Ducret, Alan Raymond v Colourshot Pty Ltd & Anor [1981] FCA 9

work, all lost their money and some were left with a load of

The defendant Colourshot Pty. Ltd. (the Company) has pleaded guilty to seven charges that it contravened the provisions of s.59(2) of the Trade Practices Act 1974 in that it invited persons to engage in a business activity requiring the investment of moneys by them and the performance by them of work associated with the investment and made a statement with respect to the profitability or risk or other material aspect of the business activities which was false or misleading in a material particular, namely that the defendant did by advertisement invite persons to participate in the

business in which income was estimated to be $300 per week.

The defendant Barry Stacey has pleaded guilty to nine charges of being knowingly concerned in an offence by the

Company i1n that it invited persons to participate in a

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business activity requiring the investment of money by the persons concerned and the performance by them of work associated with the investment and made with respect to the risk or other material aspect of the activity statements that

In respect of four of the charges to which the defendant Stacey has pleaded guilty the offence of the Company to which he has pleaded guilty is an offence to which the

Company has also pleaded guilty and been convicted.

In respect of the other five charges to which the defendant Stacey has pleaded guilty, the offence of the Company to concern in which he has pleaded guilty is one in which the Company has not been required to plead and in respect of which has not been convicted. This factor does not affect the operative effect of the defendant Stacey's plea to Support convictions of the defendant Stacey in respect of

those five charges. See R. v. Bourne (3953) 36 Cr. App. R. 125.

Accordingly the defendant Stacey is convicted of all nine offences to which he has pleaded guilty. His plea of guilty involves an admission of guilt by the company of the offences to concern in which his plea of guilty extends. The defendant Stacey was at all material times the Managing

Early in 1979 the company commenced business activites un Victoria. Those activities involved setting up a network of couriers throughout Victoria, later extending to South Australia, Tasmania and New South Wales whose duty 1t was to collect and forward to the Company in Melbourne, exposed films

left at depots by persons who had used them in their cameras and to redeliver the films and photographs when developed and printed to the depots. The idea was that there was to be great speed in the despatch, development and return of the films and prints. The depots were to be milk bars and similar places to which the public had regular access. Thus the Company required numerous persons to act as its couriers. These persons were and are hereinafter called franchisees. This is because the Company did not just engage couriers as

By the procedure of advertising 1t acquired them as franchisees who paid sums of money, usally $7,500 for the

This is an opportunity with an established company to secure a light pick up and delivery run to contracted retail outlets in

"This is a 5 day week business to -such man or woman with a reliable car, potential earnings estimated around $300 per week.

The plea of guilty carries with it an admission of every element of the charge. Accordingly it is admitted that the invitation was to persons to participate in a business and contained a statement that the income to them, if they participated, was estimated to be $300 per' week. Notwithstanding the cautious expression that the potential earnings were estimated at around $300 per week, there can be no doubt that persons were intended to understand the advertisement to say that, looking at the business prospects of the company, in the light of its actjal circumstances, it was reasonable for the company to estimate, and that it did estimate, that a diligent and competent franchisee would make

On the evidence it is clear that such a statement was quite false. The company could at no stage be said to be an established business and advertising to induce persons to

deposit their exposed films with the company's depots was

quite insufficient to produce the intake required. Television and radio advertisements were not undertaken. The experience of franchisees from the commencement was one of complete frustration, dissapointment and disillusionment. The evidence shows that of the more than seventy franchisers the most successful of all, one James, earned less than $60 in every week of his franchise. One earned nothing at all. Others earned practically nothing. Most had maximum earnings of around $20. All of these franchisees had car expenses, averaging about $200 per month and had to devote themselves for the greater part of five days a week calling at depots. They travelled daily for quite long distances up to about 200 miles on five days each week to pick up a trivial number of films, losing money every day. They did this because in most franchise contracts there was an agreement by the company to buy back "the delivery run" after six months if the franchise had faithfully fulfilled the terms of the contract. Several of the franchisees concerned in these prosecutions sought to be bought out, but without success and in the closing months of 1979 the company had no premises, no telephone and was

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prosecutions there was paid by them for their delivery run

sums as follows:- ' Mr. Cations $7,500 Mr. McLean 7,500 Mr. O'Neill 7,500 Mrs. Freeman 5,000 Mr. Knight 7,500 Mr. Salter 7,500 Mr. Palmer 5,500

There was a provision in most contracts that a payment of $100

or $150 per week would be paid to the franchisee for ten weeks to cover the lesser returns that might be expected in the early stages. There was much default in complying with the

The company and the defendant Stacey pleaded guilty, but neither has made any explanation to the Court concerning the commission of these offences and indeed no appearance was made on behalf of either of the defendants other than an

appearance by their counsel to enter pleas of guilty and to

unsuccessfully apply for an adjournment of these matters.

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From the eight persons to whom these proceedings relate, the company received $53,500. It is clear that the franchises were not only valueless but involved the franchisees in months of work and substantial travelling expenses, From the accounts of the company it is clear that for four months ending June 1979 its gross profit on developing and processing film was $162. Its overhead expenses were $99,219. Its only real income was from the sale of franchises which showed a profit of $179,593.00 after the cost of commissions to Salesmen and repurchases. The gross proceeds from the sale of franchises was $284,000.00. At approximately $7,500 each this

One would think that had great vigour been shown in T.V. advertising it was conceivable that the intake of films at depots might have been improved, to the benefit of the company as well as the franchisees. Whether returns to franchisers would have approached $300 per week even if much advertising had been undertaken is impossible to say. But the defendants do not suggest that the advertised estimate was a valid one. They concede the falsity of the published estimate and explain nothing. In addition to the intake of films at depots being so small the company failed to give the swift service which was vital to the success of the venture. Returns of films to franchisees were very slow and sometimes

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The only real income of this company was from sales of franchises. This was revealed in the first four months trading but it did not deter the defendants from selling further franchises including those sold to the persons mentioned above. The conclusion to which one is forced is that at that stage the company was afloat only upon the sale of the franchises, that there really was no business to provide returns to franchisees in excess of their expenditure, and no expectation that this situation would change. It is such a scenario which emerges from the evidence considered in the light of the pleas of guilty and the absence of any

It is quite clear that it was to suppress the class of conduct revealed in these cases that the Trade Practices Act was passed. To achieve this objective high monetary penalties are provided. The principles of punishment have been

discussed elsewhere. See Trade Practices Commission v. Stihl

Chain Saws (Aust) Pty. Ltd.) (1978) A.T.P.R.40 - 91. Hartnell v. Sharp Corporation of Australia Pty. Ltd. (1975) 5 A.L.R. 493 and Wilde v. Pagonis (infra).

In this case the extraction of sums, very large, so

far as the victims were concerned, for no benefit to them,

appears to have been deliberately planned elaborately pursued

and to have been most profitable to the company. The returns

from sales of franchises to seventy persons would have

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provided the company with a gross sum in the vicinity of

franchisees. The Court should have regard to the degree of

loss inflicted on unsuspecting persons, the nature of the

false statements, and the absence of explanation of the

defendants for their unlawful and reprehensible conduct. In

this case nothing has been urged to suggest that the punishment should not be substantial and sufficient to reflect the intention of Parliament in passing the Act and providing

However in assessing the amount of the fines the Court

must have regard to s.79(2) of the Act which provides:-

"S.79(2) Where a person is convicted of two or more offences constituted by, or relating to, contraventions of the same provisiou of Part V, being contraventions that appear to the Court to have been of the same nature or a substantially similar nature and to have occurred at or about the same time (whether or not the person is also convicted of an offence or offences, constituted by, or relating to, another contravention or other contraventions of that provision that were of a different nature or occurred at a different time), the Court shall not, in respect of the first-mentioned offences, impose on the person fines that, in the aggregate, exceed the maximum fine that would be applicable in respect of one offence by that person against that provision."

Each of the offences must, I think, be regarded in the terms of the Section as offences of the same nature as each other. Save that the victim was different and the area of operations was different in each case and the actual persons who made the actual representations were different, the offence in each case involved false statements which were substantially the same. In each case, a contract in substantially the same terms was offered for a substantial price for the same category of activities on the part of the two principals in

Accordingly, as to any of those offences which were committed at or about the same time as each other the total fines imposed must not exceed the maximum for one offence, that is $50,000 in the case of the company and $10,000 in the

Section 79(2) is a section limiting the generality of s.79(1). Accordingly it is to be construed as limiting the effect of s.79(1) so far as its terms provide, according to their ordinary meaning in the context in which they appear. Whether in the ordinary affairs of mankind it may be said that an event occurred at about the same time aS another event, depends largely on the context. Thus in one sense it may be said that the Declaration of Independence occurred at about the same time as Captain Cook's landing at Botany Bay. In

this case the context is justice in the punishment for

offences. Punishment is to be reduced where there is a time gpan according to which the second event occurs about the same time as the first.

Section 79(2) would seem to reflect the principle that a man shall not be punished twice for the same offence. Looking at the matter broadly two offences, albeit separate offences, committed at the same time may normally be regarded as substantially one offence for the application of this

In the context the expression "at the same time" used by itself would impose a strict and narrow test likely to exclude cases fairly within the broad concept. The insertions of the words "or about" to expand the test to read "at or about the same time" would seem to have been intended to describe the contemplated offences less strictly and more practically. Thus offences comprising contraventions which, while not occurring at the same time, occurred at about the same time are to be considered as having adequate unity. Under this test the question in relation to multiple contraventions not occurring at the same time is whether they occurred about the same time. The critical moments of time which are relevant are those of the occurrence of the relevant contraventions. Is the coincidence in time so close as to impart unity to the two offences as such in the context of

To my mind the span of time between these moments contemplated by the section must reflect an emphasis on the notion of contemporaneity of the contraventions rather than the notion of the collection into a fictional unity of contraventions separated by a distinct measurable and substantial period of time. Where, considered as offences against the criminal law, the contraventions fairly regarded are separated by such an interval it is only by fiction that they can be regarded as participating in a quality of unity. The section appears to me to be based on substance of unity and not mere fiction thereof. It would be difficult to contemplate that Parliament was extending a privilege to commit offences, inflicting great losses on persons, and suffer only one penalty provided that the offences were committed at about the same time in merely a broad historical sense, where intervals of weeks or even months would be

Separate contraventions of the Act committed at an interval of two months could not reasonably be regarded as having occurred at about the same time. The relevant frame of reference is, I conclude, to offences so close together in time that there is a basis in reality for attributing to them a unity in the commission of the actus reus of each. Construing the section in the light of these observations it

would seem that it would be unsound to regard the offences

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against s.59(2) with which this Court 1s concerned as being committed at about the same time as each other if they were separated by more than, at most, say three days. Accordingly, for the purposes of s.79(2) I regard those offences which were committed at intervals not less than four days of each other as offences occurring otherwise than at about the same time as each other. This is a matter of some importance in relation to the offence the subject of proceeding VG No. 94 of 1980 because it occurred on a date not precisely established between 14 and 31 August 1979. As such 1t could have occurred within four days of the offence the subject of VG No. 92 of 1980. If it did it would not have occurred within four days of any other of the relevant offences. If on the other hand it occurred in the latter part of August it could have occurred within four days of all three subsequent offences which occurred in August. The onus under s.79(2) would appear to be on the cefendant, but in any event I think it proper to act on the basis that the offence the subject of VG No. 94 of 1980 occurred shortly before 28 August 1979. The evidence

The offences of the defendant company charged in the following proceedings respectively were committed on the

VG No. 79 of 1980 14 August 1979 VG No. 81 of 1990 between 14 August 1979 and en wee me er ae en ee ee oe - -= - - - - earner lo

The offences of the defendant Stacey alleged in the following

proceedings respectively were committed on the following

1980 14 1980 a date between 14 1980 22 1980 27 1980 28 1980 24 1980 25 1980 28 1980 on or about 9

August 1979 August 1979 and August 1979 August 1979 August 1979 August 1979 September 1979 September 1979 September 1979

VG No. 81 of 1980 $12,000 VG No. 79 of 1980 $12,000 VG No. 82 of 1980 $12,000 VG No. 85 of 1980 $12,000 VG No. 87 of 1980 $12,000 VG No. 89 of 1980 $15,000 VG No. 91 of 1980 $20,000

the progression of these impositions reflects the fact that in the latter months of 1979 the time when the

company ceased to trade was relentlessly approaching.

I impose fines totalling $35,000 upon the defendant Stacey in respect of the proceedings herein

VG No. 92 of 1980 $7,000 VG No. 94 of 1980 $ 500 VG No. 96 of 1980 $4,500 VG No. 97 of 1980 $ 500 VG No. 99 of 1980 $4,500 VG No.100 of 1980 $1,000 VG No.101 of 1980 $4,500 VG No.103 of 1980 $4,500

Every offence meant a loss of either $7,500 or $5000

By virtue of s.18A of the Crimes Act 1914 and ss.82 and 106 of the Victorian Magistrates (Summary Proceedings) Act 1975 it is mandatory on this Court to fix a period of imprisonment in the case of each fine, not exceeding one year, except in proceedings VG Nos. 94 and 97 not exceeding six months in default of payment of such fine. This matter is discussed at length in my Reasons for Judgment in Wilde v. Pagonis VG No. 32 of 1980 delivered on 9 February 1981. I

Accordingly the Court orders that the amount of each fine imposed on each defendant be paid to the Registrar of this Court. As the defendant Stacey is not present in Court at the time this judgment is delivered s.106(1)(c) of the

Magistrates (Summary Proceedings) Act 1975 requires that each

fine be payable "within 21 days after service on him of a notice given under paragraph (d)"" which notice shall be issued by the Registrar of this Court and the Court orders that each fine be paid within such time. In case circumstances should so require liberty to apply is hereby granted. It is ordered in each of the following proceedings, namely VG Nos. 92, 94, 96, 97, 99, 100, 101, 103 and 104 of 1980 that in default of payment of each fine imposed therein as and when required

according to the order of the Court the defendant Stacey be

imprisoned for six months. The effect of this 1s that should the defendant Stacey default in the payment of all fines he

would be imprisoned for a total period of four years and six

In each of the above proceedings it is also ordered that,

(i) in each case against the defendant Colourshot Pty. Ltd. the company shall pay the costs thereof including the proofs of the acts and matters performed by its agents.

(ii) In each case against the defendant Stacey he shall pay

the costs of those proceedings so far as they relate to work performed additional to that performed in the particular proceedings against the Company to which

(iii) in the matter of granting relief pursuant to s.21B(d) of the Crimes Act 1914 to the persons referred to in these proceedings is reserved.

Accordingly in connection with the above the order of

pursuant to s. 59(2) of the Act the company be fined

In proceeding VG No. 82 of pursuant to s.59(2) of the $12,000.

In proceeding VG No. 85 of pursuant to s.59(2) of the

pursuant to s.59(2) of the $12,000. In proceeding VG No. 89 of

In proceeding VG No. 92 of 1980 against the defendant

s.59(2) of the Act the defendant to be fined $7,000.

In proceeding VG No. 94 of 1980 against the defendant Stacey pursuant to s.5 of the Crimes Act and s.59(2)

In proceeding VG No. 96 of 1980 against the defendant Stacey pursuant to s.5 of the Crimes Act and s.59(2) of the Act the defendant to be fined $4,500.

In proceeding VG No. 97 of 1980 against the defendant Stacey pursuant to s.5 of the Crimes Act and s. 59(2)

In proceeding VG No. 99 of 1980 against the defendant Stacey pursuant to s.5 of the Crimes Act and s. 59(2)

of the Act the defendant to be fined $4,500. In proceeding VG No. 100 of 1980 against the defendant Stacey pursuant to s.5 of the Crimes Act and s.59(2)

In proceeding VG No. 101 of 1980 against the defendant

Stacey pursuant to s.5 of the Cimes Act and s.59(2) of

In proceeding VG No. 103 of 1980 against the defendant Stacey pursusnt to s.5 of the Crimes Act and s.59(2)

In proceeding VG No. 104 of 1980 against the defendant

Stacey pursuant to s.5 of the Crimes Act and s.59(2)

In each of the above proceedings it is further ordered

In each proceeding against Colourshot Pty. Ltd. the

company shall pay the fine imposed to the Registrar of

In each proceeding against the defendant Stacey he shall pay the fine imposed to the Registrar of the Court within 21 days after service on him of a notice given by the Registrar under s.106(1)(c) and (d) of

should the defendant default in the payment of such fine the defendant be imprisoned for six months. In each case the notice shall be posted by registered

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22 Tryon Road Wollstonecraft Nth Sydney N.S.W. C/- Robert Parker

In each case against the defendant Colourshot Pty. Ltd. the Company shall pay the costs of the proceedings including the proofs of the acts and

In each case against the defendant Stacey he shall pay the costs of those proceedings so far as they relate to work performed additional to that performed in the particular proceedings against the company to which

The matter of granting relief pursuant to s.21B(d) of the Crimes Act 1914 to the persons referred to in

I certify that this and the preceding pages are a true copy of the Reasons for Judgment and Order of the Honourable Mr. Justice Smithers.