"Clearly, Mr McNeill was aware of the representations that he made on behalf of [the Club], and all of the remaining defendants [the appellants] were aware of the representations similarly made at the meeting with Mr Magro on 21 September 1997. The question whether each was also aware that the representations were misleading or that there were no reasonable grounds for making the same, requires a further consideration of the facts.
In this regard, it is common ground that each of the remaining defendants was authorised by [the Club] to act on its behalf not only in the negotiations with Mr Magro, but also in appointing him as assistant coach. Furthermore, it was the remaining defendants who had the authority to determine the terms on which such an appointment was made.
The self-evident and inevitable conclusion from the facts as found is that the second, third and fourth defendants [the appellants] failed to appoint Mr Magro as assistant coach on the terms as previously represented. Quite the contrary, little more than two weeks later Mr Hatt was able to state to the Board of Directors that Mr Magro had been appointed for "no fixed period". Similarly, [the Club's] subsequent lack of effort in finding employment for Mrs Magro, or in meeting all of Mr Magro's relocation expenses, is indicative of a failure by the remaining defendants to take steps to ensure that those representations would be met.
In these circumstances, the facts that are critical to the question of liability are that the remaining defendants represented to Mr Magro that he would be appointed on a particular basis, but then failed to exercise their authority and power to ensure that this occurred. They appointed Mr Magro without saying more, thus misleading him into believing that his appointment was as previously represented. Of necessity, these were all matters that were within the actual knowledge of the remaining defendants.
Given these circumstances, it is my view that there is simply no scope for s 51A(2) to operate. Put another way, in circumstances where accessorial defendants make representations as to future matters on behalf of a corporation, but then by their own conduct bring about the situation where those representations are not met, they are necessarily a 'party' to the contraventions involved. Accordingly, there is no need to resort to the question of whether there were reasonable grounds for making the representations because the defendants, by their own conduct, ensured that the representations did not come to pass.
Even if I am wrong in this view, it is relevant to note that the deeming provision in s 51A can only operate to the extent that the representations are "taken to be misleading". The deeming provision cannot operate in respect of representations that are 'likely to mislead' (s 52) or 'liable to mislead' (s 53B). In this regard, and on the facts as found, each of the remaining defendants was certainly a "party" to representations which were likely to mislead or liable to mislead."