White v Baycorp Advantage Business Information Services Ltd

DECISION : Entries in credit reference bureau database misleading and deceptive. Injunctions requiring removal granted.

CATCHWORDS : CONTRACTS - PARTICULAR PARTIES - principal and agent - undisclosed principal - contract inherently incapable of being entered as agent for an undisclosed principal - need for agent to have actual authority to enter contract on behalf of undisclosed principal at the time contract is made - TRADE PRACTICES AND RELATED MATTERS - consumer protection - criteria for deciding whether a representation is misleading and deceptive - whether necessary for a person making an implied representation to know that it was incorrect at the time it was made before it can be misleading and deceptive - whether all false statements are misleading and deceptive - CORPORATIONS - miscellaneous cases - effect of deregistration - effect of reinstatement of registration - extent to which effect of reinstatement is retrospective - TORTS - MISCELLANEOUS TORTS - other economic torts - injurious falsehood - element of malice - DAMAGES - causation - role of "but for" test - shifting the onus of adducing evidence

Company Law Review Act 1998 (Cth) Company Law Review Bill 1997 LEGISLATION CITED : Corporations Act 2001 (Cth) Corporations Law Privacy Act 1988 (Cth) Trade Practices Act 1974 (Cth)

Apollo Shower Screens Pty Ltd & Anor v Building and Construction Industry Long Service Payments Corporation (1985) 1 NSWLR 561 Ash Street Properties Pty Limited & Ors v Pollnow (NSWCA, Handley JA, 1 September 1995, unreported) Baiada & Ors v Waste Recycling & Processing Service of NSW [1999] NSWCA 139; (1999) 130 LGERA 52 Campomar Sociedad, Limitada & Anor v Nike International & Anor (2000) 202 CLR 45 Concrete Constructions Group Ltd v Litevale Pty Ltd (2002) 170 FLR 290 Davis v Capel [1959] NZLR 825 DFC of T v Action Workwear Pty Ltd (1996) 14 ACLC 1335 Diamond Hill International Pty Ltd v Xu (2001) 19 ACLC 1139; [2001] FCA 531 Dunlop Pneumatic Tyre Company Ltd v Selfridge & Company Limited [1915] AC 847 Hampton Court Ltd v Crooks (1957) 97 CLR 367 Humble v Hunter (1848) 12 QB 310; 116 ER 885 Illawong Village Pty Ltd v State Bank of NSW [2004] NSWSC 18 Jekos Holdings Pty Ltd v Australian Horticultural Finance Pty Ltd (No 2) [1995] 1 QdR 612 Joro Pty Ltd v State Bank of NSW (1992) 5 BPR 11,709 Lucas v De La Cour (1813) 1 M & S 249; 105 ER 93 CASES CITED : March v E & MH Stramare Pty Ltd & Anor (1991) 171 CLR 506 Maynegrain Pty Ltd v Compafina Bank [1982] 2 NSWLR 141 McWilliams Wines Pty Ltd v LS Booth Wine Transport Pty Ltd (1992) 25 NSWLR 723 Morris v Harris [1927] AC 252 Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388 Perpetual Trustee Co (Ltd) v Bligh (1940) 41 SR (NSW) 33 Pollnow v Ash Street Properties Pty Ltd (1996) 130 FLR 235 Re Kenneth Wright Distributors Pty Ltd (in liquidation); WJ Vine Pty Ltd v Hall [1973] VR 161 Siu Yin Kwan (Administratrix of the Estate of Chan Ying Lung, Decd) & Another v Eastern Insurance Co Ltd [1994] 2 AC 1999 Solla v Scott & Ors [1982] 2 NSWLR 832 Sweeney & Vandeleur Pty Ltd v BNY Australia Pty Ltd (1993) 11 ACSR 356 Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1987) 8 NSWLR 270 Tyman's Ltd v Craven [1952] 2 QB 100 United Service Insurance Co Ltd (in liq) v Lang (1935) 35 SR (NSW) 487 Wright v TNT Management Pty Ltd (1989) 15 NSWLR 679 Bowstead and Reynolds on Agency (17th edition 2001) Dalpont, Law of Agency (2001)

John Anthony White - First Plaintiff White Group Holdings Pty Limited - Second Plaintiff PARTIES : Baycorp Advantage Business Information Services Limited - First Defendant Capital Consumer Finance NSW - Second Defendant Capital Finance Australia Ltd - Third Defendant

COUNSEL : P King - Plaintiffs M Ashhurst - Third Defendant

Segal & Associates - Plaintiffs SOLICITORS : Submitting Appearance - First Defendant Kemp Strang - Third Defendant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EQUITY LIST

2219/06 JOHN ANTHONY WHITE & ANOR v BAYCORP ADVANTAGE BUSINESS INFORMATION SERVICES LIMITED & ORS

1 HIS HONOUR: The plaintiffs are a man and his company, who were both the subject of notification in the database maintained by a credit reference bureau. They contend that the notifications are inaccurate, and involve improper disclosure of personal information concerning the man. They seek a remedy concerning those notifications.

2 Mr John White conducts, through various companies, businesses which include that of a commercial printer and mail house. The White Holdings Group Pty Ltd ("White Holdings") is one such company.

3 Baycorp Advantage Business Information Services Limited ("Baycorp") conducts a credit rating information bureau. It has submitted to any order of the Court save as to costs.

4 Capital Finance Australia Ltd ("Capital Finance") is a finance company. It is a subscriber to Baycorp's credit information bureau. It is the third defendant in these proceedings.

5 Capital Finance has a subsidiary, Capital Corporate Finance Limited ("Capital Corporate"). It is not a party to these proceedings.

6 The entries in the Baycorp database which are the subject of these proceedings, each contain a reference to "Capital Consumer Finance NSW". The plaintiffs named "Capital Consumer Finance NSW" as the second defendant in the proceedings. However, there is neither the name of a corporation, nor a registered business name, which contains those words.

7 At the hearing, the only appearances were Mr King, for the plaintiffs, and Mr Ashhurst, for Capital Finance.

8 On 1 September 1999 Metronome Enterprises Pty Ltd trading as Cobb & Co Mail entered an agreement with Konica Australia Pty Ltd ("Konica"), under which it agreed to rent four items of equipment (a Konica model 7040 photocopier, a finisher stapler, an interface, and a 2500 sheet paper supply) for a "Term" of 60 months. In that agreement Metronome was referred to as the "Hirer", and Konica Australia was referred to as "Konica".

9 That agreement contained the following provisions: "1 Ownership of Equipment The Hirer is only a bailee of the Equipment. The Equipment is and will remain the sole property of Konica. On the expiry or termination of this agreement, the Hirer must return the Equipment as Konica may direct, at the expense of the Hirer. 2 Payment The Hirer must (a) pay the Rental as specified in this agreement; (b) pay interest on all overdue moneys at a rate which is 2% per year above Konica's cost of funding the overdue amount. Unpaid interest will be compounded monthly; (c) repay on demand any expense (including legal expenses and outgoings) Konica incurs in enforcing or protecting its rights under this agreement and any moneys Konica may pay to make good any failure by the Hirer to observe this agreement. (d) pay on demand all taxes, stamp duty, fees, duties, charges, costs and expenses relating to this agreement, the Equipment or payments received under this agreement; and (e) pay all amounts in full, without any deduction. … 7 Continuations and Variations (a) This agreement will extend beyond the expiry of the Term until (i) either party gives 90 days prior written notice of termination expiring on or after expiry of the Term; and (ii) at the expiry of the 90 day notice period, the hirer delivers the equipment, in good condition, as Konica may direct. … 8 Default (a) Each of the following is an event of default under this agreement: (i) the Hirer does not pay any amount payable under this agreement when due; … (b) If an event of default occurs Konica may, at its option, and without limiting any other remedy available to it, (i) seek to enforce the Hirer's obligation under this agreement; or (ii) terminate this agreement by notice to the Hirer. (c) If this agreement is terminated, Konica may retake possession of the Equipment and the Hirer must pay to Konica by way of liquidated damages the total of (i) all unpaid Rental and other moneys due under this agreement; (ii) the present value of all Rental not then due but which would have been payable until the expiry of the Term; (iii) if the Equipment is not returned to Konica within 7 days of termination, the value of the Equipment; (iv) any stamp duty or financial institutions duty payable in respect of the foregoing; (v) any costs and expenses incurred in repossessing the Equipment and making any repairs or reconditioning necessary to bring it to the condition in which the Hirer is required to return it; and (vi) interest in accordance with clause 2(b). A certificate signed by an officer of Konica as to any or all of the above amounts will prima facie evidence thereof. 9 Miscellaneous … "Konica" includes the successors and assigns of Konica and any person entitled to the benefit of this agreement. … Any notice to be given by Konica in connection with this agreement, in addition to any other manner in which it may be given, ■ may be sent by prepaid post to the Hirer at its last known place of residence or business and shall be deemed to be received on the second day after posting; ■ may be sent by facsimile to the Hirer's last notified facsimile number and shall be deemed to be received when Konica's facsimile machine prints a report of successful transmission."

10 The contract for hire was allocated a reference number 62900764.

11 White Holdings purchased the business of Metronome. In connection with that purchase, an agreement entitled "Assignment of Rental Agreement" was entered, which stated that it was made on 23 October 2000. It provided that it was: "BETWEEN the undermentioned Assignor Assignee and Owner respectively WHEREBY IT IS AGREED as follows:- 1. In consideration of the sum stated in the Schedule and of the agreements on the part of the Assignee hereinafter contained, the Assignor HEREBY ASSIGNS AND TRANSFERS to the Assignee all his right title and interest under the Rental Agreement between the Assignor and the Owner referred to in the Schedule (hereinafter called the "Principal Agreement") subject to the observance and performance by the Assignee as if he were the "Renter" under the Principal Agreement. 2. IN consideration of this Assignment and of the consent of the Owner thereto (testified by its execution hereof) the Assignee agrees with the Assignor and (as a separate agreement) with the Owner as follows: (a) To pay all rentals now due or to become due under the Principal Agreement at the place provided for in the Principal Agreement and to make good all defaults of the Assignor under the Principal Agreement. (b) As if the Assignee were the Renter under the Principal Agreement and the Owner had consented to the removal of the goods to the Assignee's address set out in the Schedule:- (i) to perform and observe all other stipulations and conditions of the Principal Agreement binding on the Renter. … SCHEDULE (1) Name of Assignor (original Renter): Metronome Enterprises Pty Ltd t/as Cobb & Co Mail (ACN 052 446 107) Address: 162 Old Northern Road, Baulkham Hills NSW 2153 (2) Name of Assignee: The White Holdings Group Pty Ltd (ABN: 093 203 733) Address: 162 Old Northern Road, Baulkham Hills NSW 2153 (3) Name of Owner: KONICA AUSTRALIA PTY LTD ACN 001 065 096 (4) Date of Principal Agreement: 2nd September, 1999 Account Number: 62/900764 (5) Consideration paid or to be paid by the Assignee to the Assignor: The sum of $1.00."

That agreement was executed by White Holdings. As well, someone executed it on behalf of Konica, opposite an attestation clause which said "SIGNED on behalf of the Owner …".

12 Immediately below where White Holdings executed it, the agreement also contained a guarantee, as follows: "In consideration of Konica accepting this offer, the Guarantor (jointly & severally) guarantees the payment of all Rentals and other money payable by the Assignee to Konica under this agreement (including any variation …) which appears below and the due performance of all the Assignee's obligations under this agreement (and any such variation). … The Guarantor must pay Konica's costs of enforcing this Guarantee & interest on the guaranteed money at the rate in clause 2(b) which appears below, and must pay the guaranteed money on demand. This guarantee is a primary obligation, and Konica need not take action against the Hirer or any other person before enforcing this Guarantee.

13 Immediately below that guarantee clause appeared some variations to the terms of the Rental Agreement, as follows: "2. Payments The Assignee must: (b) pay interest on all overdue moneys at a rate which is 2% per year above Konica's cost of funding the overdue amount. Unpaid interest will be compounded monthly; … 9. Default (b) If an event of default occurs Konica may, at its option, and without limiting any other remedy available to it, i) seek to enforce the Assignee's obligation under this agreement; or ii) terminate this agreement by notice to the Assignee. And in either case Konica may also take action against the Assignee to recover damages for breach of this agreement."

That document was signed by Mr White, under the heading "Guarantor", on 31 October 2000.

14 From the time that White Holdings took over the lease of the equipment, it was nearly always in arrears in payment of rent. The usual pattern was that three or four months instalments of rental would accumulate unpaid, and then a payment would be made which reduced the arrears to zero. From October 2003, however, the arrears were never less than one month of rental. The last payment of rental which White Holdings made was on 4 March 2004.

15 On 9 August 2004 Mr White wrote a letter on behalf of White Holdings, addressed to the accounts department of "Konica Finance", referring to the contract, and saying: "This letter is to confirm your advice that the Service Agreement for the abovementioned Photocopier is due to expire on 14th August, 2004 , and we wish to advise that we will not be renewing this Service Agreement. Therefore, we are requesting that this Photocopier should be collected from our Company on that date, when this account will be fully paid up and our Company has advised Michael, Capital Finance of this fact, as Michael has been contacting our Company for payment of this account."

16 The evidence contains a document bearing date 2 September 2004, as follows:

"NOTICE OF TERMINATION ISSUED BY CAPITAL FINANCE AUSTRALIA LIMITED ("CAPITAL")

The White Holdings Group Pty Ltd 162 Old Northern Road, Baulkham Hills NSW 2153

RE: Your Rental agreement number 62900794 with Capital Finance Australia Ltd dated 23/10/00 ("THE AGREEMENT")

Events of default have been committed as defined in the Agreement and Capital hereby notifies you that it has terminated the Agreement.

Accordingly, Capital hereby demands from you $4193.42 as liquidated damages as calculated below:

Arrears Balance $3732.33 Overdue Interest $ 441.20 Adj Govt Charges (Incl. GST less rebated Govt. charges) $ 19.89

Total Payable $4193.42

We would like to advise that it is policy of Capital Finance, to list any defaulting accounts with Baycorp Advantage. This listing will remain on your credit file for a period of 5 years and may affect any future credit application.

We therefore request that you contact this office within seven ( 7) days with a view of payment of the outstanding account.

Capital Finance Australia Ltd GPO Box 3660, Please send payments to: Sydney NSW 2001 Direct Line: 02 9210 1286 Fax No: 02 9210 1280

Loss Recoveries Department Capital Finance Australia Limited"

17 The evidence also contains two documents, each dated 2 September 2004, addressed to Mr White. One of them was addressed to him at 5 Chicago Avenue, Blacktown NSW 2148. The other one was addressed to him at 14 Fairway Drive, Kellyville 2155. The text of those documents was otherwise identical, namely:

… The White Holdings Group Pty Ltd

RE: Your Rental agreement number 62900794 With Capital Finance Australia Ltd dated 23/10/00 ("THE AGREEMENT")

Events of default have been committed as defined in the Agreement and Capital hereby notifies you that it has terminated the Agreement.

Capital hereby demands from you as Guarantor of the Agreement the sum of $4193.42 as the amount payable by you pursuant to the Agreement calculated as set out in the schedule below.

Arrears Balance $ 3732.33 Overdue Interest $ 441.20 Adj Govt Charges (incl. GST less rebated Govt. charges) $19.89

Total Payable $4193.42

We would like to advise that it is policy of Capital Finance, to list any defaulting accounts with Baycorp Advantage. This listing will remain on your credit file for a period of 5 years and may affect any future credit application.

We therefore request that you contact this office within seven (7) days with a view of payment of the outstanding account.

Capital Finance Australia Ltd GPO Box 3660, Please send payments to: Sydney NSW 2001 Direct Line: 02 9210 1286 Fax No: 02 9210 1280

Loss Recoveries Department CAPITAL FINANCE AUSTRALIA LIMITED"

18 The reader will observe that each of these notices dated 2 September 2004 contains an agreement number the second-last digit of which differs from the agreement number of the agreement to which the Assignment of Rental Agreement entered on 23 October 2000 relates. As well, each of those notices is one given by Capital Finance. Further, it asserts that the rental agreement to which it relates is an agreement with Capital Finance.

19 The evidence also contains three forms of notice dated 13 September 2004. One of them, addressed to White Holdings, contains text which differs from the Notice of Termination dated 2 September 2004 only in the following respects. 1. the number of the Rental Agreement in the heading was altered so that it was exactly the same as the number of the Rental Agreement to which the assignment dated 23 October 2000 related. 2. The amount demanded was $4,525.54, made up as follows:

Arrears Balance $ 4062.32 Overdue Interest $ 443.14 Adj Govt Charges (Incl. GST less rebated Govt. charges) $ 20.08

Total Payable $4525.54

3. The time within which contact was requested with a view to payment of the account was altered from "within seven (7) days" to "within two (2) days" .

20 The evidence also contains two documents addressed to Mr White, dated 13 September 2004 and headed "Notice of Termination and Demand-Renter/Guarantor". They differ from the documents entitled "Notice of Termination and Demand-Renter/Guarantor" dated 2 September 2004 in precisely the same three respects as the notice dated 13 September 2004 addressed to White Holdings differs from the notice addressed to White Holdings and dated 2 September 2004.

21 The evidence also contains two forms of letter from Capital Finance dated 16 September 2004. One of them is addressed to White Holdings at PO Box 1 Pendle Hill NSW. It says: " NOTICE TO LIST WITH BAYCORP ADVANTAGE CONTRACT NUMBER: 62900764 You are in default of your obligations under the Agreement in that you have failed to make payments of Rental instalments in accordance with the terms of the Agreement. We would like to advise that Capital Finance has now placed a default on the company file with Baycorp Advantage for the value of $4525.00. This listing will remain on your credit file for a period of 5 years and may affect any future credit application. Yours faithfully, Loss Recoveries Department Capital Finance Australia Limited "

22 The other is addressed to Mr White at PO Box 1, Pendle Hill NSW. Its text is identical to that of the letter addressed to White Holdings, save only that the words "the company file" in the second paragraph were deleted and replaced with the words "your personal file".

23 A Notice to Produce served on Baycorp produced a computer printout which records that the database file of each of White Holdings and Mr White was updated, a little before 9:11 am on 16 September 2004, to record a payment default concerning $4,525.00.

24 At some stage in September 2004 more likely prior to 13 September 2004, the leased equipment had been collected, at Mr White's request and without the need for any repossession action being taken, from the office of White Holdings.

25 Mr Ashhurst submitted that Mr White's letter to Konica dated 9 August 2004 (para [15] above) did not relate to the Rental Agreement, but to a separate service agreement.

26 In some fashion which the evidence does not make clear, Konica claimed an entitlement to have White Holdings pay it a fee for each page which was photocopied using the leased equipment. This fee per page was sometimes referred to as a "click fee". From a time in the early months of 2004, and possibly earlier, there was a dispute between Mr White and Konica about the basis on which those fees were charged. Mr White's contention was that Konica was charging the click fees on the basis of an estimate of the usage of the machine which White Holdings made, not on the basis of actual readings of the meter which recorded the number of copies made. Mr White contended he was being overcharged for the click fees.

27 The evidence includes a tax invoice dated 27 May 2004 from a company called Konica Minolta Business Solutions Australia Pty Ltd relating to a fee for copies, charged at 2.145¢ per copy, concerning a photocopier bearing the same serial number as the leased photocopier, Konica Minolta Business Solutions Australia Pty Ltd is shown, in some of its letterheads, as having the same ACN as Konica Australia had had in 2000. I infer that they are the same company.

28 The dispute between Konica and White Holdings about the correct copy costs was not resolved until 7 December 2005, when Konica agreed to write off some of the copy costs which it had charged.

29 In his affidavit of 20 April 2006, Mr White said: "Apart from the agreement with Konica regarding the equipment owned by Konica and the linked service agreement as to click fees from 2000 to 2004 to the best of my knowledge and belief I had no other agreement or arrangement with Konica during that period." (emphasis added)

30 I am satisfied that there was an agreement relating to Konica receiving a fee per page, but it did not, so far as the evidence goes, take a documentary form, and its terms cannot be stated with precision.

31 Mr White came to be aware that White Holdings was being chased for money in connection with the photocopier by people from Capital Finance. However, I accept his evidence that he thought that Capital Finance was in some way the finance arm of Konica. In light of the second paragraph of the letter of 9 August 2004, it is clear that at least part of what Mr White was intending to convey by this letter was that the agreement whereby the photocopier was rented would not be renewed. But Mr White did not draw in his mind any clear distinction between the agreement under which he paid rent, and the agreement under which the click fees became due. The preferable construction of the letter is that it was advice that both the Rental Agreement and the agreement under which the click fees became due would not be renewed.

32 Because of the terms of Clause 7 of the Rental Agreement, that agreement did not automatically expire by effluxion of time. Nor was the letter of 9 August 2004 an effective notice under Clause 7(a) of the Rental Agreement to terminate the Agreement, because it did not give 90 days prior notice of the termination.

33 In my view, however, the Rental Agreement came to an end in early September 2004 in consequence of Mr White requesting Konica to remove the machine, and Konica doing so.

34 The Baycorp database entry which was made relating to White Holdings appears in a report generated from the database in the following form: Account No: 62900764 Account Type: Commercial Rental Association Code: Company/Business Acct. Co Borrower: Latest Subscriber: CAPITAL CONSUMER FINANCE NSW Latest Date: 16/09/2004 Latest Amount: 4525 Latest Reason: Payment Default Original Subscriber: CAPITAL CONSUMER FINANCE NSW Original Date: 16/09/2004 Original Amount: 4525 Original Reason: Payment Default Status: Status Date:

35 The database entry which was made concerning Mr White was in identical terms, save only that the third line of the entry read: Association Code: Guarantor Co Borrower:

36 The entry is intended to be read as though it were a two-column table, arranged as follows:

Account No: 62900764 Account Type: Commercial Rental Association Code: Company/Business Acct. Co Borrower: Latest Subscriber: CAPITAL CONSUMER FINANCE NSW Latest Date: 16/09/2004 Latest Amount: 4525 Latest Reason: Payment Default Original Subscriber: CAPITAL CONSUMER FINANCE NSW Original Date: 16/09/2004 Original Amount: 4525 Original Reason: Payment Default Status: Status Date:

37 According to Mr White, in late 2004 he asked a finance broker to arrange some finance for his business, and was told by that finance broker that a credit search had shown there was an amount outstanding under the assigned Rental Agreement with Konica. Mr White says that he had not received any notice, as a guarantor, that White Holdings had defaulted. Mr White arranged for the $4,525 to be paid. That amount was received by Capital Finance on 9 December 2004.

38 Promptly upon receipt of that money, Capital Finance caused the entry on the Baycorp database relating to White Holdings to be amended, so that its final line read: Status: Paid Status Date: 09/12/2004

39 A publication of Baycorp explains some of the terminology appearing in its reports. A default status of "Paid" means "A defaulted account, which has been paid in full and for which the account is now closed." I infer that the entry relating to "Status Date" concerns the date on which the account changed its status, to being a "Paid" account. I also infer that the blanks which had previously existed in the database entry concerning White Holdings alongside "Status" and "Status Date" would convey to a reader that the payment default had not been rectified.

40 Even though the Baycorp database entry relating to White Holdings was amended in this fashion on 9 December 2004, no amendment was made to the database entry which related to Mr White.

41 In February 2006 Mr White obtained, on payment of a small fee, a copy of his credit information file from the Baycorp Public Access Division. He was, at the time, seeking other finance - some for the acquisition of other equipment connected with his business and some to repay a facility which White Holdings had obtained from a company originally called H G & R Finance Limited (but now called Balance Securities Limited). That company was, by March 2006, claiming to be owed a little over $6.98m, on the security of three pieces of real estate. Balance Securities has commenced proceedings for possession of land in the Common Law Division of this Court. Mr White and White Holdings gave instructions to a solicitor to defend those proceedings but, through an error on the part of that solicitor, a default judgment came to be entered. Mr White and White Holdings have filed a Notice of Motion seeking to set aside that default judgment. A stay has been granted pending the determination of that motion. I am informed that that motion has been stood over in the Common Law Division to the end of May.

42 The proceedings that I am now giving judgment in were begun on 4 April 2006. Because of the plaintiffs' contention that the entries in the Baycorp database are stopping them from raising finance at anything other than prohibitive interest rates, to repay the debt they owe to Balance Securities these proceedings have been brought on for a very urgent hearing.

43 While I will examine the plaintiffs' legal contentions in more detail later, the relief which the plaintiffs claim is, first, injunctions aimed at causing the entries to be removed from the database; an order restraining Capital Finance from providing any credit information or personal information concerning either of the plaintiffs to any other credit provider; and damages.

44 The causes of action on which those claims for relief are based are that the making of the representations in the database entries are misleading or deceptive, or likely to mislead and deceive, and so contravene section 52 Trade Practices Act 1974 (Cth) and section 1041H Corporations Act 2001 (Cth). As well, both plaintiffs assert that the making of the entries in the database, and their remaining there, amounts to the tort of injurious falsehood. They also say that the tort of injurious falsehood was committed by statements, detrimental to the credit worthiness of Mr White, alleged to have been made by an employee of the third defendant to a finance broker in March 2006. Finally, Mr White (but not White Holdings) alleges that Baycorp and Capital Finance "have breached their duty of privacy and/or confidence to him", resulting in him suffering loss.

45 While there are numerous respects in which the database entries are alleged to be misleading or deceptive, one respect is that neither Capital Finance, nor any entity called "Capital Consumer Finance NSW" (which, it will be recalled, is listed in the entries as the subscriber to the database) was owed any debt by either plaintiff. To follow that argument, it is necessary to state some facts relevant to the role which various entities with "Capital" in their name played concerning this transaction.

The Relationship Between Capital Finance, Konica, and the Plaintiffs

46 On 25 February 1997 Capital Corporate (a company which, it will be recalled, is a subsidiary of Capital Finance) entered into a tripartite agreement with Konica and a finance broker, Operating Lease Pty Ltd. In it, Capital Corporate was referred to as the "Principal", Konica was referred to as the "Agent", and Operating Lease Pty Ltd was referred to as the "Broker". The following provisions of that agreement are relevant. " Definitions In this document: "Approved Form " means, in relation to any document, a form approved in writing by the Principal from time to time. … "Equipment" means equipment the subject of a Leasing Proposal or Leasing Agreement. "Leasing Agreement" means: (a) a rental agreement … in each case in an Approved Form. "Leasing Proposal" means a proposal in relation to a Leasing Agreement in an Approved Form. … "Security" means any guarantee … or other form of security given or to be given by any person in relation to a Leasing Agreement … "Security Provider" means any person who provides a Security. 2.1 Appointment With effect on and from the date of this document the Principal appoints the Agent as its agent on the terms of this document, and the Agent accepts that appointment. … 2.5 Rights to be held for Principal The Agent must hold on behalf of and as trustee for the Principal all rights under or in relation to all Leasing Agreements, Securities, Equipment and Insurances and all money received or receivable by the Agent under or in connection with any of them. … 3.1 Submission of Leasing Proposals The Agent may deliver to the Principal a Leasing Proposal requesting the Principal to purchase Equipment and to approve the execution by the Agent of a Leasing Agreement in relation to it. A Leasing Proposal must be in Approved Form and contain full particulars of the proposed leasing arrangement. … 3.3 Further information Following receipt of a Leasing Proposal, the Principal may require the Agent to provide any documents and financial or other information in relation to the proposed Lessee, Equipment, Security or Security Provider as the Principal requires. The Agent must use its best endeavours to provide the required documents and information to the Principal. 3.4 Approved by Principal The Principal may in its absolute discretion approve or reject a Leasing Proposal … … 4.1 Authority of Agent If the Principal approves a Leasing Proposal then the Principal authorises the Agent to sign as agent for the Principal the relevant Leasing Agreement and any Security specified in the Leasing Proposal. 4.2 Things the Agent must deliver If the Principal approves a Leasing Proposal then the Agent must deliver to the Principal: (a) an invoice for the Equipment for an amount and in terms agreed to by the Principal and the Agent. (b) the Leasing Agreement and any Security specified in the Leasing Proposal, each in an Approved Form and duly signed by all parties; … 4.3 Purchase of Equipment If the Principal is satisfied: … then: (i) the Principal authorises the Agent to acquire the relevant Equipment on the Principal's behalf on terms approved by the Principal and agreed to by the Agent; and (ii) the Principal must pay the agreed purchase price to the Agent or, at the Agent's option, to the supplier. 4.4 Delivery of Equipment (a) The Equipment is taken to be delivered to the Principal when the Principal pays the purchase price in accordance with clause 4.3(d)(ii). … 5.2 Action the Agent must take The Agent must, at the Principal's cost, take any action which the Principal reasonably requires under or in relation to a Leasing Agreement or Security or to protect the Principal's interest in any Equipment. The actions which the Principal may require the Agent to take include, but are not limited to: (a) giving notices and demands under Leasing Agreements, Securities and Insurances; … 5.3 Undisclosed agency (a) If the Principal approves a Leasing Proposal on the basis that the agency of the Agent in relation to the subject transaction is to be undisclosed, then the Principal must not, except as allowed under paragraph (b), disclose to any person that the Agent is acting as Agent of the Principal. (b) Despite paragraph (a) the Principal may disclose the agency arrangement: … (iii) if an Event of Default occurs; or (iv) for the purpose of enforcement under clause 6. 6.2 Breach by Lessee or Security Provider If a Lessee or Security Provider fails to comply with any of its obligations under a Transaction Document the Principal, at its discretion, may either itself take, or require the Agent to take at the Principal's cost, any action which the Principal considers necessary or desirable in connection with the failure. Such action may include, without limitation, action: … (b) to terminate, or to accept the repudiation of, the Leasing Agreement; or (c) to recover money owing by the Lessee or Security Provider. … 6.4 Attorney The Agent irrevocably appoints the Principal and each Authorised Officer of the Principal jointly and each of them severally as the Agent's attorneys with power, subject to clause 6.5: (a) to execute any documents, give any notices or take any other action under or in relation to any Transaction Document; (b) to commence, defend or compromise any legal action in relation to any Transaction Document or Equipment; and (c) to do anything which in the Attorney's reasonable opinion is necessary or expedient to enable the exercise of any right of the Principal under any Transaction Document. This power of attorney is granted for valuable consideration (receipt of which the Agent acknowledges). 7. LIMITATIONS ON AGENT'S AUTHORITY The Agent must not, without the prior written consent of the Principal: (a) exercise any right or discretion, take any enforcement action or give any consent under a Leasing Agreement or a Security except as contemplated by this document; (b) accept the repudiation by a Lessee of a Leasing Agreement or agree to terminate a Leasing Agreement; (c) waive, or grant any time for, the performance of any obligation of a Lessee or a Security Provider; (d) agree to any variation of the terms of a Leasing Agreement or a Security; (e) make any representation or warranty on behalf of the Principal; or (f) purport to bind the Principal except in accordance with clause 4. … 14.6 Assignment The Agent may not assign, Encumber or otherwise dispose of or deal with its rights under this document, any Leasing Agreement or any Security without the prior written consent of the Principal."

47 Under Clause 11, that agreement continued until terminated by one party giving to the other one months written notice.

48 On 23 August 1999 Mike Hitchock (who I infer works for Konica) faxed to someone at one of the Capital companies (the evidence does not contain any fax coversheet or covering letter, so one cannot decide who) details of a finance application by Metronome relating to the Konica copier and accessories. An internal memorandum on the file maintained by one or other of the Capital companies records that it was approved on 23 August 1999. On 27 August 1999 Konica sent to an addressee referred to as "Konica Finance" an invoice for the goods. The original of that invoice appears in the file relating to this transaction maintained by one of the Capital companies, with an original stamp "paid" on it. I infer that Capital paid it. Only after all this was the leasing agreement entered, on 1 September 1999.

49 On 15 November 2000 Konica faxed to someone in the Capital group a document which was, I infer, a request for consent to the assignment of the Lease Agreement which had been entered with Metronome. That document recommended that the assignment be approved, for reasons which included (as expressed in one place) that "Mr White has provided his personal guarantee" (and expressed in another) that "director has supplied personal g'tee & property details".

50 The application for assignment, though on a form which bore the corporate name "Konica Australia Pty Limited" had a fax header stating "Konica Finance HO".

51 The facsimile which Konica sent to Capital on 15 November 2000 also included the printout of various searches, all of which had been conducted on a database maintained by an entity called Datalink PC Credit Reference Limited.

52 The searches recorded the "member" (which, I infer, means the subscriber to the Datalink PC database who had conducted the search) as being "Konica Finance".

53 One of those search results was a search conducted on 15 November 2000 against the business name "Cobb & Co Mail". It shows that the proprietor of that business name is White Holdings, and that the "appointment date" for that proprietorship was 30 October 2000. Summary information in the report had headings for "defaults", "mercantiles", "file notes", "judgments", "petitions", "extl admin", "court writs" and "securities". Alongside each of those headings a "nil" entry appeared. The search showed that there was one proprietor of the business name (namely, White Holdings), that there were two addresses (the address of Cobb & Co Mail at 162 Old Northern Road, Baulkham Hills, and the address of White Holdings at 14 Fairway Drive, Kellyville), and that there had been two enquiries about credit status. One of them was an enquiry made on 2 September 1999 by a member called "Canon Aust NSW" concerning an amount of $1,000, the other was the enquiry which "Konica Finance" itself had made on 15 November 2000. That search also included an extract from the New South Wales Register of Business Names.

54 The second search was one of White Holdings. It disclosed Mr White was a director, stated the date he had been appointed a director, stated his date of birth, stated that he was a male, and gave his residential address as being 14 Fairway Drive, Kellyville. There was only one credit enquiry reported, made by "Konica Finance" on 25 October 2000.

55 The third search was one which had been obtained on 14 November 2000 concerning Mr White personally.

56 The final search was a search which had been done on the ASIC database on 23 October 2000, to obtain corporate details of White Holdings.

57 On 4 August 2003 the Board of Capital Corporate held a meeting, the Minutes of which record as follows: "COMPANY DEREGISTRATION : IT WAS NOTED that Capital Finance Australia Limited directors had passed a resolution to deregister the Company as it was no longer operating. IT WAS FURTHER NOTED that: (a) all members of the company agree to the deregistration; and (b) the company is not carrying on business; and (c) the company's assets are worth less than $1,000; and (d) the company has paid all fees and penalties; and (e) the company has no outstanding liabilities; and (f) the company is not a party to any legal proceedings. NOTIFICATION TO ASIC: IT WAS RESOLVED that the company secretary of the Company be instructed to lodge a notice with ASIC advising of the deregistration."

58 An application for voluntary deregistration of Capital Corporate was lodged with ASIC on 8 September 2003. That application was approved by ASIC. The relevant notice was published in the Australian Government Gazette. On 18 January 2004, pursuant to section 601AA(4) Corporations Act 2001 (Cth), Capital Corporate was deregistered.

59 On 29 November 2004 ASIC reinstated the registration of Capital Corporate.

60 The structure of the plaintiffs' case concerning misleading and deceptive conduct is to allege that various representations were made by the entries in the Baycorp register, and those representations were misleading and deceptive. The manner in which the representations are alleged to be misleading and deceptive is by being false, rather than by being, for example, accurate but misleadingly incomplete.

61 For a case with that structure, the onus of proving the inaccuracy of the various representations lies upon the person who asserts that they are inaccurate: Illawong Village Pty Ltd v State Bank of NSW [2004] NSWSC 18 at [208] and cases there cited.

Representations Made By the Baycorp Database Entries

62 There was no real argument that the Baycorp database entries made representations to the effect that:

• White Holdings had made default in payment of a debt

• The debt concerning which the default had been made related to a commercial rental agreement

• The amount concerning which the default had been made was $4525

• The guarantee related to a commercial rental agreement

• Mr White was in default in payment of the guaranteed debt

• The amount in relation to which he had made default was $4525.

63 The plaintiffs contend that certain other representations are also made by the entries. One of those representations contended for is that the debt which was owed by each of White Holdings, and Mr White, was to an entity called "Capital Consumer Finance NSW".

64 To decide whether that representation was made, it is relevant to state some more facts about the Baycorp database. The Baycorp database is the largest single source of credit information in Australia. It contains more than 12 million consumer and 1.5 million commercial credit files. It includes records on the credit activity of Australian individuals, companies and businesses. A company can become a subscriber to Baycorp upon making application and being accepted. Once accepted, subscribers are obliged to report defaults to Baycorp. Over 800,000 reports of defaults were lodged in 2003, and the number has increased since then. Subscribers are able to obtain, from the database, reports which collate information contained in the database, of a type which the subscriber has requested. As well, an individual can obtain a copy of their own file if they have been refused credit, or require their file to assist in the management of their consumer credit arrangements.

65 An entry on the Baycorp database is one which is made available to the class of people who are potential acquirers of information from that database. In deciding whether a representation is misleading or deceptive, one considers the effect which the representation is likely to have on reasonable members of the class to which the representation is made: Campomar Sociedad, Limitada & Anor v Nike International & Anor (2000) 202 CLR 45, at 85, [103]. If a reasonable member of that class is likely to derive a particular message from a statement made, the substance of that message is a representation made by the statement, whether or not the person who made the statement intended to convey that message. I do not accept Mr Ashhurst's submission that Wright v TNT Management Pty Ltd (1989) 15 NSWLR 679, McWilliams Wines Pty Ltd v LS Booth Wine Transport Pty Ltd (1992) 25 NSWLR 723 at 729, and Concrete Constructions Group Ltd v Litevale Pty Ltd (2002) 170 FLR 290 establish any general proposition that an implied representation will be treated as being misleading and deceptive only if the person making that representation knew that it was incorrect at the time it was made.

66 An examination of the Baycorp reports in evidence shows that sometimes the subscriber listed in a data entry is a legal entity, as is indicated by the suffix "P/L" or "Ltd". However, there are also many subscriber names appearing which are not the name of a legal entity. Examples are "Esanda Dealership NSW", "Westpac Credit Centre NSW", "American EXP New Accts NSW", and "Nationwide News". Such examples appear with sufficient frequency to alert even the reasonable reader without prior experience of such searches to the fact that the "subscriber" shown in an entry may well not be a legal entity. The evidence of Mr Malafouris, a finance broker and supplier, was to the effect that he understood the subscriber name "Capital Consumer Finance NSW:" appearing in the database entry as being a subscriber name, which referred to some entity in the Capital Finance group, but that it would be necessary to contact Capital if one wanted to find out what company was involved in the reported default. Similarly, he understood that the reference to "Nationwide News" was a reference to the company called News Limited. Mr Rodd, a Senior Executive of Capital Finance who has extensive experience in the finance industry, said that he would not assume that a subscriber name was the name of any existing business, or any registered business name, but merely a name used to describe a business being carried on. I accept the evidence in chief of Mr Cusack, another finance broker, that the Baycorp entry in question "draws attention to a default to a company or business in the Capital Group."

67 I am not satisfied that the Baycorp entries in question would be taken, by a reasonable member of the class to which they were directed, to involve a representation that the debt concerning which a default had been made was one owed to an entity named "Capital Consumer Finance NSW". I am satisfied, however, that the reasonable member of that class would regard the entries as representing that a default had been made concerning a debt owed to a company which was part of the Capital group.

Is a Company in the Capital Group a Party to the Rental Agreement

68 Capital Finance contends that when Konica entered into both the Rental Agreement, and the Assignment Agreement, it did so as the agent for its undisclosed principal, Capital Corporate. Furthermore, in making the various demands in September 2004, Capital Finance was also an agent acting for an undisclosed principal, namely Capital Corporate. The plaintiffs assert that each of those propositions is incorrect. To the extent to which the plaintiffs bear an onus of proving facts to establish the incorrectness of each of those propositions, it is the plaintiffs who have the onus of proof.

Approval of Rental Agreement Given by Wrong Company?

69 Mr King's first argument is that Capital Corporate was not the principal in relation to the original contract of hire, because the approval to it was given by Capital Finance.

70 One limitation on the operation of the doctrine of undisclosed principal is stated by Hope JA in Maynegrain Pty Ltd v Compafina Bank [1982] 2 NSWLR 141 at 150: "This position of the undisclosed principal arises only where the agent was in truth his agent at the time of the transaction; a person claiming as principal cannot purport to ratify as the act of his agent a transaction entered into without his authority by one who purports at the time to be a principal, and does not disclose that he is an agent: Keighley, Maxsted & Co v Durant [1901] AC 240."

71 To similar effect is Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1987) 8 NSWLR 270 at 276 per McHugh JA, Bowstead and Reynolds on Agency (17th edition 2001) para 8-072, p 344-345, Dalpont, Law of Agency (2001) para 19.45-19.46, p 512-514.

72 Mr King's argument is that Konica had authority to enter a rental agreement on behalf of Capital Corporate only with the prior approval of Capital Corporate. Hence if the approval of the Rental Agreement was given by Capital Finance, Konica could not have entered the Rental Agreement as agent for Capital Corporate as an undisclosed principal.

73 In response to a Notice to Produce, Capital Finance has produced a file "relating to the Third Defendant's Account Number 62900764". It is a file of hard copy documents relating to this transaction which includes documents dating from 1999. One of those documents is the document by which approval was granted by a Capital company to the original entering into of the Rental Agreement. As well, Mr Duxbury a Senior Loss Recovery Officer of Capital Finance, has, in an affidavit of 11 April 2006, identified one document from that file as one "which records the internal approval of the third defendant." I conclude that it was the third defendant which granted approval to the entering of the original contract of hire.

74 Mr Simon Oosterom is the Company Secretary of both Capital Finance and Capital Corporate. He refers to Capital Corporate as "CCFL". He gives evidence, which I accept, that: "The third defendant has managed and administered the business of CCFL including the relationship between, CCFL, Konica and Operating Lease and the rental agreements entered by CCFL. For example, I have observed that either myself or other officers of CCFL, have instructed employees of the third defendant to do the following on behalf of CCFL, among other things: (a) review and, if applicable, approve applications for finance made to CCFL by customers of CCFL; (b) deposit moneys which are payable to CCFL in accounts operated by the third defendant; (c) engage agents to repossess equipment owned by CCFL; (d) contact customers who are in default and request urgent payment of arrears; (e) commence proceedings against customers who have failed to make payments that were due and payable under agreements to which CCFL and, not the third defendant, was a party; and (f) list customers who have defaulted with CCFL with an appropriate credit reporting agency."

75 On the basis of that evidence I would conclude, if it were necessary to do so, that when Capital Finance approved the entering into of the Rental Agreement it did so on behalf of Capital Corporate. Given where the onus of proof lies, it suffices to find that the plaintiffs have not proved that, when Capital Finance gave approval to the original contract of hire, it was not acting as the agent of Capital Corporate.

Rental Agreement Incapable of Being Entered for an Undisclosed Principal?

76 Another argument of Mr King's is that the Rental Agreement is inherently incapable of being one which Konica could enter on behalf of an undisclosed principal. Mr King points to particular provisions of the Agreement as follows:

• The express provision in Clause 1 that "The Equipment is and will remain the sole property of Konica", and

• The contractual powers which are conferred by Clause 8(b) and (c) on Konica.

77 Each of those provisions is, he submits, inconsistent with the agreement being one which Konica could enter as agent for an undisclosed principal.

78 In Humble v Hunter ((1848) 12 QB 310; 116 ER 885) the Court of Queen's Bench (Lord Denman CJ, Patteson and Whightman JJ) considered a charterparty which said it was made between X, "owner of the good ship or vessel called The Ann", and Y. X's mother sued Y for a breach of the charterparty. X gave evidence that his mother was the real owner of the vessel, and that he had signed the charterparty as her agent. The Court held that that evidence should not have been received. Lord Denman CJ put it on the basis that the doctrine of undisclosed principal "cannot be applied where the agent contracts as principal; and he has done so here by describing himself as "owner" of the ship."

Patteson J said: "If the contract had been made in the son's name merely, without more, it might have been shown that he was agent only, and that the plaintiff was the principal. But, as the document itself represents that the son contracted as "owner", Lucas v De La Cour [(1813) 1 M & S 249; 105 ER 93] applies."

79 In Lucas v De La Cour Lord Ellenborough CJ had said: "If one partner makes a contract in his individual capacity, and the other partners are willing to take the benefit of it, they must be content to do so according to the mode on which the contract was made."

80 I do not regard Humble v Hunter as leading to a conclusion that prevents Capital Corporate from being an undisclosed principal concerning the Rental Agreement in the present case. The principle which it exemplifies is, in my respectful view, accurately stated by Jordan CJ in Perpetual Trustee Co (Ltd) v Bligh (1940) 41 SR (NSW) 33 at 40: "… if the written terms are such as to hold out the actual parties as the real and only principals, evidence is not admissible to show that there are other persons who are also liable as principals: Humble v Hunter (12 QB 310); Formby Bros v Formby (102 LT 116); Fred Drughorn Ltd v Rederiaktiebolaget Transatlantic [1919] AC 203."

To similar effect is the statement of Lord Parmoor in Dunlop Pneumatic Tyre Company Ltd v Selfridge & Company Limited [1915] AC 847 at 864, that: "… parol evidence is admissible to prove that the plaintiff in an action is the real principal to a contract; but it is also well established law that a person cannot claim to be a principal to a contract, if this would be inconsistent with the terms of the contract itself."

81 Similarly, Lord Lloyd of Berwick, delivering the advice of the Privy Council in Siu Yin Kwan (Administratrix of the Estate of Chan Ying Lung, Decd) & Another v Eastern Insurance Co Ltd [1994] 2 AC 1999 at 207 said: "The terms of the contract may, expressly or by implication, exclude the principal's right to sue, and his liability to be sued. The contract itself, or the circumstances surrounding the contract, may show that the agent is the true and only principal."

82 Other discussion of authority relating to Humble v Hunter in Davis v Capel [1959] NZLR 825 at 832-3, Bowstead and Reynolds on Agency, 17th edition (2001) para 8-080 and 8-081 (pp 351-354) and Dalpont, Law of Agency (2001) para [19.32] - [19.36] (pp 504-508) does not lead me to conclude the statements of principle of Jordan CJ, Lord Parmoor and Lord Lloyd are in any way incorrect.

83 The contract as a whole needs to be construed to decide whether it is inconsistent with its terms for one of the parties entering it to do so as agent for an undisclosed principal. That question is not determined by the fact that the agreement contains a term that someone is the "owner" of the goods to which it relates. It depends on who that "someone" is.

84 I say nothing about what the situation would be if the agreement contained a term that the very entity which was a contracting party was the owner of the goods to which it related. In Maynegrain Pty Ltd v Compafina Bank [1982] 2 NSWLR 141 at 150-151 Hope JA was of the view that an attornment was an act in the law to which the doctrine of undisclosed principal could apply, notwithstanding the problems of legal theory which would arise through there thereby being two concurrent and alternative rights to possession arising out of the one transaction. Hutley JA, at 155, reached the same conclusion. The reversal of that case in the Privy Council on other grounds (Maynegrain Pty Ltd v Compafina Bank (1984) 1 NSWLR 258) means that the decision of Hope and Hutley JJ is not an authority which binds me. However, I will not decide whether I agree with the views their Honours expressed when the question does not arise directly for consideration.

85 In the Rental Agreement, the contracting party was Konica Australia Pty Ltd. However, the extended definition of the term "Konica" in Clause 9 meant that Clause 1 contained an agreement that the Equipment was and would remain the sole property of Konica Australia Pty Ltd, its successors and assigns, and any person entitled to the benefit of the Agreement. In my view that leaves open the possibility that Konica Australia Pty Ltd entered the Agreement as agent for an undisclosed principal.

86 There are certain agreements which, either from their inherent nature, or from the surrounding circumstances, are ones which can be availed of only by the people named as parties to them. For example, a contract to paint a portrait could not be entered into by an artist as agent for an undisclosed principal. There was evidence from Mr White to the effect that he regarded it as important that he was dealing with Konica Australia, rather than with a finance company, because he did not like dealing with finance companies. He said he regarded finance companies as out to get money from you, and that he trusted a photocopy company more than a finance company. While I accept that he held those views, any views which he held could not affect whether the Rental Agreement - to which White Holdings was not a party, and had been entered well before White Holdings took over Metronome's business - could be entered into by Konica Australia as agent for an undisclosed principal. In my view the powers contained in Clause 8(b) and (c) are usual provisions to find in commercial agreements relating to the leasing of property. I see nothing in them which, from their inherent nature, makes them the type of provision which would objectively be regarded as the type of provision where it was likely that the powers would have been agreed to only because it was Konica Australia Pty Limited, rather than someone else, who would have the opportunity to exercise them.

87 In all these circumstances, I conclude that the Agreement was one which was inherently capable of being entered into by Konica as agent for an undisclosed principal.

88 From the fact that the tripartite agency agreement existed with Capital Corporate, that there was no such agreement with Capital Finance, and that Konica made application to a Capital company for approval to enter the agreement before it was entered, I conclude that it was in fact entered by Konica as agent for Capital Corporate.

Is Capital Corporate a Party to the Assignment of Rental Agreement?

89 Mr King's next argument was that the Assignment of Rental Agreement was not one to which Capital Corporate was a party. He submitted that there were three separate ways of reaching that conclusion.

Assignment of Rental Agreement Inherently Incapable of Being Entered for an Undisclosed Principal?

90 The first way to the conclusion arose from the terms of the agreement itself. He points out that, unlike the Rental Agreement, the Assignment Agreement does not contain any extended definition of the term "owner". Further, he points to the attestation clause whereby it was "signed on behalf of the Owner". In those circumstances, he submits, the Assignment Agreement was one inherently incapable of being entered into on behalf of an undisclosed principal. Considering that argument requires closer attention to the terms of the Assignment Agreement itself.

91 Clause 1 of the Assignment of Rental Agreement was an assignment by Metronome to White Holdings of all its "right title and interest" under the Rental Agreement. That "right title and interest" would include the benefit of any covenants which Konica gave to Metronome under the agreement. At the least, that would include a right to peaceable possession of the Equipment during the term.

92 That assignment was "subject to the observance and performance by the Assignee as if he were the "Renter" under the Principal Agreement." Performing in the same manner as if it were the "Renter" would involve White Holdings carrying out any obligations which might be owed, under the Principal Agreement, to any entity which was an undisclosed principal of Konica in connection with that agreement. However, the phrase beginning "subject to" in Clause 1 of the Assignment of Rental Agreement does not involve any covenant on the part of White Holdings to carry out those obligations. Rather, it is a condition subsequent to the assignment effected by the earlier part of Clause 1. In other words, if White Holdings were to stop acting as if it were the "Renter" under the Principal Agreement, Konica would be entitled to treat the assignment by Metronome to White Holdings of Metronome's right title and interest under the Rental Agreement as no longer operative. The condition subsequent does not involve any promise by White Holdings that it will actually do everything as if it were the "Renter" under the Principal Agreement. Rather, it is an agreement by White Holdings that if it were not to act in that way, it would no longer be entitled to the right title and interest of Metronome under the Rental Agreement.

93 The positive covenants which are given by White Holdings in the Assignment of Rental Agreement are those contained in Clause 2. So far as the document goes, those covenants are only obligations which White Holdings owes to Konica.

94 However, in the Assignment Agreement the expression "Owner" is simply a defined term, referring to Konica Australia Pty Ltd. The Assignment Agreement does not contain any covenant that it is only Konica Australia Pty Ltd who is the owner of the goods in question. Indeed, there is no covenant in the Assignment Agreement that Konica Australia Pty Ltd is the owner of the goods.

95 Further Clause 2(b) involves a covenant on the part of the Assignee to observe all the other terms of the Rental Agreement which are binding on "the Renter". That involves a covenant by the Assignee to recognise the ownership of the goods of the entity described as "Konica" in the principal agreement - ie, in the extended sense which Clause 9 of the Rental Agreement permits.

96 I see no inconsistency between the terms of the Assignment Agreement and the possibility that Konica might hold the benefit of the Assignment Agreement as agent for an undisclosed principal.

97 The second way in which Mr King submits that the Assignment Agreement is not one which Konica entered as undisclosed principal for Capital Corporate arises from Mr White's views about the undesirability of contracting with finance companies. I have already held that there is nothing in the terms of the Rental Agreement itself which makes it inherently incapable of being held for an undisclosed principal. Nor is there anything in the actual terms of the Assignment Agreement which make it incapable of being held for an undisclosed principal.

98 Construction of a contract, including deciding who are, or can be, the parties to it, can sometimes be influenced by surrounding circumstances. However, before surrounding circumstances can enter into construction of a contract, they need to be surrounding circumstances which are known to all contracting parties. There is no evidence that Mr White made his views about the undesirability of contracting with finance companies known to anyone from Konica Australia. In those circumstances, they do not affect whether the benefit of the assignment agreement is inherently capable of being held for an undisclosed principal.

99 If Mr White had been right in thinking that the Rental Agreement and the click agreement were both with the same company, and he was right in thinking that White Holdings had overpaid fees due under the click agreement, it would still not have been possible for there to have been a set-off between the amount of the overpaid fees, and the unpaid rental, because Clause 2(e) of the Rental Agreement required rental to be paid without deduction. It might sometimes happen that the fact that a contracting party had reason to believe it was entering into two agreements with the same company could be relevant to deciding whether one, but not the other, of those agreements could be entered as agent for an undisclosed principal. However, in the present case, the facts about the click agreement are so inadequately proved that I cannot conclude that there is anything in the circumstances in which White Holdings entered the Assignment Agreement and the click agreement, both apparently with Konica, that has a bearing on whether the Assignment Agreement is inherently incapable of being held for an undisclosed principal.

No Authority of Konica to Enter Assignment Agreement at the Time Konica Entered It?

100 The third way in which Mr King submits the Assignment Agreement is not one which Konica entered as undisclosed principal for Capital Corporate relates to the circumstances in which the Assignment Agreement was entered.

101 The actual authority of Konica to act on behalf of Capital Corporate was severely limited. In accordance with Clause 7 of the Agency Agreement, it had actual authority to enter an agreement like the Assignment Agreement only if it had the prior written consent of Capital Corporate. And, in accordance with the principle that someone who enters an agreement as agent for an undisclosed principal must have actual authority to enter that agreement at the time it was entered (paras [70]-[71] above) if Konica lacked actual authority to enter the Assignment of Rental Agreement, at the time it actually entered it, then it could not do so as agent for an undisclosed principal.

102 I find that Konica did not have the prior written consent of Capital Corporate at the time it entered the Assignment Agreement. The agreement itself states that it was made on 23 October 2000. Mr White signed the guarantee on 31 October 2000. Konica's recommendation for Capital to approve the assignment, made on 15 November 2000 confirmed that by that time Mr White had already provided the guarantee (para [49] above). The business name "Cobb & Co Mail" was transferred into the name of White Holdings on 30 October 2000 (para [53] above), and it is at least consistent with that fact that the assignment of the Rental Agreement for one of the items of equipment of that business should occur at or around the time of transfer of the business. It was within the power of Capital Finance to either call evidence explaining that the date written on the agreement was mistaken, but it did not do so.

103 In these circumstances, the Assignment Agreement was not entered by Konica as agent for Capital Corporate. It follows, as well, that neither was the guarantee entered by Konica as agent for Capital Corporate. It also follows that neither White Holdings, nor Mr White, owed any debt to any company in the Capital group in 2004. Hence neither of them defaulted in payment of any debt to a company in the Capital group in 2004. Thus, insofar as the Baycorp entries represented that White Holdings and Mr White had made default in payment of a debt to a company in the Capital Group by 16 September 2004 (concerning a commercial rental agreement, so far as White Holdings was concerned, and concerning a guarantee related to a commercial rental agreement so far as Mr White was concerned) those entries are false.

104 Not every false statement is misleading and deceptive. Whether a false statement is misleading and deceptive depends on the context in which it is made, and the purpose for which the statement in question is made to the person or class of people to which it is made. In the present case, if the database entries had stated the amount of a default as being a figure which was inaccurate by one dollar, but the database entries were otherwise accurate, I doubt that they would be misleading and deceptive. In consequence of no debt being owed by either White Holdings or Mr White to a company in the Capital group, however, the two particular database entries in question depart from accuracy in many ways, and those departures are significant. Each of the entries is misleading and deceptive.

105 There is no doubt that the action of Baycorp in publishing the entries to its subscribers, and of Capital Finance in placing the entries there, were acts done in trade or commerce. Nor is there any doubt that each of Baycorp and Capital Finance is a corporation within the meaning of section 52 of the Trade Practices Act 1974 (Cth). Thus, the allegation of contravention of section 52 Trade Practices Act 1974 (Cth) is made out.

106 Another argument of Mr King, independent of the one on which he has just succeeded, is that the various notices issued by Capital Finance in September 2004 to White Holdings and Mr White are ineffective. He puts that argument several ways.

Notices Ineffective Because No Authority From Capital Corporate - As a Matter of Fact

107 The first is that, if the notices were to have any contractual efficacy at all, they would need to have been issued by Capital Finance as agent for its undisclosed principal Capital Corporate. If Capital Corporate were in existence at the time the notices were issued, I would have little difficulty in inferring, from the evidence of general practice which Mr Oosterom gave (para [74] above), that those notices were issued by Capital Finance as agent for Capital Corporate.

108 However, at that time Capital Corporate had been deregistered.

109 The effect of deregistration of a company is set out in section 601AD Corporations Act 2001 (Cth):

"(1) A company ceases to exist on deregistration. Note: Despite the deregistration, officers of the company may still be liable for things done before the company was deregistered. Company's property vests in ASIC (2) On deregistration, all the company's property vests in ASIC. If company property is vested in a liquidator immediately before deregistration, that property vests in ASIC. This subsection extends to property situated outside this jurisdiction. (3) Under subsection (2), ASIC takes only the same property rights that the company itself held. If the company held particular property subject to a security or other interest or claim, ASIC takes the property subject to that interest or claim. Note: See also subsection 601AE(3) - which deals with liabilities that a law imposes on the property (particularly liabilities such as rates, taxes and other charges). (4) ASIC has all the powers of an owner over property vested in it under subsection (2). Note: Section 601AF confers additional powers on ASIC to fulfil outstanding obligations of the deregistered company."

110 Section 9 Corporations Act 2001 (Cth) defines "property" in an extremely broad fashion, and expressly states that the word "includes a thing in action". Insofar as Capital Corporate had property, in the form of any contractual rights against White Holdings or Mr White, those rights would be vested in ASIC from the time of the deregistration.

111 The understanding of the Board of both Capital Corporate (at the time of passing the resolution for deregistration) and of Capital Finance was that Capital Corporate had no business to carry on. That fact undermines, in my view, any inference which would otherwise arise from the general practice of which Mr Oosterom gave evidence. When Capital Finance did not have actual authority from Capital Corporate to issue those notices, it could not have done so as agent for Capital Corporate as an undisclosed principal. This reason for the invalidity of the notices is one which applies quite independently of the argument for invalidity of the notices arising from the effect of reinstatement, to which I now turn.

Notices Ineffective because No Authority from Capital Corporate - As a Matter of Law of Corporate Reinstatement

112 A separate argument is that Capital Finance could not have had authority from Capital Corporate to exercise any contractual powers to give the notices when Capital Corporate did not itself exist, and the contractual powers had become vested in ASIC. Thus, Capital Finance could not have had authority, if one were deciding it at the time Capital Finance issued the various notices in September 2004, to issue them on behalf of Capital Corporate: cf United Service Insurance Co Ltd (in liq) v Lang (1935) 35 SR (NSW) 487; Sweeney & Vandeleur Pty Ltd v BNY Australia Pty Ltd (1993) 11 ACSR 356. Further, the law concerning the effect of reinstatement of a corporation does not lead to any different conclusion if one is deciding, now, at a time when Capital Corporate has been reinstated, whether it had that authority.

113 The effect of reinstatement of a corporation is stated in section 601AH Corporations Act 2001 (Cth). " Reinstatement by ASIC (1) ASIC may reinstate the registration of a company if ASIC is satisfied that the company should not have been deregistered. Reinstatement by Court (2) The Court may make an order that ASIC reinstate the registration of a company if: (a) an application for reinstatement is made to the Court by: (i) a person aggrieved by the deregistration; or (ii) a former liquidator of the company; and (b) the Court is satisfied that it is just that the company's registration be reinstated. (3) If the Court makes an order under subsection (2), it may: (a) validate anything done between the deregistration of the company and its reinstatement; and (b) make any other order it considers appropriate. Note: For example, the Court may direct ASIC to transfer to another person property vested in ASIC under subsection 601AD(2). ASIC to give notice of reinstatement (4) ASIC must give notice of a reinstatement in the Gazette. If ASIC exercises its power under subsection (1) in response to an application by a person, ASIC must also give notice of the reinstatement to the applicant. Effect of reinstatement (5) If a company is reinstated, the company is taken to have continued in existence as if it had not been deregistered. A person who was a director of the company immediately before deregistration becomes a director again as from the time when ASIC or the Court reinstates the company. Any property of the company that is still vested in ASIC revests in the company. If the company held particular property subject to a security or other interest or claim, the company takes the property subject to that interest or claim."

114 Capital Corporate was reinstated by ASIC, under section 601AH(1), rather than through an application to the Court.

115 Approaching the matter purely as one of statutory construction, the effect of section 601AH(5) is that, now, the statute requires everyone to treat Capital Corporate as though it had never been deregistered. However, that does not mean that anything which purported to be done on behalf of Capital Corporate during the period of its deregistration is thereby regarded as valid. If a director had purported to act on behalf of a deregistered company during the period of deregistration, mere reinstatement would not validate his action, because section 601AH(5) provides only a limited measure of retrospectivity, so that the director regains his office only from the time of reinstatement. Similarly, section 601AH(5) provides only a limited measure of retrospectivity concerning title to the property of the company, so that the property revests in it only from the time of reinstatement. Thus, notwithstanding the reinstatement, any contractual power which Capital Corporate had prior to the deregistration is still regarded, even after the deregistration, as having been vested in ASIC during the period of deregistration. If the contractual power was vested in ASIC, Capital Finance could not have had authority to exercise that contractual power.

116 Consideration of the legislative history leading to section 601AH does not lead to any different conclusion. Section 601AH was one of the measures introduced by the Company Law Review Act 1998 (Cth), which came into force on 1 July 1998. Before the provisions of which section 601AH are part were enacted, a company ceased to exist either because the Court ordered it be dissolved, or through administrative action by ASIC in deregistering the company: See generally Keay "Deregistration: the New End of the Road for Companies in Liquidation (1999) 7 Insolvency Law Journal 87. The regime introduced as a result of the 1998 Act provided for just one way of a corporation ceasing to exist, namely deregistration.

117 Under the regime before the 1998 amending legislation, there were two separate ways by which a company's having gone out of existence could be reversed. One was by seeking an order declaring void the dissolution of a company after winding up (considered in Morris v Harris [1927] AC 252; Re Kenneth Wright Distributors Pty Ltd (in liquidation); WJ Vine Pty Ltd v Hall [1973] VR 161 and Solla v Scott & Ors [1982] 2 NSWLR 832). Another way was by the Court ordering reinstatement of the registration of a company whose registration had been cancelled. The provisions governing the latter procedure were contained in section 574 Corporations Law, as follows: "(3) If a person is aggrieved by the cancellation of the registration of a company, the Court, on an application made by the person at any time within 15 years after the cancellation, may, if satisfied that the company was, at the time of the cancellation, carrying on business or in operation or otherwise satisfied that it is just that the registration of the company be reinstated, order the reinstatement of the registration of the company. (4) On the lodging of an office copy of an order under subsection (3), the company shall be deemed to have continued in existence as if its registration had not been cancelled. (5) The Court may, in an order under subsection (3), give such directions and make such provisions (including directions and provisions relating to the retransfer of property vested in the Commission under section 576) as seem just for placing the company and all persons in the same position, so far as possible, as if the company's registration had not been cancelled."

118 In DFC of T v Action Workwear Pty Ltd (1996) 14 ACLC 1335 Senior Master Mahony applied the decision of the majority of the English Court of Appeal in Tyman's Ltd v Craven [1952] 2 QB 100 in concluding that the effect of section 574(4) is [at 1,346]: "… to validate 'acts … done and … engagements entered into by individuals purporting to act as directors or officers of the company and in its name' during the period of dissolution; and that the power of the Court conferred by s 574(5) expressly to 'give … directions and make … provisions' is exercisable with respect to matters affecting or intended to affect the company but not involving acts done and engagements entered into in its name by persons purporting to act on its behalf."

119 In Ash Street Properties Pty Limited & Ors v Pollnow (NSWCA, Handley JA, 1 September 1995, unreported) Handley JA considered a situation where: (a) a costs order was made in favour of seven entities on 18 July 1987;

(b) two of those entities were corporations, which were dissolved under section 574 Corporations Law in February and July 1992 respectively;

(c) solicitors purporting to act for all seven entities filed bills of costs in November 1992. The taxation of the bills took place on 20 September 1994.

(d) Burchett J made orders later in September 1994 reinstating the companies, and those orders were also lodged with the ASC in September 1994.

(e) The certificates of taxation issued on 12 October 1994.

Handley JA considered an argument that as a result of the dissolution of the two companies and the absence of instructions from the ASC the solicitors did not have instructions from all joint creditors, and hence the filing of the bills were nullities. His Honour rejected that argument. An essential step in his Honour's reasoning was (at page 3): "… the filing of the bills involved procedural steps in existing proceedings which the solicitors would normally be authorised to take by virtue of their general retainers in those proceedings without instructions or special authority."

120 His Honour, at page 6, quoted with approval, in relation to section 574(4) Corporations Law, the statement of Evershed MR in Tyman's Ltd v Craven at 110, that: "… I have found it impossible to formulate the qualification that would have to be read into the general words of the subsection, or to find any satisfactory basis for holding that those general words were … retroactive to a limited extent only."

121 That decision was upheld by the New South Wales Court of Appeal: Pollnow v Ash Street Properties Pty Ltd (1996) 130 FLR 235. The judgment is brief, as their Honours approved the reasoning of Handley JA. Priestley JA (with whom Clarke and Powell JJA agreed) at 235-236 characterised the argument which had been put to Handley JA as one, "… that s 574(4) of the Corporations Law had the effect, once Burchett J had made orders reinstating the two companies, of validating all procedural steps taken in their name while they had been de-registered, including the lodgement and taxation of the three bills."

122 Similarly, in Jekos Holdings Pty Ltd v Australian Horticultural Finance Pty Ltd (No 2) [1995] 1 QdR 612 Mackenzie J held that, where interlocutory orders in Supreme Court proceedings had purportedly been obtained by a company during a period when it was dissolved under section 574, the reinstatement of the registration cured any lack of capacity that the company had had to seek and obtain the orders, without the need for any separate order to cure that lack of capacity.

123 In my view, the case now before me differs from those cases in three respects. Any one of those respects is sufficient to conclude that Capital Finance was not acting on behalf of Capital Corporate in issuing the September notices. First, section 601AH(5) imposes limits on the retrospectivity of the resuscitation of the corporation, to which I have earlier referred, which section 574(4) Corporations Law did not have. Second, the issuing of the notices was not an act which purported to be done in the name of Capital Corporate and so is not within the ratio of Tyman's or the Pollnow cases. The third is a consequence of the requirement for a person who enters a contract as agent for an undisclosed principal to have actual authority, at the time of entering the contract, to do so on behalf of the undisclosed principal. That requirement will prevent any contract, which someone claims to have entered as agent for an undisclosed principal, in circumstances where that supposed undisclosed principal is a deregistered corporation at the time the contract is entered, from ever being binding on the corporation, even if the registration of the corporation is reinstated.

124 In Diamond Hill International Pty Ltd v Xu (2001) 19 ACLC 1139; [2001] FCA 531 Stone J considered an application to set aside certain orders to pay particular sums of money to particular people. Those orders had been made after there had been a costs order, which had been taxed and resulted in certificates of taxation. The applicant claimed that the orders should be set aside because at the time of the taxation it was deregistered, and only after entry of the orders was its registration reinstated.

125 The company alleged that in consequence of being deregistered at the relevant time there was no one who could make objections in relation to the bills of costs, and that in consequence, the quantum which had been ordered was grossly excessive. The applicant sought to have the orders set aside, under the court rule which empowered the Court to set aside orders which had been made in the absence of a party.

126 Her Honour was referred to the decision in DFC of T v Action Workwear Pty Ltd, and noted at [7] that the legislative provisions applicable in Action Workwear were not identical to those which presently apply. Her Honour said, at [8]: "While s 601AH(5) deems the company, once reregistered, to have had a continuous existence, it clearly cannot in any sensible way deem the company to have had the opportunity to make submissions in a proceeding that concluded before reregistration."

127 Her Honour then went on to consider whether it was appropriate to set aside the orders, and concluded that it was not. Thus, it was necessarily part of her Honour's decision that the retrospective effect of section 601AH(5) was not enough to stop the orders which had been made from being ones which were made in the absence of a party. While the decisions of Handley JA and the Court of Appeal in the Pollnow cases were not cited to her Honour, the different conclusions reached in the Pollnow cases and the Diamond Hill case concerning a similar fact situation reflects, in my view, a real difference between the mode of operation of section 574(4) Corporations Law and section 601AH(5) Corporations Act 2001 (Cth). That difference is a consequence of section 574(4) resulting in there being, upon reinstatement, a restoration of the company's property to it which is retrospective to the moment the company lost that property upon deregistration, while the retrospectivity which section 601AH(5) gives is retrospective only to the date of reinstatement.

128 In the present case, if, upon reinstatement, someone had wanted to have the issuing of the notices during the period when Capital Corporate was deregistered treated as though such notices were valid, it would have been necessary to apply to the Court for the reinstatement, rather than to ASIC, and on that application to the Court for reinstatement to make application under section 601AH(3) for a specific order for the validation of that Act. That course was not followed.

129 The conclusion at which I have arrived is consistent with the legislative intent in introducing the new regime for reinstatement of deregistered corporations. The Explanatory Memorandum for the Company Law Review Bill 1997 said: "It is envisaged that the ASC will only exercise its reinstatement power where no dealings with the property of a deregistered company which give rise to third party rights have been carried out during the intervening period. If third parties have become involved, it is expected that reinstatement will generally need to proceed through the Court."

130 For these reasons, none of the notices issued in September 2004 is contractually valid.

131 The arguments considered under this heading are ones which arise only if I am wrong in having concluded that no contractual relations exist between Mr White and White Holdings, on the one hand, and Capital Corporate on the other. For the purpose of considering these arguments, I shall proceed on the assumption that contractual relations existed between the plaintiffs and Capital Corporate.

132 Mr Ashhurst submits that no notice was needed before White Holdings owed Capital Corporate the rental which was overdue, and interest on it. I accept that Clause 2(a) of the Rental Agreement required the rental to be paid when due, without any demand. I do not accept that Clause 2(b) required White Holdings to pay, unprompted, interest on overdue money from time to time. The rate at which the interest is payable under Clause 2(b) is 2% per year above Konica's cost of funding the overdue amount. As a matter of necessary implication, White Holdings could not be required to pay interest until it was, at the least, informed what was Konica's cost of funding the overdue amount. It was never so informed, apart from by being informed of the sum of interest payable by service of a notice in September.

133 The notices in question also demanded payment of some government charges. Under Clause 2(d) of the Rental Agreement, such sums were only payable upon demand. Thus, the only amount which White Holdings could have owed, independently of a valid demand, was the amount of outstanding instalments of rent. At the time the Baycorp entries were made, the amount of instalments of rent unpaid was $4062.32. For that reason, each of the Baycorp entries would be inaccurate in stating that the amount owing was $4,525. In the circumstances of the other findings I have made, I will not go on to decide whether an entry stating that a particular sum of money is due, when only about 90% of that sum of money is actually due, amounts to conduct which is misleading and deceptive, or whether an inaccuracy of that kind calls for a remedy.

134 As mentioned earlier, it was on 18 January 2004 that Capital Corporate was deregistered. It was from March 2004 that White Holdings failed to pay any rental connected with the equipment. Even if Capital Corporate was a party to the Assignment Agreement, following its deregistration the right to receive the instalments of rental which were accruing was vested, not in it, but in ASIC. There can hardly be a default in paying a sum of money to a particular corporation, when that corporation does not exist, and has no power to receive the money: cf Joro Pty Ltd v State Bank of NSW (1992) 5 BPR 11,709. Thus, another respect in which the Baycorp entries were misleading and deceptive was in representing that, on 16 September 2004, White Holdings had made default in payment of any debt that it owed to a company in the Capital group.

135 The guarantee is one whereby Mr White undertakes to pay all rentals which were payable to Capital Corporate. It was incorrect, and hence misleading and deceptive, to say that, on 16 September 2004 he had failed to pay any sum of money which he owed to a company in the Capital group, because the only candidate for being owed such money was Capital Corporate, it did not exist, and any right it might previously have had to be paid any sum of money by Mr White was now vested in ASIC.

136 There is a further reason, in my view, why Mr White did not owe any money to Capital Corporate. As a matter of construction of the guarantee, it seems to me that the making of demand is a precondition to the obligation of Mr White to make any payment under it. It says so expressly, in the second-last sentence. The final sentence, read in context, means that the guarantee is a primary obligation in the sense that Konica need not take action against the Hirer or any other person before enforcing the guarantee - but that is still consistent with the guaranteed money being payable only on demand.

137 On that construction, an effective demand to pay is needed. For the reasons already given, any notice sent by Capital Finance in September 2004 was not an effective demand given by Capital Corporate.

138 The findings I have made so far are sufficient to establish that the entries are misleading and deceptive. Against the possibility of there being an appeal, there are some other factual findings I should make.

139 The file maintained by Capital Finance relating to this transaction contains an unsigned copy, not on any letterhead, of each of the September 2004 notices.

140 That file also contains a signed original, on Capital Finance letterhead, of the 2 September 2004 notice addressed to White Holdings. Attached to it is an opened envelope, with a "Return to Sender" sticker on it, indicating that the addressee had left the address.

141 On 5 August 2004 Michael Jones, a mercantile agent engaged by Capital, had attended at 162 Old Northern Road Castle Hill. He found that the building which had formerly existed on that site had been demolished, and the site had been turned into a carpark. Enquires by the mercantile agent gave the current address of the business as being 5 Chicago Avenue, Blacktown, and identified its telephone number. Mr Jones reported all this to Capital Finance in an email on 25 August 2004.

142 Mr White's personal assistant at the time was Ms Wendy Orton. Ms Orton's duties included dealing with creditors. Mr Jones' report to Capital Finance, made on 25 August 2004, records the following events. "8/8/04 Spoke to Wendy who advised that agent could collect full account arrears and copier on 14/8/04. 14/8/04 Phoned and spoke to John White who advised that he does not have the required funds for payment however advised that the equipment could be collected anytime. He advised that he would have half the settlement figure within a week. Numerous messages for John White to phone agent have not been returned, agent advised Wendy that as John is avoiding contact CFAL would commence legal action to recover funds. She said she would ask him to call again however doubted that he would."

143 Capital Finance maintains a record, in a continuous computer file, of contacts between its staff members and other people relating to this particular contract. It shows numerous contacts between Capital staff and people at White Holdings from 24 April 2002, in which White Holdings is being pressed to pay arrears. Ms Orton was one of the people at White Holdings who was contacted in this way.

144 Ms Orton came to have in her possession a signed original, on Capital Finance letterhead, of the notice dated 2 September 2004 addressed to Mr White at 14 Fairway Drive, Kellyville. She made a note on it that the Rental Agreement number in the heading was incorrect. She also made a note on it dated 13 September 2004 saying "will re-issue letter - 2 days only to respond will be given." I infer that this note was made following a conversation in which she told someone from Capital Finance about the incorrect Rental Agreement number, and in which she was given a message from someone at Capital Finance to the effect that the letter would be re-issued, and two days only would be given to respond to it. The conduct of Capital Finance in producing another set of notices on 13 September 2004, and which gave two days in which to pay, is consistent with that inference.

145 The computer file notes of Capital Finance contain an entry on 2 September 2004 relating to the demands being sent to the company and Mr White, but no corresponding entry relating to the sending of any demands on 13 September.

146 Mr White was separated from his wife by September 2004. They had formerly lived together in a house at 14 Fairway Drive, Kellyville, but in September 2004 he was living elsewhere. She had formerly worked in the office of White Holdings, but had ceased doing so by that time. She still opened any mail for the company which she came across, but usually it was Mr White who opened mail at the company office. The letterhead of the company in August 2004 showed its address as being 5 Chicago Avenue, Blacktown, and its postal address as being PO Box 1 Pendle Hill.

147 Mr White's account of himself in evidence was to the effect that he was a hands-on businessman, who left dealing with paperwork to other people as far as he could. I see no reason to doubt that evidence. Even so, he was consulted from time to time by Ms Orton about what to do concerning debts.

148 He did not strike me as a witness who was particularly reliable concerning recollection of documentary matters. I do not regard his denial as having received any notice of demand addressed to himself as a guarantor as sufficient to discharge his onus of proof that no such notice was received.

149 The notice of 2 September 2004 addressed to White Holdings manifestly did not reach that company, because it was returned to Capital Finance, and was addressed to White Holdings at an address that Capital Finance did not occupy, and (as Capital Finance already knew) which had been turned into a carpark. The notice of 13 September 2004 addressed to White Holdings was addressed to the same address as the notice of 2 September 2004. In my view, the plaintiffs have established that neither of the September 2004 notices addressed to White Holdings was actually received by it. Whether the notice clause in Clause 9 of the Rental Agreement suffices to reach a conclusion that, even so, one or both of those notices is deemed to have been served on White Holdings is a question of law which, in light of the conclusions I have already come to, I need not consider.

150 I am not satisfied that Mr White has established that he did not receive one or both of the notices addressed to him dated 13 September 2004.

Whether Mr White Gave No Consent to Disclosure or Use of Personal Information

151 One element in Mr White's claim based upon the Privacy Act 1988 (Cth) is a contention that he gave no consent to any personal information relating to him being disclosed to any person or included in any database.

152 Mr David Langley is the Managing Director of Operating Lease Pty Ltd. He had overall supervision, in 1999 and 2000, of the activities of Operating Lease in connection with Capital Corporate providing finance to customers of Konica.

153 When Metronome made a proposal to lease equipment from Konica, that proposal was made on a standard form of Konica, which contained acknowledgments of the practice of Konica of giving a credit reporting agency certain personal information, and an authorisation for those disclosures to be made. As well, it contained a consent for Konica to receive certain types of personal information, related to the applicant for credit, from other people. Mr Langley gave evidence that at the time the Assignment of Rental Agreement was organised, "… it was the practice of Operating Lease when organising the finance for assignment of a rental agreement to do the following: (a) give the prospective assignee and prospective guarantor of the assignee's obligations (" the Prospective Customers ") a document which provides information in relation to the disclosure of the Prospective Customers' personal credit information to credit reporting agencies under the Privacy Act 1988 (" Information Sheet "); (b) ask the Prospective Customers to review the Information Sheet; and (c) if satisfied with the contents of the Information Sheet, request that the Prospective Customers sign the Information Sheet. After an Information Sheet was signed by the Prospective Customers, an Operating Lease employee would obtain a consumer credit report about the Prospective Customers from a credit reporting agency."

154 He identified a printed form of consent, as being the type which Operating Lease obtained from prospective assignees and prospective guarantors. That form became Exhibit 5.

155 The agreement whereby Operating Lease acted as broker between Konica and Capital Corporate came to an end, according to Mr Langley, in March 2004. (Whether it had actually come to an end any earlier, by virtue of Capital Corporate's deregistration in January 2004, is a matter I need not decide.) Once the agreement came to an end, Operating Lease destroyed its files relating to the agreement. In my view this provides an adequate explanation why a copy of any privacy consent signed by Mr White is not now obtainable from Operating Lease.

156 In the ordinary course of things, according to Mr Langley, the original of that privacy consent would be sent to Capital. No such consent signed by Mr White is to be found in Capital's files at the moment.

157 Mr White denies that he ever signed any such consent. However, given his unreliability concerning what dealings he has had with documents, I do not place great weight on that evidence.

158 The information which Konica sent to Capital Finance on 15 November 2000 included a credit reference bureau search relating to Mr White. In the ordinary course of things, according to Mr Langley, that document would be obtained only after Mr White had signed a consent document.

159 In all these circumstances, I am not satisfied that Mr White has discharged the onus of proving that he signed no consent to the disclosure of his personal information, or to Konica obtaining personal information concerning him from other people.

160 Mr King submits that the conduct of Capital Finance in making the entries on the Baycorp database amounts to the tort of injurious falsehood. Malice is an essential element of that tort: Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388 at [1], 393 per Gleeson CJ, [57]-[58], 405-406 per Gummow J, [108], 423 per Kirby J, [192], 447 per Callinan J. In this context "malice" might mean having some indirect, dishonest or improper motive, or might mean intending to injure another without just cause or excuse. Kirby J in Palmer Bruyn & Parker at [108], 423 regards malice in either of those senses as sufficient to establish the tort. Callinan J at [193]-[194], 448 preferred the test whereby malice required some indirect, dishonest or improper motive. The majority in the High Court in that case express no view about which of these two versions of malice is the appropriate one for the tort of injurious falsehood to have been committed. I respectfully agree with Callinan J that the "intent to injure without just cause or excuse" test imposes a higher standard than the "indirect, dishonest or improper motive" test. I shall assume without deciding that the lower standard of malice is the appropriate one.

161 In seeking to recover money from White Holdings and Mr White, Capital Finance was, in my view, doing no more than seeking to enforce what it believed were its legal rights. Mr Duxbury, the officer of Capital Finance with supervision of the particular file, denied emphatically having an improper motive for making the listings with Baycorp. I accept that evidence.

162 I take into account that the computer file of Capital Finance relating to this transaction contains an entry on 16 September 2004, immediately following the entry on 2 September 2004 recording the sending of demands to White Holdings and Mr White. The 16 September entry says (expanding abbreviations): "No response, letter to company and guarantor advising of listing with CRAA. If no response will write off & dead loss as balance outstanding under $5,000."

163 From that I infer that the writer saw the listing as being a last possible step in seeking to obtain payment of the money which was believed to be owing.

164 As well, however, as a subscriber to the Baycorp database, Capital Finance had an obligation to report defaults to it. Quite apart from having a legitimate interest in collecting an individual debt, a financier has a legitimate interest in obtaining accurate information about financial activities of applicants for credit. For a financier to itself contribute information to a database of such information advances that interest. Of course, the activity must be carried on within limits which legislation and the general law impose on it - but in the present case the plaintiffs have not established that anyone acting for Capital Finance in connection with the matter was aware that there had been any inaccuracy or breach of the law, or was recklessly indifferent to whether there had been any inaccuracy or breach of the law. I am not satisfied that the plaintiffs have established malice. That is a sufficient reason why the claim in injurious falsehood fails.

165 Insofar as the claim of injurious falsehood depended on a statement made by an employee of Capital Finance to a finance broker in March 2006, there is no admissible evidence of any such statement having been made.

166 Mr White requested Mr Cusack, in early 2006, to seek finance for a large printing and mail sorting machine from Germany for White Holdings, costing $240,000. Mr Cusack approached Mr Malafouris, who refused to provide finance at the usual market rate of 7% for such contracts, but only at 15%. Mr White in consequence paid cash for the transaction.

167 After Mr Malafouris received the request for finance, he did a Baycorp credit search. It showed the two entries which Capital Finance had placed there. It was after seeing that search that Mr Malafouris offered finance only at 15%.

168 The search which Mr Malafouris carried out showed not only the two entries which Capital Finance had placed there, but also, against Mr White, a default posted by "Nationwide News" on 12 November 2004 described as "bad debt written off". The search made on 16 March 2006 showed that bad debt as still unpaid. Mr Cusack told Mr Malafouris that that listing had been placed there in error. There is some hearsay evidence that the listing arose from a person to whom Mr White had sold a newsagency not paying a debt which that purchaser owed. That hearsay would not ordinarily suffice to discharge an onus of proof that the entry was a mistaken one. However, I infer that, for some reason or other, the entry had been placed in error - a further search against Mr White conducted on 13 April 2006 shows that any record of a default to Nationwide News has been completely removed from Mr White's file. If there really was a debt which Mr White owed to Nationwide News, and that debt had been paid after 16 March 2006, the entry would remain, but the "status" entry would be changed to show that it had been paid, and that entry would remain on the database for five years from the date of reporting.

169 I do not doubt that having an inaccurate and unfavourable entry on one's file at a credit reference bureau has a tendency to dissuade lenders. I am not satisfied, however, that Mr White or White Holdings have established that these inaccurate entries have caused them damage. When a financier considering providing credit comes across an unfavourable entry it is not uncommon for them to seek further information from either the applicant for finance, or the entity who posted the listing. The results of those enquiries are likely to be taken into account, as well as the listing itself.

170 It is not as though the entries made by Capital Finance are the only unfavourable information which a financier could discover concerning Mr White. The Baycorp search made on 16 March 2006 shows a judgment having been obtained against Mr White on 20 August 2003 by Hallmark Cards Australia Ltd for an amount of $1,873, and still remaining unpaid. The search dated 13 April 2006 showed that that judgment remained unpaid, and as well there was a new entry relating to a District Court judgment which had been given on 24 January 2005 for $54,544 in favour of the owners of a particular strata plan. An ASIC search conducted on 10 April 2006 showed that there had been two applications to wind up White Holdings, each of which had been dismissed (one in September 2003, the other in September 2004). All of these entries might have an innocent explanation, but the evidence does not include any such explanation.

171 As well, a financier approached to provide finance will usually require financial information to be provided by the applicant. For financial accommodation of any size, a lender often requires evidence of the assets and liabilities, income and expenditure of the applicant for finance and any proposed guarantors. In the present case, the plaintiffs present no evidence that their financial position is such that, but for the existence of the entries on the Baycorp database, it is likely that they would be able to obtain finance on commercially acceptable terms. While the "but for" test is not a satisfactory statement of the legal view of causation (March v E & MH Stramare Pty Ltd & Anor (1991) 171 CLR 506, it can, as Mason CJ acknowledged in March & Stramare at 515-16, play an important role in the resolution of causal questions as a negative criterion. See also Deane J at 522. To the same effect is the statement of McHugh J at 530, that: "If the damage would have occurred notwithstanding the negligent act or omission, the act or omission is not a cause of the damage and there is no legal liability for it."

172 Recognising that the "but for" test, even used as a negative criterion of causation is an aid to deciding whether a causal connection exists, and not itself the legal test, I turn to apply the actual legal test, which requires the applying of common sense to the facts in each particular case (per Mason J at 515). I am not satisfied that the plaintiffs have established the incorrect entries on the database have caused them any loss.

173 Mr King submitted that, once it had been shown that Mr Malafouris' refusal of finance on ordinary terms followed his sighting of the Baycorp searches, that was sufficient to establish a causal link, and an onus of adducing evidence would shift to the defendants to establish that something other than the Baycorp search was the cause. I do not accept that is so. The correct proposition is that if one party has established sufficient evidence from which causation may be inferred, the other party comes under an evidential burden or an onus of adducing evidence: Hampton Court Ltd v Crooks (1957) 97 CLR 367 at 371-372 per Dixon CJ; Apollo Shower Screens Pty Ltd & Anor v Building and Construction Industry Long Service Payments Corporation (1985) 1 NSWLR 561 at 564-5; Baiada & Ors v Waste Recycling & Processing Service of NSW [1999] NSWCA 139; (1999) 130 LGERA 52 at [55]. Particularly given that it was well within the capacity of the plaintiffs to establish what information had been given to Mr Malafouris, and their own assets and liabilities, income and expenditure, I would not regard the mere temporal sequence of Mr Malafouris first seeing the Baycorp search results, and later refusing to offer finance on usual market terms, as presenting sufficient evidence from which it may be inferred, in the circumstances of this case, that it was the entries which were the cause of finance at usual market rates being unavailable.

174 I have already said that an inaccurate entry on someone's credit file has a tendency to discourage providers of finance from providing that finance. How important a discouragement it is depends in part upon the internal processes of the financier. This means that there is an inherent difficulty in an applicant proving that, because of the incorrect entry, a particular financier has failed to provide finance. Any assessment of damages in relation to a legal wrong consisting of making an inaccurate entry on a credit reference bureau database almost inevitably needs to be assessed by reference to the chances of that entry having caused damage. While assessing damages on that basis is often the best that the common law can do, and is better than providing no remedy at all, it is still an approximate remedy. Most importantly, it is a remedy which falls short of bringing about the situation which there would have been if the inaccurate entry had not been there in the first place, or did not continue to be a potential source of error in the future. For these reasons, in relation to the breach which the plaintiffs have established, damages are, in my view, an inadequate remedy. The appropriate remedy is an injunction requiring Baycorp to remove the offending entries, and requiring Capital Finance to take all steps within its power to cause the entries to be removed.

175 Another order which the plaintiffs sought was an order restraining Capital Finance from communicating any credit information or personal information regarding either plaintiff to any credit provider, lender or financier concerning the credit worthiness of the plaintiffs or either of them. I am satisfied that when there is an entry on a credit reference file it sometimes happens that a financier contacts the company which has placed the entry there, seeking to find out more about that entry. Even after the offending entries are removed from the database, Capital Finance might still be contacted by financiers who have seen those entries in the past. In my view, the appropriate way of providing a remedy for that situation is to order a mandatory injunction, requiring that, if Capital Finance is contacted by any person concerning either of the offending entries, it is to inform the enquirer that the entries were made in error, and no debt was owed by either White Holdings or Mr White to any company in the Capital group. I am not satisfied that there is any sufficiently proved threat that Capital Finance might disclose any credit information or personal information to a credit provider to warrant any wider injunction. Even if it were the case that the plaintiffs had established that the making of the entries on the database involved a breach by Capital Finance of a duty not to infringe the privacy of the plaintiffs, or a breach of a duty of confidence owed to the plaintiffs, the absence of threat would mean that the injunction which the plaintiffs seek would not be granted.

176 In light of the other conclusion to which I have come, there are various questions which have arisen, but which it is not necessary for me to decide.

Is the Exhibit 5 Consent One Capital Finance Can Rely On?

177 The form of consent contained in Exhibit 5 (para [154] above) is one which is addressed to Konica. It does not contain any extended definition of "Konica", whether of the type found in Clause 9 of the Rental Agreement, or of any other kind. The time at which Mr White would, in the ordinary course of things have signed that consent was at the time the application for assignment was being considered - ie, in the present case at a time when no contractual relations would have existed between White Holdings and Mr White on the one hand, and either Konica, or Capital Corporate, on the other. Given that the identity of the person to whom personal information is made available might possibly be a matter of importance to someone giving such a consent, there might be room for argument about whether it was possible for such a consent to be obtained by Konica as agent for an undisclosed principal.

Implied Representation of Compliance with Baycorp Default Information Guide?

178 Mr King submitted that there was an implied representation in the Baycorp database entries that the person placing the entries had done so in accordance with the Baycorp Default Information Guide. That guide is a publication which Baycorp makes available to its subscribers. It contains information about how its services operate, and some recommendations.

179 Relevant portions include: " Reporting Overdue Accounts as Defaults The Privacy Act places an obligation on subscribers to ensure that default information reported to Business Information Services is correct. You must ensure that the amount of the account reported is correct, and the identity details you supply are complete and accurate. The Act sets out clear guidelines for credit providers (ie those who are Business Information Services subscribers) wishing to report overdue consumer credit accounts to Business Information Services. The account must be 60 days or more in arrears , and collection action must have commenced prior to the debt being reported to Business Information Services. .. Guarantors Before listing the overdue account with Business Information Services, the credit provider must first give all guarantors written notice that a default has been incurred by the principal borrower(s). … Commercial Default Reporting Whilst the Privacy Act does not regulate commercial credit, Business Information Services asks its subscribers to adopt a uniform approach to all its default reporting procedures. That is, that the same guideline are adhered to for listing both consumer and commercial defaults. One of the most important procedures to adopt is to ensure that all overdue accounts are reported. Business Information Services also recommends that you allow 60 days to elapse before reporting overdue commercial accounts. Whilst this is not a Privacy Act requirement, it is a widely accepted Business Information Services standard."

180 Under the heading "Individual Commercial & Corporate Default Report Types" is listed a series of definitions of different types of default reports. The definition of a "payment default" is: "The account must be 60 days or more overdue and the debtor or debtors must have been sent a written notice advising of the overdue payment, and requesting payment of the amount outstanding."

181 Whether these standards have been complied with in relation to the default listings concerning White Holdings and Mr White can be ascertained from the factual findings I have made so far. In light of my other conclusions, and the need for this judgment to be produced with urgency, I will not spell them out.

182 If the Court of Appeal ever needs to consider whether the Baycorp database entries conveyed a representation that the Default Guide had been complied with, and it is relevant to take into consideration whether the evidence of Mr Malafouris, Mr Cusack and Mr Rodd bears on that question, I found nothing in the demeanour of any of those men which leads me to doubt their testimony.

Implied Representation that Privacy Act Complied With?

183 Mr King also submits that the Baycorp entries contain an implicit representation that the requirements of the Privacy Act have been complied with. In the circumstances it is not necessary for me to decide that question.

Breach of General Law Duty to Respect Privacy or Breach of Confidence?

184 In light of the findings I have made so far, the plaintiffs could not obtain a more extensive remedy than I have already decided to grant if they were to establish that there had been a breach of a duty to respect privacy, or a breach of confidence. In those circumstances, it is not necessary to decide those questions.

185 The plaintiffs contend that the posting of the two entries on the Baycorp database involve an infringement of various rights they are accorded by the Privacy Act 1988 (Cth). They assert that these breaches give them an entitlement to damages, through operation of the tort of breach of statutory duty.

186 Questions have been argued about whether this Court has jurisdiction to grant any such remedy, and about whether the terms of the Privacy Act 1988 (Cth) were inconsistent with the existence of a private right of action for damages. In light of the conclusions to which I have come, it is not necessary to decide those questions.

187 The plaintiffs also sought the injunction against disclosure of credit information or personal information on the bases of alleged breaches of the Privacy Act 1988 (Cth). The reason why I have declined that injunction concerning the established breaches of the Trade Practices Act 1974 (Cth) and the Corporations Act 2001 (Cth) would also prevent any such injunction being granted for any breach of the Privacy Act 1988 (Cth) that there might be, and concerning which this Court might have jurisdiction to grant an injunction.

188 Section 1041H(1) provides: "A person must not, in this jurisdiction, engage in conduct, in relation to a financial product or a financial service, this is misleading or deceptive or is likely to mislead or deceive."

189 No attention was paid in argument to the construction of this provision. What counts as a "financial product" is the subject of definitions extending over five pages of close print in the Butterworths print of section 763A-765A Corporations Act 2001 (Cth). What counts as a "financial service" depends upon a definition which occupies a mere four pages of close print, from section 766A to section 766E Corporations Act 2001 (Cth). The meaning of "in relation to" in section 1041H, as in any other linguistic context, depends upon the precise context. No attention has been paid to any of these matters in argument. If there were to be a breach of section 1041H, I do not see that it could result in any different remedy to that which I have already held is available. I will therefore not decide whether there has been a breach of section 1041H.

Orders 1. Order that the first defendant forthwith remove from its database the entries relating to the plaintiffs set out in the Schedule to the Originating Process in these proceedings. 2. Order the third defendant to take all steps within its power to cause the said entries to be removed. 3. Order that, if the third defendant by itself, its servants or agents, is contacted by any person concerning either of the said entries, it inform the enquirer that the entries were made in error, and that no debt was owed by either plaintiff to any company in the Capital Group. 4. Order third defendant to pay costs of the plaintiffs of these proceedings. 5. Direct that, if the plaintiffs wish to seek an order for costs against the first defendant, the plaintiffs cause this matter to be re-listed before me prior to 30 June 2006 for the purpose of obtaining directions for the further hearing of any such application. In the event that the matter is not re-listed pursuant to that direction on or prior to 30 June 2006, the proceedings are, apart from the orders already made, dismissed.

6. These orders may be entered forthwith. **********

12/04/2007 - Remove name "Capital Corporate" in last sentence, and replace with "Konica". - Paragraph(s) 101

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.