Wallace, J.R. v Brodribb, A.F

WALLACE v. WALPLAN PTY. LTD. (1985) 5 FCR 315
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Spender J.(1)

CATCHWORDS

Trade Practices - Bait advertising - Dealer in used cars advertising a vehicle for supply at a special price - Refusal to supply to a person believed to be an unlicensed car dealer - Whether advertisement directed to whole world or only to retail purchasers - Trade Practices Act 1974 (Cth), s 56(1)(2)(3) - Auctioneers and Agents Act 1971 (Qld), ss 14(3), 130 - Criminal Code Act 1899 (Qld), ss 7, 8.

HEADNOTE

Upon informations being laide by the Trade Practices Commission alleging a contravention of s56(1) of the Trade Practices Act 1974 (the Act) and a failure to comply with s 56(2) of the Act on the part of a dealer in used cars,

Held: (1) For the purposes of s 56(1) of the Act a corporation's intention is to be assessed at the time of the advertisement, although subsequent conduct is relevant.

(2) Despite its lack of qualification other than the limitations implied in the terms of the holiday and trade-in incentives, the advertisement by a retail dealer in this case was addressed only to the class of retail purchasers and not to the whole world. Substantiating this finding was:
(i) a subsequent, genuine sale to a retail purchaser;
(ii) evidence that in the defendant's trade, it was a common policy not to sell to unlicensed dealers; and
(iii) the fact that it could not be supposed that a corporation would intend to supply a vehicle to a person in circumstances that would make it a party to a criminal offence, which would have been the case had the dealer supplied to an unlicensed dealer.
(3) The defendant's refusal to sell to a person whom the corporation's representatives genuinely believed to be an unlicensed dealer in used motor vehicles did not evidence a breach of s 56(1) of the Act or amount to a breach of s 56(2) of the Act.

Reardon v. Morley Ford Pty. Ltd. (1980) 49 FLR 401, referred to.

HEARING

1984, June 25, 26, 27; 1985, March 11. #DATE 11:3:1985
PROSECUTION

Prosecution pursuant to informations laid by an officer of the Trade Practices Commission alleging offences against the bait advertising provisions of the Trade Provisions Act 1974.

M G Morley QC and J A Logan, for the prosecutor.

D J S Jackson, for the defendants.

Solicitor for the prosecutor: Australian Government Solicitor.

Solicitors for the defendants: S R Jones & Co.

GFV

JUDGE1

11 March 1985
Spender J. On 11 May 1984, four informations were laid by John Ralph Wallace, an officer of the Trade Practices Commission in Brisbane, alleging offences against the "bait advertising" provisions of the Trade Practices Act 1974 (Cth) (the Act).

The first information, G51 of 1984, against Walplan Pty. Ltd. (Walplan) alleged that the corporation, contrary to s 56(1) of the Act, in trade or commerce advertised for supply at a special price goods, namely a 1980 Ford XD alloy head sedan, that it did not intend to offer for supply at that price for a period that was and in quantities that were reasonable having regard to the nature of the market in which it carried on business and the nature of the advertisement. The particulars of that charge are that on 16 May 1983 the corporation failed, when requested by Philip John Larter, to offer such goods for sale at that price.
The second information against Walplan, G52 of 1984, was based on an alleged contravention of s 56(2) of the Act and asserted that the company having in trade or commerce advertised goods, namely a 1980 Ford XD alloy head sedan, for supply at a special price did fail to offer such goods at that price for a period that was and in quantities that were reasonable having regard to the nature of the market in which it carried on business and the nature of the advertisement. The particulars of that charge are that on 14 May 1983, Walplan, in an advertisement in the Daily Sun newspaper advertised that it would supply at a special price of $3,490 a 1980 Ford XD alloy head sedan and that the company did not intend to so offer the said goods for supply at that price for a period that was and in quantities that were reasonable having regard to the nature of the market in which it carried on business and the nature of the advertisement.
The next information, G50 of 1984, alleged that one Hugh Robertson Brooks (Brooks) was knowingly concerned in the offence of Walplan founded on the alleged contravention of s 56(2) of the Act on 16 May 1983.
The fourth information, G49 of 1984, was against Alan Francis Brodribb (Brodribb) and alleged that Brodribb similarly was knowingly concerned in the commission of the offence by Walplan constituted by the alleged contravention of s 56(2) of the Act on 16 May 1983.
The four informations, by consent, were heard together.
The facts. either admitted or as I find, are these.
Walplan is a corporation within the meaning of the Act and trades as "Matilda Car Co". Walplan was engaged at all relevant times as a used car dealer. In May 1983 it carried on business at two addresses in Brisbane - one yard at Underwood and a second yard with which the four informations were directly concerned, at 808 Beaudesert Road, Coopers Plains. At all relevant times, Mr Brodribb was manager of the Coopers Plains yard and Mr Brooks was one of the two directors of, and a shareholder in, Walplan. A Mr Ray Scott was the sales manager at the Coopers Plains yard and a Mr Charles Martin was a salesman employed by Walplan at that yard. The other director and principal shareholder of Walplan was one Linda Smith who is the common law wife of Mr Neville McKerrow, an undischarged bankrupt and the general manager of Matilda Car Co. It is fair to say that Mr McKerrow, whilst neither a shareholder nor a director of Walplan, plays a significant part in the day to day operations of that company and, in particular, was directly concerned with the supervision of sales staff and all aspects of the advertising of the business Matilda Car Co.
Mr Brooks was concerned primarily with the supervision of the financial aspects of the various transactions of the company.
The Daily Sun was and is a daily morning newspaper circulating in the south-east of Queensland and, as at May 1983, had a large circulation. In the edition of the Daily Sun of Saturday 14 May 1983 a full page advertisement inserted by the Matilda Car Co. appeared. The advertisement featured four motor vehicles together with photographs of the vehicles.
The advertisement was headed "Free Gold Coast Holiday plus a day trip to Lone Pine Sanctuary for the kids with Tracey Wickham with every car sold in May at Coopers Plains". There then followed photographs and descriptions of each of the four cars, the first of them being a Toyota Corolla Station Wagon, the second a Ford Fairlane, the third a Holden Gemini Sedan and the fourth car with which these informations are directly concerned, a 1980 Ford XD alloy head sedan.
The description accompanying that vehicle was in the following terms:

"Ivory duco, matching brown interior, carpets, heater and demister, radial tyres. 27 other Falcons and Commodores in stock. One only at this price. FREE family Gold Coast holiday and a day at Lone Pine for the kinds with Tracey Wickham with every car sold this month."

Then in quite large type "Full Price $3,490" and underneath the photograph of the Ford Falcon vehicle appears "Wkly $26.37".

Underneath the pictorial display and at the foot of the advertisement appears this information "Trade your old car as full deposit. Phone 277.6885. Over 200 cars in stock. 808 Beaudesert Rd, Coopers Plains. Matilda Car Co." In smaller printing at the bottom right of the advertisement appear four items of information:

".Weekly repayments calculated on 10% deposit over 48 months to approved purchasers

.Prices remain for one week

.All vehicles in stock at date of compiling advertisement

.Photos are of actual cars offered for sale."

It was admitted by Mr D Jackson of counsel who appeared for all defendants that Walplan did, in trade or commerce, advertise goods namely the 1980 Ford XD alloy head sedan for supply at a special price.
On the morning of 14 May 1983, a Mr Philip John Larter and his wife went first to the Underwood yard of the defendant company and then went to the yard at Coopers Plains which is the location referred to in the advertisement of that morning's Daily Sun. There they met a Mr Charles Martin who they knew was employed by the defendant company as a salesman. The circumstances of the acquaintanceship between Mr and Mrs Larter and Mr Martin are significant.
For three years up until June 1980 Mr Larter conducted a service station business on the Gold Coast and whilst he was in that business he bought two motor vehicles, an MGB and a Ford Mustang which he resold. He was not a licenced motor dealer. Mr Larter said in respect of those vehicles that they were purchased to be worked on in the workshop in dull periods. At the time of operating the garage business Mr Larter knew Mr Charles Martin who conducted a car yard on the Gold Coast. Mr Larter saw him from time to time at the garage and had conversations with him concerning the appraisal of motor vehicles and, in addition, had a "spotting" arrangement with Mr Martin. Mr Larter recalls on one occasion receiving commission in respect of one sale which came about through his efforts. Their association did not end on the sale of the garage business in June 1980. Mr Martin shortly thereafter became President of a Parents and Friends Association and Mrs Larter was the Secretary of that committee.
I am satisfied also that on an occasion between Mr Martin's commencing work at Matilda Car Co. at one or other of its yards in January 1983 and the first inspection of the XD Falcon on 14 May 1983, there was a casual conversation between Mr Larter and Mr Martin in the course of which Mr Martin's occupation at Matilda Car Co. was mentioned. In that discussion, reference was made to the vehicles advertised by that company being at very cheap prices. Mr Larter asked if the vehicles were any good to which Mr Martin replied that some of them were and some of them weren't and that he should come out and have a look if he was interested.
After speaking with Mr Martin at the Coopers Plains yard on the Saturday morning of 14 May 1983, Mr Larter had a conversation with Mr Ray Scott, the sales manager, and then left the yard.
On the afternoon of Monday 16 May 1983, after obtaining the sum of $3,490 in cash, Mr Larter returned to the Coopers Plains yard in the company of his employer, Mr Gary Cannon. On that afternoon he spoke with Mr Martin again and he then spoke with another person to whom he gave the $3,490. At the time of that conversation, Mr Brooks was close by in the office and had a part to play in the dealings there, as did Mr Brodribb.
On that afternoon the money was returned to Mr Larter and he left without purchasing the motor vehicle.
On Wednesday 18 May 1983, the advertised 1980 Ford XD alloy head sedan was old for cash by the defendant company to a Mr Thornbury and with that sale Mr Thornbury received the advertised holiday on the Gold Coast.
It is common ground that there was a declining to sell to Mr Larter on Monday 16 May 1983 and the central point in these four informations is whether the defendant company was entitled to decline to deal with Mr Larter. More particularly, it is necessary to determine whether one can infer from the failure to supply to Mr Larter on 16 May 1983 that the company, when it inserted the advertisement on 14 May 1983, did not intend to offer the vehicle for supply at that price, and whether the declining to sell to Mr Larter constituted a failure to offer for supply goods that had been advertised at a special price.
Surprisingly, little turns on questions of credibility in respect of these four informations. While I will later deal in detail with the various accounts, I should say something at this stage of the various witnesses.
I am satisfied that none of the witnesses who gave evidence was dishonest and that the variations in the accounts of the several dealings involving this motor vehicle are to be expected and indeed reflect no more than ordinary human experience when parties are seeking to recollect quite short transactions after the passage of time. The recollection of Mr Brooks of these matters was not sought until August 1983, some three months after the events; Mr Brodribb was not asked to give his recollection until January 1984, some eight months after the events; and Mr Martin was not approached for his recollection until February 1984. In addition Mr Martin has, since the events in May 1983, suffered serious ill health.
I do not accept the assertion by Mr Brooks that there was a qualified admission by Mr Larter that he was a "backyard" dealer. I am satisfied that at no stage was Mr Larter a "backyard" dealer and that there was nothing that could be construed as any sort of admission in that respect made by him on the afternoon of 16 May.
Mr Brooks, in the witness box, manifested an inability clearly to comprehend questions. He exhibited a lack of mental acuity and a slowness of expression which indicated plainly to me that, notwithstanding there was no conscious dishonesty on his part, his recollection of events and conversations could not be relied upon.
Mr Martin frankly conceded that he had but a vague recollection of his involvement in the various conversations and it is true to say that his recollection was hazy. However, in a number of respects, I regard his evidence as important. I am satisfied that he was aware of Mr Larter's earlier involvement in the garage business, his involvement in the selling of a small number of secondhand motor vehicles to the public in that business and in his involvement as a "spotter" in the sale of secondhand motor vehicles. Also I accept that Mr Larter had indicated to Mr Martin an interest in the low prices at which Matilda Car Co. were offering used cars and that Mr Martin communicated something of his knowledge of Mr Larter to other persons employed at Matilda Car Co. I also accept his evidence that the general operation of the Matilda Car Co. was that the cars that were advertised were intended for sale to members of the public who wished to purchase them for cash.
I accept, without reservation, the evidence of the three officers of the Trade Practices Commission who gave evidence before me, the informant Mr Wallace, Mr O'Neill and Miss Hollis.
The evidence of both Mr Larter and his wife was honest and forthright and I accept it except that, contrary to Mr Larter's evidence, I accept that there was a casual meeting between Mr Martin and Mr Larter prior to the events of 14 May 1983, at which meeting there was a discussion about the Matilda Car Co. and the possibility of obtaining bargains from that source. I do not treat Mr Larter's denial of this meeting and conversation as telling in any way against his honesty. It is not the sort of event which would be indelibly imprinted on one's memory. For Mr Martin to recall this meeting and for Mr Larter to deny its occurrence is not something which causes me difficulty.
I accept the evidence of Mr Dalgarno, the retail sales manager of Eagers Retail Pty. Ltd, and the evidence of Mr Brodribb and Mr McKerrow as honest and reliable.
Section 56 of the Act proscribes "Bait Advertising" and so far as is relevant provides:

"56. (1) A corporation shall not, in trade or commerce, advertise for supply at a special price goods or services that the corporation does not intend to offer for supply at that price for a period that is, and in quantities that are, reasonable having regard to the nature of the market in which the corporation carries on business and the nature of the advertisement.

(2) A corporation that has, in trade or commerce, advertised goods or services for supply at a special price shall offer such goods or services for supply at that price for a period that is, and in quantities that are, reasonable having regard to the nature of the market in which the corporation carries on business and the nature of the advertisement."

Section 56(3) provides for two defences where there has been unintentional non-supply, and has no application to the factual circumstances of these informations.
Bait advertising is the advertising of a product or service at a special price which the advertiser does not intend to honour. The advertiser intends that the advertised product or service be unavailable at the special price or available at that price only in quite limited quantities. The purpose of bait advertising is to entice customers to the place of business of the advertiser where they might be persuaded to purchase other goods of the advertiser or induced to purchase goods similar to the advertised bargain but at a higher price.
"Loss leader" advertising where goods are advertised at a price which does not reflect a profit does not constitute bait advertising if the advertising is accompanied by a genuine intention to sell the goods at the advertised price in reasonable quantities and for a reasonable period. The intention of "loss leader" advertising is to attract customers to the premises of the advertiser, the expectation being that, in addition to purchasing the products advertised at the "loss leader" price, those potential customers will purchase other goods or services on which a profit will be made which will more than compensate for the loss suffered on the "loss leader".
The practice of bait advertising smacks of fraud. The deceit of the advertiser is in causing the prospective purchaser to seek the advertised bargain, which in a practical sense does not exist. The prospective purchaser in a real sense is the victim of a confidence trick, and is put to inconvenience and expense in responding to the bait.
Competitors of the bait advertiser also are affected by the dishonesty of the advertiser's saying one thing and intending another.
The obligation of which s 56(1) speaks has three aspects: the advertised special price, the supply of the goods or services in reasonable quantities, and the supply of those goods or services for a reasonable period.
There is no reason why the operation of s 56(1) should be confined to the advertising of a quantity of goods or services, even though a common area of operation of s 56(1) exists where a quantity of goods or services of a particular type is advertised. Regard has to be had to the nature of the advertisement. What s 56(1) requires is that there be no mere tokenism in so far as the quantity of the goods advertised is concerned and that the period during which the special price is available in respect of those goods is reasonable.
The advertisement of the 1980 Ford XD alloy head sedan at a price of $3,490 states "One only at this price".
Where one is dealing with the sale of a single item at a special price, what the section requires is that that item be genuinely available for sale for a period that is reasonable, having regard to the market in which the corporation carries on business and the nature of the advertisement. The relevant intention must be assessed at the time of the advertisement although frequently the existence or otherwise of that intention may only be gleaned from the evidence afforded by conduct subsequent to the appearance of the advertisement.
In determining the corporation's intention, it is to be noted that the section draws a distinction between "advertising" and "offering". The function of the section is to require the advertiser, at the time of making the advertisement, to have the intention to make available to potential purchasers in reasonable quantities the advertised goods or services at that special price.

In my view, "offer" in s 56(1) is not used in the contractual sense of the word but is used in the ordinary non-technical meaning of "make available".
In this regard, I respectfully disagree with the views of Smithers J. in Reardon v. Morley Ford Pty. Ltd. (1980) 49 FLR 401. In that case, the crucial question was whether a display in the showroom of the respondent corporation of a 3.3 Falcon sedan with a $6,600 label on it, which figure was the special price at which the respondent had advertised that particular model vehicle, was accompanied by a genuine intention to supply the goods so displayed at the price indicated.
Smithers J. concluded that the conduct in displaying the vehicle so labelled "would be all that was required of a trader genuinely offering the vehicle in quantity to all and sundry". However, from the circumstances in that case which included the repeated rejection by the sales staff of the proposition that the 3.3 Falcon should be offered for the advertised price, and a belief by some of the sales staff that they were not authorised to sell the 3.3 Falcons at that price, Smither J. found:

"These circumstances have led me to conclude beyond reasonable doubt that Morley (the managing director of the respondent corporation) did not intend to offer the 3.3 Falcon for supply in accordance with advertisements."

I agree with that learned judge's conclusion that the obligation imposed by s 56 is such that, where a corporation advertises goods or services for supply at a special price, the advertiser must be prepared to enter into a binding contract at that advertised price, and there must be the reality of an intention to supply, rather than a colourable charade.
Having said that, it seems to me that reference to technical distinctions between invitations to treat and offers capable of immediate acceptance introduces unnecessary difficulties. Section 56 is intended to have a broad reach and no benefit is secured by giving the phrase "offer to supply" anything other than its ordinary and non-technical meaning. According to the Shorter Oxford English Dictionary "offer" means, in the sense of the word generally prevailing, "to tender for acceptance or refusal, to hold out (a thing) to a person to take if he will."
Consistent with that meaning, if a corporation in trade or commerce advertises for supply goods or services at a special price, s 56(1) obliges that corporation to make available the advertised goods or services at the advertised price for a period that is reasonable.
The failure to make known the availability of the goods at the special price or to act otherwise than as a genuine trader who intended to honour the advertisement would act, woud be circumstances relevant to whether there existed at the time of the advertisement the intention to make available in reasonable quantities the advertised goods.
In this case the advertisement states that there is "One only at this price" and "Prices remain for one week". The advertisement itself directs attention to the period for which the vehicle will be available at the advertised price. That period would be reasonable, having regard to the nature of the market for used motor vehicles.
It is admitted that there was a declining to sell to Mr Larter on 14 May 1983. In those circumstances it is necessary to determine the persons to whom the advertisement was directed.
It was contended by the prosecution that the advertisement in the Daily Sun of 14 May 1983 was an advertisement directed to the whole world and s 56(1) required the advertiser to have the intention to offer to sell the advertised goods at the special price to the whole world. It was said that if there was a declining to sell to any person at all, that would be evidence indicating the absence of that intention and, further, would constitute a failure to supply under s 56(2).
On the other hand it was contended by counsel for the respondents that the proper view of the advertisement in the Daily Sun on 14 May 1983 was that it was directed to a market consisting of the retail purchasers of secondhand motor vehicles. In particular, it was not an advertisement which was addressed to a class of persons which included unlicensed motor dealers.
It is necessary in the light of those contentions to deal in some particularity with the various accounts of what occurred on Saturday 14 and Monday 16 May 1983.
Mr Larter said that when he went to the Coopers Plains yard on the morning of 14 May 1983, he first had a general conversation about personal matters with Mr Martin and then asked him "Is that XD over there the one that is for sale?" to which Martin replied "Yes". He then asked Martin "Is it still for sale?" to which Martin said "Yes". Martin later said "I'll go and find out." Martin then went away and another person named Scott returned and asked Larter what sort of car was he looking for, and Larter said "Something like that XD". Larter said to Scott "Since I'm not interested in the trip you advertise, what discount could I expect". Scott replied "There is no trip, no discount. It's got to be a cash sale, no cheques and no holding deposits". Scott asked him "Do you buy this sort of thing?" to which Larter replied "Yes, I would, but it would not worry you". Larter then left the yard.
This conversation occurred in the context that the particular vehicle had a reading of 188,502 kms on its odometer, was unregistered, without a roadworthy certificate, had no battery, had dents and scratches on most panels, and was in a dirty condition.
The evidence of Mr Dalgarno is relevant to this aspect also.
Mr Dalgarno was called by the prosecution as an expert on the value of used motor vehicles. He is the retail sales manager for Eagers Retail Pty. Ltd, and has been in the motor industry for some twenty-seven years. He has never seen the vehicle in question. He indicated that a conservative figure for the retail value of a 1980 Ford XD alloy head motor vehicle which had travelled 188,502 kms would be in the vicinity of $6,500. He conceded that that appraisal was based on the assumption that there was in existence a roadworthy certificate for the vehicle and that it had been prepared for retail sale. He gave evidence that he would not buy a secondhand motor vehicle without appraising it physically first. Mr Dalgarno agreed that if the vehicle were unregistered and without a roadworthy certificate, the value would undoubtedly be affected. Similarly, the presence of dents and scratches in every panel would also have an effect as would the absence of maintenance. Nonetheless he remained of the opinion that the vehicle would have a greater wholesale value than the advertised figure of $3,490.
In one area which is important, Mr Dalgarno was asked in cross-examination by Mr D Jackson, the following series of questions:

"Q. You are employed by a licensed motor dealer, obviously? A. Yes.

Q. Have you had in your experience some dealings with people who can be called backyard motor dealers, in other words, unlicensed people? A. We have a company policy we do not sell to unlicensed dealers.

Q. Why is that? A. Well, I should imagine the repercussions, if anything, should happen in a transaction if a car had been purchased from us. I work for a reputable company. It is a franchised company who are rather jealous of their reputation in the motor industry. That company makes policies, and being an employee, I have to abide by those policies."

On the following Monday, 16 May 1983, at about 5.30 pm, Mr Larter, in company with Mr Cannon, went to the Coopers Plains yard of Matilda Car Co and saw Mr Martin. Larter said to Martin "Is the XD still for sale?" to which Martin replied "Yes, I think it is. I'll find out for you." Another person then came to the door and said "Yes, it's for sale, but have you got the cash?" to which Larter replied "Yes". Larter then went with this other man into a small office where they both sat at a desk. Larter handed the money to this person who commenced to count the money when another person, who the evidence establishes as Mr Brodribb, came in and sat at a vacant chair at the table. Larter was asked:

". . . Mr Brodribb . . . said, 'What do you intend to do with the car?' and I said, 'I have lost my company car. I intend to fix this one up and drive it'.

Carry on please? And he said, 'I think you are a backyard dealer. We don't have to sell you the car. We are not going to,' and he picked up the money off the table and gave it back to me.

Did you make any reply about whether you were a backyard dealer 'Yes. I said, I'm not a backyard dealer. You can call Charles Martin, who has been in my house, and I have nowhere to do mechanical repairs'."

Mr Brodribb handed the money bakc to Mr Larter who took his money and left the premises.

Mr Martin in his evidence said that he had sold lots of advertised cars. He was asked:

"Q. Did you know of any special instructions relating to its (the advertised car's) sale? A. That the car was for sale in the yard.

Q. Were any instructions given to you in relation to cars in the yard which were advertised, that they were not to be sold? A. No, never.

Q. Were there any instructions given to you? A. Every car was

available for sale in the yard."

Mr Brodribb said that the company's policy with respect to cars that were advertised was that the advertised cars were there to be sold if somebody wanted to buy them.
The records of the Matilda Car Co. in relation to the advertised Ford sedan indicate that it had been purchased for $3,400 earlier in the month in question. In Mr Brodribb's opinion the car was certainly not worth any more money than that.
In respect of the actual transaction he can recall walking into the office where Mr Larter was sitting at a desk. His recollection is that Ray Scott was sitting opposite Mr Larter discussing the purchase of the vehicle. He cannot recall what was being said but he does recall stepping in and asking Mr Larter what he wanted to do with the car and he said in evidence: "I believed him to be a backyarder". He said he had obtained that belief from speaking to Charles Martin. He said that he turned and spoke to Mr Brooks and asked him what he wanted to do and Mr Brooks told him "Give him back the money. He's a dealer". Mr Brodribb indicated in cross-examination that he attended to the transaction because he believed the man was a backyarder but at no stage did he hear Mr Larter say that he was a backyard dealer. He also said that, in May 1983, "The reason I did not wish to sell the car to him was because I believed him to be a backyard dealer". He later was asked:

"Q. At that time, were you of the view that, as manager of that yard, you were entitled to refuse to deal with a . . . would-be purchaser who produced that sum in cash and asked to buy that vehicle? A. If I felt that person was not a general member of the public and did not want it as his own vehicle, yes."

In so far as Mr Brooks' evidence is concerned, while I am not prepared to accept the accuracy of his recollection, he was forthright and open in his expressions of opinion. His attention was specifically directed to his perception of his obligations in respect of the sale of advertised vehicles. Mr Morley QC asked him:

"Q. At that time, May 1983, were you of the view that Walplan was entitled to refuse to sell to a would be purchaser any of its motor vehicles? A. Under circumstances, yes.

Q. Which circumstances? A. If I could not get them set on finance, if they did not complete the sale with cash, or I could not get them set on finance; I could not deliver the vehicle.

. . .

Q. In which circumstance? A. I just outlined two.

Q. Yes, but those circumstances related to finance. I am asking you now to think of a would be purchaser who is tendering the cash? A. If I had reason to believe he was a backyarder, yes."

He was earlier asked:

"Q. In mid-May 1983 did you have a view of whether Walplan could refuse to sell a vehicle to . . . a would be purchaser? A. Being a licensed motor dealer, which I am, at no stage would I support the bargain price industry by selling to a backyarder."

On 25 January 1984 Mr Brodribb was questioned by officers of the Trade Practices Commission and signed a statement which was written by one of the officers. That statement contains his account of what occurred on 16 May in respect of this vehicle. In part, it states:

"The male person wished to purchase the said motor vehicle and I said words to the effect 'What are you going to do with the car'.

He said: 'I lost my company car, I'm going to fix it up.'

I said: 'I think you're a backyard dealer.'

He said: 'No I'm not. You can take a look at my house, there is nowhere I could do backyard work on a car. You can ask Charles Martin.'

I said: 'It's got nothing to do with him. I think you're a backyard dealer. We don't have to sell you the car and we're not going to.'

I thought he was a backyard dealer after being told so by C Martin.

The advice that I had given to this male person (that the car would not be sold to him because he was a backyard dealer) was given after I had sought advice from Mr Brooks the owner of Matilda Motors. I recall saying to Mr Brooks who was standing nearby 'What do you want to do, do you want to sell it to him'.

Mr Brooks said 'He is a dealer. Don't sell it to him, give him back the money'."

That account of course is only admissible in the case against Mr Brodribb.
Similarly Mr Brooks was questioned on 23 August 1983, some three months after the dealings involving the Ford sedan, by officers of the Trade Practices Commission. On that occasion Mr Wallace had the following conversation with Mr Brooks:

"I said to him: 'That company Walplan Pty. Limited, are you still a director?' and he replied 'Yes'.

I said: 'We have received some complaints concerning the Matilda Car Company. They mainly concern bait advertisements'."

After referring to the broad details of the complaint by Mr Larter, Mr Wallace continued:

"I said: 'Subsequently, on 16 May 1983, Mr Larter returned with the cash, the money was initially accepted, but as a salesman was counting the money, Mr Brodribb interrupted the deal and handed back the money, and Larter was told the car was not for sale as he was a backyard dealer'.

Did Mr Brooks say anything to that? Brooks said, 'Yes, that's right. I know this bloke and I know the deal. He came from the coast isn't he? What is his address?'

I said: 'Yes, he is from the coast but I do not have his address here'. Brooks said, 'Yes that was about 4 o'clock in the afternoon. I was there. I broght that deal undone. I got Brodribb to interrupt the deal.' He then said, 'I am losing $1200 on each of those advertised cars. I am not doing that so a dealer can put it in his mind to make $2,000 at my expense. You can sell 12 cars from one of those vehicles. They are not good cars but I do not say they are. For all they know they could be shot right up the middle. Sometimes we sell them registered, sometimes not. I am not running a charity. I am entitled to sell to who I like, aren't I? It is my business, my property. I conduct my business the way I like just like you two can go about your business like you like. I have been in this game for years. I know what I can do . . .'."

Mr Brooks also told Mr Wallace and Miss Hollis, the other officer of the Commission present on that occasion, that he was the company, that he owned it and that he was in charge of the whole operation.

Mr Larter from September 1980 has been employed by a firm of plumbing suppliers on the Gold Coast and I am satisfied as a matter of fact that he was not in May 1983 an unlicensed dealer in used motor vehicles. I am however satisfied that there was at the least a genuine belief by both Messrs Brodribb and Brooks that Mr Larter was such a person and that their sole reason for declining to offer him the advertised Ford sedan was their belief that he was an unlicensed dealer in used motor vehicles.
There can be no doubt that the suspicion or belief as to Mr Larter being a backyard dealer was given as the reason for the refusal to sell contemporaneously with the refusal. It is not an explanation thought up belatedly as an excuse justifying what would otherwise be an offence under the Act. There was a basis for that belief which consisted amongst other things in the knowledge that Mr Martin had of Mr Larter's previous experience as a garage proprietor, seller of secondhand motor vehicles to the public and spotter for the sale of secondhand motor vehicles. The physical appearance and condition of the car itself are not calculated to appear to the broad spectrum of the public but would, when coupled with its price, be the type of vehicle in which a "backyard" dealer could be interested. There is the conversation, deposed to by Mr Larter, that the sales manager, Ray Scott, had with him on the Saturday in which Mr Scott asked him "Do you buy this sort of thing?" to which Mr Larter replied "Yes, I would, but it would not worry you". The conversation, while enigmatic, is at least capable of germinating a suspicion that Mr Larter intended the vehicle for resale but not in a way that would damage the interests of the Matilda Car Co. The evidence does not establish with any precision the particular bases any particular person had for their opinions of Mr Larter.
On the other hand, the evidence leading to the conclusion that Walplan, at the time of the insertion of the advertisement, intended to sell the car to an ordinary retail purchaser member of the public is very strong. I accept the evidence of Messrs Martin, Brodribb, Brooks and McKerrow which all point to this conclusion. The evidence that the vehicle was in fact sold to Mr Thornbury who seems to have been an ordinary retail purchaser of the vehicle for $3,490 cash on 18 May 1983 is strongly corroborative of that conclusion. Mr Thornbury was not called as a witness but the details of the sale to him were tendered by the prosecution having been obtained by them pursuant to a s 155 notice directed to Walplan.
Mr Morley QC frankly conceded that it was not part of the prosecution's case to suggest that this sale on Wednesday 18 May 1983, after the appearance of the advertisement on Saturday 14 May, was a sham or a contrived sale or something embarked upon to avert the inquiries of the Trade Practices Commission. It was not suggested by the prosecution that the sale to Mr Thornbury was a smoke-screen to camouflage the failure to sell to Mr Larter and thereby avoid the consequences of what was perceived to be an offence.
It was not disputed that the company did in fact sell to a member of the public at the advertised price for cash within a few days of the advertisement.
I conclude that Walplan at all times had an intention to sell this vehicle at the advertised price to a retail purchaser. The defendant company did not intend, when it inserted the advertisement and, in particular, on 16 May 1983, to supply this vehicle at the advertised price to a person it believed to be an unlicensed motor dealer and it declined to offer the advertised vehicle at the advertised price to Mr Larter for purchase by him because it genuinely believed he was such a "backyard" motor dealer.
In these circumstances, has the company committed offences under s 56(1) and (2) of the Act?
In respect of each information it is necessary for the prosecution to establish beyond reasonable doubt each of the elements of the information. In so far as the s 56(1) offence concerning the defendant company is concerned, the allegation is that the company advertised to supply the Ford Sedan and at that time it did not intend to offer for supply that vehicle at that price for a reasonable period. The only question is whether the prosecution has established that the company, when it advertised the Ford Sedan, did not intend to offer it for sale at that price. In relation to the offence alleged as a contravention of s 56(2), it is necessary for the prosecution to establish beyond reasonable doubt that Walplan, having advertised the Ford sedan for sale at a special price on 14 May 1983, failed to offer the Ford sedan at the advertised price.

It was submitted by Mr Morley QC for the informant that a contravention of s 56(1) is made out if there is absent from the relevant mind an intention to honour the advertisement. With that submission I agree. The further submission by Mr Morley is that Walplan would commit the offence alleged under s 56(1) if, at the time the company inserted the advertisement, it intended to sell to any person who came along with the cash provided he was not a "backyarder". The prosecution submits that if the state of mind of the company at the time of advertising was "We will sell this car to an ordinary member of the public who comes along with the cash money at the price we have advertised at, provided that person is not a 'backyarder'", the company is guilty of the conduct proscribed by s 56(1). Mr Morley further stated that if that submission be not accepted, the prosecution here fails.
Section 14(3) of the Auctioneers and Agents Act 1971 (Qld) prohibits any person from carrying on the business of a motor dealer unless he is the holder of a motor dealer's licence. Section 130 of that Act creates an offence if a person contravenes s 14(3). If a person supplied a motor vehicle to an unlicensed motor dealer knowing that that vehicle would be dealt with by that person in the course of his unlicensed business he would be a party to the offence under the State Act by virtue of ss 7 or 8 of the Criminal Code Act 1899 (Qld). That consideration is relevant to a proper evaluation of the persons to whom the advertisement was addressed. If, on a fair reading of the advertisement, it is addressed only to retail purchasers of motor vehicles then it is only if there is no intention to supply to a person of that class that there can be a contravention of s 56(1) and it is only if there has been a failure to offer to supply to a member of that class that there can be a failure to comply with the requirements of s 56(2).
Counsel for the informant in these matters relies on the observations of Smithers J. in Reardon v. Morley Ford Pty. Ltd. where his Honour said at 406:

". . . to my mind the duty created by s 56(2) rests on the defendant immediately he advertises and is independent of the existence of any situation such as that described above. Just as the advertisement was addressed to the whole world the offer should be to the whole world . . . ."

It is asserted by the prosecution here that the advertisement of 14 May 1983 by Matilda Car Co. was an advertisement to the whole world, was not restricted or qualified by any reservation against "backyard" dealers and that where the advertiser intended such a qualification to operate, it followed he did not intend to offer the advertised goods for supply at the advertised price to the whole world. In other words, the advertisement was to the whole world, but the intention was to supply the goods to the more limited group, backyard motor dealers being excluded.
The prosecution's submission is a bold one. In my view, a person who has advertised a motor vehicle at a special price in a daily newspaper is not ordinarily to be taken as having directed the advertisement to a purchaser who indicates that he wishes to purchase the vehicle for a criminal purpose such as robbing a bank. The advertiser is of course entitled to decline to supply that vehicle to that person offering the cash price. If, similarly, the advertiser knew that the prospective purchaser tendering the cash price intended to dispose of the vehicle as part of the prospective purchaser's business as an unlicensed motor dealer, he would not be obliged to commit the offence against the State law by supplying that vehicle to that purchaser in those circumstances.
The advertiser is not obliged to supply in those circumstances because the prospective purchaser does not fall within the class to whom the advertisement is directed. The advertisement is not directed to prospective criminals but is directed to the members of the public who are retail purchasers of used motor vehicles for their own use.
In my view, on a proper reading of the advertisement, Walplan was offering to supply the Ford sedan depicted there at a full price of $3,490 to retail purchasers in the market for secondhand motor vehicles in south-east Queensland. It was not an advertisement directed at persons who were unlicensed motor dealers or persons who intended to use the vehicle for criminal purposes. If a person fell into either of those categories there would be no obligation on the vendor to supply the vehicles to him even though the full cash price was tendered.
The belief entertained by the respondents that Mr Larter was a "backyarder" was not, I have found, factually correct, but was genuinely and not unreasonably entertained by them. Their criminal liability can therefore be no greater than if their erroneous belief were the true state of affairs.
It is necessary of course to scrutinise carefully the circumstances in which a refusal o sell goods advertised at a special price is claimed to be justified, so as to detect spurious or disguised grounds for avoiding the effective control of bait advertising at which s 56 is directed.
If, however, the advertiser genuinely intended to offer to supply the goods on the terms advertised to persons who were members of the public seeking to purchase used cars, then the advertiser would commit no offence against s 56(1) and a failure to supply to a person who was not in that class of purchasers would not constitute a failure to supply pursuant to s 56(2).
That the advertisement was so directed to the ordinary members of the public in my view follows from a fair reading of the advertisement itself. Amongst other things the advertisement offers a "free Gold Coast holiday plus a day trip to Lone Pine Sanctuary for the kids with Tracey Wickham with every car sold at the Coopers Plains yard in May". The advertisement states "Trade in your old car as full deposit". So far as the question of weekly payments detailed in the advertisement are concerned, there is a reference to weekly repayments calculated on 10 per cent deposit over forty-eight months to approved purchasers - again consistent with the advertisement being directed to the market consisting of retail purchasers of used car vehicles.
It follows in those circumstances that the company did not advertise for sale at a special price goods that it did not intend to offer for supply at that price.
It follows similarly that, having advertised the Falcon for sale to retail purchasers at a price of $3,490, the company did not fail to offer that vehicle for sale at that price simply because it declined to supply that vehicle to a person whom it genuinely believed was a backyard dealer.
For the above reasons I am of the view that the prosecution in each of the four informations fails. I find each of the respondents not guilty. Each of the informations are therefore dismissed with costs to be taxed if not otherwise agreed.

ORDER

Orders accordingly

[1985] FCA 76

11 MARCH 1985