ADDRESSING THE ISSUES
263 The applicants have established that the representations which I have found were contained in the brochure were made and were false. They were made by the first respondent when the second respondent published the brochure to the second and third applicants, and thereby the first applicant.
264 The representations were made in trade or commerce. The transaction which was contemplated in the brochure had, by its very nature, a trading or commercial character. The applicants have therefore established that the first respondent has contravened s 52 of the Trade Practices Act. Subject to the matters raised in the respondents' defence, the applicants will, if loss is established by the respondents' conduct, be entitled to damages against the first respondent pursuant to s 82 of the Trade Practices Act. In those circumstances, I do not have to determine whether the applicants are entitled to damages against the first respondent pursuant to s 79(1) of the Fair Trading Act for a contravention of s 10 of that Act.
265 As I have already said, the applicants' claim against the second respondent is both under the Trade Practices Act and the Fair Trading Act. To succeed under the Trade Practices Act, the applicants, on their pleadings, must establish that the second respondent was a person within the meaning of s 75B of the Trade Practices Act who was knowingly concerned in or a party to the contraventions by the first respondent of s 52. Section 75B of the Trade Practices Act is in pari materia to s 68 of the Fair Trading Act. However, the applicants have not relied upon s 68 of the Fair Trading Act so that section does not need to be addressed.
266 To succeed under the Fair Trading Act, in respect of their claim against the second respondent, the applicants on their pleadings must establish that the second respondent herself contravened s 10 of that Act. I will return to that aspect of the applicants' claim against the second respondent.
267 Section 75B of the Trade Practices Act provides:
'(1) A reference in this Part to a person involved in a contravention of a provision of Part IV, IVA, IVB, V or VC, or of section 75AU or 75AYA, 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.
(2) In this Part, unless the contrary intention appears:
(a) a reference to the Court in relation to a matter is a reference to any court having jurisdiction in the matter;
(b) a reference to the Federal Court is a reference to the Federal Court of Australia; and
(c) a reference to a judgment is a reference to a judgment, decree or order, whether final or interlocutory.'
268 A corporation may contravene s 52 without intending that its conduct mislead or deceive another person: Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 228. A corporation therefore acting honestly can still be found to have contravened the section: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 197.
269 Section 82 (damages) and s 87 (other orders) make a corporation, as defined in s 4, liable in damages and to other orders for a contravention of s 52. Corporations cannot act, of course, except through a human agency, being its directors, servants or agents: Fencott v Muller (1983) 152 CLR 570 at 583 per Gibbs CJ. The effect of s 75B is to apply the provisions of s 82 and s 87 to any person who has been involved in a contravention of those parts of the Trade Practices Act mentioned in s 75B(1) by reason of any of the conduct in paragraphs (a)-(d) of s 75B(1). Those persons may be the corporation's directors, servants or agents. It is not only directors, servants or agents who may be caught by s 75B but, for the purpose of this case, it is enough to consider only that class.
270 In this matter the question is whether s 75B applies to either or both of the second respondent and third respondent so as to allow the Court to make an order for damages against one or both of them as persons involved in a contravention of s 52 of the Trade Practices Act.
271 Section 75B(1) prescribes the particular circumstances where a person who has not himself or herself contravened s 52 can be made the subject of an award of damages or may be made the subject of other orders. In that sense, it is a procedural section which widens the class of persons who may be the subject of orders under the Trade Practices Act. The section instances four separate ways in which a person may be made subject to orders under ss 82 or 87. In this proceeding the applicants have, in their claims against the second and third respondents, only relied on one of those paragraphs, namely s 75B(1)(c).
272 Section 75B was considered by the High Court in Yorke v Lucas (1985) 158 CLR 661. In that case, a corporation sold its business to the appellants. A land agent, which was also a corporation, acted on behalf of the vendor. A director of that land agent acted in the sale of the business. The trial judge found that the vendor had contravened s 52 of the Trade Practices Act. He also found that the land agent company had contravened s 52 but unwittingly. He found that a director of the vendor had aided and abetted or, alternatively, was knowingly concerned in the contravention by the vendor and by virtue of s 75B was a person involved in the vendor's contravention. However, he found that a director of the land agent company was unaware and had no reason to suspect the information supplied by the director of the vendor and thereby the vendor was incorrect. He dismissed the case against the director of the land agent company on the ground that the appellant had failed to prove that the director was aware or should have been aware of the relevant facts before he could be said to have been involved in the contravention. His decision was upheld by the Full Court of the Federal Court and the purchasers appealed to the High Court. The appellants argued that the respondent was caught by paragraphs (a) and (c) of s 75B(1). They argued that s 75B(1), or at least paragraphs (a) and (c), did not require the appellants to prove any intent on the part of the respondent based upon knowledge of the material facts.
273 In dealing with paragraph (a) of s 75B(1), Mason ACJ, Wilson, Deane and Dawson JJ (the majority) applied principles of the criminal law because the words used in s 75B(1)(a) are taken directly from the criminal law. In particular, they relied upon a previous decision of that Court in Giorgianni v The Queen (1985) 156 CLR 473 which had held that in the criminal law where a party is accused of aiding and abetting, the party must have knowledge of the essential matters which go to make up the offence before the party can form the requisite intention even if the party does not know that those matters amount to a crime. The majority said at 667-668:
'If par.(a) of s 75B imports the requirements of the criminal law, it is clear in the light of Giorgianni v The Queen that Lucas could only be brought within that paragraph if he intentionally aided, abetted, counselled or procured a contravention by the Lucas company of s 52 of the Trade Practices Act. Upon the findings of the trial judge, however, Lucas lacked the knowledge necessary to form the required intent. A contravention of s 52 involves conduct which is misleading or deceptive or likely to mislead and deceive and the conduct relied upon in this case consisted of the making of false representations. Whilst Lucas was aware of the representations - indeed they were made by him - he had no knowledge of their falsity and could not for that reason be said to have intentionally participated in the contravention.'
274 A similar construction was given to s 75(1)(c). The majority said at 670:
'There can be no question that a person cannot be knowingly concerned in a contravention unless he has knowledge of the essential facts constituting the contravention.'
275 The majority concluded at 670:
'In our view, the proper construction of par.(c) requires a party to a contravention to be an intentional participant, the necessary intent being based upon knowledge of the essential elements of the contravention.'
276 The distinction between the inquiry into the corporation's conduct for a s 52 contravention and a person's liability under s 75B(1) was addressed by Brennan J at 676-677:
'As we have seen, the actual misleading or deception of a person is not an element of a contravention of s. 52, though a person seeking compensation under s. 82(1) must establish that his loss or damage resulted from the contravening conduct. In determining who is civilly liable for a s. 52 contravention under s. 75B(a) no question arises as to whether the person upon whom liability is sought to be imposed knew that another person would or might be misled or deceived by the contravening conduct. But s. 75B(a) does require knowledge of the acts constituting the contravention and of the circumstances which give those acts the character which s 52 defines, namely, "misleading or deceptive or … likely to mislead or deceive". As the net of civil liability for a contravention does not catch those who would not be caught if s. 52 created an offence, honest ignorance of the circumstances which give a representation which is likely to mislead or deceive is inconsistent with civil liability under s. 75B(a). The operation of s. 75B(a) in conjunction with s. 52 may be incongruous, for s. 52 throws a strict liability on a corporation, but s. 75B(a) does not extend liability for a s. 52 contravention to a person who procures the corporation to engage in contravening conduct if that person is honestly ignorant of the circumstances that give that conduct a contravening character.'
277 He said in relation to s 75B(1)(c) at 677:
'Nor, in my opinion, does par. (c) of s. 75B impose a stricter liability. The juxtaposition of "knowingly concerned in" and "party to" in a statute defining criminal liability (e.g., s. 5 of the Crimes Act) would deny to the latter term a construction equivalent to "unknowingly concerned in". A "party to" an offence is one who, by the principles of the common law, would be held to be criminally liable for the offence.'
278 It must be actual knowledge not constructive knowledge that is established. There may be circumstances where knowledge may be inferred: Pereira v Director of Public Prosecutions (1988) 82 ALR 217 at 219-220. But that is still a factual inquiry as to whether the particular person was seized of the actual knowledge. Where knowledge is sought to be inferred it must be the only rational inference available. The person said to be accessorily liable, if s 75B(1)(c) is relied on, must not only have the necessary knowledge, the person must also be involved in a contravention of the relevant provision of the Act. Therefore, there must be some evidence of a participation in the contravention by the corporation.
279 For the reasons already given, it is my opinion that the second respondent well knew that the brochure contained representations which were, in material respects, false. That having been established, the applicants have established an actual rather than a constructive knowledge of the essential matters that make up the contravention. The applicants have established that there is a close rather than a remote involvement in the contravention: Fencott v Muller (1983) 152 CLR 570 at 584. The second respondent was an intentional participant in the first respondent's contravention. The second respondent constructed the brochure and included the figures which made up the brochure profit and loss statement for the financial statement. She published the brochure to the second and third applicants. She was directly involved in the contravention by the first respondent of s 52 of the Trade Practices Act.
280 It follows, therefore, that the applicants have established that the second respondent was knowingly concerned in or a party to a contravention by the first respondent of s 52 of the Trade Practices Act.
281 In my opinion, the applicants have also established that the second respondent contravened s 10 of the Fair Trading Act. The second respondent's conduct in publishing to the second and third applicants, and thereby the first applicant, the brochure which contained the false representations means that inevitably a finding must be made that she contravened s 10 of the Fair Trading Act. It was her action which caused the company to contravene s 52 of the Trade Practices Act. Necessarily, her action is a contravention of s 10 of the Fair Trading Act.
282 Arktos Pty Ltd v Idyllic Nominees Pty Ltd [2004] FCAFC 119 ('Arktos Pty Ltd v Idyllic Nominees Pty Ltd') was a case in the Full Court of the Federal Court mainly concerned with practice and procedure. However, the case is instructive in relation to the ambit of s 10 of the Fair Trading Act. In that case, the appellant had purchased a business from the first respondent. The primary judge found that the third respondent, who was a director of the first respondent, made misleading precontract representations and held, as a result, that the first respondent had thereby engaged in misleading conduct in trade or commerce contrary to s 52 of the Trade Practices Act. The misleading representation related to profitability and value of the business. The primary judge considered the third respondent's liability but dismissed the action against him on the ground that, whilst it was pleaded the third respondent had acted within the scope of his actual or apparent authority as a director or agent of the first respondent, the pleading did not allege that the third respondent engaged in conduct in trade or commerce on his own account. He also found that there was no plea that the third respondent was knowingly concerned in the contravention as defined in s 75B of the Trade Practices Act or s 68 of the Fair Trading Act. He concluded at [77] that therefore no 'derivative liability under the Act or the Fair Trading Act, was made out against [the third respondent] in respect of conduct by Idyllic held to contravene s 52 of the Act or s 10 of the Fair Trading Act'. The appeal was against the primary judge's failure to grant the appellants relief against the third respondent.
283 In their joint judgment, Carr, Tamberlin and RD Nicholson JJ set out the appellants contentions:
'7 The first is that the conduct of Mr Price, which was the conduct of Idyllic in this matter, was itself in trade or commerce and attracted primary liability under ss 10, 77 and 79 of the FTA, because that conduct was misleading.
8 Secondly, the appellants contend that it is no part of a cause of action under those sections that a director or agent engages in misleading conduct "on his own account".
9 Thirdly, the appellants say that the statement of claim adequately raised a cause of action under those sections of the FTA against Mr Price.
10 Finally, the appellants say that, if they do not succeed on their third point, the statement of claim pleaded all the facts found at trial sufficient to sustain a cause of action under ss 10, 77 and 79 of the FTA against Mr Price and he would have been afforded procedural fairness had judgment been entered against him.'
284 The Court observed that the appellants had not only sued the company but also the third respondent and that circumstance indicated that the appellants sought relief against the third respondent. The Court said at [13]:
'The authorities show that a director of a corporation who acts on its behalf in the course of trade or commerce also acts himself or herself in trade or commerce and, if the corporation is liable under a State Fair Trading Act for their conduct, they also attract primary liability under the same statute: Cleary v Australian Co-operative Foods Ltd (1999) 32 ACSR 701 at [54]-[57]; Lauriana Pty Ltd v Corfield Food Warehouse Pty Ltd, unreported, Supreme Court of Western Australia, Wallwork J, 28 April 1995 at 6 and 22; Citibank Ltd v Liu [2003] NSWSC 569 at [53] and the cases there discussed, and Miba Pty Ltd v Nescor Industries Group Pty Ltd (1996) 141 ALR 525 at 541. That is supported in particular by the provision in s 84(2) of the TPA and s 82(2) of the FTA that conduct engaged in on behalf of a body corporate by a director within the scope of actual or apparent authority is deemed 'also' to have been engaged in by the body corporate. It is not correct, as the case for the third respondent asserted, that the principle recognized in these authorities is applicable only when there is a finding of 'separate conduct' by the director; that is, conduct other than in the capacity of director or agent. It is accepted in J D Heydon, Trade Practices Law, Law Book Company, Sydney, 1989 at 18.350 that corporate officers acting in the course of their employment, or in the scope of their authority as agents causing the corporation to be liable under s 84(2) also have personal liability. It is added there that in normal circumstances such officers will be knowingly concerned in the conduct: s 75B(c).'
285 The Court went on to say that it was not a question as to whether the third respondent had some sort of derivative liability under the equivalent of s 75B of the Trade Practices Act (s 68 of the Fair Trading Act) but whether the appellants had adequately raised a cause of action against the third respondent based upon his contravention of s 10 of the Fair Trading Act. The case then went on on a question of pleading.
286 The passage to which I have referred is, in my opinion, clear. Where a director who is acting on behalf of a corporation engages in conduct which would make a corporation liable for a contravention of the Fair Trading Act, the director or agent also is liable under s 10 of the same Act. The director or agent need not be acting separately or be engaged in conduct in trade or commerce different from that of the corporation. The liability does not attach to the director because of the provisions of s 68 of the Fair Trading Act, although in normal circumstances the director or agent will also be knowingly concerned in the conduct of the contravention. As there is a primary liability under s 10, it is unnecessary to resort to the accessorial liability established by operation of s 68 of the Fair Trading Act.
287 In Citibank Ltd v Liu [2003] NSWSC 569, an employee of a corporation (Mr Wong), who was not a director, presented draw down notices to a bank for the purpose of certifying certain matters necessary for a lease to the company. The notices contained false representations which were not known to the employee. In those circumstances, accessorial liability under s 75B of the Trade Practices Act did not attach. However, Hamilton J, in the New South Wales Supreme Court, held Mr Wong liable under s 42 of the Fair Trading Act 1987 (NSW) which is the equivalent of s 10 of the Fair Trading Act (WA). Hamilton J said at [53]:
'In my view, no difference is made to the application of the principle by the fact that the representor on behalf of a corporation is an employee. The fact that he is an employee does not negative the fact that he is acting as an agent. That the FTA may impose liability on employees acting as such is illustrated by Australian Competition and Consumer Commission v McCaskey (2000) 104 FCR 8. That was a case under the TPA but, as the conduct involved telephone communications, the provisions bound natural persons as well as corporations. The injunctive orders were made by consent, but French J scrutinised them carefully to see that they were authorised by the Act (see at 21). His Honour made orders against the employee who had engaged in the conduct. In Primcom Pty Ltd v Sgarioto (1994) ATPR (Digest) 46-135, a case under the Victorian FTA, Eames J held an estate agent liable for misleading conduct although his principals selling their own house could not be held liable because not engaged in trade or commerce. The FTA proscribes conduct by natural persons. If that conduct is in trade or commerce and cannot be said not to be misleading conduct of the person who engages in it by reason that that person is acting merely as a conduit, in my view the person is not removed from the purview of the Act by the fact he is engages (sic) in the conduct as the employee of another.'
288 The matter went on appeal to the Court of Appeal and is reported sub nomine Wong (as Executor of the Estate of the Late Casey Wong) v Citibank Limited [2004] NSWCA 396.
289 Mr Wong, who died subsequent to the trial, was the general manager of the corporation of which Ms Liu was the principal. His executor appealed against the finding of the trial judge that Mr Wong had breached s 42 of the Fair Trading Act (NSW). The Court of Appeal said at [17]-[19]:
'In the course of his reasons, the trial judge referred to John G. Glass Real Estate Pty. Limited v. Karawi Constructions Pty. Limited (1993) ATPR 41-249, where the Full Court held that an agent (in that case a real estate agent), who had transmitted a false misrepresentation to it by the owner, itself engaged in conduct that was misleading and deceptive. Here, his Honour held that it did not matter that the "agent" was an employee. In support of this proposition, he relied upon the decision of French J in Australian Competition and Consumer Commission v. McCaskey (2000) 104 FCR 8 where French J made injunctive orders against an employee who had engaged in the misleading and deceptive conduct.
Counsel for the appellant submitted that McCaskey was not binding on this Court and was of little persuasive authority in circumstances where the issue as to whether an employee could be liable under s.52 had not been fully argued. He submitted therefore that his Honour erred in placing reliance upon it. Although McCaskey is a first instance authority, French J is an experienced Federal Court judge who, in the Full Court system of that court, sits both at first instance and on appeal. His decision commands respect, and, if the appellant wishes this Court not to have regard to it, an attempt should have been made to establish that his Honour was wrong in some respect or that there was some reason why the case had no application or was irrelevant to the issue under consideration. No such attempt was made.
But in any event, his Honour's acceptance that relief could be granted against an employee for breach, in that case of s.52 of the Trade Practices Act, is clearly correct. As a matter of law, an employee acts as agent for the employer. There is no basis in principle why different rules should apply to agents who are appointed in different circumstances. Provided that a party alleging the contravention is able to establish that the agent is liable within the principles state in Yorke v, Lucas, then liability under the section attaches, notwithstanding that the agent in question is an employee acting within authority in the course of employment.'
290 In Arms v WSA Online Limited (ACN 081 121 495) [2005] FCA 943, the primary judge was concerned with representations made by two employees in the course of their employment of a corporation.
291 The primary judge said at [107] that the researches of Counsel 'have not revealed a single authority where an employee has been held personally liable for statements made in the course of his or her employment by an employer who, or which, was concededly engaged in trade or commerce'. He then went on to say:
'109 The consideration just indicated together with my own analysis in the light of the authorities of the common basis on which liability for deceptive or misleading conduct "in trade or commerce" is erected by both the TPA and the Fair Trading Act has led me to conclude that it does not extend to the conduct of Student or Houghton in the present case. That is not to say that a director or sole shareholder of a company may not attract liability for statements made in the course of the company's business if their making can be characterised as tending to promote the director's or shareholders own trading or commercial interests. See eg Arktos v Idyllic Nominees Pty Ltd [2004] FCAFC 119; (2004) ATPR 42-005. However, no independent trading or commercial interest can be imputed to Student or Houghton in the present case. The application against those respondents must therefore be dismissed.'
292 That matter went on appeal. The Full Court of the Federal Court in Arms v Houghton [2006] FCAFC 46 discussed the decisions in Arktos Pty Ltd v Idyllic Nominees Pty Ltd, Citibank Ltd v Liu, and Wong v Citibank and concluded at [38] that there was authority both in the Full Court of this Court and in the Court of Appeal in New South Wales that 'an employee can be found to have engaged in misleading or deceptive conduct for actions taken within the scope of his actual authority; that is, not independently of such authority'.
293 In this case, the second respondent was neither a director or an employee of the first respondent. I think, however, she was clearly the agent of the first respondent and, consistent with the authorities to which I have referred and in particular the authorities of the Full Court of this Court, she would be independently liable under s 10 for her contraventions of the Fair Trading Act for her actions in preparing and publishing the brochure to the second and third applicants, and thereby the first applicant.
294 The applicants have, as I have said also, framed their case against the third respondent on alternative bases. First, it is said, that the third respondent was a person who was knowingly concerned in or a party to the contravention by the first respondent of s 52 of the Trade Practices Act. Its plea is that s 75B of the Trade Practices Act is invoked so as to allow the applicants to obtain damages against the third respondent. In the alternative, it is pleaded that the third respondent has contravened s 10 of the Fair Trading Act. Again, as I have already indicated, in the first, second and third respondents' joint defence those respondents, relevantly for the purpose of this aspect of the claim, have denied paragraph 18 of the applicants' statement of claim but have not made any positive plea on behalf of the third respondent.
295 It will be convenient to address the claim under s 10 of the Fair Trading Act first. The third respondent was a director of the first respondent. It was submitted that, in those circumstances, he also contravened s 10 of the Fair Trading Act and he is liable to the applicant: Arktos Pty Ltd v Idyllic Nominees Pty Ltd.
296 In my opinion, that submission cannot be accepted. The critical fact in Arktos Pty Ltd v Idyllic Nominees Pty Ltd which made that director liable under the Fair Trading Act was that the director had acted on behalf of the corporation and made misleading pre-contractual representations within the scope of his authority as a director to the purchaser. In those circumstances, the Full Court concluded that he was liable for the reasons it gave at [13] cited above at [284].
297 It is not enough for an applicant to merely establish that a corporation has contravened s 52 of the Trade Practices Act and thereby claim that any director of that corporation is liable under s 10 of the Fair Trading Act. There must be a contravention by the director himself or herself. That was made clear by Nicholson J in Caple v All Fasteners (WA) (A Firm) [2005] FCA 1558. In that case, it was alleged that a corporation had contravened s 52 of the Trade Practices Act. It was pleaded that the appellant, who was a director of the corporation but who had not been party to any of the representations which had been made, was accessorily liable under s 75B of the Trade Practices Act and, in the alternative, primary liable under s 10 of the Fair Trading Act. The Federal Magistrate found the appellant was accessorily liable under s 75B of the Trade Practices Act, even though the representations were not made by the appellant. He did not find her liable under s 10 of the Fair Trading Act. On appeal, the respondent filed a notice of contention contending that 'in addition, or in the alternative, to the grounds for liability of the appellant contained in the reasons of his Honour, the appellant is liable to the respondent in relation to her breach (sic) of s 10 of the Fair Trading Act 1985 (WA) as pleaded in the respondent's re-amended statement of claim': at [77]. The respondent relied on this Court's decision in Arktos Pty Ltd v Idyllic Nominees Pty Ltd to support the submission.
298 Nicholson J said at [87]-[89]:
'In Arktos a Mr Price made misleading pre-contractual representations on behalf of a company of which he was a director. It was held that such representations were made both on behalf of the company and in his individual capacity, thereby grounding his direct liability pursuant to s 10 of the Fair Trading Act 1985 (WA) (sic).
However, here the appellant, although a director of the company, did not make any representation nor was it pleaded or put to her that she had done so. Further, it was not pleaded or put to her that she had given any authority for any representation to be made on her behalf beyond negotiation of the lease of the premises. Nor was it pleaded or put to her that any agent who acted on her behalf exceeded the agent's actual ostensible authority in circumstances such as to bind her or render her personally liable.
I agree with the appellant's submissions. The notice of contention cannot be upheld.'
299 There are other decisions of the same effect at first instance; Astvilla Pty Ltd v Director of Consumer Affairs Victoria [2006] VSC 289; Miba Pty Ltd v Nescor Industries Group Pty Ltd (1996) 141 ALR 525, particularly at 541; Cleary v Australian Cooperative Foods Ltd (No 2 & 3) (1999) 32 ACSR 701.
300 In my opinion, the third respondent is not liable merely because he is a director of the first respondent. If the applicants are to succeed in their claim that he is directly liable because of a contravention of s 10 of the Fair Trading Act, then they must establish that the third respondent, in trade or commerce, engaged in conduct that was misleading or deceptive or was likely to mislead or deceive.
301 If those matters cannot be established, they will have to establish that he is accessorily liable under s 75B of the Trade Practices Act.
302 It is appropriate to consider the findings which I have already made in relation to the third respondent for the purpose of determining whether he has directly contravened s 10 of the Fair Trading Act or is accessorily liable under s 75B of the Trade Practices Act.
303 The third respondent was the sole director of the first respondent. He was a party to the decision that the third respondent sell its business and lease its premises. He assisted in the preparation of a brochure which he knew the first respondent and the second respondent intended to publish to potential vendors. He knew that potential vendors would rely upon the matters contained in the brochure. He created the disclaimer. He assisted to create a brochure for the purpose of creating in the mind of the reader that the brochure had been prepared by a CPA which he knew to be false. More importantly, he created the précis and the brochure profit and loss statement. He took the brochure profit and loss statement from information provided by the fifth respondent. That information was later provided to Mr Moore in the Moore 1999 profit and loss statement. The brochure profit and loss statement omits a material fact in the Moore 1999 profit and loss statement; the stock on hand at 30 June 1999.
304 In any event, Mr Bahr created the document which represented that the first respondent had made a gross profit from trading of $164,966 and a net profit of $145,595 in the 1999 financial year. Having regard to the taxation profit and loss statement, which disclosed a gross profit of $105,162 and a net profit of $2,983, Mr Bahr must have known that the representations contained in the brochure profit and loss statement were untrue and therefore to publish the document would be to engage in misleading and deceptive conduct. I am fortified in making that finding by the fact that in the previous year the first respondent had made a net profit of $7,117. In the 1997 financial year it had made a profit of $17,079. Having regard to the admissions made by Mr Bahr in his cross-examination, he must have known that the brochure profit and loss statement was false. He was present when the brochure was handed to Mr and Mrs White.
305 In my opinion, the applicants have established, as a matter of fact, that he has himself engaged in misleading and deceptive conduct and thereby contravened s 10 of the Fair Trading Act. They have also established accessorial liability under s 75B of the Trade Practices Act. He had the necessary knowledge. He was involved in a contravention in that he intentionally participated in the first respondent's conduct. In doing so, he had knowledge of the falsity of the representations contained in the brochure.
306 Subject to proof of loss or damage by the respondents' conduct and the other issues to which I have referred, the applicants are entitled to relief against the first, second and third respondents.