Yorke v Lucas

[1983] FCA 243

Re: MILES RICHARD YORKE and SUE ELIZABETH YORKE
And: ROSS MELVILLE LUCAS (1983) 80 FLR 143
No. G11 of 1983
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Bowen C.J.(1), Lockhart(1) and Beaumont(1) JJ.

CATCHWORDS

Trade Practices - Misleading and deceptive conduct - False representation by company in contract of purchase - Claim for amount of loss or damage suffered by reason of contravention of s.52 - Liability of managing director as an aider and abettor to the contravention - Liability as a "party to the contravention" - Construction and operation of s.75B - Meaning of any person "involved in" the contravention.

Trade Practices Act 1974 ss. 52, 75B, 82

Crimes Act 1914 s.5

Trade and Commerce - Trade practices legislation - Consumer protection - Misleading or deceptive conduct - Liability of aider or abettor - Managing director of corporation - Whether aider or abettor must have actual or constructive knowledge - Trade Practices Act 1974 (Cth), ss 52, 75B(a).

Trade and Commerce - Trade practices legislation - Trade Practices Act 1974 (Cth) - Consumer protection - Misleading or deceptive conduct - Liability of person knowingly concerned in the contravention - Managing director of corporation - Whether must be aware of facts or should have been aware of facts - Trade Practices Act 1974 (Cth), ss 52, 75B(c).

HEADNOTE

Held: (1) To show that a person has aided or abetted in the contravention of a provision of Pt V of the Trade Practices Act 1974, within s 75B(a), it is necessary to establish that the person had actual or constructive knowledge of the essential facts or matters which constituted the contravention, although it is not necessary to prove that he knew that they in fact constituted such a contravention.

R v. Glennan (1970) 91 WN (NSW) 609, applied.

Lenzi v. Miller (1965) SASR 1, distinguished.

(2) To be a "party to the contravention" within s 75B(c) of the Act necessarily connotes that a person assents to or concurs in the conduct which constitutes the contravention. He must therefore know or be aware of the essential facts or matters which must be proved to establish the contravention.

Mallan v. Lee (1949) 80 CLR 198, followed.

HEARING

Sydney, 1983, July 18, 19; September 23. #DATE 23:9:1983

APPEAL

Appeal from the decisions of Fisher J of the Federal Court of Australia involving the interpretation of the Trade Practices Act 1974, s 75B(a) and (c).

D N Angel QC and S J Haarsma, for the appellant.

H C Williams QC and B M Burky, for the respondent.

Cur adv vult

Solicitors for the appellant: Haarsma, Womersley.

Solicitors for the respondent: Scales & Partners.

BAG

ORDER

1. The appeal be dismissed.

2. The appellants pay the respondent's costs of the appeal.

JUDGE1

This appeal raises important questions as to the construction and operation of s.75B of the Trade Practices Act, 1974 ("the Act").

The appellants commenced proceedings in this Court claiming the amount of the loss or damage which they alleged was suffered by them by the conduct of the respondent Ross Melville Lucas and three others - Ross Lucas Pty. Limited. Treasureway Stores Pty. Limited ("Treasureway") and Kevin Thomas Mahoney. The conduct was said to contravene s.52 of the Act. The claim for damages is made pursuant to s.82. Under that provision, a person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part V may recover the amount of the loss or damage not only against that other person but also against any person "involved in" the contravention. A person so "involved" is defined in s.75B of the Act. The question here is whether Mr. Lucas was a person "involved in" contraventions by the other parties mentioned.

The contraventions arose out of the sale by Treasureway of its retail record business to the appellants through the agency of Ross Lucas Pty. Limited, a real estate and business agent. Mr. Lucas is managing director of that last mentioned company. Mr. Mahoney is a director of Treasureway. Mr. Lucas and Mr. Mahoney were alleged to have aided, abetted, counselled or procured or to have been knowingly concerned in, or party to, the conduct in question and thus, by virtue of s.75B, to be liable for the amount of the appellants' loss or damage as persons "involved in" the contravention.

The proceedings were heard by a single Judge of this Court (Fisher, J.) who gave three judgments. His Honour took this course, at the request of the parties, because the issues included questions relating to this Court's jurisdiction to enter judgment against Mr. Mahoney and Mr. Lucas as individuals and to require Treasureway and Mr. Mahoney to indemnify Ross Lucas Pty. Limited and Mr. Lucas. The validity of s.75B was challenged. The High Court had not delivered judgment in Fencott v. Muller (1983) 46 A.L.R. 41 when the proceedings were before Fisher, J. It was thought by the parties that the High Court's judgment in that case would probably resolve the constitutional questions which were said to arise in this case. It is not necessary for present purposes to distinguish between the three judgments of Fisher, J.

His Honour concluded that Treasureway had engaged in conduct both misleading and deceptive by falsely representing in the contract of purchase between itself as vendor and the appellants as purchasers that the average weekly turnover of the business during the relevant period was $3,500.00. His Honour said that it followed, as a necessary consequence, that a representation that the gross profit of the business was $1,200.00 per week was also misleading. He found that the appellant, Mr. Yorke, was induced by that conduct to enter into the contract of purchase. His Honour held that Ross Lucas Pty. Limited had also contravened s.52 of the Act by acting as agent for Treasureway, but that its contravention was unwitting. His Honour assessed the loss of the appellants at $73,000.00. ordered that there be judgment for the appellants in that sum against Treasureway and Ross Lucas Pty. Limited, but ordered that execution on the judgment against Ross Lucas Pty. Limited be stayed until further order, that is, until such time as the Court could determine that company's right, if any, to an indemnity from Treasureway and Mr. Mahoney.

His Honour accepted that s.52 involved no question of intent on the part of Ross Lucas Pty. Limited, relying in particular upon the remarks of Gibbs, C.J. in Parkdale Custom Built Furniture Pty. Limited v. Puxu Pty. Limited (1982) 42 A.L.R. 1 (at p.5).

Fisher, J. held that Mr. Mahoney aided and abetted or, alternatively, was knowingly concerned in the contravention by Treasureway, and, by virtue of s.75B, was a person involved in that contravention and therefore liable in damages pursuant to s.82. He entered judgment against Mr. Mahoney in the sum of $73,000.00.

His Honour found:
"There is no doubt that Mr. Lucas was acting exactly in accordance with the instructions and information given to him as managing director of Ross Lucas Pty. Ltd. by Mr. Mahoney. He was sufficiently careful to obtain Mr. Mahoney's written confirmation on at least three occasions of the turnover figure and he heard Mr. Mahoney orally confirm it to Mr. Yorke. When he returned from an overseas trip he asked Mr. Mahoney for an up to date profit figure and he sought and obtained confirmation that the weekly turnover was $3,500 before he resumed his efforts to sell the business. My ultimate finding was that Mr. Lucas conscientiously and carefully passed on to Mr. Yorke the instructions and informations he received from Mr. Mahoney and this finding is not disturbed by the evidence given by Mr. Mahoney.

The position then is and I find that Mr. Lucas was not aware and had no reason to suspect, that the information concerning turnover which he relayed to Mr. Yorke was incorrect. He made all appropriate enquiries from Mr. Mahoney and was entitled to be satisfied by the answers he was given, particularly as the turnover figure which he was supplied received some support from the accounts of Treasureway. He did not know of or suspect, and had no reason to suspect, the inaccuracy of the turnover figures and in no way could it be said that he acted recklessly or deliberately abstained from asking questions or pursuing enquiries."

Although certain of these findings were challenged by the appellants, we are satisfied that they were open to his Honour. We are not persuaded that he fell into error in making those findings.

His Honour said that in his opinion the authorities established that it must be proved that Mr. Lucas was aware or should have been aware of the relevant facts before he could be said to have been involved in the contravention.

His Honour found that knowledge of falsity of the information conveyed as to the turnover of the business was not necessary to establish a contravention by Ross Lucas Pty. Limited, but that actual or constructive knowledge was necessarily involved in establishing a contravention by a person who is alleged to have participated as an aider or abettor.

His Honour found that Mr. Lucas did not aid, abet, counsel or procure the contraventions and was not knowingly concerned in, or party to, the conduct which constituted the contravention whether it be the conduct of Treasureway or Ross Lucas Pty. Limited. He dismissed the appellants claims against Mr. Lucas.

The appellants appealed to this Court from that portion of the judgments of Fisher, J. which dismissed the application of the appellants for recovery against Mr. Lucas. It is that appeal which was heard by us. The only question argued on the appeal was whether Fisher, J. was correct in holding that Mr. Lucas was not liable under s.75B as a person involved in the contravention.

The appellants submitted that Mr. Lucas was involved in the contravention of Ross Lucas Pty. Limited by reason of s.75B which provides:
"75B. A reference in this Part to a person involved in a contravention of a provision of Part IV or V shall be read as a reference to a person who -

(a) has aided, abetted, counselled or procured the contravention;

(b) has induced, whether by threats or promises or otherwise, the contravention;

(c) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or

(d) has conspired with others to effect the contravention."

Some of the language of s.75B was apparently derived from s.5 of the Crimes Act, 1914(Cth.). It provides that any person who "aids, abets, counsels, or procures, or by act or omission is in any way directly or indirectly knowingly concerned in, or a party to," the commission of any offence against any law of the Commonwealth shall be deemed to have committed that offence and is punishable accordingly.

The purpose of s.75B, insofar as it relates to sub-s.82(1), is to extend the liability for loss or damage to persons who are found in certain accessory situations in relation to the corporate contravenor of Part IV or Part V of the Act.

It is to be noted that wording similar to that contained in paras. (a), (b), (c) and (d) of s.75B is used in ss.76, 78, 80 and 80AA. The purpose varies slightly in these other sections. Section 76 provides for the imposition of a pecuniary penalty on a person who has contravened or attempted to contravene a provision of Part IV. It also provides for the imposition of such a penalty upon persons who are found in the same accessory situations as are specified in s.75B. Section 77 provides that the Minister or the Trade Practices Commission may institute proceedings in the Court for the recovery of the penalty provided for by s.76. This is a civil proceeding. Section 78 provides that criminal proceedings do not lie against a person by reason only that that person has contravened or attempted to contravene a provision of Part IV or is a person in one of the accessory situations. Furthermore, sub-s.85(6) provides that where in any proceedings under Part VI against a person other than a body corporate, it appears to the Court that the person has or may have engaged in conduct in contravention of a provision of Part IV or in conduct referred to in para. 76(1)(b), (c), (d), (e) or (f), but that the person acted honestly and reasonably and ought fairly to be excused, the Court may relieve him from liability for penalty or damages.

Section 79, which may be contrasted with s.76, provides that a person who contravenes a provision of Part V other than s.52 is guilty of an offence punishable on conviction by a fairly substantial fine which varies according to whether the contravenor is a body corporate or natural person. It will be noted that s.79 does not itself reach out to cover persons in an accessory situation (but of. Crimes Act, 1914, s.5 and see The Queen v. The Judges of the Australian Industrial Court; Ex parte C.L.M. Holdings Pty. Limited (1977) 136 C.L.R. 235 per Mason, J. at p. 246).

Section 80 provides that the Court may grant an injunction restraining a person from engaging in conduct that constitutes or would constitute a contravention of a provision of Part IV or V or attempting to contravene such a provision. It also provides that the Court may grant such an injunction against a person who is in an accessory situation. Section 80AA may be compared with s.80.

It was submitted that Mr. Lucas aided or abetted the contravention (para.75B(a)); alternatively, it was said, he was "party to" the contravention (para.75B(c)).

We turn first to the submission as to aiding and abetting. The expressions in s.75B "aided" and "abetted", like the expressions "counselled", "procured" and "conspired with others", are well known to the criminal law.

Generally "aiding" and "abetting" suggest presence at the scene of the offence. In R. v. Glennan (1970) 91 W.N. (N.S.W.) 609, the Court of Criminal Appeal in New South Wales (Herron, C.J., Mason, J.A. and Taylor, J.) said (at p.613):
"At common law mens rea was an essential element in the conviction of an aider and abettor. This was a consequence flowing from the existence of mens rea as an element in common-law offences and the concept that the aider and abettor was a participant in the substantive common-law offence who did not commit a separate and independent offence.

The application of the doctrine of aiding and abetting to statutory offences involving no element of intention is not without its difficulty, for that doctrine, as we have said, had its origin in common-law offences involving mens rea. Its purpose was to identify participants, other than the actual perpetrator, with the commission of the common-law offence, so as to convict them of that offence. As the offence involved an element of intention it was necessary to show that they were participants and that, as such, they were parties to the intention which was an element in the offence. In the application of the doctrine to a statutory offence which does not involve an element of intention, it is necessary to establish participation by the defendant in the offence, but in circumstances in which the existence of an intention on the part of the perpetrator is immaterial to guilt.

But it does not follow that knowledge of the facts necessary to constitute the statutory offence is not a material element in the conviction of an aider and abettor. Notwithstanding the absence of a requisite intention as an ingredient in the offence, it is necessary to show that the defendant participated in the commission of an offence. Where the offence consists of the doing of an act which viewed in isolation is innocent, but which, when done in particular circumstances, or by a particular person, becomes a prohibited act, participation in the offence is not established by proving that the defendant assisted or encouraged the doing of the act in circumstances where it had for him the appearance of an innocent occurrence. There is a large body of judicial authority in England which supports this proposition and which asserts that a person cannot be convicted of aiding and abetting the commission of an offence unless he knew the facts which must be proved to show that an offence has been committed . . . "

We agree with those remarks. In our view, they are pertinent here. We also agree with the following passage from the judgment of Lord Goddard C.J. in Johnson v. Youden (1950) 1 K.B. 544 (at p.546):
"Before a person can be convicted of aiding and abetting the commission of an offence he must at least know the essential matters which constitute that offence. He need not actually know that an offence has been committed, because he may not know that the facts constitute an offence and ignorance of the law is not a defence. If a person knows all the facts and is assisting another person to do certain things, and it turns out that the doing of those things constitutes an offence, the person who is assisting is guilty of aiding and abetting that offence, because to allow him to say, I knew of all those facts but I did not know that an offence was committed, would be allowing him to set up ignorance of the law as a defence."

Johnson v. Youden was approved by the House of Lords in Churchill v. Walton (1967) 2 A.C. 224 (at pp. 236-7).

Those remarks of Lord Goddard were, as were the remarks of the Court of Criminal Appeal of N.S.W. in Glennan's case, made with reference to statutory offences where the intention of the offender was not a necessary element.

However, as was acknowledged in Glennan's case (at p.614) it is not essential that actual knowledge of all the essential facts or matters which constitute an offence is necessary before a person may be convicted as an aider and abettor. Shutting one's eyes to the obvious, or deliberately failing to obtain knowledge by making reasonable inquiry in circumstances where the defendant suspects the existence of a fact which may be revealed upon inquiry, may render a person liable as an aider and abettor: Carter v. Mace (1949) 2 All E.R. 714; Davies, Turner & Co. Limited v. Brodie (1954) 3 All E.R. 283. Passive acquiescence may suffice where the aider or abettor has the capacity to control the principal offender and is present when the offence is committed, but fails to exercise that right although aware that the conduct of the principal offender must have involved a breach of the law: Du Cros v. Lambourne (1907) 1 K.B. 40.

In Glennan's case the Court said (at p.614):
"It may, therefore, be concluded that, in the case of statutory offences in which intention is not a necessary element, the law does not require actual knowledge on the part of the aider and abettor, of all the essential facts of the offence. The element of knowledge or intention required of an aider and abettor might perhaps be more accurately expressed by saying that it must be shown that he either knew or suspected the existence of facts which would constitute the commission of the offence or, perhaps, that he acted recklessly, not caring whether the facts existed or not. Mere failure to make an inquiry which, if made, would yield knowledge of an essential fact, is not in itself enough to constitute knowledge of the fact, for it is accepted that to act negligently does not make a person an aider and abettor (Callow v. Tillstone; see also Bowker v. Premier Drug Co.). But the circumstances of a given case may be such as to reveal not merely a failure to make an inquiry, but a failure to make an inquiry which is of such a kind as to suggest that the defendant has deliberately abstained from acquiring knowledge because he suspected the existence of a fact which would have been ascertained on inquiry, or that the defendant has acted recklessly in the sense that he did not care whether the facts existed or not (Carter v. Mace; of. Davies, Turner & Co. Ltd. v. Brodie).

In our opinion neither s.100 of the Justices Act nor s.4E of the Motor Traffic Act should be read as effecting an alteration to the rules of the common law concerning aiding and abetting. As we have already observed, s.100 of the Justices Act is a procedural provision and does not alter the substantive common-law rules in relation to misdemeanours. Section 4E creates a criminal offence on the part of the perpetrator, he who drives or attempts to drive; except in so far as it attracts the common law as to participation in an offence, it creates no offence on the part of any other person. In accordance with the rule that a penal statute should be construed strictly, it should not be read as creating a new and different offence on the part of any other person--for example, by creating a duty to prevent the commission of an offence by another, or as altering the basis of common-law liability for aiding and abetting.

Section 4E is an illustration of a statutory offence the essence of which is the doing of an act by a person having a particular condition or characteristic. Viewed in isolation the act which is prohibited, namely the driving of a motor vehicle, is innocent and of frequent occurrence. By force of the statute, when undertaken by a person having the prescribed condition or characteristic it constitutes an offence. It cannot be that it is an offence against the statute for a person, who has no knowledge, suspicion, or reason to believe that the perpetrator has the prescribed condition, to permit or encourage the perpetrator to drive a motor vehicle.

It is not a satisfactory answer to the situation which would otherwise arise to say that the defendant may establish by way of defence that he honestly believed on reasonable grounds that the act was innocent because, firstly, the statute appears to displace that common-law defence and, secondly, even if the common-law defence were available, it would in any event leave the onus with the defendant of establishing lack of knowledge on his part. In that respect it must be kept in mind that the common-law defence exists independently of the elements which must be established in order to obtain a conviction.

The decision in Lenzi v. Miller is not inconsistent with what we have said, for the Full Court was of the opinion that on the evidence the appellant had actual knowledge that the motor trailer was uninsured and it was a case in which the appellant as owner of the trailer at least had strong grounds for suspecting that it was uninsured, even if the circumstances were insufficient to show actual knowledge of the fact."

In Lenzi v. Miller (1965) S.A.S.R. is a decision of the Full Court of the Supreme Court of South Australia, the appellant was charged with having aided, abetted, counselled or procured the commission of an offence, namely, the driving of a motor vehicle on a road without there being in force in relation to the motor vehicle a policy of insurance complying with Part IV of the Motor Vehicles Act, 1959-1962. It was proved that an uninsured motor vehicle had been driven on a road on the instructions, or with the permission, of the appellant. It was held that it was not necessary for the prosecution to prove that the appellant knew that the motor vehicle was not insured.

Napier, C.J. and Travers, J. said (at p.12):
"The prohibition, in s.102 of the Motor Vehicles Act, is in the following terms: A person shall not drive a motor vehicle on a road unless a policy of insurance complying with this part is in force in relation to that vehicle. The prohibition is plainly absolute, in the sense that the liability is imposed on any person driving the vehicle, without the necessity for any proof that he or she knew that it was uninsured. It seems to us that there can be no doubt that any other person, who causes the driver to contravene the section, is a party to the contravention, and under s.53 of the Justices Act is liable to be prosecuted for, and convicted of, the offence."

In their reasoning, Napier, C.J. and Travers, J. accepted the general proposition that a person cannot be convicted of aiding and abetting the commission of an offence unless he knew the essential facts which must be proved to show that an offence has been committed, subject to these qualifications (at p.11):
"In the first place, it is to be observed that anyone may be deemed to know anything to which he shuts his eyes (Cook v. Stockwell; Johnson v. Youden). Secondly, there is the principle laid down in Mousell Bros. Ltd. v. London and North-Western Railway Co. as follows:

While prima facie a principal is not to be made criminally responsible for the acts of his servants, yet the Legislature may prohibit an act or enforce a duty in such words as to make the prohibition or the duty absolute; in which case the principal is liable if the act is in fact done by his servants. To ascertain whether a particular Act of Parliament has that effect or not, regard must be had to the object of the statute, the words used, the nature of the duty laid down, the person upon whom it is imposed, the person by whom it would in ordinary circumstances be performed, and the person upon whom the penalty is imposed.

In that case, and in Provincial Motor Cab Co. v. Dunning and Gough v. Rees there was the relation of master and servant; but it seems to us that the reasoning is capable of general application, and in recent cases (Carter v. Mace; Quality Dairies (York) Ltd. v. Pedley it has been carried to its logical conclusion. These authorities show that the special Act may be couched in such terms as to imply a duty to foresee and prevent the act or thing that is the offence. In such circumstances, any party, who could and should prevent the act or thing, but omits to do so, is a party to and participates in the offence.

In our opinion, the latter qualification can have no application in the present case. We do not think that, by employing an interpretation provision such as s.75B which is of a kind well known to of the criminal law, it was intended by Parliament that a special and absolute duty should be imposed upon those concerned in the management of a corporation to take positive steps to prevent the corporation engaging in conduct of the type prescribed by s.52 where they have no knowledge, actual or constructive of the essential facts necessary to constitute a contravention of the section. In our view, the imposition of a personal liability upon the management of a corporation with limited liability in those circumstances would involve a significant departure from the previous legislative provisions of which s.75B is a typical example and would require explicit language to effect such a change. No such language is to be found here. Instead, Parliament has chosen, as its dictionary, an interpretation provision, in the form of s.75B, which picks up the traditional legislative formula employed in the criminal law. That formula has always been interpreted to require actual or constructive knowledge of the essential facts said to constitute the offence before a person can be liable as an aider or abettor.

It is true that s.52 may be contravened notwithstanding the absence of an intent to mislead or deceive on the part of the contravenor. The liability imposed by the section is absolute in that sense (see Hornsby Building Information Centre Pty. Limited v. Sydney Building Information Centre Limited (1978) 140 C.L.R. 216 per Stephen, J. (at p.228) and Parkdale Custom Built Furniture Pty. Limited v. Puxu Pty. Limited (supra)). But it does not follow that knowledge of the facts necessary to constitute a contravention of s.52 is not a material element in the finding against a person of aiding or abetting the contravention. To show that a defendant aided or abetted the contravention, it is necessary to establish that he knew of the essential facts or matters which constituted the contravention, although it is not necessary to prove that he knew that they in fact constituted such a contravention.

It follows that Mr. Lucas could not be held to have contravened s.52 as an aider or abettor unless the Court is satisfied that he knew of the essential facts or matters constituting the contravention including knowledge that the relevant representations as to the weekly turnover of the record business and its gross profit were incorrect. The incorrectness of those representations is essential to support a finding of misleading or deceptive conduct. Mr. Lucas had no actual knowledge whatever of their incorrectness and it is not suggested that the circumstances of the case warrant an inference of constructive knowledge on his part of the character of the conduct complained of.

Argument was also addressed to us to the effect that, whatever the position may be under para. 75B(a) as to aiding and abetting, Mr. Lucas was nevertheless "party to" the contravention within the meaning of para. 75B(c). One of the dictionary meanings of the term is: "One who takes part, participates, or is concerned in some action or affair; a participator; an accessory" (Oxford English Dictionary). Its ordinary or popular meaning was adopted by Pennycuick V-C in In Re Maidstone Buildings Provisions Ltd. (1971) 1 W.L.R. 1085. There it was held that the company secretary was not, merely by virtue of that office, a "party to" the carrying on of the company's business with intent to defraud creditors within the meaning of s.332(1) of the Companies Act, 1948. The Vice-Chancellor held that the expression "party to" in s.332(1) indicated no more than "participates in", "takes part in" or "concurs in", but involved some positive steps. Thus, it was held that omission by the secretary to give certain advice to the directors was not being a party to carrying on the business in a fraudulent manner. He said (at p.1092):
"The expression 'parties to the carrying on of the business' is not, I think, a very familiar one, but so far as I can see, the expression 'party to' must on its natural meaning indicate no more than 'participates in,' 'takes part in' or 'concurs in.' And that, it seems to me, involves some positive steps of some nature. I do not think it can be said that someone is party to carrying on a business if he takes no positive steps at all. So in order to bring a person within the section you must show that he is taking some positive steps in the carrying on of the company's business in a fraudulent manner."

To be "party to" a contravention of a provision of Part IV or V requires, in our view, that the defendant a participation in the contravention involves some mental element. In this connection, it is important to consider the meaning and effect of the other provisions of s.75B because in our view there is present in each of those provisions a requirement that the involvement of the defendant was other than innocent. We have already mentioned that to aid or abet the contravention necessarily requires that the defendant knew the facts or matters which must be proved to establish the contravention.

The word "counsel" is probably equivalent to "instigate": Stephen's Digest of Criminal Law 9th Ed. at p. 18; R. v. Baker (1909) 28 N.Z.L.R. 536 at p.544 per Cooper, J. Its ordinary meaning is to urge the doing or adoption of a plan or design (Macquarie Dictionary).
"To procure means to produce by endeavour. You procure a thing by setting out to see that it happens and taking the appropriate steps to produce that happening."
Attorney-General's Reference (No. 1 of 1975) (1975) 1 Q.B. 773 per Lord Widgery, C.J. (at p.779). Both notions of counselling or procuring involve an element of intent: Gough v. Rees (1929) 46 T.L.R. 103.

Inducing a contravention in the context of para.75B(b) connotes, in our view, some act of compulsion by force or threat of force or some act of persuasion or stimulation aimed at ensuring that an act is committed which constitutes a contravention. The word "incite" is akin to "induce", though "induce" probably covers a wider field. "Incite" is a word familiar to the criminal law and involves some deliberate act of rousing, stimulating, urging or spurring on: Young v. Cassels (1914) 33 N.Z.L.R. 852 per Stout, C.J. (at p.854). Thus something more than innocent participation by the defendant is involved in the notion of inducing a person to commit a contravention. The word "induce" appears in other sections of the Act: for example, para.49(4)(a), s.57 and para.96(3)(b). The use of that word in those provisions is not inconsistent with the meaning which we have attached to it in the context of s.75B.

The phrase "knowingly concerned in" (para.75B(c)) plainly requires a mental element, namely, knowledge of the relevant facts (see Mallan v. Lee (1949) 80 C.L.R. 198 at p.211).

The act of conspiring with others to effect a contravention (para.75B(d)) necessarily involves an element of intention, requiring an agreement between two or more people to effect a proscribed act.

We can discern no reason why Parliament would have intended that a section which renders natural persons liable for a contravention by a corporation should require some mental element or absence of innocence in every case to which it refers except one which itself requires in its first limb that the person was "knowingly" concerned in the contravention. This is especially so when the word "party" is found in accessory provisions of criminal legislation such as s.5 of the Crimes Act, 1914.

The words "party to the contravention" necessarily connote in our view that a person assents to or concurs in the conduct which constitutes the contravention. He must therefore know or be aware of the essential facts or matters which must be proved to establish the contravention. We do not think that the word "knowingly" should literally be read as qualifying both the phrases "concerned in" and "party to" in para.75B(c). Two considerations lead us to this view. First, it would be unnecessary to precede the phrase "party to" with the word "knowingly" as the requisite element of knowledge is inherent in the concept of being a "party to" a contravention. Secondly, the placement of the commas in para.75B(c) is indicative of the draftsman's intentions.

In Fencott v. Muller, supra, Gibbs, C.J. said (at p.48):
"By the combined provisions of sec.75B and 82, the Parliament has made natural persons liable in damages for a contravention by the corporation only if they have been involved in the manner described by sec.75B, which, in my opinion, refers to a close rather than a remote involvement in the contravention. In the most general words of sec.75B, those of para.(c), the word 'knowingly' significantly confines the operation of the provision."

In our opinion, the words "party to the contravention" refer to a person who participates in, or assents to the contravention in question. To be regarded as participating in or assenting, such a person must actually or constructively be aware of the elements constituting the contravention. To our minds, it is not sufficient to render an individual liable if he is shown to be aware of some only of those elements. Where the contravention in question relates to engaging in trade or commerce in conduct that is misleading, one of the elements involved is that the conduct is misleading. If a person sued under s.82 for damages as a person involved in the contravention is unaware of the essential facts and matters constituting the contravention, then he lacks knowledge of an essential element of the contravention. He cannot, in our view, in those circumstances, be regarded as a party to the contravention (cf. Guthrie v. Doyle Dane & Bernbach Pty. Limited (1977) 16 A.L.R. 241 at p.244 but see Taperell, Vermeesch & Harland, Trade Practices and Consumer Protection, 2nd Ed. at p.604).

By applying the "organic" theory of company law, criminal liability of a corporation can arise where an offence is committed in the course of the corporation's business by a person in control of its affairs to such a degree that it may fairly be said to think and act through him so that his actions and intent are the actions and intent of the corporation (see Halsbury's Laws of England, 4th Ed. Vol. 11 at p.30; Universal Telecasters (Qld.) Ltd. v. Guthrie (1977) 18 A.L.R. 531 at p.535 per Bowen, C.J.). It may be that where, in accordance with this principle, a corporation is guilty of a crime, the person whose actions and intent are those of the corporation will himself also be criminally liable (see Halsbury's Laws of England, 4th Ed.Vol 11 at p. 31 (fn.(7)). But, in the case of a statutory offence, this will depend upon the construction of the legislation involved. In the present case, no question arises of the extended operation of s.52 by virtue of sub-s.6(2) or (3) of the Act as in the C.L.M. case, supra. Since s.52 only applies to corporations, Mr. Lucas cannot be liable for any contravention of s.52 as a principal party. He can only be liable, if at all, as a secondary party of the kind described in s.75B. For the reasons we have given, it should be assumed that the Legislature, in adopting a provision in the terms of s.75B, was aware of the judicial interpretation of similar provisions insofar as they imported a requirement of actual or constructive knowledge of the relevant facts. No doubt, it was within the constitutional competence of Parliament to render an accessory liable without the need to establish any such knowledge. But, given the adoption, in s.75B, of the traditional language of accessory provisions such as s.5 of the Crimes Act, 1914, we must infer that it was intended that the meaning of such provisions, as explained by a considerable body of judicial authority, should be applied here also. This is especially so when it would appear that sub-s.82(1), when read with s.75B, gives the Court no discretion in the sense that the measure of damages cannot be adjusted to reflect the degree of involvement or blameworthiness of the person upon whom liability is imposed (see Fencott v. Muller, supra at p.78 per Dawson, J.).

It is clear from the facts of the case, as found by the primary Judge, that Mr. Lucas did not know, nor did he suspect or have reason to suspect, that the statements made by him to Mr. Yorke about the business of Treasureway were incorrect. Thus, he could not have been party to the contravention of s.52 within the meaning of para.75B(c).

It was next submitted by counsel for Mr. Lucas that the misleading or deceptive conduct was that of Treasureway and Mr. Mahoney and that Ross Lucas Pty. Limited and Mr. Lucas were, to the knowledge of Mr. Yorke, merely channels for the communication of information from the vendor to him. It was said that, in those circumstances, no conduct of Ross Lucas Pty. Limited or Mr. Lucas in fact misled or deceived Mr. Yorke or was likely to mislead or deceive him, so that Ross Lucas Pty. Limited did not contravene s.52 and Mr. Lucas could not have been involved in any contravention. In other words, there may well be a distinction to be drawn between, for example, engaging in conduct for the purposes of s.52 and making a statement for the purposes of s.53(e) (see Universal Telecasters (Qld.) Ltd. v. Guthrie, supra). It may be said that the conduct was in truth that of Treasureway alone and the role of Ross Lucas Pty. Limited and Mr. Lucas was no more than that of an "innocent instrument": see White v. Ridley (1978) 140 C.L.R. 342 per Stephen, J. (at p.359) and thus outside s.52. There is force in this submission but, in view of our findings on the earlier submissions, it is not necessary to consider it.

We would dismiss the appeal with costs.