He executed the agreement a second time against the following execution clause:
" Executed by Motor Trades Finances (Australia) Pty Ltd by its duly constituted attorney under power of attorney dated 1st May 2001 … "
231 Motor Trade Finances (Australia) Pty Ltd was not a party to the agreement. The plaintiff tendered three deeds of appointment of Mr Dunn as attorney. One was a deed dated 1 May 2001 signed by Mr Dunn under the common seal of Macburg. It conferred a general power of attorney on Mr Dunn to act for Macburg. The second power of attorney was a deed dated 8 January 2002 signed by Mr Dunn under the common seal of Motor Trade Finances (Australia) Pty Ltd. It appointed Mr Dunn as a general attorney of that company (which was itself misdescribed in the body of the deed as Motor Trade Finances Pty Ltd). The third power of attorney was a deed dated 4 March 2002 signed by Mr Dunn under the common seal of MTFPL. Again, it was a general power of attorney.
232 Mr Dunn was authorised to act as the attorney of both Macburg and MTFPL to cause those companies to enter into the agreement of 14 March 2002. He was the sole director and controlling mind of both companies. Mr Dunn said that the agreement was a standard management contract that Macburg had with other companies. It is clear that he intended that MTFPL should enter into the agreement with Macburg, for Macburg to provide the services described in the agreement. So much is clear from the first page of the agreement and the recitals. There were typographical errors on the execution page and a misdescription of one of the powers of attorney being exercised. Macburg and MTFPL subsequently acted under the agreement as if it were binding on them. Macburg invoiced MTFPL for services as envisaged by the agreement. Notwithstanding its defective execution, the agreement was binding on Macburg and MTFPL until such time as Mr Dunn decided that it should be terminated, and took steps to terminate it.
233 MTFPL was induced to enter into its contract with Elderslie by Elderslie's misrepresentations in the letter of 8 March 2002. The entry by MTFPL into the agreement with Macburg was a direct consequence of MTFPL's having accepted Elderslie's letter of offer of 8 March 2002. MTFPL needed either to employ people to market its lease finance product, assess leasing proposals, and otherwise carry on the business contemplated by that agreement, or it had to contract with another party for those services. It took the latter course. There is a direct causal relationship between Elderslie's misleading and deceptive conduct and MTFPL's making the agreement with Macburg.
234 I do not think that any question arises as to whether the sums MTFPL agreed to pay to Macburg were reasonable or excessive. The moneys paid or payable by MTFPL to Macburg are not claimed as damages, on the basis that the expense was incurred by way of mitigation, where there would be an onus on the plaintiff to show that expenses were reasonable. Rather, the question is simply what expenses were incurred by MTFPL, and whether the incurring of such expenses was caused by Elderslie's misleading and deceptive conduct. (The question whether MTFPL failed to act reasonably to mitigate its damages by not terminating its arrangements with Macburg is a different question.) However, there was no evidence that the charges made by Macburg were excessive. Had its services not been used, MTFPL would have had to incur wages, rental and other costs.
235 The defendant challenged the plaintiff's evidence that invoices for services provided by Macburg were rendered. It was submitted that there was no direct evidence of what management services were in fact provided by Macburg to MTFPL. However, it is clear that MTFPL did carry on a business from March 2002 of arranging for the leasing of cars to customers, the obtaining of finance for that to be done, and the assignment of the lease receivables to Elderslie. It was not suggested that MTFPL had its own employees and equipment and office space through which it carried on the business. As it was under a contractual obligation to pay $13,200 per month for the schedule A services provided by Macburg, as those services were necessary for the conduct of that business, and as it carried on no other business, I do not think it is material that there was no direct evidence of precisely what management services were provided. Nor is it relevant whether invoices were periodically rendered or not. However, in case it be relevant, I accept Mr Dunn's evidence that they were. However, there is no evidence that the invoices were paid. Rather, the evidence establishes that a liability was incurred by MTFPL for the amounts in the invoices. The claim did not extend beyond 6 April 2004.
236 The evidence in relation to the charges for the "Category B Services" consisted of the production of three invoices each dated 20 July 2003 from Macburg to MTFPL. One invoice was for the sum of $108,662 and was for "credit management fees". Another invoice was for $57,995 and was for "additional administration costs". The third was for "general out of pocket expenses" and was for $47,600.
237 These invoices totalled $214,257. Curiously, Mr Dunn deposed that during the period from 20 March 2002 and 6 April 2004, invoices were issued to MTFPL for $210,252 for clause 2(b) services. I can only assume that the figure of $210,252 was a mistake.
238 Given the relationship between Macburg and MTFPL, I do not conclude from the fact that the invoices were rendered that MTFPL had a liability to pay the invoices. If Macburg incurred out of pocket expenses in carrying out its duties under the agreement, it was entitled to be reimbursed by MTFPL. The invoice for "general out of pocket expenses" suggests that some such expenses were incurred by Macburg. However, there was no evidence of what they were. The plaintiff has not proved that it had a liability to Macburg for the amount of that invoice.
239 The invoice of $57,995 was for "additional administration costs". Again, there is no evidence as to what was done for which this invoice was raised. Category B services were to be invoiced by Macburg to MTFPL "at a rate applicable for the service provided". No rate was specified in the agreement. Presumably, in the absence of agreement between Macburg and MTFPL as to an applicable rate, Macburg would be entitled to a reasonably charge for services provided in addition to those nominated in Category A. However, it is not possible to say what was the "additional administration" for which the charge was made. There is no evidence that any rate applicable to such "additional administration" was agreed. It is not known how the charge was made up. Therefore, it cannot be known whether the amount charged was reasonable.
240 The plaintiff has not established that it had a liability pursuant to the agreement of 14 March 2002 to pay this invoice.
241 The invoice of $108,662 was for "credit management fees". Again, there was no explanation of the charge. "Credit management" is not a "Category B service" unless it comes within the description of "any other management services" in (xi). Category A services include the management of the credit submission process (vi), the management of delegated approval authorities (vii), the management of credit approval process outside the delegated credit approval authorities (viii), and the management and provision of credit reference checking (xiv). As there is no evidence of what work was done for which "credit management fees" of $108,662 were charged, it is not possible to say that that charge was for services falling outside Category A services. Again, MTFPL did not prove that it was liable to Macburg on these invoices under the agreement of 14 March 2002.
242 In the absence of evidence as to the basis on which the invoices totalling $214,472 were raised, there is no evidence that MTFPL had a liability to Macburg for these sums. Unless it had a liability under the 14 March 2002 agreement, or it was liable to pay a reasonable sum for work performed by Macburg on its behalf which arose from Elderslie's misleading conduct, it is unable to recover such moneys as damages for breach of s 12DA(1) of the ASIC Act.
243 Subject to Elderslie's contention that MTFPL failed to take reasonable steps to mitigate its loss, MTFPL is entitled to recover as damages the amount of $336,000 payable to Macburg for general management fees incurred up to 6 April 2004. There is no explanation as to why no claim was made for such expenses incurred after 6 April 2004, but it suffices that no such claim was made. MTFPL must give credit for the income which it derived under its agreement with Elderslie of $104,588.86 and the contractual damages to which it is entitled for loss of its bargain. In other words, MTFPL has established that by entering into the contract with Elderslie and the contract with Macburg, which was entered into because of its contract with Elderslie, it was worse off by the difference between $336,000 payable to Macburg and the sum of the income (after brokerage) of $104,588.86, and the value of its claim for damages for breach of contract. (In his affidavit Mr Dunn said that the gross profit derived was $103,422.69, but the detailed summary of the motor vehicle leases funded by Elderslie at exhibit CJD104 shows that the figure was $104,558.86).
Failure to Mitigate by not Terminating Agreement with Macburg
244 Elderslie submitted that Mr Dunn's decision to enter into a three-year agreement with Macburg, when he knew that the Master Receivables Purchase Agreement could be terminated on one month's notice, was so unreasonable that it broke the causal connection between the defendant's conduct and the alleged loss. It also submitted that it was unreasonable for Mr Dunn not to bring the management agreement to an end. It submitted that any loss suffered as a result of the contract with Macburg extending beyond one month's notice of the MRPA ceasing to be operative should be to the plaintiff's account.
245 The difficulty with these submission is that the MRPA was not terminated until 23 December 2004. No claim was made for moneys payable to Macburg after 6 April 2004. MTFPL was required to continue to keep books and records, to collect GST remitted to it by Elderslie, and to remit GST to the Australian Taxation Office.
246 On 16 May 2002, Elderslie wrote to Mr Dunn at MTFPL confirming the parties' discussions in relation to "operational aspects of our transaction". On 22 May 2002, Mr Dunn agreed to the provisions outlined in the letter. Elderslie wrote:
" 1. GST ITC rebate
Under the arrangement we are lending to you the rebatable GST component at the date of settlement. This is currently capped at $5,012.18 on each deal and may be less in some instances. You have agreed to pay to us the cash equivalent of each GST ITC rebate when received from the Australian Taxation Office. This is required by us as all of the loan pricing has been based on that assumption.
You also agreed under clause 8.1(c)(iii)A of the Deed of Charge and Mortgage to furnish us with copies of the BAS within ten banking days after every lodgement of the same.
2. GST on lease receivables
As we are collecting the lease receivables via direct debit to our account, we undertake to pay the relevant GST and stamp duty amount to you on a monthly basis. We will also provide a reconciliation of these amounts on an individual account basis.
We have agreed that the GST that we are required to pay to you can be offset against the amount owed to us under point 1 above. In the early stages of this transaction this will mean that you are a net payer to us. "
247 As the later discussions between the parties made clear, the effect of this arrangement was that MTFPL needed to maintain accounts in relation to the loan of the "rebatable GST component" of each transaction, and to account for the cash equivalent of each GST ITC rebate when received from the Australian Taxation Office. It was to continue to receive GST collected by Elderslie from the customers on the making of regular lease payments. It had to keep accounts to reconcile these transactions. It appears that MTFPL changed its method of accounting from an accruals to a cash basis. Elderslie complained that MTFPL did not. These arrangements were not the subject of cross-examination. However, on any view, MTFPL needed to maintain the management and accounting services provided by Macburg for at least so long as the MRPA remained on foot. I do not consider that MTFPL failed to mitigate its damages by not taking steps to terminate its agreement with Macburg.
248 Nor was there a break in the chain of causation by the fact that the agreement with Macburg contained no provision for its termination following the termination of the MRPA. As Mr Dunn could bring the agreement to an end when he chose, there was no reason to have such a provision. In any event, as the MRPA was not terminated until 23 December 2004, and as MTFPL did not claim any damages for payments due to Macburg after 6 April 2004, the point is academic.
249 For these reasons, I conclude that MTFPL is entitled to damages pursuant to s 12GF(1) of the ASIC Act of the difference between $336,000 payable as management fees to Macburg for Category 2(a) services, and the income of $104,558.86 received from the seventeen lease contracts. MTFPL did not prove that it had suffered further losses by the misleading and deceptive conduct of Elderslie. Its damages under s 12GF of the ASIC Act should also be adjusted to allow for its claim for damages for breach of contract. Those damages reflect the additional value of the contract with Elderslie which are to be set off against the expenses incurred by MTFPL as a result of its entering into the contract.
250 MTFPL would also be entitled to interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW) if it had paid the invoices issued to it, as distinct from being liable for the amounts shown in the invoices. However, there was no evidence that the invoices were paid. Its agreement with Macburg does not include a term providing for interest on late payments. It could discharge its debt to Macburg by paying $336,000 without interest. I do not think that it is appropriate to award pre-judgment interest on the damages.
251 Therefore, MTFPL is entitled to damages against Elderslie pursuant to s 12GF of the ASIC Act for the difference between $336,000 and the sum of $104,558.86, $21,648, and interest at 9% per annum on $21,648 from 23 December 2004 to the date of judgment. As at 8 December 2006, such interest amounts to $3,816.64. Therefore, damages under s 12GF amount to $205,976.50. In total, MTFPL is entitled to judgment against Elderslie in the sum of $231,441.14.
Claims Against Mr Garcia and Mr Garrett
252 MTFPL pleaded that Mr Garcia and Mr Garrett were liable as primary contravenors of s 12BA of the ASIC Act, s 42 of the Fair Trading Act 1987 (NSW), and s 9 of the Fair Trading Act 1999 (VIC). The misleading conduct relied on was primarily the letter of 8 March 2002. MTFPL also alleged that Elderslie, Mr Garcia and Mr Garrett engaged in misleading and deceptive conduct by statements made by Mr Garcia on 6 April and 27 July 2001 to the effect that Elderslie had the capacity to provide funding for the program. MTFPL also relied upon statements made at a meeting between Mr Dunn, Mr Garcia and Mr Garrett, and representatives from SG, where it was pleaded that "the second and third defendants introduced MTFPL to Societe Generale as its proposed Program Securitiser which had committed, or would commit, funding of at least $50,000,000 annually to support the program".
253 However, the representations upon which Mr Dunn relied were those conveyed by the letter of 8 March 2002. They were the only representations which had the formality which he required before committing MTFPL.
254 Mr Garrett cannot be liable as a primary contravenor by the sending of the letter of 8 March 2002. He did not send it. He did not read it before it was sent.
255 It was submitted for Mr Garcia that the representations on which MTFPL relied were in fact not those of Mr Garcia, but of his principal, Elderslie. It was submitted that the conduct relied on by MTFPL was the "accumulation of events occurring prior to signature of the letter of offer and MRPA. … It is not possible to attribute liability to each of Messrs Garcia and Garrett, as their conduct, viewed individually, would not be sufficient to amount to the representations asserted".
256 However, in earlier submissions, the defendants said, correctly in my view, that Mr Dunn's evidence made it clear MTFPL's "representation case" stands or falls entirely on the contents of the letter of 8 March 2002.
257 Mr Garcia signed the letter of 8 March 2002 in his capacity as a director of Elderslie. He did not purport to act as a principal. He signed the letter acting within his authority as an agent for Elderslie.
258 However, that does not mean he escapes personal liability under s 12DA of the ASIC Act, or the provisions of the New South Wales and Victorian Fair Trading Acts. Both State statutes were invoked because Elderslie's place of business was in New South Wales, and Mr Dunn's place of business was in Victoria. The letter was sent from Sydney to Melbourne. However, the State Acts do not arise for consideration, because the case is covered by s 12DA of the ASIC Act. Section 24AI of the Wrongs Act 1958 (Vic) does not apply.
259 Authorities on s 52 of the Trade Practices Act, and the equivalent provisions in the State Fair Trading Acts, clearly establish that if a director or employee of a corporation engages, in trade or commerce, in conduct on behalf of the corporation which is misleading or deceptive, not only is the company primarily liable for contravention of s 52, but the individual is also primarily liable, and not merely as an accessary, for contravention of the equivalent State provisions (Arktos Pty LTd v Idyllic Nominees Pty Ltd [2004] FCAFC 119 at [13], [87]-[89]; Nescor Industries Group Pty Ltd v Miba Pty Ltd (1997) 150 ALR 633 at 641; Cleary v Australian Co-operative Foods Ltd (1999) 32 ACSR 701; Citibank Ltd v Liu [2003] NSWSC 569 at [53], and on appeal Wong v Citibank Ltd [2004] NSWCA 396 at [19]; Arms v Houghton [2006] FCAFC 46 at [38], [40], [42]; Astvilla Pty Ltd v Director of Consumer Affairs Victoria [2006] VSC 289 at [169]-[175]; Genocanna Nominees Pty Ltd v Thirsty Point Pty Ltd [2006] FCA 1268 at [295]-[300]).
260 Mr Garcia is "a person" to whom s 12DA of the ASIC Act applies. On behalf of Elderslie, he made the representations in the letter of 8 March 2002. Those representations were made by him as well as by Elderslie. He has a primary liability under that section which does not depend upon its being established that he knew that the representations in the letter were misleading or deceptive. He is liable for the same reasons that Elderslie is liable.
261 For these reasons there will be judgment for the plaintiff against Mr Garcia in the sum of $205,976.50.
Liability of Mr Garrett as an Accessary
262 MTFPL pleaded that Messrs Garcia and Garrett personally conducted or supervised for Elderslie, all dealings between it and MTFPL. MTFPL alleged that they were directors of Elderslie and acted within the scope of their authority as directors. They allege that by reason of these matters, Messrs Garcia and Garrett were persons who were directly or indirectly, knowingly concerned in, or party to, the conduct of Elderslie that was misleading or deceptive, or was likely to mislead or deceive, in contravention of s 75B of the Trade Practices Act, or alternatively s 12GB of the ASIC Act.
263 It follows from my conclusion that the defendants' impugned conduct was engaged in in relation to financial services, that neither Mr Garrett nor Mr Garcia can be liable as accessaries pursuant to s 75B of the Trade Practices Act for any contravention by Elderslie of s 52 of that Act. MTFPL alleged that Messrs Garrett and Garcia were liable as accessaries under s 12GB of the ASIC Act. That section makes it an offence for a person to be an accessary to certain contraventions of subdivision D of Div 2 of Pt 2 of the ASIC Act, but not s 12DA. The section does not impose civil liability on persons who aid or abet or are knowingly concerned in a contravention by another of s 12DA of the ASIC Act.
264 As counsel correctly submitted, s 12GB of the ASIC Act is not relevant on the present application.
265 However, s 12GF provides that:
" A person who suffers loss or damage by conduct of another person that contravenes a provision of … Subdivision D (sections 12DA to 12DN) may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention ."
266 A person "involved in the contravention" includes a person who "has been in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the contravention" (Corporations Act 2001 (Cth), s 79(c), ASIC Act, s 5(2)(b)). The fact that MTFPL identified the wrong provision of the ASIC Act as creating accessorial liability is not an answer to this claim.
267 As Mr Garcia is liable as a primary contravenor of s 12DA of the ASIC Act, it is only necessary to consider whether Mr Garrett is liable as an accessary. There is no issue that Mr Garrett knew of the representations made in the letter of 8 March 2002. Mr Garcia signed the letter. Mr Garrett was on holidays when the letter was sent. However, he saw the earlier version of the letter dated 18 February 2002. He gave evidence that he did not read the letter prior to its being sent out. He did not say that he did not read the letter after his return. The changes to the letter of 18 February 2002 incorporated into the letter of 8 March 2002 did not affect the representations made in Elderslie's correspondence that Elderslie had secured funding of $50,000,000 per annum from SG, or possibly, that it expected that it would obtain such funding. Both Mr Garrett and Mr Garcia knew that these representations were made. They were both concerned in the making of the representations.
268 However, to be liable as any accessary for being knowingly concerned in Elderslie's contravention of s 12DA, Mr Garrett must know the essential facts constituting the contravention (Yorke v Lucas (1985) 158 CLR 661 at 670).
269 It was submitted by counsel for Messrs Garcia and Garrett that for them to be liable as accessaries, it was necessary that they know of the falsity of the representations made, and that in this context, knowledge meant actual knowledge or wilful blindness (Yorke v Lucas at 668 and 670; Giorgianni v The Queen (1985) 156 CLR 473 at 487-488; Crocodile Marketing Ltd v Griffith Vintners Pty Ltd (1989) 28 NSWLR 539 at 546).
270 There is controversy as to whether for a person to be liable under these provisions as an accessary to a false or misleading representation by a primary contravenor, he or she must know that the representation is false or misleading. Knowledge that a representation is misleading is not an essential element of primary liability (see M Pearce SC, "Accessorial Liability for Misleading or Deceptive Conduct" (2006) 80 ALJ 104 at 107-110).
271 However, I accept that Yorke v Lucas does require that for a person to be liable for being directly or indirectly, knowingly concerned in, or party to, the contravention, the person must know both that the representations have been made (assuming that the relevant conduct is based on representations), and that the representations are false or misleading. Most recently, Brereton J explained the principles in the following terms (Australian Securities and Investments Commission v Maxwell [2006] NSWSC 1052 (at [92]):
" By s 1041I, a person who suffers loss or damage by conduct of another person that was engaged in in contravention of s 1041H may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention , whether or not that other person or any person involved in the contravention has been convicted of an offence in respect of the contravention, subject to section 1044B. By s 79, a person is involved in a contravention if, and only if, the person: (a) has aided, abetted, counselled or procured the contravention; or (b) has induced, whether by threats or promises or otherwise, the contravention; or (c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the contravention; or (d) has conspired with others to effect the contravention. The widest of those concepts is that of being "knowingly concerned" in a contravention, and even that involves (a) knowledge of the essential facts which constitute the contravention which, in the case of provisions such as those in issue here, requires knowledge that the relevant representation is being made and is misleading, and (b) some intentional participation or assistance in the contravening conduct [ Giorgianni v The Queen (1985) 156 CLR 473, 494, 501; Yorke v Lucas (1985) 158 CLR 661; Smithers v Beveridge (1994) 14 ACSR 197, 201]. The mere circumstance that a person is a director of a company that engages in contravening conduct is insufficient to establish that he or she is a person involved in it. As Finklestein J explained in Compaq Computer Australia Ltd v Merry (1998) 157 ALR 1, 4-5 [see also King v GIO Australia Holdings Ltd (2001) 184 ALR 98, [7]]:-
"A contravention of s 52(1) of the Trade Practices Act can occur regardless of whether the corporation is acting honestly or reasonably: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 197; 42 ALR 1. But where it is sought to make a person liable as an accessory to a contravention of s 52(1) based on s 75B it is necessary to establish that the person has intentionally participated in the contravention. To establish intentional participation it must be proved that the person has knowledge of the essential matters that make up a contravention of s 52(1): see generally Yorke v Lucas (1985) 158 CLR 661; 61 ALR 307; Edwards v R (1992) 173 CLR 653; 107 ALR 190. In this regard "knowledge" means actual and not constructive knowledge. For example, it would not be sufficient merely to show that the person charged with accessorial liability had shut his eyes to the obvious if that is intended to be a substitute for actual knowledge: Giorganni v R (1985) 156 CLR 473; 58 ALR 641. Of course, where there is a combination of suspicious circumstances and a failure to make an inquiry it may be possible to infer knowledge of the relevant essential matters: Pereira v Director of Public Prosecutions (1988) 82 ALR 217; 63 ALJR 1 at 3.'"
272 It was submitted that Mr Garrett did not know that the representations were false. Mr Garret deposed that:
" As at 8 March 2002 when the letter of offer was sent, I believed, based on the discussions I had with SG to that date, that SG had the capacity to and would provide funding in the amount of at least $50,000,000 provided that they were satisfied with the quality of deals presented to them by MTFPL. The basis of my belief was that SG had funded $28,000,000 of business with Elderslie in the past, so I knew that SG had substantial capacity to fund further amounts. Elderslie had a good relationship with SG. I also knew that SG was affiliated with a large French bank that operates internationally and has large balance sheet capacity. At the time when the letter of offer was sent, I had no reason to believe that there were any issues that would cause SG to reject the funding. I believe that even if the tax aspects of the proposal were raised, we would be able to convince SG to proceed because of the advice from PricewaterhouseCoopers and Peter Searle. "
273 Mr Garrett was not cross-examined on this evidence. Although there was some cross-examination as to his understanding of the representations made in the letter of 8 March 2002, it was not suggested to him that he understood that the letter was misleading because SG could reject any particular proposal and had not been told of the important taxation characteristics of the lease finance product, even though he understood that a financier was likely to treat such a product with caution. Mr Garrett acknowledged that it was a possibility (although he said it was less than a 50/50 chance) that SG would react adversely to the tax issues.
274 Mr Garrett said that he believed that Mr Dunn was aware of the extent to which Elderslie had made disclosure to SG of the taxation risks. He was cross-examined on that evidence. Neither he nor Mr Garcia gave any specific evidence as to how that disclosure was made to Mr Dunn. I have found that no such disclosure was made. Nonetheless, Mr Garrett was not cross-examined directly to seek to establish that he knew that the letter of 8 March 2002 was misleading because it failed to disclose that SG could reject any lease finance proposal, and that there was at least a possibility that it might to so because it had not been advised of the tax issues relating to the lease finance product.
275 Mr Garrett was cross-examined to establish that SG had not approved of a letter being sent to Mr Dunn in terms of the letters of 18 February and 8 March 2002, but it is not SG's lack of approval to the sending of the letter which renders it misleading.
276 Mr Garrett was also cross-examined to suggest that he understood that the letter of 8 March 2002 offered MTFPL a "committed facility" of up to $50,000,000 annually. He denied having that understanding.
277 There was some justification for the cross-examiner not exploring this matter further. Both Mr Garcia and Mr Garrett asserted a belief that Mr Dunn was aware that the tax issues had not been discussed with SG. I do not accept that Mr Dunn was made aware of that, and I would infer that neither Mr Garcia nor Mr Garrett believed that Mr Dunn had been made aware that there had been no such disclosure. Given their evidence that Mr Dunn was aware of this matter, there was limited scope for the cross-examiner to test whether they understood that the representations in the letter were misleading for making the unqualified representations that the facility had been obtained, or would be obtained, without disclosing that SG could reject any proposals and may do so because the important tax features of the product had not been disclosed to it.
278 Nonetheless, I am not satisfied that Mr Garrett had an actual appreciation that the letter of 8 March 2002 misrepresented to Mr Dunn the availability of funding through SG. There is an available inference that he did. However, it would be a serious finding which should not be made on the basis of uncertain inferences. It is one thing to find that Mr Garrett knew of the facts that made the letter of 8 March 2002 misleading. It is another thing to conclude that he put two and two together and knew that the letter was misleading. Although it may be possible to infer he had such knowledge, it is not an inference I am prepared to draw, particularly having regard to the limited cross-examination on the topic.
279 Accordingly, I do not consider that Mr Garrett is liable either as a primary contravenor or as an accessary for breach of s 12DA of the ASIC Act.
Conclusion
280 For these reasons there will be judgment for MTFPL against Elderslie in the sum of $231,441.14. There will be judgment for MTFPL against Mr Garcia in the sum of $205,976.50. There will be judgment for Mr Garrett against MTFPL. The exhibits may be returned after 28 days. I will hear the parties on costs.
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