Quikfund (Australia) Pty Ltd v Prosperity Group International Pty Limited

Cases cited: Australian Competition and Consumer Commission v Original Mama's Pizza and Ribs Pty Ltd [2008] FCA 370; [2008] ATPR 42-236 cited Australian Securities and Investments Commission v Bank of Queensland Ltd (2011) 86 ACSR 258 cited Branwhite v Worcester Works Finance Ltd [1969] 1 AC 552 followed Custom Credit Corporation Ltd v Luff (unreported, 27 November 1990) cited Custom Credit Corporation Ltd v Lynch [1993] 2 VR 469 cited Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 cited NMFM Property Pty Ltd v Citibank Ltd (No 10) (2000) 107 FCR 270 followed Octapon Pty Ltd v Esanda Finance Corporation Ltd (unreported, 3 February 1989) cited Technology Leasing Ltd v Lennmar Pty Ltd [2012] FCA 709 cited Bowstead and Reynolds on Agency (19th ed, 2010) The Law of Agency, Dal Pont (2nd ed, 2008)

Date of hearing: 26 November 2012

Place: Sydney

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 132

Counsel for the First and Second Appellants: Mr R Lancaster SC and Mr S Bell

Solicitor for the First and Second Appellants: SR Law

Counsel for the Third Appellant: The Third Appellant did not appear

Counsel for the First Respondent: Mr A Hourigan

Solicitor for the First Respondent: O'Neill Partners

Counsel for the Second Respondent: The Second Respondent did not appear

IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 379 of 2011

BETWEEN: QUIKFUND (AUSTRALIA) PTY LTD (ACN 116 768 711)

AUSTRALIAN EQUIPMENT RENTALS PTY LTD (ACN 126 049 376)

CT 129 PTY LIMITED (FORMERLY CLEAR TELECOMS (AUST) PTY LIMITED) (IN LIQUIDATION) (ACN 129 296 573)

AND: PROSPERITY GROUP INTERNATIONAL PTY LIMITED (IN LIQUIDATION) (ACN 110 539 636)

WORLDNET CORPORATION INTERNATIONAL PTY LIMITED (IN LIQUIDATION) (ACN 113 910 124)

JUDGES: FOSTER, BARKER AND GRIFFITHS JJ DATE OF ORDER: 31 January 2013 WHERE MADE: SYDNEY

1. Within seven (7) days of the date of the publication of these Reasons for Judgment, the first and second appellants bring in Short Minutes of Order to give effect to these Reasons for Judgment.
2. Within three (3) days thereafter, the first respondent file and serve a Written Submission addressing any disagreement which it has with the Orders proposed by the first and second appellants or, alternatively, if there is no disagreement, within the same timeframe, inform the Court by letter that it accepts the terms of the Short Minutes of Order proposed by the first and second appellants.
3. In the event that the first respondent files a Written Submission pursuant to Order 2 above, within three (3) days thereafter, the first and second appellants file a Written Submission whereby they seek to support the draft orders proposed by them and whereby they also seek to answer the first respondent's submissions.
4. The form of final orders to be made by the Court be thereafter determined by the Court on the papers. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 379 of 2011

BETWEEN: QUIKFUND (AUSTRALIA) PTY LTD (ACN 116 768 711)

AUSTRALIAN EQUIPMENT RENTALS PTY LTD (ACN 126 049 376)

CT 129 PTY LIMITED (FORMERLY CLEAR TELECOMS (AUST) PTY LIMITED) (IN LIQUIDATION) (ACN 129 296 573)

AND: PROSPERITY GROUP INTERNATIONAL PTY LIMITED (IN LIQUIDATION) (ACN 110 539 636)

WORLDNET CORPORATION INTERNATIONAL PTY LIMITED (IN LIQUIDATION) (ACN 113 910 124)

JUDGES: FOSTER, BARKER AND GRIFFITHS JJ DATE: 31 January 2013 PLACE: SYDNEY

REASONS FOR JUDGMENT THE COURT: 1 In the proceedings below, the respondents in the appeal, Prosperity Group International Pty Ltd (In Liquidation) (Prosperity) and Worldnet Corporation International Pty Limited (In Liquidation) (Worldnet), claimed orders relieving them from liability under a contract for the provision of telecommunications services with a corporation called Axis Telecoms Pty Ltd (In Liquidation) (Axis) (the Axis telecoms contract) and from liability under five separate equipment leases (the relevant equipment leases) by reason of misrepresentations made to executives of Prosperity and Worldnet by a man called Jayson Croom, which representations induced Prosperity to enter into the Axis telecoms contract and the relevant equipment leases. Prosperity was an index trader and Worldnet provided a directory service. Before the primary judge, Prosperity and Worldnet relied upon ss 52, 80 and 87 of the Trade Practices Act 1974 (Cth) (the TPA) as well as general equitable principles relating to penalties. Ultimately, the trial was conducted as though the primary relief had been claimed under s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) (the ASIC Act) rather than under s 52 of the TPA. 2 Prosperity was the hirer under the relevant equipment leases. Australian Equipment Rentals Pty Limited (AER) was the equipment owner/lessor under four of those leases. Quikfund (Australia) Pty Ltd (Quikfund) was the equipment owner/lessor under the remaining lease. 3 Prosperity also sought damages or compensation under the TPA and damages under the general law for breach of contract, in negligence and in deceit. In addition, it claimed interest and costs. 4 Prosperity and Worldnet also relied upon s 73 of the TPA in order to sheet home responsibility for their losses to Quikfund and AER. 5 At trial, pecuniary relief was also sought against Queensland Communication Company Pty Ltd (In Liquidation) (QCC) and Clear Telecoms (Aust) Pty Ltd (now called "CT 129 Pty Ltd") (Clear). QCC was the company which employed Mr Croom. Clear purchased the telecommunications business of Axis after Prosperity and Worldnet had signed the Axis telecoms contract and the relevant equipment leases. As part of that purchase transaction, Clear acquired the benefit of the Axis telecoms contract with Prosperity. 6 The learned primary judge found for Prosperity (Prosperity Group International Pty Ltd v Queensland Communication Company Pty Ltd (No 3) [2011] FCA 1122). His Honour made orders relieving Prosperity from all liability under the relevant equipment leases and made an award of damages in favour of Prosperity against Clear. His Honour dismissed the proceedings as against QCC and Axis and made no order as to the costs of the proceedings as between the applicants (Prosperity and Worldnet) and QCC and Axis. His Honour also dismissed the Cross-Claims brought by Clear, Quikfund and AER. In so doing, his Honour set off the amount of the damages award made against Clear in favour of Prosperity against the amount due to Clear from Prosperity under the Axis telecoms contract. 7 Prosperity and Worldnet are both now in liquidation. Prosperity was put into liquidation by resolution of its creditors on 5 April 2011. This was soon after the trial had concluded but before the primary judge published his Reasons for Judgment. It is not clear whether the primary judge was ever informed of the liquidation of Prosperity. No party to the appeal has taken any point arising from these circumstances. Worldnet was put into liquidation by Order of the Court on 3 February 2012. 8 On 7 June 2012, Greenwood J granted leave to Quikfund, AER and Clear to proceed against Prosperity and Worldnet pursuant to s 471B of the Corporations Act 2001 (Cth). That leave was granted upon the usual terms. 9 Since the trial, Clear has also gone into liquidation. 10 The present appeal has been maintained by Quikfund and AER only. Neither Prosperity nor Worldnet has appealed against the trial judge's dismissal of their cases against QCC and Axis. Clear was named as the third appellant in the Notice of Appeal. However, it has not actively prosecuted its appeal and did not appear at the hearing of the appeal. The Full Court was informed by Senior Counsel for Quikfund and AER that Clear did not intend to proceed with its appeal. In those circumstances, the Court should make an order dismissing Clear's appeal. There is no need to make any order for costs in relation to that appeal. 11 Neither Prosperity nor Worldnet has filed a Notice of Contention. Worldnet did not actively participate in the appeal. This was hardly surprising since the primary judge made no orders in favour of Worldnet and the appellants sought no relief against Worldnet in the appeal. To all intents and purposes, Worldnet is a party which had no real interest in the proceeding below and which has no interest in the appeal. 12 In light of the above, the only active parties to the appeal were the first and second appellants (Quikfund and AER) and Prosperity which is the first respondent in the appeal. 13 For these reasons, the Full Court's consideration of the matter on appeal will be confined to considering the relief granted by the primary judge in favour of Prosperity against Quikfund and AER and his Honour's reasons for granting that relief. It is not necessary to consider the cases brought by Prosperity against any of QCC, Axis or Clear or the manner by which the primary judge determined those cases.

The Issues on Appeal 14 The Notice of Appeal contains 11 grounds of appeal. 15 Grounds 9, 10 and 11 do no more than restate the pecuniary claims made by Clear, Quikfund and AER under the Axis telecoms contract and the relevant equipment leases. 16 Ground 8 raises an issue concerning the effect of the sale of the Axis telecoms business by Axis to Clear. It is not now relevant. 17 Ground 7 was confined in oral argument to being a necessary consequence of the challenges made by Quikfund and AER to the primary judge's finding that Mr Croom acted as the agent of Quikfund and AER in his dealings with Prosperity. It will stand or fall with the Full Court's decision on the agency point. 18 Grounds 1 to 6 are in the following terms: 1. The Court erred in finding that Queensland Communications Company Pty Limited ("Qcom") and Technix Pty Limited ("Technix") were agents of or brokers to Quikfund (Australia) Pty Limited ("Quikfund") and Australian Equipment Rentals Pty Limited ("AER"). 2. The Court erred in finding that at the relevant times Clear Communications (EurAust) AB had a shareholding in each of AER, Qcom and Axis Telecoms Pty Limited ("Axis"). 3. The Court erred in finding that Mr Croom used the word "Clear" in describing a linked group of companies. 4. The Court erred in finding that Mr Croom stated that he represented a linked group of companies (those companies including AER and Quikfund and/or Clear Telecoms (Aust) Pty Limited). 5. The Court erred in finding that the subject rental contracts were not a financial service. 6. The Court erred in finding that AER and Quikfund were linked credit providers. 19 Insofar as any of grounds 1-6 raise a challenge to the primary judge's findings that Mr Croom made statements substantially to the effect of those alleged by Prosperity, that challenge was abandoned at the hearing of the appeal. The effect of the abandonment of that challenge is that the primary judge's findings as to what was said by Mr Croom on the occasions when he met and spoke with representatives of Prosperity are now accepted by Quikfund and AER. So too are his Honour's findings to the effect that the statements made by Mr Croom were false and thus misleading and deceptive and that the executives of Prosperity to whom those statements were made relied upon them when they decided to cause Prosperity to enter into the Axis telecoms contract and the relevant equipment leases. In broad terms, those findings and the acceptance of them by Quikfund and AER mean that the substance of the evidence given by each of the witnesses called on behalf of Prosperity (Messrs King, Panozzo and Bozov) as to what they were told by Mr Croom and as to the circumstances in which the critical statements were made by Mr Croom is accepted. There are some aspects of the evidence of those witnesses which were not accepted by the primary judge. The rejection of those particular portions of the evidence of those witnesses is not challenged by any party on appeal. His Honour's rejection of some of the evidence of Messrs King, Panozzo and Bozov will also therefore stand. Those particular findings are, however, not germane to the issues to be determined on appeal. 20 In light of the above matters, the substantive issues to be determined on appeal are as follows. 21 The first issue is: Whether, in making the various representations which he made to the representatives of Prosperity, Mr Croom acted as the agent of Quikfund and AER in circumstances where Quikfund and AER should be held liable for the losses suffered by Prosperity as a result of acting in reliance upon those statements. 22 It was common ground at the trial that Mr Croom was employed by QCC at all relevant times as its Regional Manager. He was not employed by either Quikfund or AER at any time. He was not an officer of either of those companies at any time. Mr Croom used the trade or business name "Technix" from time to time in both his oral and written communications with Prosperity. The precise status of that name and its connection with Mr Croom and QCC was not fully explored in the evidence before the primary judge and his Honour made no precise findings as to the relationship between the entity which used the trade name "Technix" and the other actors in this story. "Technix" was probably a trade or business name used by QCC. The only corporate entity registered with ASIC under the "Technix" name plainly had no connection with any of QCC, Mr Croom, Axis, Clear, Quikfund or AER. There was no evidence of any connection between the entity to which Mr Croom referred when he used the name "Technix" and either Quikfund or AER. It was common ground both at trial and on appeal that there was no evidence of any formal agency agreement between Mr Croom (or, for that matter, QCC or Technix) and either Quikfund or AER. At trial, Prosperity and Worldnet undertook the task of establishing agency by reference to various documents. They also relied upon the evidence of Messrs King, Panozzo and Bozov. Mr Croom did not give evidence at all at the trial. It appears that no party was prepared to call him. 23 In the circumstances described at [22] above, the precise issue on appeal is whether the evidence tendered before the primary judge and, in particular, the material relied upon by the primary judge as establishing the requisite agency, justified the finding of agency which his Honour made. Prosperity did not conduct the trial upon the basis that Quikfund and AER had expressly authorised Mr Croom to make the statements which he made to Messrs King, Panozzo and Bozov. Rather, Prosperity relied upon the proposition that Quikfund and AER should be held liable for the misleading statements made by Mr Croom because Quikfund and AER had appointed QCC and/or Mr Croom as their agent to procure persons to seek finance from them and that the statements which Mr Croom made were within the general class or scope of statements which they thereby authorised him to make. 24 The second issue raised on appeal is: Whether, in any event, Quikfund and AER were linked credit providers within the meaning of s 73 of the TPA in respect of the provision of goods to Prosperity by QCC and/or Axis. There was no suggestion either at trial or on appeal that either Quikfund or AER had the necessary association with Clear for the purposes of s 73 of the TPA. 25 His Honour found that both Quikfund and AER were liable to Prosperity by reason of the operation of s 73 of the TPA. 26 The first and second appellants' challenge to that conclusion on appeal involves two further questions: (a) Whether s 73 is engaged at all in the circumstances of the present case. The argument is that the services provided by both Quikfund and AER were financial services within the meaning of that expression in s 51AF of the TPA and that the conduct engaged in by Mr Croom was conduct engaged in in relation to such services with the consequence that, by reason of the operation of s 51AF of the TPA, s 73 of the TPA could not have any operation in relation to Quikfund and AER in the present case. (b) If, contrary to the proposition contained in subpar (a) above, s 73 is capable of application in a case such as the present, whether the particular facts and matters proven in evidence in the instant case are sufficient to satisfy the requirements specified in s 73(14) and s 73(1) of the TPA. 27 The appellants did not contend on appeal that Prosperity was not relevantly a "consumer" within the meaning of s 73 of the TPA (as to which, see, in particular, s 4B of the TPA). 28 Quikfund and AER submitted to the Full Court that, should they succeed in their appeal, they should have judgment on the Cross-Claim which they brought in the proceedings below in the amounts specified in the Written Submissions made to the Full Court in support of their appeal. It will be remembered that the primary judge dismissed that Cross-Claim upon the basis that he had found for Prosperity on its principal claims for relief. The Full Court was informed by Counsel for Prosperity that Prosperity accepted that, should Quikfund and AER be successful in their appeal, the amounts specified in their Written Submissions were amounts which were properly due and owing by Prosperity to each of Quikfund and AER as claimed. The appellants therefore sought judgment in those amounts against Prosperity. We will consider the question of whether judgment should be entered for those amounts later in these Reasons. All that need be said at the moment is that there was no issue as to the entitlement of Quikfund and AER to those amounts in the event that they are successful in their appeal. The position adopted by Prosperity in the appeal on this point was the same as that which it had taken before the primary judge (as to which see [54] of his Honour's Reasons). 29 We propose to address the appeal by dealing with the issues which we have described above in turn. 30 Before doing so, however, it is necessary that we set out as briefly as possible the relevant primary facts which will form the basis of our consideration of the issues to be determined on appeal.

The Relevant Primary Facts 31 By the time of the hearing of the appeal, there was no extant dispute amongst the parties to the appeal as to the relevant primary facts. As mentioned at [19] above, the appellants abandoned their challenges to the primary judge's acceptance of the substance of the evidence called on behalf of Prosperity concerning the statements made to Messrs King, Panozzo and Bozov by Mr Croom. In addition, at the hearing of the appeal, Counsel for Prosperity accepted that the finding made by the primary judge at [31] of his Reasons for Judgment to the effect that Mr Croom had signed the various contractual documents and other associated documents, on behalf of QCC, AER or, as the case may be, Axis, copies of which were forwarded by a colleague of Mr Croom to Mr King at Prosperity under cover of a facsimile transmission dated 1 February 2008, was plainly incorrect insofar as it referred to AER. Although Mr Croom signed two Letters of Understanding dated 11 and 25 October 2007 respectively on behalf of QCC, signed an Axis document dated 11 October 2007 on behalf of Technix (which organisation was described in that document as "Sales Agent") and subsequently signed other Axis documents apparently on behalf of Axis, he did not sign any of the documents forwarded by QCC to Mr King on 1 February 2008 on behalf of Quikfund or AER. Further, Counsel for Prosperity accepted (correctly, in our view) that there was no other evidence that supported a finding to the effect that Mr Croom had signed any documents relevant to the transactions in question on behalf of either Quikfund or AER. 32 In those circumstances, we are able to give an account of the relevant events which will be uncontroversial. Our description of the dealings among the parties will be drawn from the relevant findings made by the primary judge and from the evidence given on behalf of Prosperity which underpinned those findings. 33 On several occasions in the second half of 2007, Mr Croom approached Mr King and suggested to Mr King that Prosperity could save money on its telephone bills if it changed telephone service providers. According to Mr King, Mr Croom introduced himself as the Regional Manager of Technix which he said was a company that acted for a group of linked companies. He said that Technix was the authorised representative of a group of companies. He may have mentioned one or more of those companies by name but Mr King was not sure about this. At one stage during these initial meetings, Mr Croom showed Mr King a laminated card which contained words to the effect that Mr Croom was an authorised representative of Technix. 34 In September 2007, Mr Croom met with Messrs King and Panozzo at the office premises of Prosperity which were then located at Suite 4A, 69-73 Upton Street, Bundall, Qld (Prosperity's old offices). On this occasion, Mr Croom urged Messrs King and Panozzo to cause Prosperity to change telephone service providers but Mr King told him that he saw no need to do so. Nonetheless, Mr King gave to Mr Croom a copy of three of Prosperity's recent large telephone bills from M2 Telecommunications, which was Prosperity's telephone service provider at that time, so that Mr Croom could prepare and submit a proposal to Prosperity designed to reduce its telephone costs. 35 Mr Panozzo said that, on the first occasion that he met Mr Croom, Mr Croom told him that he (Croom) was the Regional Manager of Technix and that Technix was the authorised representative of a group of companies. Mr Bozov gave evidence to the same effect. Whether specific companies were mentioned was not entirely clear. Mr King ultimately testified that he doubted that companies had been mentioned by name. Mr King said that, at the September 2007 meeting, Mr Croom told him and the other Prosperity representatives that he (Croom) was a representative of a number of companies who had gotten together and bundled a deal which allowed the end users to receive cheaper call rates by providing equipment as call credits. 36 A short time later, a second meeting took place at Prosperity's old offices. Those present at this meeting were Messrs Croom, King, Panozzo and Bozov. At this meeting, Mr Croom told the Prosperity representatives that, if Prosperity were to change telephone service providers and to agree to take its telephone services from the provider which he represented, Prosperity would never pay more than $6,000 per month during the contract period, irrespective of the volume of calls actually made. Mr Croom said that the total cost of calls would be "capped" at $6,000 per month. Mr King told Mr Croom that Prosperity was expanding its business at that time and queried whether there was any "catch" in Mr Croom's offer. Mr Croom responded to that query by saying that Prosperity would have to enter into a five year contract. 37 Mr Croom went on to inform the Prosperity representatives who attended this second meeting that the company which he represented would also provide certain products and equipment that could be used by Prosperity in its business. Mr King said that Prosperity did not require any additional office equipment. He also informed Mr Croom that Prosperity was in the process of negotiating a move to larger premises being Suite 1A, 128 Bundall Road, Bundall Qld (Prosperity's new offices). 38 A third meeting took place later in September 2007. This meeting took place at Prosperity's new offices. Present on this occasion were Messrs Croom, King, Panozzo and Bozov. Mr Croom repeated his offer that, if Prosperity changed telephone service providers as suggested by him, the total cost of its telephone calls would be capped at $6,000 per month for the life of the contract. He said that this would be the case even if the volume and length of overseas calls undertaken by Prosperity increased with the expansion of its business. Mr Croom repeated his proposal that Prosperity should take additional office equipment. He said that the equipment would be rented to Prosperity free of charge because the rental charges would be credited to the telephone bill each month thereby reducing even further the charges payable by Prosperity for telephone services. 39 Mr King agreed to the proposal offered by Mr Croom at the third meeting. 40 On 8 October 2007, Mr Croom sent a facsimile transmission to Mr King on Technix letterhead. Under cover of that transmission, Mr Croom sent a proposal whereby Technix was to provide telephony services, a new Panasonic Digital Telephone System, a plasma display and stand, certain massage chairs and an accounting software package. The material contained a flyer which described the "AXIS Unlimited Call Plan". 41 On 11 October 2007, Mr Croom attended at Prosperity's old offices. He brought with him several formal documents. On that day, Mr King signed the following documents: (1) Application for Axis telephone service dated 11 October 2007; (2) Direct Debit authority dated 11 October 2007 in favour of Axis Telecoms Pty Ltd in respect of charges to be made under document (1); (3) Porting authority dated 11 October 2007 relating to Worldnet's telephone numbers; (4) Sales Order Form dated 11 October 2007 in respect of the new telephone system to be supplied to Worldnet through Mr Croom. The vendor specified in that document was QCC; (5) Equipment Rental Agreement between Worldnet and AER dated 11 October 2007 in relation to the new telephone system, two massage chairs and plasma display and stand covered by the Sales Order Form referred to at (4) above; and (6) Letter of Understanding between QCC and Worldnet whereby QCC gave to Worldnet an option to purchase from QCC for $1.10 at the end of the rental period second hand equipment equivalent to all related accessories provided by AER under at least one of the Equipment Rental Agreements entered into between Worldnet and AER. 42 On 25 October 2007, a replacement set of contracts was signed. The customer specified in these contracts was Prosperity. A new Letter of Understanding dated 25 October 2007 was also signed. The parties to that letter were QCC and Prosperity. The terms of that letter were the same as the earlier Letter of Understanding between QCC and Worldnet dated 11 October 2007. 43 At Transcript 135-136, Mr King testified that the following exchanges took place between Mr Croom and him on 25 October 2007 when replacement documents were signed: On 25 October 2010 [sic], you also signed some contracts and rental agreements with Australian Equipment Rentals?---Yes. Right. Now, you refer to Mr Croom - referred to various providers of rental equipment at paragraph 91?--- Yes. Right. Did you refer to any other - any other company other than Australian Equipment Rentals?---He referred to the whole group that he represented. What-who were they?---Well, I am still-it's difficult for me to determine who provides which service and how it's all linked. I still am not sure. Mr Croom, we weren't there. You - sorry, Mr King, we weren't there. You were listening to Mr Croom?---Yes. What did Mr Croom tell you?---Mr Croom said that he represented a collective group of organisations which together bundled packages which allowed us to receive discounted phone call rates and equipment services which are credited towards that phone bill. Is it the case he didn't nominate any other company other than Technix, who he represented?---No. He did nominate - - - He did nominate other companies?---Well, he told me he was a representative of - an authorised representative of all of the organisations for which we signed agreements. So what words did he use?---"I am an authorised representative." Of whom?---"I am an authorised representative." He just said, "I am an authorised representative" but didn't say - - - ?---Well, he basically provided us with agreements and contracts and he stated that he was authorised representative on behalf of who we were signing contracts with. So every time he presented an agreement he said, "I am an authorised representative" did he?---No, he didn't say it every single time but he did mention the fact that he was an authorised representative on behalf of the companies with which we were signing agreements. So did he mention their name?---Specifically, I can't say he listed them off one by one. Did he mention any names?---He mentioned Clear, he mentioned Axis Telecoms and specifically Technix. So he mentioned Clear at these meetings in October 2007, did he?---I am not specific, if it was in October 2007 or prior to that. What about September 2007?---Quite possibly. Mr King. I am suggesting you are making it up, that Mr Croom saying he's an authorised representative of the companies?---I say that that is the truth. 44 On 30 October 2007, Mr Feo, who was an employee of QCC, sent to Mr King three Customer Satisfaction Certificates. Those certificates related to the equipment to be leased to Prosperity. Mr Feo asked Mr King to sign each of those certificates. Mr King signed those certificates in early November 2007 and returned them to QCC on or about 9 November 2007. QCC passed them on to AER. 45 The Customer Satisfaction Certificates sent by Mr Feo to Mr King on 30 October 2007 were all in the same terms. They were sent under cover of a facsimile transmission on QCC letterhead signed by Mr Feo over the name "Queensland Communication Company". The certificates themselves bore QCC's name and logo. After describing the customer, the equipment and the delivery address, each certificate provided as follows: With business equipment provided to you by Queensland Communication Company Pty Ltd will provide you with a Monthly Call Credit in phone calls up to the amount stipulated below. The call credit amount has been formulated using, and is based on, information that you have provided to Queensland Communication Company Pty Ltd. HOW DOES THE Solution WORK? There are two separate and unrelated agreements, a Rental Agreement for the equipment with Australian Equipment Rentals Pty Ltd "(AER)" (an external finance company) and a Telecommunications Airtime agreement with AXIS Telecoms Pty Ltd. 1. Under the Equipment Rental Agreement with ("AER") your nominated bank account or credit card account will be Direct Debited with the monthly amount of [specified amount] based on a [specified amount] (Rental), $0.00 (Stamp Duty) and [specified amount] (GST) over the next 60 months. 2. Under the Telecommunications Services Agreement, AXIS Telecoms Pty Ltd will bill you for telephone usage as follows, Monthly Unlimited Plan Fee of [specified amount] ex GST, the Monthly Mobile Plan Fee Total of $0.00 ex GST, the Monthly Other Service Plan Fee of $0.00 ex GST and the Monthly Broadband Plan Fee of $0.00 ex GST. AXIS Telecoms Pty Ltd will then allow Unlimited OnNet Calls of up to 15 minutes ("subject to the AXIS Telecoms Pty Ltd fair play policy). Mobile included calls and services will be provided as agreed on your Mobile Rate Card. All unused calls and data in any month from AXIS Telecoms Pty Ltd Mobile, Broadband and Other Service Call Plans are forfeited and cannot be used in a later month. Call usage in excess of the monthly included calls are charged at discounted rate as indicated on your specific rate card. AXIS Telecoms Pty Ltd will provide you with a Monthly Unlimited Plan Credit of [specified amount] ex GST, the Monthly Mobile Plan Credit of $0.00 ex GST, the Monthly Other Service Plan Credit of $0.00 ex GST and the Monthly Broadband Plan Credit of $0.00 ex GST for the next 60 months. Call credit rates and discounted rates referred to in the agreement are specifically listed and endorsed, included Calls, include National, International, Local, Fixed wire to Mobile Calls ONLY (this excludes line rentals, numbers held for diversion, outbound and inbound calls to 13, 1300, 0019, 0015, 1900 numbers, call connect, directory assistance/operator connected calls, Centel Citywide, message bank and residential connections and services). 46 We have removed from the extract at [45] above the relevant specific dollar figures. 47 On 6 March 2008, a second replacement set of contracts was signed at a meeting between Mr King and Mr Croom. This occasion was the first time that Mr Croom specifically mentioned Quikfund. 48 Since Prosperity does not challenge its obligation to pay to AER and to Quikfund the amounts which those corporations have claimed from it in their Cross-Claim, in the event that the appeal is upheld, it is not necessary to discuss the terms of the relevant equipment leases in detail. It is sufficient to note that, by the time the proceedings were commenced, Prosperity had entered into four relevant agreements with AER for the rental of goods and equipment. These were contract number 092480 dated 25 October 2007, contract number 092481 dated 25 October 2007, contract number 093905 dated 13 March 2008 and contract number 092429 dated 25 October 2007. Prosperity had also entered into an agreement with Quikfund for the rental of goods and equipment. This was contract A001618 dated 6 March 2008. 49 Each of the contracts referred to in [48] above was terminated in late May 2010. Quikfund and AER claim monies due under those contracts. As we have already mentioned at [28] above, Prosperity did not dispute its liability to pay those amounts in the event that the appeal is upheld. 50 It was Mr King who signed most of the documents which required a signature on behalf of Prosperity. Mr Bozov signed one or two of those documents. Mr Croom witnessed Mr King's signature on many of those documents and signified that fact by signing where appropriate as the witness to the signatures of Mr King and Mr Bozov. With the exception of the QCC and Axis documents referred to at [31] above, Mr Croom only ever signed any of the relevant contractual documents as a witness. Mr Croom did not purport to sign any of those documents on behalf of either Quikfund or AER. 51 At some stage after the end of October 2007, Axis commenced the supply of telephone services to Prosperity. Subsequently, on 1 January 2008, Prosperity moved its business to Prosperity's new offices. Later still, the new telephone system was installed at Prosperity's new offices. 52 In late April 2008, Prosperity received a telephone bill from Clear in the amount of approximately $5,000 and rental bills for office equipment from Quikfund and AER totalling approximately $9,000. Mr King complained to Mr Croom about these bills. Thereafter, relations between Prosperity and Clear and Prosperity and Quikfund and AER deteriorated markedly. There were constant disputes about charges rendered by the suppliers. Ultimately, in late October 2008, Prosperity took a stand and refused to pay what it considered to be excessive charges from Clear, Quikfund and AER.

Issue 1 - Was Mr Croom the Agent of Either Quikfund or AER?

The Relevant Findings and Conclusions of the Primary Judge 53 At [34] and [35] of his Reasons, the primary judge said: 34 The point of mentioning these October 2007 documents before the oral evidence which Messrs King, Panozzo and Bozov gave on the subject of what Mr Croom said as to the companies he represented is that, in conjunction with the admission as to QCom on the pleadings, they provide a basis for concluding and I find that, in October 2007, Technix, via its regional manager, Mr Croom, was variously acting at least for Axis, QCom and AER amongst the respondents. 35 Further, it seems inherently likely, given the arrangements which came to pass and the offers he made in September 2007 in his endeavours to secure the business of Prosperity Group and WorldNet that Technix and QCom, each via Mr Croom, were at least acting for those same respondent companies then, too. To reach these conclusions in no way depends upon accepting the evidence of Messrs King, Panozzo and Bozov as to of whom Mr Croom said he was a representative. There is nothing which would suggest that this representative role undertaken by Technix (in addition to or, as the case may be, QCom), via Mr Croom, ceased before the last of the contracts in question, ie, those dated 6 March 2008. Rather, that role appears to have continued. 54 His Honour's reasoning in support of the findings which he set out at [34] and [35] is found at [29]-[33] and at [36]-[52] of his Reasons. That reasoning may be summarised in the following way: (a) Mr Croom was employed by QCC as its Regional Manager (at [30]); (b) Mr Croom described himself in the facsimile transmission dated 8 October 2007 on Technix letterhead as "Regional Manager" (at [30]); (c) Technix and QCC shared business premises at Level 1, 3 Balaclava Street, Woolloongabba, Qld (at [30]); (d) Mr Croom was, in fact, the Regional Manager of Technix (at [30]); (e) Mr Croom signed all of the formal documents dated 25 October 2007 "… as a representative of [QCC], AER, or as the case may be, Axis" (at [31]); (f) According to the Accounts Receivable Manager of both Quikfund and AER, Michelene Semaan, Quikfund and AER never dealt directly with any end consumers but always dealt with brokers (at [32]); and (g) Under cover of a facsimile transmission dated 1 February 2008 on QCC letterhead, an employee of QCC, Fay Jones, sent to Mr Bozov a copy of the various formal documents which Mr King had signed on 25 October 2007 (at [32]). 55 After referring to the matter described at [54(g)] above, the primary judge went on to say (at [32] of his Reasons): This [referring to the matter described at [54(g)] above], plus the coincidence of premises as between QCom and Technix, as well as the holding of a regional manager position by Mr Croom with both companies and the facsimile sent on QCom letterhead on 8 February 2008 supplying copies of contracts signed with various of the respondents also gives rise to an inference that QCom itself, via Mr Croom, also acted on behalf of AER and Quick Fund in the various dealings with Prosperity Group and WorldNet. QCom did not act as the agent or broker for Prosperity Group or WorldNet in any of the subject transactions. On the evidence, part of QCom's business at the time was the sale of equipment. AER and Quick Fund were financiers which acquired equipment and then rented or hired this to third parties such as Prosperity Group and WorldNet. Their brokers or agents were QCom and Technix, each acting via Mr Croom. 56 At [33], his Honour referred to the Axis Unlimited Call Plan document which formed part of the documents executed on 11 October 2007 which Mr Croom signed on behalf of Technix. 57 At [36]-[38], his Honour set out the evidence of Messrs King, Panozzo and Bozov to the effect that: (a) Mr Croom had told Mr King that he represented QCC, Axis, Clear, Quikfund and AER (at [37]). He said that he represented a group of companies that were all linked, and essentially one entity (at [38]); (b) Mr Croom had told Mr King that he was an authorised representative of Technix, Axis and Clear (at [37]); and (c) Mr Croom had told Mr Panozzo that he was the Regional Manager of Technix and that Technix was the authorised representative of a group of companies, namely, QCC, Clear and Quikfund (at [37]). 58 At [42], his Honour described some of the shareholdings and directorships of the relevant corporations. He did so for the purpose of deciding whether Mr Croom had mentioned "Clear" when dealing with the officers of Prosperity in late 2007 and not for the purpose of deciding whether Mr Croom was relevantly the agent of Quikfund or AER. He said that, by the time of the trial, the ultimate holding company of Clear (Clear Communications (Aust) Pty Ltd) held 883,334 shares in AER. That shareholding had been initially held by Clear Communications (EurAust) AB. He mentioned that the remaining one share in AER was held by a Dutch corporation. His Honour noted that both AER and Axis were incorporated on the same day viz 19 June 2007. For at least some part of the relevant period, because each of them had the same parents, AER and Axis were sister corporations. His Honour also noted that George Tawaf was once a shareholder in QCC and was also a director of both AER and Axis in the relevant period. Mr Tawaf was not the only director of those corporations in that period. 59 The primary judge's observations at [37]-[45] of his Reasons culminated in the following passage (at [46] of his Reasons): For these reasons, I find that, though Mr Croom did not refer to Clear, the third respondent, in any of his conversations with Messrs King, Panozzo and Bozov in September or October 2007 (or thereafter for that matter), he did use the word, "Clear" in describing a linked group of companies which he represented. Subject to the qualification as to an absence of reference to the third respondent, I am satisfied that Mr Croom did indeed state that he represented the other respondents and that he did so on repeated occasions in September 2007 and October 2007 (and in March 2008) to each of Messrs King, Panozzo and Bozov. Again subject to this qualification, I accept the evidence of each of them as to the statements which Mr Croom made to them as to the features of the telecommunications service and "free" equipment which was on offer. 60 His Honour then moved on to discuss what Mr Croom had said to Messrs King, Panozzo and Bozov (at [47]-[51]). At [52], his Honour said: Having regard to the evidence which I have accepted, the alleged representations are proved. Further, they are proved to have been made on behalf of each of the named respondents, save Clear. Yet further, and even though this fact also need only be proved on the balance of probabilities, I have no doubt that, when executing various contracts on behalf of Prosperity Group or WorldNet or in signing related personal guarantees as set out in various contract documents, Mr King or, as the case may be, Mr Bozov relied upon those representations. 61 After discussing certain other matters to which we need not refer, at [63] of his Reasons, his Honour referred to and extracted the terms of the Customer Satisfaction Certificates. 62 At [64], his Honour said: While it may be accepted that s 52 of the TPA is not designed to protect the reckless or careless, neither is its protection confined to the cynical or the paranoid. The section is to be given effect according to its terms in the circumstances of a given case. In the circumstances of this case, Messrs King, Bozov and Panozzo were entitled to and did take Mr Croom at his word both as to the representations that he made and as to the absence of inconsistency in the standard form agreements. There was no want of reasonable care on the part of any of them and thus none on the part of either Prosperity Group or WorldNet.

The Parties' Submissions 63 Quikfund and AER submitted that: (a) There was no evidence that either Quikfund or AER ever entered into any express contract of agency with any of QCC, Technix, Axis, Clear or Mr Croom. (b) There was no documentary evidence that could conceivably support a conclusion that there was a less formal but nonetheless express agency arrangement between either Quikfund or AER, on the one hand, and QCC, Technix or Mr Croom, on the other hand. (c) The only facts and matters that arguably demonstrated any connection between either Quikfund or AER, on the one hand, and QCC, Technix or Mr Croom, on the other hand, were: (i) Mr Croom was in possession of blank printed contractual documentation (equipment lease forms) apparently made available by AER by some means, although there was no evidence as to how Mr Croom had come to be in possession of these forms. (ii) Mr Croom repeatedly stated that he, Technix and QCC represented a group of linked companies. (iii) Quikfund and AER did not deal directly with clients but only did so through brokers. (iv) Mr Croom was able, on 1 February 2008, to cause a colleague to send to Prosperity copies of the documents which Mr King had signed on 25 October 2007. Those copies, however, did not bear a signature of anyone of behalf of AER. The evidence suggested that someone signed the relevant equipment leases on behalf of Quikfund and AER on 17 and 18 March 2008, and not before. (d) The facts and matters referred to in sub-par (c) above were not sufficient to justify a finding of agency as between either Quikfund or AER, as principal, and any of QCC, Technix or Mr Croom, as agent. It was for Prosperity to make good its contention that one or more of QCC, Technix or Mr Croom was relevantly acting as the agent of Quikfund and AER and it failed to do so. As far as the relevant equipment leases were concerned, the transactions were typical lease finance transactions where a customer (Prosperity) agrees to acquire equipment from an equipment supplier (QCC) and pays for that acquisition by procuring lease finance. By arrangement among the parties, the equipment supplier sells the equipment to the financier (Quikfund or AER) which then leases it to the end user/customer. The mere fact that the equipment supplier introduces the financier to the customer (or, perhaps, introduces the customer to the financier) does not mean that either the equipment supplier (QCC) or its associate (Mr Croom) was acting as the agent of the financier in the transaction generally or in securing or arranging the necessary finance. An agent cannot prove his or her own authority merely by asserting same. There has to be some evidence that the alleged principal has clothed the alleged agent with the requisite authority. This is essentially a question of fact. (e) There was no evidence that either QCC or Mr Croom had ever acted as a broker for Quikfund or AER. Mr Croom was never an officer or employee of either corporation. (f) Mr Croom did not purport to sign any document on behalf of Quikfund or AER. He only ever signed relevant documents to which either of those corporations was a party as a witness to the signature of Mr King. (g) The Letters of Understanding signed by Mr Croom were communications between QCC and Prosperity. Neither Quikfund nor AER was a party to those documents. The mere fact that he may have purported to sign some Axis documents on behalf of Axis cannot be used to prove agency as between Quikfund and AER, on the one hand, and QCC and Mr Croom, on the other hand. 64 The liquidator of Prosperity repeated the submissions which Prosperity had made at trial. Those submissions included the proposition that the statements made by Mr Croom to the Prosperity representatives from time to time constituted evidence which was probative of the alleged agency. He also submitted that Mr Croom had signed the Letters of Understanding "… on behalf of AER …". He otherwise generally relied upon the reasoning of the primary judge.

Consideration 65 The case was pleaded and conducted by Prosperity before the primary judge upon the basis that Mr Croom made the various representations attributed to him as agent of all of the respondent parties (including Quikfund and AER) acting "… within the scope of his actual or apparent authority". That allegation was denied by all respondents. It was the relationship of principal and agent that was said to be the foundation of the alleged liability of Quikfund and AER for the misrepresentations made by Mr Croom to the executives of Prosperity with whom he dealt. 66 The learned authors of Bowstead and Reynolds on Agency (19th ed, 2010 at par 1-001) define agency as follows: Agency is the fiduciary relationship which exists between two persons, one of whom expressly or impliedly manifests assent that the other should act on his behalf so as to affect his relations with third parties, and the other of whom similarly manifests assent so to act or so acts pursuant to the manifestation … 67 The onus lies upon the party alleging agency to prove: (a) The existence and terms of the agency; and (b) The fact that, in dealing with that party, the agent acted within his or her actual or ostensible authority (Dal Pont: The Law of Agency, 2nd ed, 2008, at par 1.10). 68 In the present case, there was no evidence that either Quikfund or AER had expressly authorised QCC or Mr Croom to act as its agent in relation to the lease finance transactions into which Prosperity entered or had expressly authorised Mr Croom to make any of the statements which he made to the representatives of Prosperity. 69 If Prosperity was to succeed, it had to establish implied actual authority on the part of QCC and Mr Croom or that Mr Croom acted with the ostensible authority of Quikfund and AER. 70 There is a difference between implied actual authority and apparent or ostensible authority. That difference was explained by Diplock LJ in Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 at 502-503 in the following way: It is necessary at the outset to distinguish between an "actual" authority of an agent on the one hand, and an "apparent" or "ostensible" authority on the other. Actual authority and apparent authority are quite independent of one another. Generally they co-exist and coincide, but either may exist without the other and their respective scopes may be different. As I shall endeavour to show, it is upon the apparent authority of the agent that the contractor normally relies in the ordinary course of business when entering into contracts. An "actual" authority is a legal relationship between principal and agent created by a consensual agreement to which they alone are parties. Its scope is to be ascertained by applying ordinary principles of construction of contracts, including any proper implications from the express words used, the usages of the trade, or the course of business between the parties. To this agreement the contractor is a stranger; he may be totally ignorant of the existence of any authority on the part of the agent. Nevertheless, if the agent does enter into a contract pursuant to the "actual" authority, it does create contractual rights and liabilities between the principal and the contractor. It may be that this rule relating to "undisclosed principals," which is peculiar to English law, can be rationalised as avoiding circuity of action, for the principal could in equity compel the agent to lend his name in an action to enforce the contract against the contractor, and would at common law be liable to indemnify the agent in respect of the performance of the obligations assumed by the agent under the contract. An "apparent" or "ostensible" authority, on the other hand, is a legal relationship between the principal and the contractor created by a representation, made by the principal to the contractor, intended to be and in fact acted upon by the contractor, that the agent has authority to enter on behalf of the principal into a contract of a kind within the scope of the "apparent" authority, so as to render the principal liable to perform any obligations imposed upon him by such contract. To the relationship so created the agent is a stranger. He need not be (although he generally is) aware of the existence of the representation but he must not purport to make the agreement as principal himself. The representation, when acted upon by the contractor by entering into a contract with the agent, operates as an estoppel, preventing the principal from asserting that he is not bound by the contract. It is irrelevant whether the agent had actual authority to enter into the contract. In ordinary business dealings the contractor at the time of entering into the contract can in the nature of things hardly ever rely on the "actual" authority of the agent. His information as to the authority must be derived either from the principal or from the agent or from both, for they alone know what the agent's actual authority is. All that the contractor can know is what they tell him, which may or may not be true. In the ultimate analysis he relies either upon the representation of the principal, that is, apparent authority, or upon the representation of the agent, that is, warranty of authority. 71 A common feature of both species of authority is conduct on the part of the alleged principal which, in all the circumstances, evidences the clothing of the alleged agent with the requisite authority to bind his or her principal. 72 As far as ostensible authority is concerned, the only conduct on the part of Quikfund or AER that is capable of constituting the necessary representation as to Mr Croom's authority upon which Prosperity could have relevantly relied comprised the actions of those corporations in making it possible for Mr Croom to have possession of their standard equipment lease and associated documentation. Whether, by that conduct, either Quikfund or AER made such a representation and whether Prosperity relied upon that representation are both questions of fact which fall to be decided after considering all of the relevant circumstances. 73 For reasons which we shall shortly explain, we think that the evidence tendered at trial in the present case did not justify a conclusion that Mr Croom and QCC acted with the authority (actual or ostensible) of either Quikfund or AER in the dealings which Mr Croom and QCC had with Prosperity. 74 In Branwhite v Worcester Works Finance Ltd [1969] 1 AC 552, the House of Lords considered the various legal relationships associated with hire purchase transactions. Lindgren J analysed the speeches in that case in NMFM Property Pty Ltd v Citibank Ltd (No 10) (2000) 107 FCR 270 at 392-394 [544]-[553] as follows: The distinction between an agent and a mere introducer of business 544 Citibank submits that the present case relevantly replicates the non-agency circumstances of Branwhite v Worcester Works Finance Ltd [1969] 1 AC 552 (Branwhite). Branwhite is one of many cases concerned with the legal relationships associated with hire-purchase transactions. 545 Branwhite owned a Talbot motor car and wished to buy a Rapier motor car from a dealer, Raven Motor Co. Raven's manager arranged with Branwhite that the price of the Rapier would be £430 and that £130 would be allowed on the trade-in of the Talbot, the balance of £300 being payable by 60 monthly instalments of £5. The manager produced certain forms of Worcester Works Finance Ltd ("Worcester Works") which Branwhite signed without reading. One was a proposal form and the other was a hire purchase agreement. The hire purchase agreement contained no figures and the manager said he would fill them in. Branwhite left his Talbot with Raven and took away the Rapier. 546 There was subsisting a "master agreement" between Raven and Worcester. This provided that Raven would submit hire purchase agreements to Worcester. After Worcester accepted them, it would pay Raven the price of the goods less the initial payment or trade-in credited to the hirer. The master agreement allowed Raven to retain that initial payment or trade-in as part payment of the purchase price payable to it by Worcester as buyer. 547 Raven's manager sent to Worcester the signed forms but had inserted £649 rather than £430 as the cash price. With charges, the hire purchase price amounted to £805 and the monthly instalments were shown as £18 14s 11d. The deposit was correctly shown as £130. 548 Worcester proceeded with the transaction, buying the Rapier from Raven for £649 and paying Raven £519 (£649 - £130). Worcester sent a copy of the signed hire purchase agreement to Branwhite who, seeing the discrepancy, relied on Raven's manager to have it corrected. Branwhite paid no instalments. Contrary to his promise, Raven's manager did nothing and Worcester repossessed the Rapier. Worcester sued Branwhite to recover arrears of instalments but failed on the ground that Worcester and Branwhite had never been ad idem and that there was no valid agreement between them. Branwhite then sued Worcester for return of the deposit. 549 The House of Lords held that Worcester had received £130 from Branwhite for a consideration that had wholly failed and must therefore repay it. But a majority of their Lordships were of the opinion that Raven was not Worcester's agent to receive and hold the initial deposit. 550 I need not address the ground on which Branwhite succeeded. What is of present interest is the ground on which Branwhite failed, namely, that Raven had acted as agent for Worcester in receiving and holding the deposit. Branwhite failed on that ground by a three to two majority. Lords Morris of Borth-y-Gest, Guest and Upjohn were of the view that Raven was not Worcester's agent to receive and hold the deposit, whereas Lords Reid and Wilberforce thought that it was. 551 Lord Upjohn (with whom Lord Guest agreed) considered that the acts of holding a stock of Worcester's forms of hire purchase agreement, filling them in with particulars including particulars of Worcester's charges, having a prospective hirer sign the documents, and forwarding the forms to Worcester, showed that Raven was assisting the proposing hirer but did not establish that it had actual or apparent authority from the financier. Lord Upjohn identified the various stages of the typical hire purchase transaction and emphasised the role of the dealer as a party-principal and the financier's lack of interest in the transaction between the dealer and its customer. His Lordship's speech contained the following passage which is of some relevance to the circumstances of the present case (at 577-578): "It is argued that in having possession of the finance company's forms and the ability to settle and fill in all these essential figures he showed that he was acting in the transaction generally as the agent of the finance company. But I do not myself think that this is a realistic approach. A motor dealer must have, if he is to be successful, one or more finance companies willing to enter into the ordinary bona fide hire-purchase agreements with purchasers, many of whom cannot pay the cash price. They must, therefore, supply him with forms and tell him as a matter of common sense the terms upon which they are prepared to do business, and this must include information upon the terms of their hiring charges, their minimum initial instalment and the maximum period of hire; probably this will be controlled by the relevant statutory regulations but if their terms differ no doubt they will inform him of their commercial practice. But I cannot see that this makes him an agent of the finance company. In any event, all he is doing is to fill in a document which he submits on behalf, as I think clear, of the would-be hirer which contains a proposal for hire-purchase finance. … I cannot see how, in fact, it is possible to spell out of this transaction that in these circumstances the dealer is in any way a general agent for the finance company. He is a principal acting on his own behalf in selling his own car, in taking at a price another car in part exchange, and in submitting the hire-purchase forms to the finance company he is submitting them as proposals on behalf of the would-be hire-purchaser. That is good business on his part. No doubt, when the transaction has gone through and the hire-purchase agreement has been completed the dealer has the express authority of the finance company to hand over the car which they have purchased to the hirer; but on the facts of this case that seems to me the extent of his agency on behalf of the finance company. The facts of this case negative any general agency of the dealer on behalf of the finance company." 552 Lord Morris of Borth-y-Gest, like Lord Upjohn, thought that while the evidence in a particular case might demonstrate that the dealer was the agent of the finance company ad hoc for one purpose or another, the evidence did not establish that Worcester held out Raven as its agent to receive and hold the deposit. In particular, his Lordship thought that Raven's possession of Worcester's forms and the terms of the master agreement between Worcester and Raven did not establish agency. 553 Lord Wilberforce (with whom Lord Reid agreed), dissenting, also identified the sequential steps involved in a hire-purchase transaction. While accepting that in each case "something, much or little, must depend on the individual facts" (at 586), his Lordship thought that the normal conclusion should be that a dealer is the agent of the finance company unless there are facts displacing that conclusion. In arriving at this "presumption of agency", his Lordship relied heavily on "the established mercantile background of hire-purchase transactions" or "mercantile reality". He stated (at 586-587): "In my opinion, such questions as arise of the vicarious responsibility of finance companies, for acts or defaults of dealers, cannot be resolved without reference to the general mercantile structure within which they arise; or if one prefers the expression, to mercantile reality. This has become well known and widely understood by the public, as well as by the commercial interests involved. It involves a system by which consumers expect to be able to acquire goods on hire-purchase terms: by which they expect these terms to be made available to them either at the premises where the goods are exhibited and sold, or by the representatives of the dealer who offers them for sale elsewhere, for example, at the customer's home. So far from thinking first of a purchase from the dealer, and then, separately, of obtaining finance from an outside source, the identity or even existence of the finance company or bank which is going to provide the money is a matter to them of indifference: they look to the dealer, or his representative, as the person who fixes the payment terms and makes all the necessary arrangements. And in this, their expectation conforms with reality. It is in fact the dealer who seeks and obtains the business; he who makes the decisions, subject to what is little more than the possibility of veto by the finance company: for practical purposes both dealer and customer regard the transaction as complete when the forms are signed, subject only to a right of veto, and delivery of the article takes place then. If this is so, a general responsibility of the finance company for the acts, receipts and omissions of the dealer in relation to the proposed transaction of hire-purchase ought to flow from this structure of relationship and expectation, built up from accepted custom and methods of dealing: a general responsibility which requires to be displaced by evidence of particular circumstances rather than to be positively established in each individual case. It may be that some wider conception of vicarious responsibility other than that of agency, as normally understood, may have to be recognised in order to accommodate some of the more elaborate cases which now arise when there are two persons who become mutually involved or associated in one side of a transaction. Whether this could be so, and on what facts, was, I think, the real issue in Garnac Grain Co. Inc. v. H.M.F. Faure & Fairclough Ltd [1968] A.C. 1130; [1967] 3 WLR 143n; [1967] 2 All ER 353, HL(E) But I think that 'agency' still has room in it for the relationship that exists in such cases as this." In the present case, no "established mercantile background" or "mercantile reality" touching a class of contracts can be called in aid by NM: the form of transaction in the present case was sui generis. 75 As Lindgren J observed in NMFM Property Pty Ltd v Citibank Ltd (No 10) (at 394-396 [554]-[562]), the reasoning in Branwhite v Worcester Works Finance Ltd was adopted and applied by the Appeal Division of the Supreme Court of Victoria in Custom Credit Corporation Ltd v Lynch [1993] 2 VR 469; by the Full Court of the Supreme Court of Victoria in Custom Credit Corporation Ltd v Luff (unreported, 27 November 1990); and by Cole J in Octapon Pty Ltd v Esanda Finance Corporation Ltd (unreported, 3 February 1989). 76 In NMFM Property Pty Ltd v Citibank Ltd (No 10), Lindgren J held that the fact that the advisers in that case had possession of Citibank forms, the fact that they assisted the customers to complete those forms and the fact that they forwarded the completed forms to Citibank, whether taken individually or in combination, did not lead to the conclusion that the advisers were agents of Citibank but was consistent with them being mere introducers of business to Citibank. 77 We agree with the observations made by Lindgren J in NMFM Property Pty Ltd v Citibank Ltd (No 10) which we have extracted at [74] and referred to at [75] and [76] above and with his analysis of Branwhite v Worcester Works Finance Ltd. We shall apply those observations to the case at hand. 78 At 493-495 [1023]-[1032] in NMFM Property Pty Ltd v Citibank Ltd (No 10), Lindgren J considered whether there was any actual authority that had been given to the advisers outside the relevant formal contractual arrangements. His Honour observed that a mere introducer of business could become an agent without ever entering into a formal agency agreement. He went on to note that a finding of actual authority depended on the existence of consensus. His Honour said that the Court ought not to find such a consensus if to do so would be inconsistent with the express arrangements between the parties. 79 It is clear from the above brief conspectus of some of the relevant authorities that assertions made by the alleged agent that he or she is acting for the alleged principal can never by themselves prove the existence of the alleged agency. More is required. There must be some conduct on the part of the alleged principal from which the relationship of agency can be inferred and which breathes life into the assertions of the alleged agent. 80 In the present case, at [31] of his Reasons, the learned primary judge found that Mr Croom signed each of the documents which he signed on 25 October 2007 as a representative of QCC, AER or, as the case may be, Axis. With great respect to his Honour, that finding was erroneous. Mr Croom did not sign any of those documents as a representative of AER. Indeed, there is no evidence that Mr Croom ever signed any document on behalf of either Quikfund or AER. Furthermore, most of his signatures on the various documents which he did sign were as a witness to the signature of Mr King. Mr Croom did, of course, sign various versions of the Letter of Understanding on behalf of QCC. He also described QCC/Technix as the "Sales Agent" of Axis in the Axis Unlimited Plan document dated 11 October 2007 and signed several documents in October 2007 and in March 2008 on behalf of Axis which recorded the arrangements between Axis and Worldnet and Axis and Prosperity. But his actions in signing these latter documents are not probative of any agency between QCC and him, on the one hand, and Quikfund and AER, on the other hand. 81 Three of the four AER equipment leases were signed on behalf of AER by a person whose identity was not revealed in the evidence. It is clear that the signature on each of those documents is not that of Mr Croom. The signatory is described as an "authorised officer" of AER. The evidence also showed that the same position obtained in respect of the Quikfund equipment lease. The signature of the Quikfund representative on the Quikfund equipment lease is the same signature as appears on the relevant AER equipment leases. 82 The other matters relied upon by the primary judge as supporting his finding that, in making the representations which he made to the officers of Prosperity, Mr Croom was acting as the agent of Quikfund and AER, are referred to at [54]-[57] above. They were: (a) Mr Croom was the Regional Manager of both QCC and Technix and described himself as such; (b) QCC and Technix shared business premises; (c) Quikfund and AER always dealt through brokers and never dealt with the ultimate consumers directly; (d) Mr Croom had possession of both Quikfund's and AER's lease documentation in blank as well as other Quikfund and AER documentation; (e) Mr Croom was able to and did, in fact, cause to be forwarded to Mr King on 1 February 2008 a copy of the various documents which Mr King had signed on behalf of Prosperity on 25 October 2007; and (f) Mr Croom repeatedly asserted to the officers of Prosperity with whom he dealt that he and QCC represented a linked group of companies in relation to the Axis telecoms contract and the relevant equipment leases. 83 To the above list of factors relied upon by the primary judge may be added the further fact that, at least for some period after the date of the incorporation of AER and Axis (viz 19 June 2007), AER and Axis were sister corporations with at least one common director (George Tawaf). Mr Tawaf had also once been a shareholder of QCC although the precise details of his shareholding were not made clear in the evidence. 84 It is obvious that the primary judge's finding at [31] of his Reasons to the effect that Mr Croom signed relevant documents on behalf of AER was critical to his ultimate conclusion that Mr Croom had acted as the agent of Quikfund and AER in his dealings with Prosperity. If that finding is removed as a factor in favour of a finding of agency, the remaining factors relied upon by his Honour, even if supplemented by the additional matters to which we have referred at [83] above, do not warrant the conclusion which his Honour reached in respect of agency. 85 Factors (a) and (b) concern QCC and Technix only. They do not have any relevance to the question of agency as between Quikfund and AER, on the one hand, and QCC and Mr Croom, on the other hand. 86 Factors (c), (d) and (e) are in the same category as very similar factors considered in Branwhite v Worcester Works Finance Ltd and the Australian cases which have followed Branwhite v Worcester Works Finance Ltd (NMFM Property Pty Ltd v Citibank Ltd (No 10); Custom Credit Corporation Ltd v Lynch; Custom Credit Corporation Ltd v Luff; and Octapon Pty Ltd v Esanda Finance Corporation Ltd). The transactions in question in the present case are typical lease finance transactions. In addition, there are features of the present case which make it even less likely that Mr Croom and QCC acted as the agents of Quikfund and AER in their dealings with Prosperity. First, there is no evidence as to how and why Mr Croom came to have Quikfund and AER documentation. Second, there was no binding arrangement between Quikfund and AER, as owner, and Prosperity, as hirer, until Quikfund and AER accepted the deal by executing the contractual documentation. All that Mr Croom did was complete the relevant forms, procure the hirer's signature on them and then submit those forms to Quikfund and to AER for their consideration. Third, there was no communication between Quikfund or AER and QCC and Mr Croom that could conceivably support a finding of agency. 87 It must also be remembered that Mr Croom was not employed by or an officer of either Quikfund or AER and that there was nothing to suggest that QCC (or Technix) had ever been authorised by Quikfund or AER to do anything on its behalf. The evidence of common shareholdings and directorships was not directed with any precision to the relevant period (from about September 2007 to late March 2008) and therefore did not establish the precise shareholdings in that period. That evidence did not usefully add to the evidence relevant to agency. 88 Finally, as far as factor (f) is concerned, the assertions made by Mr Croom as to the corporations which he represented were vague and imprecise and, in any event, on their own, incapable of establishing agency. We should add, at this point, that the existence and terms of the Customer Satisfaction Certificates provided by Mr Feo of QCC to Prosperity do not advance Prosperity's case on agency. The terms of those certificates are inconsistent with that case. In any event, they are QCC documents and do not assist at all to prove the requisite agency. 89 For all of the above reasons, the primary judge erred when he found that, in his dealings with Prosperity, Mr Croom had acted as the agent of Quikfund and AER. His Honour's finding of agency was the foundation for his Honour's ultimate conclusion to the effect that Quikfund and AER must be held liable for the misrepresentations made by Mr Croom to Prosperity. That conclusion was also erroneous.

Issue 2 - Quikfund and AER as Linked Credit Providers 90 This case was based upon s 73 of the TPA. It was put in the alternative to Prosperity's case based upon agency (Issue 1). 91 Prosperity's pleading of this case was singularly uninformative. The entire case is set out in par 11 of the Amended Statement of Claim which was in the following terms: 11. Alternatively: (a) The Applicants were consumers as that term is used in the TPA; (b) [Quikfund and AER] were linked credit providers as that term is used in the TPA; and (c) [Quikfund and AER] are jointly and severally liable to [Prosperity] for [QCC's and Axis'] contravention of the TPA pursuant to s73(1) of the TPA. 92 In its submissions to the primary judge, Prosperity contended that QCC acted as a broker for Quikfund and AER, that Ms Semaan had conceded as much and that, because QCC and Axis were the agents of Quikfund and AER, both Quikfund and AER were linked credit providers within the meaning of s 73 of the TPA. 93 We should say at once that, although Ms Semaan had said in her evidence that QCC was a broker, she immediately qualified that remark by saying that it was an "… introducer of business". In any event, it was clear from her evidence that she was not qualified to make any admission as to the true characterisation of the relationship between Quikfund and AER, on the one hand, and QCC, on the other hand. We give no weight to this so-called admission.

The Relevant Findings and Conclusions of the Primary Judge 94 At [72] and [73] of his Reasons, the primary judge said: 72 As to the applicants' alternative case in respect of AER and Quick Fund, which relies on their being linked credit providers for the purposes of s 73 of the TPA, the difficulty is that Pt V of the TPA does not apply to the provision of services that are financial services: s 51AF(1). Section 73 falls within Pt V of the TPA. Without limiting the effect of s 51AF(1), s 51AF(2)(a) materially provides that s 52 of the TPA does not apply to conduct engaged in in relation to financial services. The use of "in relation to" is indicative of a broader application, requiring only a relevant connection between the conduct and the provision of financial services. The linkage between the telecommunications and rental charges under the contracts is such that the conduct in which Mr Croom engaged on behalf of Axis as well as QCom, AER and Quick Fund could be classified as conduct "in relation to" the provision of services by AER and Quick Fund. If those services were "financial services", that would not exculpate them from liability for misleading or deceptive conduct as s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) makes like provision in respect of conduct "in relation to" "financial services" as does s 52 of the TPA in respect of conduct in trade or commerce. Further, s 12GF and s 12GM of the ASIC Act would, in respect of a contravention of s 12DA, entitle the applicants to no different relief than would s 82 and s 87 of the TPA in respect of a proved contravention of s 52. However, there is no equivalent of s 73 of the TPA in the ASIC Act. 73 "Financial service" is defined by the TPA (s 4) in a way which directs attention to the ASIC Act. In that Act, the term "financial service" is defined by s 12BAB. Materially, a financial service can be provided if there is a dealing in a "financial product". The latter is defined by s 12BAA of the ASIC Act but not in a way which readily applies to what is provided under the subject rental contracts. I am not persuaded that s 73 is excluded by s 51AF of the TPA. The applicants are "consumers" as defined by s 4B of the TPA because the "price" of the goods is less than the statutory maximum. In these circumstances, s 73(4) of the TPA operates so as to entitle the applicants to set up the liability of AER and Quick Fund under s 73(1) in respect of misrepresentations effected via Mr Croom in diminution or extinction of their claims for allegedly outstanding amounts. 95 Paragraphs 72 and 73 are the only paragraphs of his Honour's Reasons which are relevant to this issue. The critical conclusions reached by his Honour were: (a) Prosperity was relevantly a consumer within the meaning of s 73 of the TPA. (b) The relevant equipment leases were not financial services within the meaning of s 51AF of the TPA. For that reason (and only that reason), Pt V of the TPA was not excluded by that section in respect of the conduct of Mr Croom and of Quikfund and AER. Accordingly, s 73 of the TPA was not excluded by s 51AF from application in the present case. (c) Section 73(1) of the TPA applied with the consequence that Quikfund and AER were linked credit providers within the meaning of s 73 of the TPA. This conclusion meant that s 73(4) was engaged so that Prosperity could set up the liability of Quikfund and AER under s 73(1) in diminution of the debts owed by it to Quikfund and AER.

The Parties' Submissions 96 Quikfund and AER attacked the findings of the primary judge in two fundamental ways: First, they argued that his Honour failed to consider at all whether, in the circumstances of the present case, either Quikfund or AER fell within the definition of linked credit provider in s 73(14) of the TPA. They contended that, when the terms of that definition are considered, the correct conclusion, on the facts, even if s 73 remained potentially available to be invoked by Prosperity after the enactment of s 51AF, was that neither Quikfund nor AER was a linked credit provider vis-à-vis Prosperity. Second, they argued that s 73 of the TPA was excluded from any application in the present case, in any event, because the relevant equipment leases were financial services within the meaning of that expression in s 51AF of the TPA and that, by reason of the operation of s 51AF(1), Pt V (including s 73) did not apply to the relevant equipment leases. Because this latter line of attack necessarily required Quikfund and AER to submit that certain reasoning applied by two single judges of this Court in separate decisions at first instance was wrong (viz the decision of Foster J in Australian Securities and Investments Commission v Bank of Queensland Ltd (2011) 86 ACSR 258 at 272-275 [43]-[55] and the decision of Cowdroy J in Technology Leasing Ltd v Lennmar Pty Ltd [2012] FCA 709 at [190]-[200]), Quikfund and AER advanced their first challenge as their primary challenge, submitting that, even if the decisions of Foster J and Cowdroy J are correct, Prosperity failed to prove that either Quikfund or AER was a linked credit provider as defined in s 73(14) of the TPA. 97 We will approach our consideration of this issue in the same fashion as the matter was argued by Quikfund and AER. 98 Senior Counsel for Quikfund and AER submitted that none of the alternative circumstances specified in the definition set out in s 73(14)(a) to (d) was satisfied in the present case. Each subparagraph of the definition requires that the activity or subject matter to which that subparagraph is directed be carried out or addressed pursuant to some arrangement made between the supplier of the goods and services and the financier ultimately contracted to provide credit in relation to the supply of those goods and services. In the present case, so it was submitted, there was no direct evidence of any such arrangement nor was there any evidence from which the existence and terms of such an arrangement could properly be inferred. Counsel submitted that Prosperity had not attempted to address the requirements of s 73(14) and that the primary judge had failed to do so in any event. Senior Counsel for Quikfund and AER also submitted that Prosperity was obliged to identify the supplier to whom Quikfund and AER were said to be linked and that it had failed to do so in the pleading and in its submissions. 99 Counsel for Prosperity asserted that subpars (a) and (c) of the definition in s 73(14) were satisfied in the present case. He did not rely upon subpar (d) and only faintly pressed subpar (b).

Consideration 100 At all relevant times, subss (1), (4), (7) and (14) of s 73 of the TPA were in the following terms: (1) Where: (a) a corporation (in this section referred to as the supplier) supplies goods, or causes goods to be supplied, to a linked credit provider of the supplier and a consumer enters into a contract with the linked credit provider for the provision of credit in respect of the supply by way of sale, lease, hire or hire-purchase of the goods to the consumer; or (b) a consumer enters into a contract with a linked credit provider of a corporation (in this section also referred to as the supplier) for the provision of credit in respect of the supply by the supplier of goods or services, or goods and services, to the consumer; and the consumer suffers loss or damage as a result of misrepresentation, breach of contract, or failure of consideration in relation to the contract, or as a result of a breach of a condition that is implied in the contract by virtue of section 70, 71 or 72 or of a warranty that is implied in the contract by virtue of section 74 of this Act or section 12ED of the Australian Securities and Investments Commission Act 2001, the supplier and the linked credit provider are, subject to this section, jointly and severally liable to the consumer for the amount of the loss or damage, and the consumer may recover that amount by action in accordance with this section in a court of competent jurisdiction. … (4) Subject to subsection (5), in any proceedings in relation to a contract referred to in paragraph (1) (a) or (b) in which a credit provider claims damages or an amount of money from a consumer, the consumer may set up the liability of the credit provider under sub-section (1) in diminution or extinction of the consumer's liability. … (7) The liability of a linked credit provider to a consumer for damages or a sum of money in respect of a contract referred to in sub-section (1) does not exceed the sum of: (a) the amount financed under the tied loan contract, tied continuing credit contract, lease contract, contract of hire or contract of hire-purchase; (b) the amount of interest (if any) or damages in the nature of interest allowed or awarded against the linked credit provider by the court; and (c) the amount of costs (if any) awarded by the court against the linked credit provider or supplier or both. … (14) In this section: credit provider means a corporation providing, or proposing to provide, in the course of a business carried on by the corporation, credit to consumers in relation to the acquisition of goods or services. linked credit provider, in relation to a supplier, means a credit provider: (a) with whom the supplier has a contract, arrangement or understanding relating to: (i) the supply to the supplier of goods in which the supplier deals; (ii) the business carried on by the supplier of supplying goods or services; or (iii) the provision to persons to whom goods or services are supplied by the supplier of credit in respect of payment for those goods or services; (b) to whom the supplier, by arrangement with the credit provider, regularly refers persons for the purpose of obtaining credit; (c) whose forms of contract or forms of application or offers for credit are, by arrangement with the credit provider, made available to persons by the supplier; or (d) with whom the supplier has a contract, arrangement or understanding under which contracts or applications or offers for credit from the credit provider may be signed by persons at premises of the supplier; tied continuing credit contract means a continuing credit contract under which a credit provider provides credit in respect of the payment by a consumer for goods or services supplied by a supplier in relation to whom the credit provider is a linked credit provider; tied loan contract means a loan contract entered into between a credit provider and a consumer where: (a) the credit provider knows or ought reasonably to know that the consumer enters into the loan contract wholly or partly for the purposes of payment for goods or services supplied by a supplier; and (b) at the time the loan contract is entered into the credit provider is a linked credit provider of the supplier. 101 Subsections (2) and (3) specified circumstances in which no liability would attach. These subsections are not presently relevant. Other subsections addressed the way in which judgment debts may be recovered by a consumer as against the supplier and against the linked credit provider and also addressed the way in which adjustments as between the linked credit provider and the supplier should be made. These subsections are also not presently relevant. 102 There is no doubt that, in 2007 and 2008, both Quikfund and AER were credit providers within the meaning of that expression in s 73(14). Whether either of those corporations was a linked credit provider remained a matter of dispute. 103 Subparagraph (a) of s 73(14) requires that there be a contract, arrangement or understanding in relation to one or more of the matters described in subpars (a)(i) to (iii). Subparagraph (c) requires that the requisite forms be made available to persons by the supplier "… by arrangement with the credit provider". Similar expressions appear in subpars (b) and (d). 104 For a corporation to be a linked credit provider in relation to a particular supplier there must have been a consensus reached between that corporation and the supplier prior to the transaction with the consumer who seeks to rely upon s 73. That consensus must relate to one or more of the subject matters covered by subpars (a) to (d) of s 73(14). 105 In the present case, Prosperity ultimately identified QCC as the relevant supplier and pointed to the fact that QCC and Mr Croom had possession of Quikfund's and AER's lease contracts in blank as well as other related Quikfund and AER documents and to the fact that QCC and Mr Croom made those documents available to Mr King, on behalf of Prosperity. Prosperity also relied upon the fact that Mr Croom filled out those forms and submitted them to Quikfund and AER. 106 The rationale behind s 73 is to make credit providers liable for the wrongful conduct of certain suppliers of goods and services being those suppliers whom the credit provider has permitted, indeed encouraged, to procure credit business on the credit provider's behalf pursuant to consensual arrangements reached between them. Section 73 brings about a deemed statutory agency as between the credit provider, as principal, and the relevant supplier, as agent, in respect of contraventions of the kind specified in s 73(1) in the circumstances described in s 73(1)(a) and (b). It is critical to the imposition of liability on the credit provider that the credit provider has formed an association with the supplier in one or more of the ways specified in s 73(14)(a) to (d). 107 In our judgment, in the present case, it is not sufficient for Prosperity to point to the fact that QCC and Mr Croom had possession of Quikfund's and AER's lease documentation, made that documentation available to Prosperity and forwarded the completed documents to Quikfund and to AER after filling them out and procuring Mr King's signature on them. More was required. At the very least, Prosperity was obliged to prove that Quikfund and AER knew that QCC and Mr Croom possessed their lease documentation in blank and intended to make that documentation available to Prosperity. Ordinarily, those matters would be proven by evidence that Quikfund and AER had provided that documentation to QCC and that it had done so pursuant to an arrangement to the effect that QCC would propose to its customers, or at least some of them, that they seek lease finance from Quikfund or AER in relation to goods or services to be supplied by QCC. Those matters might be proven by direct evidence or inferred from other evidence. 108 In the present case, there was no direct evidence of any arrangement between QCC and either Quikfund or AER. Furthermore, the only facts from which the requisite arrangement are sought to be inferred are those which we have summarised at [105] above. Those facts do not support the required inference. The arrangements contemplated by s 73(14) are all arrangements which must be in existence prior to the consumer transactions in question. 109 In the case of subpar (c), the provision of forms to the consumer is the activity which must be separate from but contemplated by the antecedent arrangement. That arrangement cannot be proven merely by the fact that the forms were made available to the consumer in a particular case or even by the fact that they were in the possession of the supplier. At the very least, evidence establishing that the documentation had been supplied by Quikfund and AER to QCC for the purpose of being passed on to consumers was required. No such evidence was forthcoming. For all the Court knows, the relevant documentation may have been downloaded by QCC from the websites of Quikfund and AER without either corporation knowing that this had occurred. The fact that that documentation was available to be downloaded from the website by any member of the public would not be a basis for inferring an arrangement of the kind contemplated by s 73(14). The documentation may have been obtained in some other way. It is not for the Court to speculate about these matters. It was incumbent upon Prosperity to prove facts that constituted a proper basis for the Court to infer the existence of the requisite arrangement. It has failed to do so. 110 For these reasons, Prosperity failed to prove that either Quikfund or AER was a linked credit provider within the definition set out in s 73(14) of the TPA. Prosperity therefore failed to prove that s 73 of the TPA was engaged at all in the present case. 111 The primary judge did not specifically address the terms of s 73(14). He erred in proceeding to decide the ultimate question of the applicability of s 73 of the TPA in the circumstances of the present case without first satisfying himself that both Quikfund and AER were caught by the definition of linked credit provider set out in s 73(14). 112 Our conclusions in respect of s 73(14) of the TPA are sufficient to dispose of the question of whether Quikfund and AER were jointly and severally liable with QCC pursuant to s 73 of the TPA for the loss or damage suffered by Prosperity as a result of relying upon the misrepresentations made to its executives by Mr Croom. 113 In those circumstances, it is not necessary for us to consider the second argument raised by Quikfund and AER to the effect that, by reason of the operation of s 51AF(1) of the TPA, s 73 could not have been engaged in any event in the circumstances of the present case and we expressly decline to do so. 114 We would nevertheless wish to record that, in our judgment, the primary judge erred when he concluded that the relevant equipment leases were not financial services within the meaning of s 51AF of the TPA. We shall briefly explain why. 115 At all relevant times, s 51AF(1) of the TPA provided: (1) This Part [referring to Pt V - Consumer Protection] does not apply to the supply, or possible supply, of services that are financial services. 116 In the TPA, unless the contrary intention appeared, financial service, was defined as having the same meaning as in Div 2 of Pt 2 of the ASIC Act (see the definition of financial service in s 4). The plural financial services had a corresponding meaning. 117 In Div 2 of Pt 2 of the ASIC Act, unless the contrary intention appears, financial service has the meaning given by s 12BAB of the ASIC Act (see the definition specified in s 5 and in s 12BA). 118 Section 12 BAB of the ASIC Act relevantly provides as follows: 12BAB Meaning of financial service When does a person provide a financial service? (1) For the purposes of this Division, subject to paragraph (2)(b), a person provides a financial service if they: (a) provide financial product advice (see subsection (5)); or (b) deal in a financial product (see subsection (7)); or (c) make a market for a financial product (see subsection (11)); or (d) operate a registered scheme; or (e) provide a custodial or depository service (see subsection (12)); or (f) operate a financial market (see subsection (15)) or clearing and settlement facility (see subsection (17)); or (g) provide a service that is otherwise supplied in relation to a financial product; or (h) engage in conduct of a kind prescribed in regulations made for the purposes of this paragraph. … (2) The regulations may set out: (a) the circumstances in which persons facilitating the provision of a financial service (for example, by publishing information) are taken also to provide that service; or (b) the circumstances in which persons are taken to provide, or are taken not to provide, a financial service. 119 Other subsections of s 12BAB flesh out the meaning of "providing", "dealing", "making a market" and so on. It is not necessary to refer to these provisions in detail for present purposes. 120 Relevantly, the definition of financial service therefore depends upon the definition of financial product. That concept is defined in s 5 and in s 12BAA of the ASIC Act. The terms of s 12BAA are complex. 121 The section begins with a general definition of financial product (subs (1)) and then, as was the case with s 12BAB, fleshes out some of the concepts referred to in the general definition. 122 Subsection (7) of s 12BAA specifies things that are financial products subject to subs (8) which specifically excludes certain things. 123 Subsection (7)(k) provides as follows: (7) Subject to subsection (8), the following are financial products for the purposes of this Division: … (k) a credit facility (within the meaning of the regulations); 124 Regulation 2B of the Australian Securities and Investments Commission Regulations 2001 provides that, for the purposes of s 12BAA(7)(k) of the ASIC Act, a credit facility is (amongst other things) the provision of credit for any period, with or without prior agreement between the credit provider and the debtor and whether or not both credit and debt facilities are available. For the purposes of that definition, credit is defined in reg 2B(3) as meaning a contract, arrangement or understanding: … (a) under which: (i) payment of a debt owed by one person (a debtor) to another person (a credit provider) is deferred; or (ii) one person (a debtor) incurs a deferred debt to another person (a credit provider) and (b) including any of the following: (i) any form of financial accommodation; (ii) a hire purchase agreement; (iii) credit provided for the purpose of goods or services; (iv) a contract, arrangement or understanding for the hire, lease or rental of goods or services, other than a contract, arrangement or understanding under which: (A) full payment is made before or when the goods or services are provided; and (B) for the hire, lease or rental of goods - an amount at least equal to the value of goods is paid as a deposit in relation to the return of the goods; … 125 When regard is had to the terms of reg 2B, there is no doubt that the relevant equipment leases were credit facilities within the meaning of s 12BAA(7)(k) of the ASIC Act. For that reason, those leases were financial products within the meaning of s 12BAA. 126 It follows that both Quikfund and AER dealt in a financial product within the meaning of s 12BAB(1)(b) because they issued a financial product within the meaning of s 12BAB(7)(b) of the ASIC Act. For those reasons, Quikfund and AER both provided financial services when they executed the relevant equipment leases. 127 The above analysis and conclusions concerning the meaning of financial services in s 51AF(1) of the TPA are consistent with the analysis and conclusions as to the meaning of that expression adopted and reached by Madgwick J in Australian Competition and Consumer Commission v Original Mama's Pizza and Ribs Pty Ltd [2008] FCA 370 at [84]-[102]; [2008] ATPR 42-236. 128 But, a finding that the relevant equipment leases were financial services is not the end of the matter. Both Foster J and Cowdroy J in the cases to which we have referred at [96] above accepted that the lease transactions in the cases with which they were concerned were financial services within s 51AF(1) but nonetheless held that s73 of the TPA was still available to the consumer party in those cases. The conclusion which their Honours reached was not dependent upon a finding that the leases in question were not financial services for the purposes of s 51AF of the TPA.

Conclusions 129 The learned primary judge erred in finding an agency relationship between QCC (via Mr Croom), as agent, and Quikfund and AER, as principals. He also erred in finding that s 73 of the TPA was engaged in the present case. The appeals brought by Quikfund and AER must be allowed and the orders made by his Honour which affected Prosperity, Quikfund and AER must be set aside. Quikfund and AER should have judgment for the amounts claimed by them against Prosperity in their Cross-Claim together with interest thereon up to a date 15 days hence. We see no reason why judgment for those amounts should not be entered notwithstanding that Prosperity is now in liquidation. Prosperity did not suggest that judgment should not be entered. Quikfund and AER should have their costs of the appeal and of the proceedings below. 130 The appeal brought by Clear should be dismissed with no order as to costs. 131 All other orders made by the primary judge should stand undisturbed. 132 We shall direct Quikfund and AER to bring in Short Minutes of Orders in order to give effect to these Reasons for Judgment. We shall allow Prosperity a short time thereafter to make any submissions that it may be advised to make and Quikfund and AER a short time after that to answer those submissions. We will then determine final orders on the papers. I certify that the preceding one hundred and thirty-two (132) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Foster, Barker and Griffiths.