Astvilla v Director of Consumer Affairs [2006] VSC 289
In the Common Law Division of the Supreme Court of Victoria, Bell J dismissed an appeal on a question of law from a magistrate, holding the Fair Trading Act's deeming provision for company officers did not extend to civil proceedings, but that the orders against an officer of the companies stood because he was directly liable for conduct in his employer's trade or commerce as more than a mere conduit [189], [190].
What the court decided
The Director of Consumer Affairs alleged that the way the Cellante organisation sold a house to Ms Brown, a first home buyer, contravened the Fair Trading Act 1999 [6]. Having no more than an oral agreement to buy the house for $25,600.00, Cellante sold it to Ms Brown for $55,000.00 [5]. The defendants were Astvilla Pty Ltd, Perna Pty Ltd and Livio Cellante, their general manager, called together Cellante [8]. The magistrate ordered compensation and restrained Cellante from selling properties in this way [7]. Section 109(1) of the Magistrates' Court Act confined the appeal to a question of law [10].
On the pleadings ground, Bell J said that to establish an error of law it is not enough to show only that findings of fact went beyond the particulars [11]. Where the factual issues have been fairly contested, a party may be permitted to rely on the proved facts to establish the pleaded cause of action [11]. Cellante knew the case it faced, deliberately mounted a narrow defence and did not ask for an adjournment, so the issues were fairly contested [15], [18], [24], [26]. In any event, there was no significant difference between the facts pleaded and the facts found [27], [47], [54]. On the precision of particulars, his Honour said it would be "wrong to equate the precise with the exact" [59]. The magistrate made no error of law on the particulars and did not misapply Intrac, which concerned findings on matters not fairly contested [60], [65], [68].
On the evidence ground, the Court could only ask whether there was any evidence for each finding [70]. Some findings, including the exact words attributed to Mr Cellante, were not supported by the evidence, but his actual words could carry an implicit representation that the house was reasonably priced [100], [102], [104]. The findings on which the decision depended were open on the evidence [114].
On the construction ground, his Honour applied the special disadvantage test in ACCC v Berbatis to unconscionable conduct under section 7(1) [117]. He held the magistrate's special disadvantage findings legally unimpeachable and his statement of principle correct [119], [120]. The magistrate had considered Mr Cellante's personal liability separately [124]. The ground that he misconstrued sections 7(1) or 9(1) was rejected [125].
Bell J read section 143(1) in the context of Division 1 of Part 11, whose other provisions all related to proceedings for an offence [136]. He thought section 145 was later introduced to fill the 1999 Act's original omission of civil accessorial liability [139]. He held that section 143(1) applies only to a proceeding for an offence against the Act, so it could not support the orders against Mr Cellante [143].
On direct liability, his Honour held the general word "person" in sections 7(1) and 9(1) should not be read down to exclude employees [147], [148]. In Daniel Wong v Citibank Ltd the New South Wales Court of Appeal upheld a general manager's direct liability under the New South Wales Act [165], [166]. Arms v Houghton, a Full Federal Court decision on the Victorian Act in its pre-amended form, held that employees could be directly liable [167]. Bell J held that the principle applies even to employees who embody the company [169], [170]. As a single judge applying uniform legislation, he would not depart from an intermediate appellate interpretation unless convinced it was plainly wrong [173]. He considered the decisions he had reviewed to be correct [174]. The magistrate therefore correctly decided that Mr Cellante could be found directly liable under sections 7(1) and 9(1) of the Fair Trading Act 1999 [175].
The order restraining Cellante from representing that it owned properties it did not own was not too wide, because it did not restrain lawful sales under terms contracts [176], [180], [182]. His Honour rejected each of Cellante's grounds of appeal and upheld the magistrate's orders [189].
Why it matters
Under the Act as considered here, an employee's civil exposure rested on direct liability for their own conduct as more than a mere conduit, not on the deeming provision [190]. A party that objects to evidence outside its particulars but seeks no adjournment and shows no prejudice will find it hard to turn that into an error of law on appeal. The decision concerned the 1999 Act before the 2003 substitution of section 145; readers should check the legislation now in force [151].
Numbers in square brackets are paragraph numbers of the judgment. This note summarises a decided case for education and is not legal advice. See how the notes are written.