Participation as a person involved in a contravention of s.52 of the Trade Practices Act 1974 (Cth) under s.75B requires knowledge of the essential facts constituting the...
The terms 'aided, abetted, counselled or procured' in s.75B(a) and 'knowingly concerned in, or party to' in s.75B(c) import the concepts of accessory liability from the criminal...
A person who passes on information supplied by another without knowledge of its falsity, after making appropriate inquiries, cannot be held liable under s.75B as they lack the...
The ordinary meaning of the words in s.75B is not to be confined by assumptions that it was intended to have a wider operation than the combined effect of s.79 of the Trade...
Issues before the court
Whether a natural person can be liable under s.82 as a person involved in a contravention of s.52 pursuant to s.75B(a) or (c) in the absence of...
Cited legislation
Plain English Summary
A company can be liable for passing on false information about a business for sale even if it did not know the information was wrong. However, the individual who actually passed it on (here the managing director of the agent) cannot be made personally liable for the company's breach unless he actually knew the information was false. Because Lucas honestly believed the figures, checked them repeatedly, and had no reason to doubt them, he was not 'involved' in the breach and the claim against him failed.
AI-generated legal information, not legal advice. Zoe can make mistakes — check the cited source, and for advice about your situation consult a qualified Australian lawyer.
Deep Dive
2,482 words · generated 24/04/2026
What happened
The appellants, Miles Richard Yorke and his wife, agreed to purchase a record and tape business from Treasureway Stores Pty Ltd. The sale was negotiated through Ross Lucas Pty Ltd, a licensed land and business agent of which the respondent, Ross Melville Lucas, was the sole active director and managing director. Kevin Thomas Mahoney, a director of Treasureway, supplied Lucas with figures stating that the business enjoyed an average weekly turnover of $3,500 and a gross profit of $1,200 per week. Lucas communicated these figures to Yorke both orally and in the contract documentation. He did so after seeking and obtaining written confirmation from Mahoney on at least three occasions, after hearing Mahoney confirm the figures directly to Yorke, and after requesting an up-to-date profit figure upon his return from overseas. The trial judge expressly found that Lucas "conscientiously and carefully passed on to Mr Yorke the instructions and informations he received from Mr Mahoney" and that "Mr Lucas was not aware and had no reason to suspect that the information concerning turnover which he relayed to Mr Yorke was incorrect". He had made all appropriate inquiries and was entitled to be satisfied by the answers, which received some support from Treasureway's accounts.
No linked legislation citations have been extracted yet.
When the business failed to achieve anything like the represented performance the appellants sued in the Federal Court under s 82 of the Trade Practices Act 1974 (Cth) for damages caused by conduct contravening s 52. Fisher J found that Treasureway had engaged in misleading or deceptive conduct by the false representations as to turnover and profit. He further held that the Lucas company had contravened s 52 by acting as agent and repeating the representations, although that contravention was unwitting. Judgment for $73,000 was entered against Treasureway, the Lucas company and Mahoney (who was found to have aided and abetted or been knowingly concerned in Treasureway's contravention). The claim against Lucas personally was dismissed on the ground that he lacked sufficient awareness of the relevant facts to fall within s 75B.
The Full Court of the Federal Court dismissed the appellants' appeal against the judgment in Lucas's favour. The High Court (Mason ACJ, Wilson, Brennan, Deane and Dawson JJ) granted special leave and heard the appeal on the single question whether Lucas was a person involved in the Lucas company's contravention of s 52 within the meaning of s 75B and therefore liable under s 82. The Court unanimously dismissed the appeal with costs, holding that liability under s 75B requires knowledge of the essential facts that make the conduct misleading.
Why the court decided this way
The joint judgment (Mason ACJ, Wilson, Deane and Dawson JJ) and Brennan J's separate reasons both rest on the proposition that the language chosen by Parliament in s 75B deliberately imports the well-settled concepts of the criminal law of complicity. The phrases "aided, abetted, counselled or procured" in paragraph (a) and "knowingly concerned in, or party to" in paragraph (c) are not ordinary English words given a new, diluted meaning for civil purposes. They carry the meaning they have borne for centuries in the law of principal and accessory liability.
That criminal-law meaning, recently restated by the Court in Giorgianni v The Queen (1985) 156 CLR 473, requires intentional participation in the principal offence. To possess the necessary intent the alleged accessory must have knowledge of the essential matters which go to make up the offence. It is not necessary that the accessory know that those matters amount to a crime, but he must know the facts that constitute the contravention. Because a contravention of s 52 consists of conduct that is in fact misleading or deceptive, the essential fact in this case was the falsity of the turnover and profit representations. Lucas had no knowledge of that falsity. Therefore he could not have intentionally participated in a contravention constituted by the making of false representations.
The Court rejected the appellants' argument that because s 52 itself is a strict-liability provision, accessory liability under s 75B should likewise dispense with any mental element. The joint judgment noted that Giorgianni itself involved a strict-liability principal offence (culpable driving) yet the accessory still required knowledge. Brennan J expressed the same idea by observing that s 75B must be construed as though it were defining the persons who would be criminally liable if the contravention were an offence. The symmetry deliberately created by Parliament between criminal liability under s 79 and s 5 of the Crimes Act 1914 (Cth) on the one hand and civil liability under ss 75B and 82 on the other would be destroyed if the civil accessory provision were given a wider operation.
The Court also emphasised the history of s 75B. Inserted in 1977 at the same time as the present s 82, it took up the language of s 5 of the Crimes Act. Mason J's earlier observation in Reg v Australian Industrial Court; Ex parte CLM Holdings Pty Ltd (1977) 136 CLR 235 that the incidental power would support a provision having the same effect as s 5 reinforced the conclusion that the concepts in s 75B were not intended to be given a new or special civil meaning. Defences of lack of knowledge in s 85(3) and (4) were held to be irrelevant; they mitigate the strict liability that would otherwise fall on the principal contravenor, not on the accessory.
Brennan J added that the requirement of knowledge applies equally to the "party to the contravention" limb of s 75B(c). The word "knowingly" governs the whole paragraph, and in any event a person cannot be a party to a contravention in the accessory sense unless he participates with knowledge of the essential facts. The punctuation and the structure of the four paragraphs of s 75B reinforced this reading. The result was that both the trial judge and the Full Court had correctly applied the law to the facts as found.
Before and after state of the law
Before Yorke v Lucas there was uncertainty whether the accessory provisions in the Trade Practices Act carried the full mental-element baggage of the criminal law. Some lower-court decisions had suggested that because s 52 imposes strict liability, secondary liability might do the same. The Full Court in this very matter and Fisher J at first instance had, however, already concluded that knowledge was required, drawing on the authorities later collected in Giorgianni.
The High Court removed that uncertainty. It declared that the criminal-law meaning must be given to the words of s 75B unless the context requires otherwise. That context does not require otherwise merely because the principal contravention is one of strict liability or because the remedy is civil damages rather than punishment. After Yorke v Lucas it has been settled that an individual cannot be made liable under s 82 as an accessory to a corporate contravention of s 52 unless the individual knew the facts that made the conduct misleading or deceptive. Honest ignorance, even if unreasonable, is a complete answer to accessory liability although it would not be an answer for the corporation itself.
The decision also confirmed that the same mental element applies to the pecuniary-penalty provisions in s 76 and the criminal-accessory provisions in s 78. The statute therefore maintains substantial symmetry between the classes of natural persons exposed to civil damages, pecuniary penalties and criminal punishment.
Key passages with plain-English translation
The joint judgment contains several passages that have become canonical. One is:
"Both in the case of felonies where the principal offender and the secondary participant commit separate offences, and in the case of misdemeanours where no distinction is drawn between the two, a person will be guilty of the offences of aiding and abetting or counselling and procuring the commission of an offence only if he intentionally participates in it. To form the requisite intent he must have knowledge of the essential matters which go to make up the offence whether or not he knows that those matters amount to a crime."
Plain English: You cannot be an accessory unless you deliberately help or encourage the wrong thing, and you cannot deliberately help something if you do not know the facts that make it wrong.
Another key statement appears in the discussion of s 75B(c):
"There can be no question that a person cannot be knowingly concerned in a contravention unless he has knowledge of the essential facts constituting the contravention … the proper construction of par (c) requires a party to a contravention to be an intentional participant, the necessary intent being based upon knowledge of the essential elements of the contravention."
Plain English: "Knowingly concerned" obviously needs knowledge. "Party to" also needs knowledge because in this context it means the same sort of accessory role. Parliament would not have created a strange gap in which every other paragraph requires a mental element but one limb of (c) does not.
The obiter discussion of the company's own liability is also frequently cited:
"If the circumstances are such as to make it apparent that the corporation is not the source of the information and that it expressly or impliedly disclaims any belief in its truth or falsity, merely passing it on for what it is worth, we very much doubt that the corporation can properly be said to be itself engaging in conduct that is misleading or deceptive."
Plain English: Real-estate agents and business brokers who say "the vendor tells me the turnover is $3,500 but I don't know if it's true" may not be breaching s 52 at all. The Lucas company did not appeal, so the Court left the point open, but the observation has guided countless subsequent "mere conduit" cases.
Finally, the reference to Mallan v Lee:
"It would be an inversion of the conceptions on which the degrees of offending are founded to make the person actually committing the forbidden acts an accessory to the offence consisting in the vicarious responsibility for his acts."
Plain English: It would be conceptually odd to say that the director who actually made the false statement is an accessory to the company that is liable only because it is responsible for his statement. The Court did not need to decide the point but flagged it as a further potential obstacle for the appellants.
What fact patterns trigger this precedent
Yorke v Lucas is triggered whenever a natural person is said to be liable under s 82 (or for a pecuniary penalty under s 76) as an accessory to a corporate contravention of s 52 or any other provision of Pts IV or V. The paradigm case is the director, employee or agent who passes on information originating from someone else without knowing that the information is false. The precedent applies with full force where the individual has made reasonable inquiries, obtained confirmations in writing, and received answers that appear consistent with available documentary material. It is not necessary that the individual be "innocent" in any broader moral sense; the only question is whether he knew the facts that made the conduct misleading.
The case does not apply where the individual knows the representation is false, or is reckless as to its truth, or deliberately shuts his eyes to the obvious. It also has nothing to say about direct liability of the individual as a contravenor in his own right under s 52; the decision is confined to accessory liability through s 75B. Because the accessory must know the essential facts, the precedent is most commonly encountered in "passing-on" or "conduit" cases in the sale of businesses, real estate, or financial products where one party supplies figures to an intermediary who repeats them.
How later courts have treated it
The judgment itself grounds its reasoning in the earlier authorities it cites, especially Giorgianni, Hornsby, Parkdale and the CLM Holdings case. It treats Giorgianni as authoritative on the mental element for aiding and abetting even a strict-liability offence. The Court carefully distinguishes the position of the principal contravenor (strict liability, no intent required) from that of the accessory (knowledge required). It endorses the Full Court's observation that Parliament is unlikely to have intended every paragraph of s 75B to require a mental element except one limb that happens to use the word "knowingly" only once.
The decision is presented as restoring the ordinary and natural meaning of the statutory language rather than creating new doctrine. It confirms that the 1977 amendments did not silently revolutionise accessory liability but simply transplanted the existing criminal-law framework into the civil damages provision. The joint judgment and Brennan J's reasons are careful to ground every proposition in either the text of the Act, the history of its insertion, or the pre-existing learning on complicity. No subsequent development is mentioned because none had yet occurred; the case stands as the definitive High Court statement on the point.
Still-open questions
The Court expressly left two matters undecided. First, it doubted but did not finally decide whether a corporation that does no more than pass on information supplied by another, while making it clear that it is not the source and disclaims belief in its truth or falsity, is itself engaging in misleading conduct. Because the Lucas company had not appealed, the point did not arise. That obiter has generated a lively jurisprudence on "mere conduit" or "pass-through" liability that the High Court has not yet revisited.
Second, the Court noted but did not resolve the conceptual difficulty, drawn from Mallan v Lee, of treating the actual maker of a representation as an accessory to the corporation whose liability is wholly vicarious. If Lucas himself made the representations on behalf of the Lucas company, it might be "an inversion" to say he aided and abetted the company's contravention. Again, the Court found it unnecessary to decide the issue.
A further open question implicit in the reasoning is the precise content of the knowledge required when the principal contravention is one of "likely to mislead or deceive" rather than actual deception. The Court emphasised that the accessory must know the facts that give the conduct its misleading character, but the boundary between knowledge of facts and appreciation of their tendency to mislead may require further elaboration in future cases. The judgments also leave unexplored the interaction between s 75B and the specific defences in s 85 when both principal and accessory are sued.
These unresolved issues illustrate that while Yorke v Lucas settled the core mental-element question, it deliberately left room for further refinement at the margins of conduit liability, vicarious-accessory overlap, and the exact mens rea needed for representations that are only "likely" to mislead. Practising lawyers must still advise clients that honest ignorance protects the individual but not the corporation, yet the precise scope of that protection continues to be worked out case by case.
Judgment (61 paragraphs)
[1]
High Court of Australia
Mason A.C.J. Wilson, Brennan, Deane and Dawson JJ.
Yorke v Lucas
[1985] HCA 65
[2]
Oct. 3
Mason A.C.J., Wilson, Deane and Dawson JJ.
[3]
The respondent, Ross Melville Lucas ("Lucas"), was the managing director of a company, Ross Lucas Pty. Ltd. ("the Lucas company") which carried on business in South Australia as a licensed land and business agent. It acted for Treasureway Stores Pty. Ltd. ("Treasureway") in the sale of that company's business to the appellants.
[4]
Arising out of the sale of the business, the appellants claimed damages in the Federal Court under s. 82 of the Trade Practices Act 1974 Cth against Treasureway, Kevin Thomas Mahoney who was a director of Treasureway, the Lucas company and Lucas. The basis of the claim was a contravention of s. 52 of the Act. That section prohibits a corporation from, in trade or commerce, engaging in conduct that is misleading or deceptive or is likely to mislead or deceive. Section 82 allows a person who suffers loss or damage by conduct of another person that was done in contravention of, amongst other provisions, s. 52, to recover the amount of the loss or damage against that other person or against "any person involved in the contravention". Lucas is said by the appellants to be involved in the contravention of s. 52 and they rely upon s. 75B of the Act, which provides that a reference to a person involved in a contravention shall be read as a reference to a person who -
[5]
(a) has aided, abetted, counselled or procured the contravention;
[6]
(b) has induced, whether by threats or promises or otherwise, the contravention;
[7]
(c) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or
[8]
(d) has conspired with others to effect the contravention.
[9]
At the trial of the action the learned trial judge found that Treasureway had engaged in conduct which was both misleading and deceptive by falsely representing that the average weekly turnover of the business during a period preceding the sale was $3,500. The necessary consequence was, in the view of the trial judge, that a representation that the gross profit of the business was $1,200 per week was also misleading. He found that the first appellant, Miles Richard Yorke, was induced by that conduct to enter into the contract to purchase the business. His Honour held that the Lucas company had also contravened s. 52 of the Act by acting as agent for Treasureway, but that its contravention was unwitting. He assessed the loss of the appellants at $73,000 and ordered that there be judgment for the appellants in that sum against Treasureway and the Lucas company. Execution on the judgment against the Lucas company was stayed until such time as the court could determine that company's right, if any, to an indemnity from Treasureway and Mahoney.
[10]
The trial judge held that Mahoney aided and abetted or, alternatively, was knowingly concerned in the contravention of s. 52 by Treasureway and was, by virtue of s. 75B, a person involved in that contravention and hence liable in damages under s. 82. He entered judgment against Mahoney in the sum of $73,000.
[11]
The trial judge dismissed the claim against Lucas, taking the view that he was insufficiently aware of the relevant facts for him to be involved in the contravention within the meaning of ss. 75B and 82 of the Act. He found as follows [1] :
[12]
There is no doubt that Mr. Lucas was acting exactly in accordance with the instructions and information given to him as managing director of Ross Lucas Pty. Ltd. by Mr. Mahoney. He was sufficiently careful to obtain Mahoney's written confirmation on at least three occasions of the turnover figure and he heard Mahoney orally confirm it to Mr. Yorke. When he returned from an overseas trip he asked Mahoney for an up to date profit figure and he sought and obtained confirmation that the weekly turnover was $3,500 before he resumed his efforts to sell the business. My ultimate finding was that "Mr. Lucas conscientiously and carefully passed on to Mr. Yorke the instructions and informations he received from Mr. Mahoney and this finding is not disturbed by the evidence given by Mr. Mahoney".
[13]
The position then is and I find that Mr. Lucas was not aware and had no reason to suspect, that the information concerning turnover which he relayed to Mr. Yorke was incorrect. He made all appropriate inquiries from Mr. Mahoney and was entitled to be satisfied by the answers he was given, particularly as the turnover figure which he was supplied received some support from the accounts of Treasureway. He did not know of or suspect, and had no reason to suspect, the inaccuracy of the turnover figures and in no way could it be said that he acted recklessly or deliberately abstained from asking questions or pursuing enquiries.
[14]
The Full Court of the Federal Court dismissed an appeal against the judgment in favour of Lucas and it is from that judgment that this appeal is now brought.
[15]
It should be observed at the outset that the facts as found by the trial judge raise the question whether the Lucas company itself was guilty of any contravention of s. 52. It is, of course, established that contravention of that section does not require an intent to mislead or deceive and even though a corporation acts honestly and reasonably, it may nonetheless engage in conduct that is misleading or deceptive or is likely to mislead or deceive: Hornsby Building Information Centre Pty. Ltd. v. Sydney Building Information Centre Ltd. [2] ; Parkdale Custom Built Furniture Pty. Ltd. v. Puxu Pty. Ltd. [3] . That does not, however, mean that a corporation which purports to do no more than pass on information supplied by another must nevertheless be engaging in misleading or deceptive conduct if the information turns out to be false. If the circumstances are such as to make it apparent that the corporation is not the source of the information and that it expressly or impliedly disclaims any belief in its truth or falsity, merely passing it on for what it is worth, we very much doubt that the corporation can properly be said to be itself engaging in conduct that is misleading or deceptive. Had the Lucas company appealed from the judgment against it, it may have been necessary to form a concluded view on that question. It has not, however, done so and it is possible to resolve this appeal against the judgment in favour of Lucas upon the assumption that the finding of a contravention of s. 52 on the part of the Lucas company was correct. As will be seen, that is so notwithstanding that the contravention was said to have taken place solely by reason of the conduct of Lucas.
[16]
(1978) 140 C.L.R. 216, at p. 228.
2. (1982) 149 C.L.R. 191, at p. 197.
[17]
The basis upon which the appellants contend that Lucas is liable under s. 82 is that he is a person involved by reason of s. 75B in the contravention of s. 52 by the Lucas company. Lucas, it is said, aided, abetted, counselled or procured the contravention within the meaning of par. (a) of s. 75B or was, directly or indirectly, knowingly concerned in, or party to, the contravention within the meaning of par. (c). The argument proceeds upon the basis that there is no requirement in s. 75B, or at least in pars. (a) and (c), of an intent on the part of Lucas based upon knowledge of the material facts.
[18]
Turning first to par. (a), the appellants immediately encounter the difficulty that the words used, "aided, abetted, counselled or procured", are taken from the criminal law where they are used to designate participation in a crime as a principal in the second degree or as an accessory before the fact. Both in the case of felonies where the principal offender and the secondary participant commit separate offences, and in the case of misdemeanours where no distinction is drawn between the two, a person will be guilty of the offences of aiding and abetting or counselling and procuring the commission of an offence only if he intentionally participates in it. To form the requisite intent he must have knowledge of the essential matters which go to make up the offence whether or not he knows that those matters amount to a crime. So much was affirmed recently in Giorgianni v. The Queen [4] where the relevant authorities were examined. That was a case in which the appellant had been convicted of culpable driving under s. 52A of the Crimes Act 1900 N.S.W. in reliance upon s. 351 of that Act. The latter section provides that a person who aids, abets, counsels or procures the commission of any misdemeanour may be proceeded against as a principal offender and was held to be declaratory of the position at common law. The offence of culpable driving under s. 52A is an offence of strict liability which, putting the defence of honest and reasonable mistake to one side, requires no proof by the prosecutor of any mental state on the part of the accused. Nevertheless it was held that to have aided and abetted or counselled and procured the offence of culpable driving the appellant must have intentionally participated in that offence and to have done so must have had knowledge of the essential matters which went to make up the offence on the occasion in question. Those matters included the defective condition of the brakes upon the vehicle being driven, because the culpable driving alleged consisted of the driving of that vehicle with defective brakes. Proof of such knowledge on the part of the principal offender was, however, not part of the prosecution case because the principal offence was one of strict liability.
[19]
If par. (a) of s. 75B imports the requirements of the criminal law, it is clear in the light of Giorgianni v. The Queen that Lucas could only be brought within that paragraph if he intentionally aided, abetted, counselled or procured a contravention by the Lucas company of s. 52 of the Trade Practices Act. Upon the findings of the trial judge, however, Lucas lacked the knowledge necessary to form the required intent. A contravention of s. 52 involves conduct which is misleading or deceptive or likely to mislead or deceive and the conduct relied upon in this case consisted of the making of false representations. Whilst Lucas was aware of the representations - indeed they were made by him - he had no knowledge of their falsity and could not for that reason be said to have intentionally participated in the contravention.
[20]
The appellants sought to meet this difficulty by submitting that s. 75B(a) should not be construed in accordance with the requirements of the criminal law and that no intent was necessary in order to constitute a person an aider, abettor, counsellor or procurer within the meaning of that paragraph. A contravention of s. 52, it was said, requires no intent and it follows that there is no reason why intent should play any part in secondary participation in a contravention of that section.
[21]
The nature of the prohibition imposed by s. 52 is, however, governed by the terms in which it is created and the context in which it is found. Section 75B, on the other hand, in speaking of aiding, abetting, counselling or procuring, makes use of an existing concept drawn from the criminal law and unless the context requires otherwise, there is every reason to suppose that it was intended to carry with it the settled meaning which it already bore: cf. Barker v. The Queen [5] . Nor is there any reason to suppose that because the application of s. 75B may occur in conjunction with a provision such as s. 52, which requires no intent, it must also be construed so as to dispense with intent as an element of aiding, abetting, counselling or procuring. In Giorgianni v. The Queen it was held that secondary participation required intent based upon knowledge, notwithstanding that the statutory provision creating the principal offence imposed strict liability.
[22]
True it is that s. 75B deals with civil rather than criminal liability. It does so by defining the term "involved in a contravention" which is used in s. 82 to impose civil liability in respect of contraventions of the provisions of Pts IV and V of the Act. The method adopted by s. 75B may be compared with the way in which criminal liability is imposed upon accessories under the provisions of the Trade Practices Act. Section 79, which makes contraventions of Pt V of the Act, other than s. 52, criminal offences, does not speak of involvement in a contravention. However, in Reg. v. Australian Industrial Court; Ex parte C.L.M. Holdings Pty. Ltd. [6] it was held that s. 5 of the Crimes Act 1914 Cth might be called in aid to render a natural person guilty of an offence created by the Trade Practices Act in respect of a corporation. Section 5, so far as is relevant, provides:
[23]
Any person who aids, abets, counsels, or procures, or by act or omission is in any way directly or indirectly knowingly concerned in, or party to, the commission of any offence against any law of the Commonwealth shall be deemed to have committed that offence and shall be punishable accordingly.
We can see, however, no basis for confining the ordinary meaning of the words of s. 75B by assumptions that particular parts of that section were intended to have a wider effect than the combined operation of s. 79 of the Trade Practices Act and s. 5 of the Crimes Act. Our conclusion in that regard is confirmed by consideration of the history of s. 75B itself.
1. (1977) 136 C.L.R. 235.
[24]
Section 75B was inserted in the Trade Practices Act by the Trade Practices Amendment Act 1977 Cth and at the same time s. 82, which was in a narrower form, was replaced by a new section which extended liability in an action for damages to a person involved in a contravention of a provision of Pt IV or V of the Act. Section 75B in introducing the concept of an involved person takes up s. 5 of the Crimes Act. As was observed in Fencott v. Muller [7] , such a course was, no doubt, suggested by the words of Mason J. in Reg. v. Australian Industrial Court; Ex parte C.L.M. Holdings Pty. Ltd. [8] :
[25]
The point here is that if a head of constitutional power enables the Parliament to legislate so as to create a particular offence, then that head of power or the incidental power will authorize a provision having the same effect as s. 5 of the Crimes Act in its application to a person who is knowingly concerned in the commission of the offence.
Notwithstanding that s. 75B operates as an adjunct to the imposition of civil liability, its derivation is to be found in the criminal law and there is nothing to support the view that the concepts which it introduces should be given a new or special meaning.
1. (1983) 152 C.L.R. 570, at p. 620.
2. (1977) 136 C.L.R., at pp. 246-247.
[26]
Reliance was also placed by the appellants upon s. 85(3) and (4) of the Act which provide defences, based upon lack of knowledge, to persons otherwise guilty of contraventions of Pt V of the Act. Those sub-sections are, however, directed at actual contraventions in which intent based upon knowledge otherwise plays no part and they serve to alleviate the strict liability which would be imposed if the defences for which they provide were not available.
[27]
So far we have dealt only with par. (a) of s. 75B which refers to involvement of persons who are accessories. The appellants also rely upon par. (c) of the same section which extends the definition of a person involved to a person who has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention. There can be no question that a person cannot be knowingly concerned in a contravention unless he has knowledge of the essential facts constituting the contravention. It cannot, therefore, be suggested that Lucas falls within the first limb of par. (c). It might be thought possible to construe the express requirement of knowledge as extending not only to being "concerned in" but also to being "party to" a contravention. However, there are two reasons, in our view, why it is inappropriate to do so.
[28]
First, the natural construction of par. (c) is to regard the word "knowingly" as qualifying only the words "concerned in" which immediately follow it. The punctuation strongly suggests such a construction. Secondly, the word "knowingly" would be an unnecessary qualification of the words "party to". In the context of the paragraph, a person could only properly be said to be "party to" a "contravention" if his participation was in the context of knowledge of the essential facts constituting the particular contravention in question. Whilst it is not a contradiction in terms to speak of a person being "party to" something of which he is unaware, some indication is needed to convey such a meaning. There is nothing in the paragraph itself which would point to any conclusion other than that the words "party to" are used to refer to a participant in the nature of an accessory. Moreover, the wider context of the whole section leads to the same conclusion. We have already indicated why par. (a) requires knowledge. Paragraph (b), which speaks of inducing a contravention by threats, promises or otherwise, and par. (d), which speaks of conspiring with others to effect a contravention, both clearly require intent based upon knowledge and there is force, we think, in the observation made in the judgment of the Full Court below [9] that there is -
[29]
no reason why Parliament would have intended that a section which renders natural persons liable for a contravention by a corporation should require some mental element or absence of innocence in every case to which it refers except one which itself requires in its first limb that the person was "knowingly" concerned in the contravention.
In our view, the proper construction of par. (c) requires a party to a contravention to be an intentional participant, the necessary intent being based upon knowledge of the essential elements of the contravention.
1. (1983) 80 F.L.R., at p. 152; 49 A.L.R. 672, at p. 682.
[30]
It follows from what we have said that both the trial judge and the Full Court were, in our view, correct in concluding that, upon the facts as found, Lucas was not a person involved in the contravention of s. 52 constituted by the false representations and that he was, therefore, not liable in damages under s. 82. We would only add, lest it be thought that it has escaped our attention, that the appellants may, even if knowledge were not necessary to involvement under par. (a) or under par. (c) as "party to", have encountered difficulty in establishing that Lucas was involved within the meaning of s. 75B in the contravention constituted by the making of the false representations, having regard to the fact that the representations, albeit made on behalf of the Lucas company, were made by Lucas himself. As Dixon J. observed in Mallan v. Lee [10] :
[31]
It would be an inversion of the conceptions on which the degrees of offending are founded to make the person actually committing the forbidden acts an accessory to the offence consisting in the vicarious responsibility for his acts.
It is, however, unnecessary to pursue this aspect of the matter further.
1. (1949) 80 C.L.R. 198, at p. 216.
[32]
Section 52(1) of the Trade Practices Act 1974 Cth ("the Act") provides:
[33]
A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
[34]
Section 82(1) of the Act creates a right of action for loss or damage caused by conduct contravening s. 52. That provision reads:
[35]
A person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part IV or V may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.
[36]
The appellants were awarded damages pursuant to s. 82(1) for loss caused by conduct which was held to contravene s. 52. In the Federal Court Fisher J. found that false representations had been made to the appellants in connexion with a purchase of a business from Treasureway Stores Pty. Ltd. ("Treasureway"). His Honour found that the false representations had been made as to the average weekly turnover and gross weekly profit of the business and that the false representations had induced Mr. Yorke to enter into the contract of purchase. The representations had been made in the contract of purchase executed by Treasureway, orally by Mr. Mahoney, who was a director of Treasureway, and orally by Mr. Lucas who was the managing director of Ross Lucas Pty. Ltd. ("the Lucas company") which Treasureway had engaged as its agent to sell the business. Holding that the making of the false representations was misleading and deceptive conduct in contravention of s. 52, his Honour assessed the appellants' damages under s. 82(1) at $73,000.
[37]
His Honour found that Mr. Lucas, the only officer of the Lucas company who had had dealings with Mr. Yorke and Mr. Mahoney regarding the purchase, had acted "exactly in accordance with the instructions and information given to him as managing director of Ross Lucas Pty. Ltd. by Mr. Mahoney" and that he "conscientiously and carefully passed on to Mr. Yorke the instructions and information he received from Mr. Mahoney". Despite Mr. Lucas' honesty and care, his Honour held that the Lucas company had contravened s. 52, albeit unwittingly. He noted that Stephen J. said in Hornsby Building Information Centre Pty. Ltd. v. Sydney Building Information Centre Ltd. [11] :
[38]
The section should be understood as meaning precisely what it says and as involving no questions of intent upon the part of the corporation whose conduct is in question.
His Honour followed what Gibbs C.J. said in Parkdale Custom Built Furniture Pty. Ltd. v. Puxu Pty. Ltd. [12] :
There is nothing in the section that would confine it to conduct which was engaged in as a result of a failure to take reasonable care. A corporation which has acted honestly and reasonably may therefore nevertheless be rendered liable to be restrained by injunction, and to pay damages, if its conduct has in fact misled or deceived or is likely to mislead or deceive.
Since the making of false representations by Mr. Lucas as an officer of the Lucas company was misleading or deceptive conduct by the Lucas company, Fisher J. held the Lucas company liable. Judgment was entered against Treasureway, Mahoney and the Lucas company.
1. (1978) 140 C.L.R. 216, at p. 228.
2. (1982) 149 C.L.R. 191, at p. 197.
[39]
Although the appellants sought judgment against Mr. Lucas personally, Fisher J. held that Mr. Lucas was not a "person involved in the contravention" within the meaning of that term in s. 82(1). Judgment was entered in his favour. On appeal to a Full Court of the Federal Court, that judgment was affirmed. The term "involved in a contravention" is defined by s. 75B of the Act as follows:
[40]
A reference in this Part to a person involved in a contravention of a provision of Part IV or V shall be read as a reference to a person who -
[41]
(a) has aided, abetted, counselled or procured the contravention;
[42]
(b) has induced, whether by threats or promises or otherwise, the contravention;
[43]
(c) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or
[44]
(d) has conspired with others to effect the contravention.
[45]
The question on this appeal is whether Mr. Lucas was a person involved in the Lucas company's contravention of s. 52.
[46]
Section 75B governs civil liability but it is couched in the language of the criminal law: cf. Crimes Act 1914 Cth, ss. 5, 7A and 86. Its terms are substantially repeated in s. 76(1)(c) to (f). Section 76(1) defines the persons who are liable to pay a pecuniary penalty for contravention of Pt IV. The terms of s. 75B are also substantially repeated in s. 78(c) to (f). Section 78 precludes the bringing of criminal proceedings for contraventions of Pt IV. As substantially the same terms are used in ss. 75B, 76(1) and 78, the meaning of the corresponding terms in the three sections is substantially the same. Clearly the meaning ordinarily attributed to those terms by the criminal law should be attributed to them in ss. 76(1) and 78, and that meaning should be attributed to those terms in s. 75B. The provisions of s. 75B should therefore be construed as though they were defining the persons criminally liable for contraventions of the provisions of Pt IV and s. 52 and for offences created by the other provisions of Pt V. Such a construction effects a substantial symmetry between the classes of persons criminally liable for offences created by Pt V (other than s. 52) and the classes of persons who may be civilly liable for contraventions of Pt V, though there may be some disconformity between those whose criminal liability arises only from s. 7A of the Crimes Act and those who fall only within s. 75B(c).
[47]
Construing s. 75B in that way, civil liability is imposed only on those who, if the particular contravention in Pt IV or Pt V were an offence, would be held criminally liable for it. Civil liability is thus imposed only on those who engage in the conduct prescribed by s. 75B with the state of mind which the criminal law calls mens rea. In the criminal law, provisions which extend liability for statutory offences to such persons as are defined by s. 75B are not understood as creating separate offences, but as making persons falling within the provision liable for the principal offence once it is committed: per Isaacs J. in Walsh v. Sainsbury [13] . A person whose act or omission brings him within the literal terms of the provision is not held liable, however, unless he engaged in the conduct therein specified (aiding, abetting, etc.) with a state of mind that amounts to mens rea. The appellants sought to make Mr. Lucas liable either as one who "aided, abetted, counselled or procured the contravention" under par. (a) of s. 75B or as a "party to the contravention" under par. (c). In Giorgianni v. The Queen [14] , this Court decided that a person cannot be held liable for aiding, abetting, counselling or procuring the commission of an offence, even a statutory offence involving strict liability, without intent based upon knowledge of the essential facts which constitute the offence [15] .
[48]
(1925) 35 C.L.R. 464, at p. 477.
2. (1985) 156 C.L.R. 473.
3. (1985) 156 C.L.R., at pp. 488, 495, 505-508.
[49]
Although the judgments in Giorgianni had not been published when Fisher J. and the Full Court were considering the present case, their Honours, founding chiefly upon the authorities referred to in Giorgianni , held that knowledge was essential to liability under s. 75B, the Full Court expressing its conclusion thus [16] :
[50]
It follows that Mr. Lucas could not be held to have contravened s. 52 as an aider or abettor unless the Court is satisfied that he knew of the essential facts or matters constituting the contravention including knowledge that the relevant representations as to the weekly turnover of the record business and its gross profit were incorrect. The incorrectness of those representations is essential to support a finding of misleading or deceptive conduct. Mr. Lucas had no actual knowledge whatever of their incorrectness and it is not suggested that the circumstances of the case warrant an inference of constructive knowledge on his part of the character of the conduct complained of.
1. (1983) 80 F.L.R. 143, at p. 151; 49 A.L.R. 672, at p. 680.
[51]
The facts that constituted the contravention for which the appellants sought to make Mr. Lucas liable consisted in his making of false representations to the appellants while he was acting as managing director of the Lucas company. That was the conduct which was held to constitute a contravention of s. 52 by the Lucas company, yet Fisher J. and the Full Court held that the same conduct was insufficient to make Mr. Lucas liable. The distinction which their Honours drew between the liability of the Lucas company and the liability of its managing director stemmed from the view that knowledge of the falsity of the representations made by Mr. Lucas was not an element in the contravention of s. 52 by the Lucas company but knowledge of the falsity of the representation was a condition of any liability imposed by s. 75B in respect of that contravention. It is necessary to consider whether that view is correct.
[52]
Section 52 may be contravened by a corporation which does not intend that its conduct will mislead or deceive another person. The section does not import what in criminal law is called a specific intent, that is, an intention that the proscribed conduct should cause a specified result. Indeed, s. 52 does not include a result - an actual misleading or deception of another - as an element. I respectfully agree with an observation by Gibbs C.J. in Parkdale [17] , that "it is unnecessary to prove that the conduct in question actually deceived or misled anyone". What s. 52 says is that a corporation which, in trade or commerce, engages in conduct which is in fact misleading or deceptive or which is in fact likely to mislead or deceive, contravenes the section. If a corporation engages in conduct that answers the statutory description, does the corporation escape liability if its officers and agents do not know or even suspect that its conduct is of that character? Gibbs C.J. gave a negative answer to that question in Parkdale [18] in the passage of his judgment on which Fisher J. relied. I would give the same answer. Although there would be a presumption that some form of mens rea should be implied if s. 52 created a criminal offence (see He Kaw Teh v. The Queen [19] ), s. 52 does not create a criminal offence (s. 79(1)). It merely defines a foundation of civil liability and there is no reason why a presumption affecting the interpretation of statutes which create offences should affect the interpretation of s. 52. Section 52 is a provision in the "Consumer Protection" Part of the Act - Pt V. It may be inferred that, as between a corporation engaged in trade and commerce and consumers who may be misled or deceived by the conduct of the corporation, the legislature intended that the burden of any loss suffered by the consumer as the result of want of knowledge on the part of the corporation should fall on the corporation.
[53]
(1982) 149 C.L.R., at p. 198.
2. (1982) 149 C.L.R., at p. 197.
3. (1985) 157 C.L.R. 523.
[54]
The question for the court in proceedings against a corporation for contravention of s. 52 is whether the conduct of the corporation was, in all the circumstances, misleading or deceptive - i.e., apt to mislead or deceive - or likely to mislead or deceive. When the conduct constituting the contravention is the making of a false representation, it is immaterial that the corporation did not know that the representation was false when it was made. The essential facts to be established in sheeting home liability to a corporation under s. 52 include the making of the representation and the falsity of the representation but not the corporation's knowledge of the falsity.
[55]
Knowledge as a Condition of Liability under s. 75B.
[56]
Construing s. 75B(a) as though it were imposing criminal liability for aiding, abetting, counselling or procuring an offence, a person cannot be made liable under that paragraph as for a contravention of a provision of Pt IV or Pt V unless he has knowledge of "the essential matters which constitute the offence". That phrase is taken from a passage in the judgment of Lord Goddard C.J. in Johnson v. Youden [20] , which was cited with approval in Giorgianni [21] :
[57]
Before a person can be convicted of aiding and abetting the commission of an offence he must at least know the essential matters which constitute that offence. He need not actually know that an offence has been committed, because he may not know that the facts constitute an offence and ignorance of the law is not a defence.
1. [1950] 1 K.B. 544, at p. 546.
2. (1985) 156 C.L.R., at p. 481.
[58]
In Giorgianni , Wilson, Deane and Dawson JJ. held that intentional participation in a crime was necessary to make a person criminally liable for aiding, abetting, counselling or procuring its commission, and said [22] :
[59]
The necessary intent is absent if the person alleged to be a secondary participant does not know or believe that what he is assisting or encouraging is something which goes to make up the facts which constitute the commission of the relevant criminal offence. He need not recognize the criminal offence as such, but his participation must be intentionally aimed at the commission of the acts which constitute it.
Their Honours confine the requirement of intention, and thus the requirement of knowledge, to "the commission of the acts which constitute" the offence. Another question, which their Honours considered earlier in their judgment, is the requirement of intention in a secondary participant with respect to the result of the acts which constitute the offence when the occurrence of the result is an element in the offence - e.g., death in the crime of involuntary manslaughter. Whether a secondary participant is criminally liable in all such cases without knowledge of the result if the offence is so defined that knowledge or foresight of the result is not required of the principal offender is a question which does not now arise: but see Reg. v. Creamer [23] ; Giorgianni [24] .
1. (1985) 156 C.L.R., at p. 506.
2. [1966] 1 Q.B. 72.
3. (1985) 156 C.L.R., at pp. 481-482, 503.
[60]
As we have seen, the actual misleading or deception of a person is not an element of a contravention of s. 52, though a person seeking compensation under s. 82(1) must establish that his loss or damage resulted from the contravening conduct. In determining who is civilly liable for a s. 52 contravention under s. 75B(a) no question arises as to whether the person upon whom liability is sought to be imposed knew that another person would or might be misled or deceived by the contravening conduct. But s. 75B(a) does require knowledge of the acts constituting the contravention and of the circumstances which give those acts the character which s. 52 defines, namely, "misleading or deceptive or likely to mislead or deceive". As the net of civil liability for a contravention does not catch those who would not be caught if s. 52 created an offence, honest ignorance of the circumstances which give a representation a misleading or deceptive character or the character of a representation which is likely to mislead or deceive is inconsistent with civil liability under s. 75B(a). The operation of s. 75B(a) in conjunction with s. 52 may be incongruous, for s. 52 throws a strict liability on a corporation, but s. 75B(a) does not extend liability for a s. 52 contravention to a person who procures the corporation to engage in contravening conduct if that person is honestly ignorant of the circumstances that give that conduct a contravening character.
[61]
Nor, in my opinion, does par. (c) of s. 75B impose a stricter liability. The juxtaposition of "knowingly concerned in" and "party to" in a statute defining criminal liability (e.g., s. 5 of the Crimes Act) would deny to the latter term a construction equivalent to "unknowingly concerned in". A "party to" an offence is one who, by the principles of the common law, would be held to be criminally liable for the offence. The term adds little to the more specific terms to be found in s. 5 of the Crimes Act, but it ensures that none is omitted from the net of criminal liability whom the common law would include. As s. 75B transports the criteria of the criminal law into the definition of the parties who are civilly liable for contraventions of Pts IV and V, the criminal law definition of parties to an offence furnishes the definition of those who are civilly liable as a party to a contravention under s. 75B(c). The requirement of knowledge under par. (a) is no less stringent under par. (c).