull ivsn 's e v i d e n c e o n t h a t aspec t and t o t h e f ac t t h a t in

May 1982 he had been made aware t h a t h e T r a d e Pract ices

C o m m i s s i o n h a d r e c e i v e d c o m p l a i n t s a b o u t t h e c o m p a n y a n d t o l d

of f i n e s for b r e a c h e s of t h e Act- In t h e r e s u l t I am n o t

s a t i s f i e d b e y o n d 5peaP.ing t o Hr. Edge r e a s o n a b l e d o u b t that M r - S u l l i v a n in

.-

used the !lords " Y O U t r i l l d o t h a t e a s i l y "

i . e . earn a b o u t '$30,000 per y e a s ( a s Mr. Edge s a i d in

e v i d e n c e ) or t h a t he t o l d fir. Z tirs. E d g e ' t h a t tde would be , I

a b l e t o earn a m i m i n u m of ~ 3 0 , 0 0 0 " p e r y e a r ( a s Mrs. Edge

s a i d in e v i d e n c e ) .

11. ..

As t o Hr. Hansen it uas a l l e g e d t h a t l a t e i n March

1 9 8 3 M r . S u l l i v a n o r a l l y 'forecast a p r o f i t o f a t l e a s t

61,500.00 t o $2,000.00 per month". Mr. Hansen gave v idence

t h a t M r . S u l l i v a n s a i d " a n i n c o m e o f b e t r l e e n Lslp500.00 t o

32,000.06 c o u l d e a s i l y br made timnth". per Under

c ros s -ex3n ins t ion hob jeve r , asked t o r e c o n s i d e r t h e word,

" e a s i l y " h e said : 'As f a r as my Ernoulecige, t h a t was t h e way

I u n d e r s t o e d it" and, t o a s u g g e s t i o n t h a t t h e ~ m r d " e a s i l y "

n o t h a v e b e e n u s e d , h e s a i d 'It c o u l d h a v e b e e n a n o t h e r

word". He a l s o s a i d in h i s e v i d e n c e i n c h i e f t h a t Mr.

S u l l i v s n t o l d h im t h a t t h e " f l r s t week. a y income could be

between 5350.00 and $400.00". Under c oss -examinat ion M r .

Hansen uas u n a b l e t o g ive a n e x p l a n a t i o n for t h e d i f f e r e n c e

between t h a t e v i d e n c e a n d a s t a t e w e n t by him i n an a f f i d a v i t ,

f i l e d i n ea r l ie r c o u r t p r o c e e d i n g s , i n r h i c h h e s a i d t h a t t h e

f i g u r e s uere '$300.00 to M O O - 0 0 a week.'. Mr. Hansen a l so

a g r e e d in cross-examination t h a t Mr. S u l l i v a n t o l d him t h a t

t h e e s r n i n g s were p u t foruard by M r . S u l l i v a n on t h e basls

t h a t Mr. Hansen " a t t e n d e d a l l t h e t r a i n i n g s e s s i o n s " and t h a t

h e "worVed hard". t k s - Hansen gave e v i d e n c e t h a t h e r h u s b a n d

was t o l d $ lp50O t o !:2,000	by Mr.	Sulli*>an " t h a t he c o u l d	e s r n p	t o h e g i n	w i h ,
a month".

Hr. Hsnsen and Mrs. Hansen weres in my o p i n i o n ,

t r u t h f u l u ihesses and were n o t seek.ing t o m i s l e a d t h e C o u r t

in any way. However, on t h e etvidence I 3m n o t s a t i s f i e d

12.

beyond r easonab le doub t t h a t M r . S u l l i v a n s s i d t o Mr. Hsnsen

t h a t a n " e a s i l y " be i n c o m e of b e t u e e n 31,500 t o 82,000 p e r month could

made or (as a l l e g e d i n t h e p a r t i c u l a r s ) t h a t " a t

l e a s t ' $1,500.00 t o 52,000.00 per mon th cou ld be e s rned .

As t o Mr. Bevan it uas a l l e g e d t h a t i n A p r i l 1983

Kr. S u l l i v a n o r a l l y 'foreesst t h a t a person uho engaged in

t h e s a i d b u s i n e s s a c t i v i t y could oake $20,000-030,000 in t h e

f i r s t year and u p t o e80,OOQ by t h e t h i r d or f o u r t h y e a r ' .

In e v i d e n c e Wr. Bevan s a i d t h a t Mr. S u l l i v a n t o l d him t h a t h e

acoldld expect t o fi1ak.e 520,000 t o $30,000 in t h e f i r s t y e a r ,

g o i n g up t o $20,000 in t h e t h i r d or f o u r t h y e a r ' . I a c c e p t

Mr. Bevan's e v i d e n c e .ss to what was s 3 i d i n relation t o t h e

f i r s t year. . In c r o s s - e x a m i n a t i u n h e a g r e e d t h 3 t in a l a t e r

t e l e p h o n e c o n v e r s a t i o n in November 1983 h e h a d t o l d Mr.

S u l l i v s n t h a t h e P m e u t h a t Mr. S u l l i v a n d i d n o t say t o hlm

t h a t h e (l$$-.. Bevan) ' c o u l d e a r n $80,000 a y e a r ' . Mr m Bevan

a g r e e d t h a t h e r e c 1 8 5 'a c o n t r a d i c t i o n o n face v a l u e " b u t

s a i d t h a t 3% t h e time of t h e t e l e p h o n e c o n v e r s a t i o n h e had

been tal9,en by surprise "and I t h o u g h t by s a y i n g t h a t I would

get r i d o f y o l ~ as quick. a5 p o s s i b l e I.I I t h o u g h t t o g o a l o n g

w i t h w h a t y o u s s i d was t h e b e s t u a y of h a n d l i n g i t Lhat

n i g h t " m Ma. Bevan IcnerJ t h a t he was l i k e l y b e t o

c ross -exsmined as t o t h e Nowember 1983 t e l e p h o n e c o n v e r s a t l o n

- as was s h o u n b y t h e f ac t t h a t h e was q u e s t i o n e d on t h a t

s u b j e c t d u r i n 5 h i s e v i d e n c e in c h i e f . M r . Bevan's memory o f

events uas a t times poor. I an n o t s a t i s f i e d b e y o n d

13 m

r e a s o n s b l e d o u b t t h a t Mr. S u l l i v a n s p o k e t o him o f earnings

"going up t o '380,000 in t h e t h i r d or f o u r t h yearno

i

Mr. S l J l l i v a n sa id i n h i s e v i d e n c e t h a t h e wss

carefu l in w h a t h e s a i d t o t h e p o t e n t i a l f r a n c h i s e e s -

p a r t i c u l a r l y a f te r he uas rrarned in May 1982 try firrn Davld

MacFarlane, an o f f i c e s of t h e Trade Bractices Commission,

t h a t f o r a n y b r e a c h of the Trade P r a c t i c e s Act he would be

l i a b l e t o a f i n e of c510,000-#0 and t h e r e s p o n d e n t company

w o u l d b e l i a b l e t o a f 5 n e of 450,000-00. Mr. HacFar l sne g3ve

e v i d e n c e t h a t h e h a d p u t Hr. S u l l i v a n on n o t i c e t h a t t h e

T rade Practices Commiss ion had r ece ived compla in t s atno,ut t h e

p r a c t i c e s of t h e company; f u r t h e r , t h a t h e h a d e : : p l a i n e d to

P5r. S u l l i v a n the a c t i o n u h i c h m i g h t b e p u r s u e d by t h e

C o r n m i s s i o n a n d p s s i b l y r e f e r r e d t o c o n s e q u e n c e s t h e

(p re sumab ly in the sense of f i n e s ) i f any b r e a c h of t h e T r a d e

P r a c t i c e s Act o c c u r r e d .

I am n o t s a t i s f e d t h a t Mr. S u l l i v a n s t a t e d t o a n y

o f t h e Cameron, f r a n c h i s e e s r e f e r r e d to i n t h e c h a r g e s , Messrs. Edge,

Opie, Hansen and Bevan, t h a t t h a t p o t e n t i a l

f r a n c h i s e e or ' a ' f r a n c h i s e e " c r o u l d " earn t h e a m o u n t a l l e g e d

in t h e i n f o r m a t i o n . Urr a l l the e v i d e n c e , i n c l l J d i n g t h e

d o c u m c n t a r y e x h i b i t s and t h e oral e v i d e n c e o f t h e f i v e

f r a n c h i s e e s , 5f t h e o t h e r f r a n c h i s e e s a n d of t h e o f f i c e s t a f f

of t h e company, toge ther r r i ih that of Mr. S u l l i v a n a n d of t h e

w i t n e s s e s s a l l e d by him, I c o n s i d e r it is p o s s i b l e t h a t M r .

14.

S u l l i v a n said t h a t t h e amount i n q u e s t l o n i n t h e p s r t l cu l s r

i n s t a n c e ' c o u l d " be ea rned .

I h a v e a l s o r e a c h e d t h e c o n c l u s i o n t h a t a l l o f t h e

statements made by tlr- S u l l i v a n as to e a r n i n g s , t h e s u b j e c t

of t h e c h a r g e s , were made on a b a s i s t h a t d i d n o t e x c l u d e t h e

need for t h e franchisee, in o r d e r to e a r n t h e m a t e r i a l

amount, a t o t e n d t r a i n i n g sessions c s i t h u f f i c i e n t

r e g u l a r i t y t o learn ffon fir. S u l l i v a n a n d h i s stsff t h e

necessary t e c h n i q u e s s a l e s o a n s h i p , o f to a p p l y t h o s e

t e c h n i q u e s a n d to work hard. In t h i s conne::ion e x h i b i t s F

and D D , which uere r e a d by nessrs . Edge and O p i e r e s p e c t l v e l y

before t h e y p u r c h a s e d t h e f r a n c h i s e s , referred i n s e v e r a l

p l a c e s to t h e n e e d for a n d t h e i r d p o r t a n c e of t h e f r a n c h i s e e s

b e i n g	t r a i n e d	in	s a l e s n a n s h i p .	S i m i l a r l y	Mr.	Cameron	before
P

p u r c h a s i n g h i s f r a n c h i s e in November 1982 r e a d e x h i b l t Z

w h i c h s t r e s s e d t h e i m p o r t a n c e of sales t r a i n i n g a n d t h e need !

f o r t h e f r a n c h i s e e to work hard. Ra ment ioned ea r l l e r , Mr.

Hansen a g r e e d i n c r o s s - e x a m i n a t i o n t h a t Mr. S u l l i v a n h a d t o l d

him t h a t t h e e a r n i n g s I E P ~ put f 0 ~ ~ 3 a s d by fir. S u l l i v s n or1 t h e

b a s l s t h a t and that h e 'wort.ed hard". Kr. Hansen "a t t ended a l l t h e t r a i n l n g s e s s i o n s '

Hr.. Bevan s a i d t h a t , when h e

p u r c h a s e d h i s f r a n c h i s e i n A p r i l 19S3, M r . S u l l i v a n t o l d hlm

t h a t f o r trso months he would L e p r o v i d e d by t h e company w l t h

n l e a d s " b u t , as t o t h e p e r i o d after t h e two months, M r .

B ~ ~ l l i v s n had "made it clear t h a t p a s t of t h e job t~as a d e a l I

was e n t e r i n g i n t o , t h a t I would L e r e q u i r e d t o d o my own

15.

a c q u ~ r i n g of l eads" . T h e p o s i t i o n is less clear on t h e

e v i d e n c e 3s to what was s a i d by tlr- S u l l i v a n o n t h i s a s p e c t

t o t h e other Pour f r a n c h i s e e s , t h e s u b j e c t o f t h e c h a r g e s .

It is n o t n e c e s s a r y to wake P i n d i n g s on t h a t matter b e c a u s e

t h e p a r t i c u l a r s statements were o f t h e fiwe charges do n o t s t a t e t h 3 t any

made t o any of the f i v e f r a n c h i s e e s t h a t t h e

company r-rould p r o v i d e a l l " l e a d s ' n e c e s s a r y t o e a r n t h e

i n c o m e s s p e c i f i e d in t h e p a r t i c u l a r s . T h e p r o s e c u t z o n

a r g u e d t h a t i n d i f f e r e n t as t o u h e t h s r a t$rm S u l l i v a n , h a v i n g s o l d t h e f r a n c h z s e , was

Zrsncbisee s u c c e e d e d or n o t but I

r e j e c t t h a t s u b m i s s i o n p a r t l y b e c a u s e o f t h e e v i d e n c e as t o

at tempts by the cmpany to get more ' l e a d s ' for t h e

f r a n c h i s e e s a n d p a r t l y b e c a u s e it blould have been aga ins t t h e

corllpany's interest t o h a v e b e e n i n d i f f e r e n t .

T h e p r o s e c u t i o n h a s f a i l e d t o s a t i s f y me beyond

r e a s o n a b l e d o u b t h a t , a t t h e m a t e r i a l times a l l e g e d in t h e

e h a r g e s , i lr- S u l l i v a n d i d n o t b e l i e v e t h e s t a t e m e n t s made by

hzm t o t h e f i v e f r a n c h i s e e s as t o incomes t h a t " c o u l d " b e

e a r n e d . Hr. S u l l i v a n is n o t r e q u i r e d t o s a t i s f y t h e C o u r t

t h a t a t t h e material times he d i d b e l i e v e any statements h e

had made and was n o t o b l i g e d to g i v e v i d e n c e i n t h e case

a l t h o u g h h e e l e c t e d t o do S O .

I do n o t z c c e p t e v e r y statement made by Mr.

S u l l i v a n in h i s e v i d e n c e as b e i n g a c c u r a t e ; f u r t h e r , on a

number of o c c a s i o n s h e s a i d tinat h e 113s u n a b l e t o remember

16.

d e t a i l s . He s a i d t h a t :-

’ I f e e l a lit-Lle b i t n e r v o u s a b o u t w h a t I

am s a y i n g , i n t h e sense of comml t t ing

myself t o spec i f ic t h i n g s , b e i n g aware o f

t h e c ross -examinat ion coming up . B l J t I am t r y ~ n g t o be as accurate as I can, o f c o u r s e , r d i t h o u t b e i n g t o o c o m m i t t a l on

. jomething I am not a b s o l u t e l y s u r e on.

Hordever, h i s ev idence g 3 i n e d sone s u p p o r t frao t h e e v i d e n c e

of v a r i o u s clitnesses c a l l e d by h i m , i n c l u d i n g i n p a r t i c u l a r

t h e e v i d e n c e of Mr. Riggs , Nr. Wak.ely and Mr L. Kevin McMshon.

I n a d d i t i o n , t h e v i d e n c e of Mrs. Knoblauch, a u i t n e s s for

t h e p r o s e c u t i o n , s u p p o r t e d Hr- S u l l i v a n o n a number of

m a t t e r s . ilr. S u l l i v s n uas c r o s s - e x a u i n e d by ilr. Perry f o r

a l m o s t a f u l l day o f t h e h e a r i n g - a c r o s s - e x a n i n a t i o n tdhich

o c c u p i e d more t h a n 80 pages of t h e t r a n s c r i p t . T h a t

c r o s s - e x a ~ l i n a t i o n d O U b t l e S S g a i n e d c o n s i d e r a b l e s u p p o r t f r o m

t h e d e t a i l e d i n v e s t i g a t i o n w h i c h h a d b e e n c a r r i e d o u t by t h e

T r a d e Pract ices Commiss ion , pa r t i cu la r ly abou t Apr i l -May 1’383

b u t i n c l u d i n g , as ment ioned ear l ier , some c o n s i d e r s t i o n of

t h e a f f a i r s o f M r . Sull iwara nd tine company as e a r l y a s May

1982. The Conuission i n p r e p a r i n g a n d p r e s e n t i n g i ts c a s e

h a d t h e a c c o u n t a n t b e n e f i t of information s u p p l i e d by t h e r e s p o n d e n t ’ s

(Mr. Mitehell) , and a member o f t h e o f f i c e staff

(Mrs. C n o b l a u c h l , b o t h of rlhom were c a l l e d a s w i t n e s s e s f o r

t h e p r o s e c u t i o n , t o g e t h e r r d i t h t h e f i v e f r a n c h i s e e s r e f e r r e d

t o i n t h e . c h a r g e s a n d a s u b s t a n t i a l number o f o t h e r p e r s o n s

rlho h a d b e e n f r a n c h i s e e s o f t h e company.

17.

The importance a t t a c h e d by i$r. S u l l i v a n t o t h e

f r a n c h i s e e s m a s t e r i n g t h e t e c h n i q u e s o f s e l l i n g t a u g h t hy h lm

a t t h e as f r a n c h i s e e s is o b v i o u s " t r a i n i n g s e s s i o n s " a n d t h e n a p p l y i n g t h o s e t e c h n i q u e s

from s o m of t h e exhibits t o whlch

Z h a v e a l r e a d y referred and a l so from t h e a r t i c l e by Mr.

S u l l i v a n , " S u c c e s s M o t i v a t i o n , D e v e l o p m e n t " , ( e x h i b i t H ) .

M r . Edge s a i d i n h i s e v i d e n c e t h a t it uas handed t o hlm a s a

P r a n c h i s e e at a c o n f e r e n c e of t h e f r a n c h i s e e s h e l d by t h e

company at K a n g a r o o I s l a n d in Navember 1932. In t h e

i n t r o d u c t i o n t o t h e l a t t e r d o c u m e n t Kr. S u l l i v a n s a i d ' L e t me

cIarn you t h a t you a n d y013 a l o n e are t h e key t o y o u r h e t t e r

future. You will h a v e ZO l i e i n the bed YOU mak.e, d o n ' t

d i s a p p o i n t y o u r s e l f " . He a l s o s a i d t h a t ' i n b u s i n e s s 3 good

a t t i t u d e is v i t a l " a n d i n a s e c t i o n h e a d e d " C o l d C o n t s c t i n g '

s a i d : " I h a v e made a n a r t o f creating hUSi reSS ou t of ' t h i n

a i r ' . I p r i d e m y s e l f o n b e i n g e x p e r t t h i s i n a r e a . I

b e l i e v e t h a t t o h e a n e f f i c i e n t small b u s i n e s s p e r s o n I t 1s a

nust t o cu l t iva te sone o e t h o d s of c o l d c o n t a c t i n g , t h e y may

s i m p l y b e d o o r t o door, b u s i n e s s to b u s i n e s s " . Amongst o t h e r

t h i n g s h e s a i d t h a t " y o u can't e x p e c t t o b e p a i d i f you have

n o t d o n e a s p e c t t h e uork". He l a i d p a r t i c u l a r e m p h a s i s u p o n t h a t

in a s e p a r a t e s e c t i o n h e a d e d , "If You P a i l - Keep

E o i n g " . A n o t h e r s e c t i o n s t r e s s e d t h a t success depends upon

t h e l n d l v i d u a l . p e r s e v e r a n c e t l r . S u l l i v a n a l s o s t r e s s e d t h e i n p o r t s n c e o f

a n d s a i d in t h e d o c u m e n t "No mat te r wha t I t e l l

y o u , no natter what you r e a d , I can o n l y s t i m u l a t e you i n t o

18.

b e i n g s u c c e s s f u l , you N I J S ~ c h o o s e t o tak.e t h e motivation and

,do i t st y o u r own v o l l t l o n 3nd do I t Lecmse ygy want to".

T h a t njocument i n g e n e r a l sets o u t Mr. S c r l l i v s n ' s

" p h i l o s o p h y " , a s c a l l e d h e it in cross -examin ing t h e

p r o s e c u t i o n ' s o i t n e s s e s , t h a t in o r d e r to s u c c e e d t h e

f r a n c h i s e e s m u s t work., must p e r s e v e r e a n d i f t h e y f a i l must

k e e p o n t r y i n g . T h e r e nay b e d i 2 f e r e n t v i e u s as t o w h e t h e r

Hr. S u l l i v a n ' s a p p r o a c h t o t h e s u b j e c t of s a l e s m a n s h i p LS

correct b u t it is n o t Cor t h i s C o u r t t o seek to d e t e r m i n e

t h a t q u e s t i o n . T h e p r o s e c u t i o n h a s t h e o n u s of s a t i s f y i n g

t h e C o u r t ststenlents a l l e g e d t h a t Hr. S u l l i v a n , a t t h e time of msking t h e

i n t h e i n f o r m a t i o n , d i d n o t b e l i e v e then1

t o be t r u e .

tjr- P e r r y s o u g h t to r e l y upon a passage f rom t h e

Judgment of Frank1 J . i n Phnsmlpson v M a s t e r t o u c h T.U. S e r v i c e s

Pj,yp. Ljpjte!j, (1977) 15 ALR 487 s t 495 uh ich has b e e n c i t e d I n

2 nuabe r o f la ter j u d q n r n t s o f t h e C o u r t . T h a t p s s s a g e r e a d s

.ss f o l l o w s :-

" T h e r e f o r e , in o r d e r t o e s t a b l i s h t h a t

t h e words 'Should earn $400 per week

m i n l m u s ' c o n s t i t u t e d a fa l se s t a t e m e n t

c o n c e r n i n g p r o f i t a b i l i t y t h e o f a

b u s i n e s s a c t i v i t y i t is n e c e s s 3 r y f o r t h e

i n f o r m a n t t o p r o v e t h a t t h e d e f e n d a n t did

n o t b e l i e v e t h a t t h e f o r e c a s t or

p r e d i c t l o n r r o u l d b e s a t i s f i e d or was

r e c k l e s s l y i n d i f f e r e n t c o n c e r n i n g t h e

f o r e c a s t or p r e d l c t i o n . "

19.

In my o p i n i o n t h a t s ta tement of t h e law d o e s n o t assist t h e

p r o s e c u t i o n in t h e p r s e n t case. The rsords 'or wss

r e c l . . l e s s l y i n d i f f e r e n t c o n c e r n i n g t h e f o r e c a s t or p r e d i c t i o n n

re fer t o a s i t u a t i o n u h e r e t h e p e r s o n c h a r g e d d i d n o t st t h e

mater ia l tinte p o s i t i v e l y b e l i e v e t h a t h i s statement was

untrue but had no b e l i e f t h a t it r ~ a s t r u e a n d was " r e c k l e s s l y

i n d i f f e r e n t " as t o rshether t h e words uere true or u n t r u e .

T h a t c o n c e p t must b e d i s t i n g u i s h e d from what , as I u n d e r s t a n d

Mr. P e r r y ' s argrJment, t h e p r o s e c u t i o n seelr.5 t o do i n t h e

present proceed ings , name ly , r e l y upon t h e e v i d e n t i a r y

m 3 t e r ~ s l ss s h o w i n g t h a t , e v e n i f M r . S u l l i v a n b e l i e v e d t h e

s t a t e m e n t s , h e uas r e c k l e s s i n f o r m i n g t h e b e l i e f . M r . P e r r y

handed in rrsitten s u b m i s s i o n s u h i c h made it clear t h a t " t h e

p r o s e c u t i o n ' s p r i m a r y c o n t e n t i o r a ( is) r e c k l e s s t h a t

i n d i f f e r e n c e " a t t r ac t s l i a b i l i t y . In my o p i n i o n t h e

p r o s e c u t i o n must e s t a b l i s h more t h a n t h a t , i n t h e l i g h t o f

t h e i n f o r m a t i o n Ir.noun to him, it uas " r e c k l e s s " o f Mr.

Sclllivan to b e l i e v e t h e s t a t e m e n t s made t o t h e P r a n c h i s e e s as

t o i n c o m e t h a t " c o u l d " b e a r n e d . I t m u s t s a t i s f y t h e C o u r t

b e y o n d r e a s o n a b l e statements at d o u b t t h a t d i d n o t e l i e v e t h e

t h e time uhen he made thew. Evidence as t o

w h a t Mr. SuPlivarr knerl at t h e t i n e is, of C O ~ J P ~ ~ , r e l e v a n t t o

[ ; h e t h e r h e i n f a c t b e l i e v e d . But i f Hr. S u l l i v a n was a n

i n c u r a b l e o p t i n l i s t rlho b e l i e v e d t h a t i n c o m e s n c o u l d ' h e

e s r n e d in circumstances u h e r e nest o t h e r p e o p l e , w i t h t h e

same k.rnoIlledge, r l ou ld no t have had t h e s a m e b e l i e f , t h e n in

my o p i n i o n t h e statement made d o e s n o t c o n t r a v e n e S. 5 9 ( 2 ) o f

20

t h e Act.

H a v i n g r e - r e a d t h e t r a n s c r i p t o f Mr. S u l l i v a n ' s

e v i d e n c e I am n o t s a t i s f i e d b e y o n d r e a s o n s b l e d o u b t t h a t a t

t h e mater ia l times h e d l d n o t b e l i e v e t h e statements made as

t o income t h a t " c o u l d " b e e a r n e d . It was u r g e d by t h e

p r o s e c u t i o n t h a t , e v e n i f t h e C o u r t uere n o t s a t i s f i e d as t o

t h e c h a r g e s November, r e l a t i n g t o t h e s t a t e m e n t s made in October and

1982, it s h o u l d b e s a t i s f i e d b e y o n d r e a s o n a b l e

d o u b t t h a t Mr. S u l l i v a n d l d n o t in Harch 3 r d A p r i l , 1 9 8 3

b e l a e v e t h e statements made b y h i n t o Messrs. Opie, Hsnsen

and Bevan. t h e company's T h i s u b m i s s i o n uas s u p p o r t e d by e v i d e n c e as t o

C i n s n c i a l p o s i t i o n , as t o c o m p l a i n t s w h i c h h a d

been made by t h e f r a n c h i s e e s b o t h t o tlr. S u l l i v a n a n d t o h i s

o f f i ce 5 ta f f and .as ta s t a t e n e n t s made t o S u l l i v a n I n

e a r l y March 1983 by a commi t t ee r rh i ch had been e l ec t ed by t h e

f r a n c h i s e e s t o	make	r e p r e s e n t a t i o n s	t o	t h e	company	on	t h e l r
b e h a l f .

There 1s c o n s i d e r a b l e f o r c e i n t h l s a r g u a e n t b u t I

am n o t s a t i s f i e d b e y o n d r e a s o n a b l e d o u b t t h a t Mr m S u l l l v a n

d i d n o t b e l i e v e t h e sta-Lements h e made i n March and Apri l

1 9 8 3 t o Messrs. Opie, Mansen and Bevan . The op t lmis t1c

a p p r o a c h u h i c h Mr. S u l l i v a n apparent ly t o o k e v e n a t t h a t time

is i l l u s t r a t e d by t h e A p r i l 1983 "Ne ts Letter" r-lhich was r e s d

by Mr. Hansen and u 'nich uas a n e x h i b i t t e n d e r e d by t h e

p r o s e c u t i o n . T h e f i n a l p a r a q r a p h 0 2 t h a t k w s Let te r r e a d a s

21.

f o l l o w s E -

'Hopefu l ly rre are well o n t h e road t o a

more e f f i c i e n t l y r u n b u s i n e s s , a t t h e

sswe time sales are still the number 1

c o n c e r n . So many f a c t o r s a f f e c t y o u r

I

s e l l i n g from p e r s o n a l i t y t o haw c l e a n

your s h o e s are. C o n c e n t r s t e a n d

d i s c i p l i n e y o u r s e l v e s a n d h a v e f a i t h t h a t I

Y O U a c h i e v e c a n s u c c e s s t h e t h a t

S u l l i v a n s	~ ~ D I J S	is	a u t	t h e r e	f o r	t h e
t s k i n g . "

A c c o r d i n g l y a l l t h e c h a r g e s a g a i n s t t h e r e s p o n d e n t

conlpsny must be dismissed and it f o l l o r ~ s , t h a t a l l t h e c h a r g e s

a g a i n s t Mr S l J l l i v a n must a lso be dismissed.

Dur ing t h e h e a r i n g r e f e r e n c e tms made t o S. 83 of

t h e Act w h i c h p r o v i d e s t h a t :-

l

'83. I n a p r o c e e d i n g a g a i n s t a p e r s o n

u n d e r s e c t i o n 82 or i n a n a p p l i c a t i o n

u n d e r s u b - s e c t i o n 87 I1A) for a n o r d e r

a g a i n s t a p e r s o n , a f i n d i n g of a n y f a c t

b y 3 c o u r t made i n p r o c e e d i n g s ... f o r 3n

offence a g a i n s t s e c t i o n 79, in GJhich t h a t

f o u n d c o n t r s v e n e d , b e p e r s o n h a n t o have

or t o h a v e b e e n i n v o l v e d i n

3 c o n t r a v e n t i o n o f , a p r o v i s i o n o f P a r t

1 U or U is pr ima fac ie e v i d e n c e o f t h a t

f a c t a n d t h e f i n d i n g nay b e proved by

p r o d u c t i o n of a document under t h e Se31

t h e	o f	c o u r t	from	w h i c h	t	f l n d i n g	e
a p p e a r s . "

The Court was n o t i n f o r m e d w h e t h e r a n y p r o c e e d i n g s u n d e r t h e

Act have been b rough t try any f r a n s h i s e e a g s i n s t e i t h e r Mr.

S u l l i v a n or the company. Having regard to t h e p o s s i b i l i t y

22 ,

!

of s u c h p r o c e e d i n g s it s h o u l d b e n o t e d t h a t t h e c r i m i n a l

c h a r g e s a g a i n s t t h e company and Hr. S u l l i v a n h a v e h e n

dismissed hecause t h e p r o s e c u t i o n has f a i l e d to s a t i s f y t h e

C o u r t b e y o n d r e a s o n a b l e d o u b t t h a t t h e r e s p o n d e n t s uere

g u i l t y o f t h e criwinal offences c h a r g e d . A p p l i c a n t s in any

l '.

c i v i l x t i o n u n d e r t h e Act Hould on ly have t o s a t i s f y t h e

C o u r t o n t h e o n u s of p r o o f a p p l i c a b l e t o c i v i l p r o c e e d i n g s .

F u r t h e r any s u c h s p p l i c m t s u o u l d n o t be c o n f i n e d t o t h e

narrow " p a r t i c u l a r s ' u p o n r r h i c h t h e p r o s e c u t i o n re l ied I n

t h e s e p r o c e e d i n g s - p a r t i c u l a r s w h i c h , a s w a s p o i n t e d o u t

e a r l i e r , p r e v e n t it f r o m r e l y i n g u p o n c e r t a i n e v i d e n c e t o

e s t a t a l i s h c o n t r a v e n t i o n s of t h e Act. Accord ing ly , it d o e s

n o t f o l l o w p r o c e c d i n g s Prom t h e d i s m i s s a l of t h e c h a r g e s i n t h e p r e s e n t

t h a t a n y c i v i l p r o c e e d i n g s b r o u g h t by sny o f t h e

f r a n c h i s e e s ssould f a i l .